BILL NUMBER: AB 2516CHAPTERED BILL TEXT CHAPTER 127 FILED WITH SECRETARY OF STATE JULY 13, 2012 APPROVED BY GOVERNOR JULY 13, 2012 PASSED THE SENATE JUNE 28, 2012 PASSED THE ASSEMBLY MAY 17, 2012 AMENDED IN ASSEMBLY MAY 14, 2012 INTRODUCED BY Assembly Member Bradford FEBRUARY 24, 2012 An act to amend Section 345.5 of the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGEST AB 2516, Bradford. Independent System Operator. The existing restructuring of the electrical industry within the Public Utilities Act provides for the establishment of an Independent System Operator (ISO) as a nonprofit public benefit corporation. Existing law requires the ISO to manage the transmission grid and related energy markets in a manner that is consistent with (1) making the most efficient use of available energy resources, (2) reducing, to the extent possible, overall economic cost to the state's consumers, (3) applicable state law intended to protect the public's health and the environment, and (4) maximizing the availability of existing electric generation resources necessary to meet the needs of the state's electricity consumers. This bill would, in addition, require the ISO to manage the transmission grid and related energy markets in a manner that is consistent with (5) conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions applicable to the operation of the ISO and (6) communicating with all balancing area authorities in California in a manner that supports electrical reliability. The Public Utilities Act provides that every corporation or person, other than a public utility and its officers, agents, and employees, that fails to comply with the act is guilty of a crime. Because the requirements of this bill are within the act, the bill would impose a state-mandated local program by expanding the application of a crime. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 345.5 of the Public Utilities Code is amended to read: 345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state. (b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following: (1) Making the most efficient use of available energy resources. For purposes of this section, "available energy resources" include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. "Available energy resources" do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load. (2) Reducing, to the extent possible, overall economic cost to the state's consumers. (3) Applicable state law intended to protect the public's health and the environment. (4) Maximizing availability of existing electric generation resources necessary to meet the needs of the state's electricity consumers. (5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter. (6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability. (c) The Independent System Operator shall do all of the following: (1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection. (2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation. (3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operator' s Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002. (4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operator's Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.