Assembly Bill 1890
(Statues of 1996, Chapter 854, Brulte)
Signed Into Law on September 23, 1996
Sections Pertaining to the Oversight Board
SEC. 10. Chapter 2.3 (commencing with Section 330) is added
to Part 1 of Division 1 of the Public Utilities Code, to read:
CHAPTER 2.3. ELECTRICAL RESTRUCTURING
Article 1. General Provisions and Definitions
Section 330. In order to provide guidance in carrying out this
chapter, the Legislature finds and declares all of the
following:...
Article 2. Oversight Board
Section 334. The Legislature finds and declares that in order to
ensure the success of electric industry restructuring, in the
transition to a new market structure it is important to ensure a
reliable supply of electricity. Reliable electric service is
of paramount importance to the safety, health, and comfort of
the people of California. Transmission connections between
electric utilities allow them to share generation resources and
reduce the number of powerplants necessary to maintain a
reliable system. The connections between utilities also create
exposure to events that can cause widespread and extended
transmission and service outages that reach far beyond the
originating utility service area. California utilities and
those in the western United States voluntarily adhere to
reliability standards developed by the Western Systems
Coordinating Council. The economic cost of extended electricity
outages, such as those that occurred in California and
throughout the Western Systems Coordinating Council on July 2,
1996, and August 10, 1996, to California's residential,
commercial, agricultural, and industrial customers is
significant. The proposed restructuring of the electricity
industry would transfer responsibility for ensuring short- and
long-term reliability away from electric utilities and
regulatory bodies to the Independent System Operator and various
market-based mechanisms. The Legislature has an interest in
ensuring that the change in the locus of responsibility for
reliability does not expose California citizens to undue
economic risk in connection with system reliability.
Section 335. In order to ensure that the interests of the people of
California are served, a five-member Oversight Board shall be
formed as provided in Section 336. Its functions shall be all
of the following:
(a) To oversee the Independent System Operator and the Power
Exchange.
(b) To determine the composition and terms of service and to
appoint the members of the governing boards of the Independent
System Operator and the Power Exchange.
(c) To serve as an appeal board for majority decisions of the
Independent System Operator governing board.
Section 336.
(a) The five-member Oversight Board shall be comprised
as follows:
(1) Three members, who are California residents and
electricity ratepayers, appointed by the Governor from a list
jointly provided by the California Energy Resources Conservation
and Development Commission and the Public Utilities Commission,
and subject to confirmation by the Senate.
(2) One member of the Assembly appointed by the Speaker of
the Assembly.
(3) One member of the Senate appointed by the Senate
Committee on Rules.
(b) Legislative members shall be nonvoting members, however,
they are otherwise full members of the board with all rights and
privileges pertaining thereto.
(c) Oversight Board members shall serve three-year terms with
no limit on reappointment. For purposes of the initial
appointments set forth in paragraph (1), the Governor shall
appoint one member to a one-year term, one to a two-year term,
and one to a three-year term.
Section 337. The Oversight Board, as the appointing body, shall
establish nominating procedures and qualifications for
Independent System Operator governing board members. The
Independent System Operator governing board shall be composed of
California residents and shall include, but not be limited to,
representatives of investor-owned utility transmission owners,
publicly owned utility transmission owners, nonutility
electricity sellers, public buyers and sellers, private buyers
and sellers, industrial end-users, commercial end-users,
residential end-users, agricultural end-users, public interest
groups, and nonmarket participant representatives. A simple
majority of the board shall consist of persons who are
themselves unaffiliated with electric generation, transmission
or distribution corporations.
Section 338. The Oversight Board, as the appointing body, shall
establish nominating procedures and qualifications for Power
Exchange governing board members. The Power Exchange governing
board shall be composed of California residents and shall
include, but not be limited to, representatives of
investor-owned electric distribution companies, publicly owned
electric distribution companies, nonutility generators, public
buyers and sellers, private buyers and sellers, industrial
end-users, commercial end-users, residential end-users,
agricultural end-users, public interest groups, and nonmarket
participant representatives.
Section 339. The Oversight Board is the appeal board for majority
decisions of the Independent System Operator governing board.
Only members of the Independent System Operator governing board
may appeal a majority decision to the Oversight Board.
Section 340. The Oversight Board shall take the steps that are
necessary to ensure the earliest possible incorporation of the
Independent System Operator and the Power Exchange as separately
incorporated public benefit, nonprofit corporations under the
Corporations Code.
Date Created: January 31, 1997
URL: http://www.energy.ca.gov/OSB/ab1890_billtext.html