BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 655 - Padilla Hearing Date:
April 21, 2009 S
As Introduced: February 27, 2009 FISCAL B
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DESCRIPTION
Current law creates the Independent System Operator (ISO) as a
nonprofit, public benefit corporation. To ensure the
reliability of electric service and the health and safety of the
public, the ISO is charged with managing the transmission grid
in a manner that is consistent with making the most efficient
use of energy resources; reducing overall economic cost to
customers, and applicable state law intended to protect the
public's health and the environment. The ISO is also required
to consult and coordinate with appropriate state and local
agencies to ensure that it operates in furtherance of state
consumer and environmental protection laws.
This bill replaces the requirement that the grid be managed
consistent with applicable state law intended to protect the
public's health and the environment with the requirement that
the grid be managed consistent with supporting implementation
and compliance with California's Renewable Portfolio Standard
and greenhouse gas emission reduction laws.
BACKGROUND
The ISO was established when the electric market was deregulated
in 1996. Control of the electric grid was transferred from the
investor-owned utilities (IOUs) to the ISO because of concerns
that the utilities would favor their own electric generation
facilities over those facilities owned by others.
The ISO's self-articulated mission includes promoting
environmental stewardship. The ISO's brochures note that it
reduces barriers for renewable energy to access the electric
grid and that it will help California achieve its 20% renewable
portfolio standard.
The ISO performs several discrete functions. They dispatch
electricity, perform a needs analysis on proposed transmission
lines, and conduct auctions for the purchase of electricity
needed to meet immediate and near-term needs.
COMMENTS
1. Ensuring Reliability - Under current law, the
overarching goal of the ISO is to ensure the reliability of
electric service and the health and safety of the public.
This bill, perhaps inadvertently, instead makes reliability
one of six operating criteria for the ISO. The author and
committee may wish to consider elevating reliability back
to the primary goal of the ISO by reinstating lines 1 and 2
on page 2 and deleting lines 5 and 6.
This bill specifically articulates that the ISO must
operate consistent with "supporting and assisting in
implementation and compliance with" the RPS statutes and
the AB 32 greenhouse gas statutes. The author intends that
the ISO give full weight to California's environmental laws
as it conducts its operations.
The bill deletes the requirement that the ISO operate
consistent with applicable state public health and
environmental laws. That requirement was probably
unnecessary as the applicable state laws are unchanged and
remain applicable.
2. Ensuring Security - Recent reports indicate that the
electric grid has been hacked.<1> Investigators found that
the hackers left behind software that could later be
activated to disrupt grid operations. Most alarmingly, the
hacking was apparently discovered not by the grid
operators, but by U.S. intelligence agencies. There was no
indication whether California's grid was hacked, though
because of the interconnectedness of the entire western
grid that may not matter. The ISOs governing statutes
discuss grid reliability but not grid security. The author
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<1> Electric Grid in U.S. Penetrated by Spies ; Wall Street
Journal, April 8, 2009.
and committee may wish to make ensuring grid security an
explicit duty of the ISO. This could be accomplished by
adding grid security to the ISOs standards for transmission
facilities in Section 348.
POSITIONS
Sponsor:
Author
Support:
Union of Concerned Scientists
Oppose:
None on file
Randy Chinn
SB 655 Analysis
Hearing Date: April 21, 2009