Article 5.5. Transformation Of The Independent System Operator of California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 2.3. >> Article 5.5.
(a) It is the intent of the Legislature to provide for the
transformation of the Independent System Operator into a regional
organization to promote the development of regional electricity
transmission markets in the western states and to improve the access
of consumers served by the Independent System Operator to those
markets, and that the transformation should only occur where it is in
the best interests of California and its ratepayers.
(b) The transformation of the Independent System Operator into a
regional organization shall not alter its obligations to the state or
to electricity consumers within the state or its obligations to
comply with state laws. The Independent System Operator shall retain
its obligations set forth in Section 345.5, shall maintain the
standards for open meetings and public access to corporate records as
set forth in Section 345.5, and shall facilitate effective tracking
and reporting mechanisms in support of state enforcement of Division
25.5 (commencing with Section 38500) of the Health and Safety Code.
(c) The voluntary transformation described in subdivision (a)
shall occur through additional transmission owners joining the
Independent System Operator with approval from their own state or
local regulatory authorities, as applicable.
(d) Modifications to the Independent System Operator governance
structure, through changes to its bylaws or other corporate
governance documents, would be needed to allow this transformation.
(e) The Independent System Operator shall prepare the governance
modifications needed as described in subdivision (d), but they shall
not become effective until all of the following occur:
(1) The Independent System Operator conducts one or more studies
of the impacts of a regional market enabled by the proposed
governance modifications, including overall benefits to ratepayers,
including the creation or retention of jobs and other benefits to the
California economy, environmental impacts in California and
elsewhere, impacts in disadvantaged communities, emissions of
greenhouse gases and other air pollutants, and reliability and
integration of renewable energy resources. The modeling, including
all assumptions underlying the modeling, shall be made available for
(2) The commission, Energy Commission, and State Air Resources
Board jointly hold at least one public workshop where the Independent
System Operator presents the proposed governance modifications and
the results of the studies described in paragraph (1). The related
Independent System Operator documents shall be made public before the
(3) The Independent System Operator submits to the Governor the
studies described in paragraph (1) and revised bylaws or other
corporate governance documents setting forth the proposed
modifications to its governance structure.
(4) The Governor transmits to the Legislature the studies
described in paragraph (1) and revised bylaws or other corporate
governance documents setting forth the proposed modifications to its
governance structure, no later than December 31, 2017.
(5) The Legislature enacts a statute implementing the revised
(f) The Independent System Operator shall expeditiously adopt the
modifications to its governance structure enacted by the Legislature
pursuant to paragraph (5) of subdivision (e) so that the
modifications become effective before new transmission owners from
outside California complete the process of joining the Independent
(g) The revised governance structure shall not alter or abridge
the contractual rights of a transmission owner to withdraw from
participation in the Independent System Operator.
(h) One year after the seating of the new, revised governing board
of the Independent System Operator pursuant to the modifications of
its governance structure, and every two years thereafter, the
Independent System Operator shall prepare a report to the states
within the areas it serves documenting its furtherance of applicable
state and federal laws and regulations affecting the electric
(i) This article is repealed on January 1, 2019, if a statute
implementing the governance modifications has not become effective on
or before January 1, 2019.