AB 538

Bill Subjects

Abstract

Existing law provides for the establishment of an Independent System Operator (ISO) as a nonprofit public benefit corporation and requires the ISO to ensure efficient use and reliable operation of the electrical transmission grid consistent with achieving planning and operating reserve criteria no less stringent than those established by the Western Electricity Coordinating Council and the North American Electric Reliability Council. The Clean Energy and Pollution Reduction Act of 2015 provides for the transformation of the ISO into a regional organization, with the approval of the Legislature, pursuant to a specified process. That process provides that modifications to the ISO's governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission (PUC) , the State Energy Resources Conservation and Development Commission (Energy Commission) , the State Air Resources Board (state board) , the Governor, and the Legislature take specified actions on or before January 1, 2019. This bill would prohibit a California electrical transmission facility owner, a retail seller of electricity, or a local publicly owned electric utility from joining a multistate regional transmission system organization, as defined, unless the bylaws or other organizational documents that govern the organization, and the organization's operations, meet Federal Energy Regulatory Commission requirements and other specified requirements. The bill would require a California transmission owner, retail seller, or local publicly owned electric utility, before joining a multistate regional transmission system organization, to submit the bylaws and other organizational documents that govern the multistate regional transmission system organization to the Energy Commission for review. The bill would require the Energy Commission, in consultation with the PUC and the state board, to review those materials for compliance with the bill's requirements. The bill would prohibit a California transmission owner, retail seller, or local publicly owned electric utility from joining the multistate regional transmission system organization unless the Energy Commission has determined that the organization's bylaws and organizational documents meet those requirements. If a California transmission owner, retail seller, or local publicly owned electric utility has joined an independent system operator that becomes a multistate regional transmission system organization and the Energy Commission determines that the organization's bylaws and organizational documents do not meet those requirements, the bill would require that the California transmission owner, retail seller, or local publicly owned electric utility not remain in the organization. The bill would authorize the ISO to develop and submit to the Energy Commission a governance proposal that complies with those requirements and to provide notice and a copy of this submission to the Legislature and the Governor at the same time as it is submitted to the Energy Commission. The bill would require the Energy Commission, in consultation with the PUC and state board, to review the proposal for compliance with the bill's requirements, and, if the Energy Commission determines that the proposal meets those requirements, to submit the governance proposal to the Governor and to the Legislature with a declaration that the Energy Commission has so found. If notice is delivered by the Energy Commission during a regular session of the Legislature, and if a transmission owner from outside California that is not a participating transmission owner as of January 1, 2024, has entered into an agreement with the ISO indicating its intent to become a participating transmission owner, the bill would authorize the ISO, beginning 270 days after receipt of notice by the Legislature, to proceed to implement the proposal.