BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1753
                                                                  Page  1

          Date of Hearing:   August 21, 2002

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                    SB 1753 (Bowen) - As Amended:  June 27, 2002 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            10-4
                        Governmental Organization             14-7

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill modifies the duties of the Independent System  
          Operator.  Specifically, this bill: 

          1)Requires the ISO to conduct its operations consistent with  
            applicable state and federal laws and consistent with the  
            interests of the people of the state.

          2)Directs the ISO to:

             a)   Consult and coordinate with appropriate state and local  
               agencies to ensure the ISO operates in furtherance of state  
               laws governing environmental and consumer protection.

             b)   Ensure that the purposes and functions of ISO are  
               consistent with the purposes and functions of non-profit  
               public benefit corporations in the state, including  
               conflict of interest standards for officers and directors  
               of a corporation.

             c)   Maintain open meeting standards consistent with open  
               meeting statutes applicable to state agencies. 

             d)   Provide public access to corporate records, consistent  
               with the general policies of the California Public Records  
               Act.

           FISCAL EFFECT  

          Negligible state costs.  (The ISO's operating costs of covered  








                                                                  SB 1753
                                                                  Page  2

          by ratepayer charges.)

           COMMENTS  

           Background and Purpose  .  The ISO is a public utility under  
          federal law and is regulated by the Federal Energy Regulatory  
          Commission (FERC).  (In general, FERC has jurisdiction over the  
          transmission of electric energy and the sale of electric energy  
          at wholesale in interstate commerce.)  Incorporated in  
          California as a non-profit public benefit corporation, the ISO  
          controls and maintains California's electric power transmission  
          grid and coordinates and controls plant outages in the state.   
          As part of its responsibilities, the ISO also acts as a power  
          broker between generators and utilities.  These transactions are  
          governed by the ISO Tariff, which is on file with FERC.

          According to the author, although the ISO performs a public  
          purpose, it is not a governmental agency, and is not subject to  
          general state laws governing the conduct of state and local  
          agencies.  This bill expands on the original charter of ISO,  
          requiring it to conduct its operations consistent with state and  
          federal laws and the public interest, and assigning it more  
          detailed public obligations.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081