BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
PURSUANT TO S.R. 29.10
SB 1437 - Kehoe Hearing
Date: August 20, 2010 S
As Amended: June 7, 2010 Non-FISCAL
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DESCRIPTION
Existing law establishes the California Independent System
operator (ISO) to ensure the efficient and reliable operation of
the transmission grid. The ISO is a non-profit public benefit
corporation with a five-member board of directors appointed by
the Governor and confirmed by the Senate.
Existing law requires the ISO to consult and coordinate with
appropriate state and local agencies to ensure the ISO operates
in furtherance of state law regarding consumer and environmental
protection.
Existing law requires the ISO to perform a review to address the
causes following a major outage that affects at least 10% of the
customers of the entity providing the local distribution
service.
This bill would require the ISO board of directors to annually
select a representative of to appear before the appropriate
policy committees of the Senate and Assembly to report on the
activities of the ISO during the previous year including:
a. A summary of ISO actions taken to ensure
reliability of service.
b. A summary of ISO modifications of standards.
c. The results of each ISO review concerning major
outages.
BACKGROUND
The ISO was created by AB 1890 (Brulte, 1996) in an attempt to
ensure fair access and open electrical transmission to
electricity providers. The investor-owned utilities (IOUs) own
and maintain the electrical transmission grid but it is operated
by the ISO. Participation in the ISO is voluntary for local
publicly owned utilities.
In addition to operating the transmission grid, the ISO also
operates a "spot-market" and ancillary services market to
balance and maintain electricity supply and demand stability.
These balancing markets procure 3% to 5% of the electricity
scheduled through the ISO.
Grid Stability - Shortly after midnight on April 1, 2010,
approximately 300,000 homes and businesses in the San Diego area
lost power for 45 minutes. The ISO performed an investigation
and found human error in their control room to be the cause. A
review of ISO actions associated with this incident by the
Western Electricity Coordinating Council found the ISO's
internal investigation and subsequent remedies appropriate. The
ISO also briefed the appropriate state and federal regulatory
agencies.
COMMENTS
1. Author's Purpose . According to the author, the purpose
SB 1437 is to provide transparency and public oversight of
the ISO. The author cites recent events such as a power
outage in San Diego described above. The author believes
that having the ISO come to the legislature and give a
public accounting on grid operations and reliability is
important not only for elected officials, but for the
overall effectiveness of the ISO and those served by the
ISO.
2. Current Agency Practices . The California Public
Utilities Commission and the Division of Ratepayer
Advocates are statutorily required to appear before the
Legislature annually. The California Energy Commission and
the ISO are not currently required to report to the
Legislature. While existing law already requires the ISO
to perform a review and address the causes following major
outages, reviewing these incidents annually with relevant
committees within the Legislature would appear to be an
effective method of oversight with respect to grid
stability and outages.
3. Gut & Amend . When the Senate passed SB 1437 on May 3rd,
2010 the bill required the CPUC to determine the direct
costs and benefits associated with the expected additional
load from plug-in hybrid and electric vehicles on the
electric grid. The June 7th Assembly amendments deleted
that language and converted the bill into a measure to
require a representative of the ISO to annually appear
before the appropriate policy committees of the Senate and
Assembly. Because this topic was never heard in the Senate,
the Senate Rules Committee has referred the amended bill
under Senate Rule 29.10 to this committee for a hearing on
the Assembly's amendments. At this hearing, the Committee
has four choices:
1. Send the bill back to the Senate Floor,
recommending concurrence.
2. Send the bill back to the Senate Floor,
recommending nonconcurrence.
3. Send the bill back to the Senate Floor, without
recommendation.
4. Hold the bill.
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
None on file
Maurice Pitesky
SB 1437 Analysis
Hearing Date: August 20, 2010