BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 655
                                                                  Page  1

          Date of Hearing:   August 19, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    SB 655 (Padilla) - As Amended:  May 20, 2009 

          Policy Committee:                               
          UtilitiesVote:15-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill:

          1)Requires the Independent System Operator (ISO) to appear  
            annually before the appropriate Senate and Assembly policy  
            committees to report on the ISO's activities.

          2)States legislative intent that the ISO take all necessary  
            steps to ensure that the transmission grid is secure from  
            intrusion by unauthorized persons.

           FISCAL EFFECT  

          Negligible fiscal impact.

           COMMENTS  

           1)Background  .  The bill that deregulated California's wholesale  
            and retail energy markets, AB 1890 (Brulte)/Chapter 854 of  
            1996, created the ISO.  Operation and 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 dispatches electricity, performs a needs analysis on  
            proposed transmission lines, and conducts auctions for the  
            purchase of electricity needed to meet immediate and near-term  
            needs.  The ISO governing board is composed of a five-member  
            independent governing board of directors appointed by the  
            Governor and subject to confirmation by the Senate.  No state  








                                                                  SB 655
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            agency nor the Legislature oversees the ISO budget.  The ISO's  
            costs are paid indirectly by ratepayers through the  
            transmission charge portion of their electric bills.

           2)Purpose  .  Current law requires the Electricity Oversight Board  
            (EOB) to oversee the ISO.  However, the EOB ceased operations  
            as of April 1, 2008.  This bill attempts to provide some level  
            of legislative awareness of the ISO by requiring an annual  
            appearance before the policy committee of each house.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081