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:


Section 336.
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