BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1753|
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UNFINISHED BUSINESS
Bill No: SB 1753
Author: Bowen (D), et al
Amended: 6/27/02/02
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-2, 4/9/02
AYES: Bowen, Alarcon, Murray, Sher, Vasconcellos, Vincent
NOES: Morrow, Battin
SENATE APPROPRIATIONS COMMITTEE : 8-3, 5/6/02
AYES: Alpert, Bowen, Burton, Escutia, Karnette, Murray,
Perata, Speier
NOES: Battin, McPherson, Poochigian
SENATE FLOOR : 21-12, 5/29/02
AYES: Alarcon, Alpert, Bowen, Burton, Chesbro, Dunn,
Escutia, Figueroa, Karnette, Kuehl, Machado, Murray,
O'Connell, Ortiz, Perata, Romero, Scott, Sher, Speier,
Torlakson, Vasconcellos
NOES: Ackerman, Battin, Brulte, Haynes, Knight, Margett,
McClintock, McPherson, Monteith, Morrow, Oller,
Poochigian
ASSEMBLY FLOOR : 49-29, 8/28/02 - See last page for vote
SUBJECT : Independent System Operator
SOURCE : Author
DIGEST : This bill requires the Independent System
Operator to abide by certain public interest principles, as
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specified, in managing the transmission grid.
Assembly Amendments make changes to further clarify ISO's
operations and specify that it shall conduct its operations
consistent with state and federal law.
ANALYSIS : Existing law requires the creation of the
Independent System Operator (ISO) as a nonprofit public
benefit corporation and requires the ISO to ensure
efficient use and reliable operation of the transmission
grid.
This bill expands the ISO's charter, requiring it to
conduct its operations consistent with applicable state and
federal laws and the public interest, and assigning it more
detailed public obligations. Specifically, this bill
requires the ISO to manage the grid and related energy
markets in a manner that:
1.Makes the most efficient use of available energy
resources.
2.Reduces, to the extent possible, overall economic cost to
consumers.
3.Is consistent to applicable state law intended to protect
public health and the environment.
4.Maximizes availability of existing electric generation
resources necessary to meet demand.
The bill also directs the ISO to:
1.Consult and coordinate with appropriate state and local
agencies to ensure the ISO operates in furtherance of
state laws governing environmental and consumer
protection.
2.Ensure that the purposes and functions of ISO are
consistent with the purposes and functions of nonprofit
public benefit corporations in the State, including
conflict of interest standards for officers and directors
of a corporation.
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3.Maintain open meeting standards consistent with open
meeting statutes applicable to state agencies.
4.Provide public access to corporate records, consistent
with the general policies of the California Public
Records Act.
Background
AB 1890 (Brulte), Chapter 854, Statutes of 1996, required
the creation of the ISO as a "separately incorporated
public benefit, nonprofit corporation." When it
established the ISO, the Legislature gave little explicit
guidance as to its public obligations. Section 345 of the
Public Utilities Code simply declares the purpose of the
ISO is to "ensure efficient use and reliable operation of
the transmission grid."
While the ISO is a corporation and not a governmental
agency, its performance of a public purpose is inherent in
its duties and fundamental to its status as a nonprofit
public benefit corporation. The ISO functions as a public
utility, performing exclusive duties delegated to it by the
state, vital to maintain public health and safety and
funded by consumer electricity rates. As such, the people
of the state have a unique and compelling interest in the
operation of the ISO.
Because the ISO is not a governmental agency, it is not
subject to general state laws governing the conduct of
state and local agencies. This bill expands on the
original charter of the ISO, requiring it to conduct its
operations consistent with state laws and the public
interest, and assigning it more detailed public
obligations.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
No direct state costs. The ISO receives no state funding,
but rather derives its revenues form a surcharge on
electricity. The current surcharge is less than one
percent. The bill imposes no direct costs on the State.
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SUPPORT : (Verified 5/5/02 - unable to reverify at time
of writing)
California Municipal Utilities Association
ASSEMBLY FLOOR
AYES: Alquist, Aroner, Calderon, Canciamilla, Cardenas,
Cardoza, Cedillo, Chan, Chavez, Chu, Cohn, Corbett,
Correa, Diaz, Dutra, Firebaugh, Florez, Frommer,
Goldberg, Havice, Hertzberg, Horton, Jackson, Keeley,
Kehoe, Koretz, Liu, Longville, Lowenthal, Matthews,
Migden, Nakano, Nation, Negrete McLeod, Oropeza, Pavley,
Reyes, Salinas, Shelley, Simitian, Steinberg,
Strom-Martin, Thomson, Vargas, Washington, Wayne,
Wiggins, Wright, Wesson
NOES: Aanestad, Ashburn, Bates, Bogh, Briggs, Bill
Campbell, John Campbell, Cogdill, Cox, Daucher,
Dickerson, Harman, Hollingsworth, Kelley, La Suer, Leach,
Leonard, Leslie, Maddox, Maldonado, Mountjoy, Robert
Pacheco, Rod Pacheco, Pescetti, Richman, Strickland,
Wyland, Wyman, Zettel
NC:kb 8/30/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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