BILL NUMBER: SBX1 31	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Bowen

                        FEBRUARY 5, 2001

   An act to amend Sections 335, 337, and 341.2 of the Public
Utilities Code, relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 31, as introduced, Bowen.  Electrical restructuring:  Oversight
Board:  Independent System Operator.
   The existing restructuring of the electrical services industry
within the Public Utilities Act provides for the authorization of
direct transactions between electricity suppliers and end-use
customers and for the establishment of an Independent System Operator
and a Power Exchange as separately incorporated public benefit,
nonprofit corporations.  An Electricity Oversight Board is also
established to oversee the Independent System Operator and the Power
Exchange.  Under existing law, the Oversight Board has the exclusive
right to decline to confirm the appointments of members of the
governing board of the Independent System Operator.  Under existing
law, the existing Independent System Operator governing board is
required to be replaced, within a specified period of time, by a
5-member independent governing board of directors appointed by the
Governor for one-year terms.  Existing law requires that a member of
the independent governing board of the Independent System Operator
not be affiliated with any actual or potential market participant
administered by the Independent System Operator.
   This bill would delete the Electricity Oversight Board's exclusive
right to decline to confirm the appointments of members of the
governing board of the Independent System Operator.  This bill would
require the Independent System Operator governing board appointed by
the Governor to be confirmed by the Senate.  The bill would require
these appointments to be for 3-year terms, with initial appointments
of one member for a one-year term, 2 members for a 2-year term, and 2
members for a 3-year term.  The bill would specify that a member of
the governing board of the Power Exchange is not considered to be
affiliated with a market participant solely as a consequence of
service on the governing board of the Power Exchange.
   This bill would make a conforming change in existing law.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 335 of the Public Utilities Code, as amended by
Section 1 of Chapter 1 of the 2001-02 First Extraordinary Session,
is amended to read:
   335.  In order to ensure that the interests of the people of
California are served, a five-member Electricity Oversight Board is
hereby created as provided in Section 336.  For purposes of this
chapter, any reference to the Oversight Board shall mean the
Electricity Oversight Board.  Its functions shall be all of the
following:
   (a) To oversee the Independent System Operator and the Power
Exchange.
   (b)  (1) To exercise the exclusive right to decline to
confirm the appointments of members of the governing board of the
Independent System Operator.
   (2)  To determine the composition and terms of service
and to exercise the exclusive right to decline to confirm the
appointments of specific members of the governing board of the Power
Exchange.
   (c) To serve as an appeal board for majority decisions of the
Independent System Operator governing board, as they relate to
matters subject to exclusive state jurisdiction, as specified in
Section 339.
   (d) Those members of the Power Exchange governing board whose
appointments the Oversight Board has the exclusive right to decline
to confirm include proposed governing board members representing
agricultural end users, industrial end users, commercial end users,
residential end users, end users at large, nonmarket participants,
and public interest groups.
  SEC. 2.  Section 337 of the Public Utilities Code, as amended by
Section 3 of Chapter 1 of the 2001-02 First Extraordinary Session, is
amended to read:
   337.  (a)  Within 90 days of the effective date of the act
adding this section, the existing   The 
Independent System Operator governing board shall be 
replaced by   composed of  a five-member
independent governing board of directors appointed by the Governor
 and subject to confirmation by the Senate  . Any reference
in this chapter or in any other provision of law to the Independent
System Operator governing board means the independent governing board
appointed under this subdivision.
   (b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Independent System
Operator.   A member of the governing board of the Power Exchange
shall not be considered to be affiliated with a participant solely
as a consequence of that individual's service on the governing board
of the Power Exchange. 
   (c) (1) All appointments shall be for  one-year 
 three-year  terms.
   (2) There is no limit on the number of terms that may be served by
any member.
   (d) The Oversight Board shall require the articles of
incorporation and bylaws of the Independent System Operator to be
revised in accordance with this section, and shall make filings with
the Federal Energy Regulatory Commission as the Oversight Board
determines to be necessary.  
   (e) For the purposes of the initial appointments to the
Independent System Operator governing board, as provided in
subdivision (a), the Governor shall appoint one member to a one-year
term, two members to a two-year term, and two members to a three-year
term. 
  SEC. 3.  Section 341.2 of the Public Utilities Code, as amended by
Section 4 of Chapter 1 of the 2001-02 First Extraordinary Session, is
amended to read:
   341.2.  The Bagley-Keene Open Meeting Act (Article 9 (commencing
with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2
of the Government Code) applies to meetings of the Oversight Board.
In addition to the allowances of that act, the Oversight Board may
hold a closed session to consider the appointment of one or more
candidates to the governing board of the  Independent System
Operator or the  Power Exchange, deliberate on matters
involving the removal of a member of the governing board of the Power
Exchange, or to consider a matter based on information that has
received a grant of confidential status pursuant to regulations of
the Oversight Board, provided that any action taken on such a matter
shall be taken by vote in an open session.