BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2516|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
CONSENT
Bill No: AB 2516
Author: Bradford (D)
Amended: 5/14/12 in Assembly
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 13-0, 6/11/12
AYES: Padilla, Fuller, Berryhill, Corbett, De Le�n,
DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Simitian,
Strickland, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/17/12 - See last page for vote
SUBJECT : Independent System Operator
SOURCE : Author
DIGEST : This bill requires the California Independent
System Operator (ISO) to conduct internal operations in a
manner that minimizes cost impacts on ratepayers and to
communicate with all balancing area authorities in the
state in a manner that supports electrical reliability.
ANALYSIS : Existing law establishes the 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.
CONTINUED
AB 2516
Page
2
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 electric outage that
affects at least 10% of the customers of the entity
providing the local distribution service.
Background
The ISO was created by AB 1890 (Brulte), Chapter 854,
Statutes of 1996, in an attempt to ensure fair access and
open electrical transmission to electricity providers. The
investor-owned utilities and participating publicly owned
utilities (POUs) own and maintain the electrical
transmission grid but it is operated by the ISO.
Participation in the ISO is voluntary for local POUs.
The ISO is a nonprofit, public benefit corporation
responsible for matching California's electricity supply
with demand and maintaining frequency of 80% of the state's
transmission grid. Other balancing authorities operating
in California are PacifiCorp, Sacramento Municipal Utility
District, Sierra Pacific Power, Turlock Irrigation
District, Nevada Energy, Los Angeles Department of Water
and Power, Western Area Lower Colorado and Imperial
Irrigation District.
The ISO is regulated by the Federal Energy Regulatory
Commission (FERC), an independent federal agency that
regulates the interstate transmission of electricity,
natural gas, and oil. The ISO operates under the terms and
conditions of its FERC-approved tariff, which is modified,
amended, supplemented or restated as needed. If a
provision of an existing ISO contract, business practice
manual or operating procedure conflicts with it, the tariff
will prevail to the extent of the inconsistency. These
tariffs dictate the prices charged for transmission and as
a consequence the state has little direct impact on
electric ratepayers and access to the grid.
The ISO opened its northern and southern California control
AB 2516
Page
3
centers in 1998 when the state restructured its wholesale
electricity industry. While utilities still own
transmission assets, the ISO acts as a traffic controller
by routing electrons, maximizing the use of the
transmission system and its generation resources, and
supervising maintenance of the lines. As the nerve center
for the California power grid, the ISO matches buyers and
sellers of electricity, facilitating nearly 30,000 market
transactions every day to ensure enough power is on hand to
meet demand.
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.
Southern California went dark . In September of 2011
blackout occurred in Southern California that left 2.7
million customers without electricity. It also extended to
Arizona and Baja California. The blackout started in
Arizona with the loss of Arizona Public Service's
Hassayampa-North Gila 500 kilovolt transmission line. That
line loss itself did not cause the blackout, but it did
initiate a sequence of events that led to the blackout,
exposing multiple grid operators' lack of adequate
real-time situational awareness of conditions throughout
the Western Interconnection.
The blackout was investigated by the staff of the FERC and
North American Electric Reliability Corporation which
recommended that bulk power system operators improve their
situational awareness through improved communication, data
sharing and the use of real-time tools system operators
plan and account for phase angle differences in order to be
able to re-energize transmission lines following outages.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
ASSEMBLY FLOOR : 73-0, 5/17/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
AB 2516
Page
4
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman,
Hall, Harkey, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Ma,
Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Olsen, Pan, V. Manuel P�rez,
Portantino, Silva, Smyth, Solorio, Swanson, Torres,
Valadao, Wagner, Wieckowski, Williams, John A. P�rez
NO VOTE RECORDED: Charles Calderon, Fletcher, Bonnie
Lowenthal, Norby, Perea, Skinner, Yamada
RM:k 6/26/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****