BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 920 - Bowen Hearing Date:
April 22, 2003 S
As Introduced: February 21, 2003 FISCAL B
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DESCRIPTION
This bill repeals the provisions of law establishing, and
granting powers to, the Electricity Oversight Board (EOB).
This bill also repeals the requirement for the Independent
System Operator (ISO) to adopt inspection, maintenance, repair
and replacement standards for transmission facilities and
repeals other, obsolete provisions related to the ISO and the
Power Exchange (PX).
BACKGROUND
AB 1890 (Brulte), Chapter 854, Statutes of 1996, established the
EOB to oversee the ISO and the PX and to "ensure that the
interests of the people of California are served." Originally,
the EOB was supposed to serve as an appellate body for decisions
of the ISO and PX governing boards.
The Federal Energy Regulatory Commission (FERC) took exception
to these provisions and, in 1998, ordered the ISO to change its
bylaws to eliminate the EOB's appointment function, as well as
the EOB's authority to approve ISO bylaws and hear appeals of
ISO governing board decisions. In the face of its order's
conflict with the provisions of AB 1890, FERC maintained that AB
1890's requirements were preempted by the Federal Power Act
SB 96 (Peace), Chapter 510, Statutes of 1999, in a compromise
with FERC, limited the EOB's confirmation powers to the
appointments of customer representatives to the ISO governing
board. It also limited the EOB's authority to serve as an
appeal board for decisions made by the ISO to matters that are
exclusively within the jurisdiction of the state.
With the passage of SB 96, the demise of the PX, the passage of
AB 5X (Keeley), Chapter 1, Statutes of 2001, to establish an ISO
board appointed by the Governor, and SB 47 (Bowen), Chapter 766,
Statutes of 2001, to require Senate, rather than EOB,
confirmation of ISO board members, the powers of the EOB have
been substantially diminished. The EOB's remaining functions
are to investigate wholesale electricity market activities and
participate in FERC proceedings as one of the state's
representatives.
COMMENTS
1.Is an EOB necessary? According to the EOB's web site, EOB
staff report directly to the Governor's office. Over the past
few years, the board itself has provided little policy
guidance, has met very few times, has taken no significant
formal actions, and has been marked by high turnover and
vacancies. While the work performed by EOB staff may have
continuing value, it could likely be conducted in much the
same manner under the auspices of the Governor's office
without the formal board structure.
This bill simply repeals the statutes establishing the EOB,
without providing a successor. Although the original
oversight function may be obsolete, there is a certain amount
of "equity" associated with the EOB, such as outstanding legal
claims on behalf of the state in EOB's name, which may need to
be assigned to another agency to preserve the state's rights
if the EOB is abolished.
2.Repeal of ISO transmission authority misplaced. In addition
to the EOB provisions, this bill contains an unrelated
provision repealing the requirement for the ISO to adopt
inspection, maintenance, repair and replacement standards for
transmission facilities. The same issue is addressed in SB
888 (Dunn, et al), pending in this committee, which transfers
these duties back to the California Public Utilities
Commission. The author and the committee may wish to consider
removing this provision from this bill in favor of addressing
it in SB 888.
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
Independent Energy Producers
Lawrence Lingbloom
SB 920 Analysis
Hearing Date: April 22, 2003