BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 920|
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THIRD READING
Bill No: SB 920
Author: Bowen (D)
Amended: As introduced
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 5-1, 4/22/03
AYES: Bowen, Alarcon, Dunn, Murray, Sher
NOES: Morrow
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electricity Oversight Board: Independent
System Operator:
Power Exchange
SOURCE : Author
DIGEST : This bill repeals the statutes establishing the
Electricity Oversight Board and makes related changes to
provisions concerning the Independent System Operator and
the Power Exchange.
ANALYSIS : AB 1890 (Brulte), Chapter 854, Statutes of
1996, established the Electricity Oversight Board (EOB) to
oversee the Independent System Operator (ISO) and the Power
Exchange (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
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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.
This bill repeals the provisions of law establishing, and
granting powers to, EOB.
This bill also repeals the requirement for ISO to adopt
inspection, maintenance, repair and replacement standards
for transmission facilities and repeals other, obsolete
provisions related to the ISO and the PX.
Comments
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
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/7/03)
- - -
OPPOSITION : (Verified 5/7/03)
Independent Energy Producers
NC:sl 5/7/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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