Amended IN Senate March 24, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 540Introduced by Senators Becker and SternFebruary 20, 2025 An act to amend Section 337 of, to add Section 345.6 to, to repeal Section 352 of, and to repeal Article 4 (commencing with Section 355) of, Article 5 (commencing with Section 359) of, and Article 5.5 (commencing with Section 359.5) of, Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGESTSB 540, as amended, Becker. Independent System Operator: independent regional organization.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. Existing law, 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 ISOs governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission, the State Energy Resources Conservation and Development 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 delete the above-described provisions providing for the transformation of the ISO into a regional organization. The bill would authorize the ISO and the electrical corporations that are participating transmission owners whose transmission systems are operated by the ISO, in lieu of the ISO managing related energy markets, as provided, to use voluntary energy markets governed by an independent regional organization, provided that specified requirements are satisfied. The bill would authorize the ISO, on or after January 1, 2027, to implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization if the governing board of the ISO adopts a resolution, as specified, finding that each of the specified conditions have been, or will be, adopted by the independent regional organization. The bill would require the ISO to maintain the necessary technical capability to operate energy markets, as specified, and would require the ISO to continue its functions and responsibilities as a balancing authority, as provided.Existing law requires the Power Exchange to provide an efficient competitive auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of all exchange customers at efficient prices, and authorizes the Power Exchange governing board to form appropriate technical advisory committees composed of market and nonmarket participants to advise the governing board on relevant issues.This bill would delete these provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 337 of the Public Utilities Code is amended to read:337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.SEC. 2. Section 345.6 is added to the Public Utilities Code, to read:345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.SEC. 3. Section 352 of the Public Utilities Code is repealed.SEC. 4. Article 4 (commencing with Section 355) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.SEC. 5. Article 5 (commencing with Section 359) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.SEC. 6. Article 5.5 (commencing with Section 359.5) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
Amended IN Senate March 24, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 540Introduced by Senators Becker and SternFebruary 20, 2025 An act to amend Section 337 of, to add Section 345.6 to, to repeal Section 352 of, and to repeal Article 4 (commencing with Section 355) of, Article 5 (commencing with Section 359) of, and Article 5.5 (commencing with Section 359.5) of, Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGESTSB 540, as amended, Becker. Independent System Operator: independent regional organization.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. Existing law, 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 ISOs governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission, the State Energy Resources Conservation and Development 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 delete the above-described provisions providing for the transformation of the ISO into a regional organization. The bill would authorize the ISO and the electrical corporations that are participating transmission owners whose transmission systems are operated by the ISO, in lieu of the ISO managing related energy markets, as provided, to use voluntary energy markets governed by an independent regional organization, provided that specified requirements are satisfied. The bill would authorize the ISO, on or after January 1, 2027, to implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization if the governing board of the ISO adopts a resolution, as specified, finding that each of the specified conditions have been, or will be, adopted by the independent regional organization. The bill would require the ISO to maintain the necessary technical capability to operate energy markets, as specified, and would require the ISO to continue its functions and responsibilities as a balancing authority, as provided.Existing law requires the Power Exchange to provide an efficient competitive auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of all exchange customers at efficient prices, and authorizes the Power Exchange governing board to form appropriate technical advisory committees composed of market and nonmarket participants to advise the governing board on relevant issues.This bill would delete these provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Amended IN Senate March 24, 2025
Amended IN Senate March 24, 2025
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Senate Bill
No. 540
Introduced by Senators Becker and SternFebruary 20, 2025
Introduced by Senators Becker and Stern
February 20, 2025
An act to amend Section 337 of, to add Section 345.6 to, to repeal Section 352 of, and to repeal Article 4 (commencing with Section 355) of, Article 5 (commencing with Section 359) of, and Article 5.5 (commencing with Section 359.5) of, Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 540, as amended, Becker. Independent System Operator: independent regional organization.
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. Existing law, 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 ISOs governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission, the State Energy Resources Conservation and Development 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 delete the above-described provisions providing for the transformation of the ISO into a regional organization. The bill would authorize the ISO and the electrical corporations that are participating transmission owners whose transmission systems are operated by the ISO, in lieu of the ISO managing related energy markets, as provided, to use voluntary energy markets governed by an independent regional organization, provided that specified requirements are satisfied. The bill would authorize the ISO, on or after January 1, 2027, to implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization if the governing board of the ISO adopts a resolution, as specified, finding that each of the specified conditions have been, or will be, adopted by the independent regional organization. The bill would require the ISO to maintain the necessary technical capability to operate energy markets, as specified, and would require the ISO to continue its functions and responsibilities as a balancing authority, as provided.Existing law requires the Power Exchange to provide an efficient competitive auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of all exchange customers at efficient prices, and authorizes the Power Exchange governing board to form appropriate technical advisory committees composed of market and nonmarket participants to advise the governing board on relevant issues.This bill would delete these provisions.
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. Existing law, 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 ISOs governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission, the State Energy Resources Conservation and Development 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 delete the above-described provisions providing for the transformation of the ISO into a regional organization. The bill would authorize the ISO and the electrical corporations that are participating transmission owners whose transmission systems are operated by the ISO, in lieu of the ISO managing related energy markets, as provided, to use voluntary energy markets governed by an independent regional organization, provided that specified requirements are satisfied. The bill would authorize the ISO, on or after January 1, 2027, to implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization if the governing board of the ISO adopts a resolution, as specified, finding that each of the specified conditions have been, or will be, adopted by the independent regional organization. The bill would require the ISO to maintain the necessary technical capability to operate energy markets, as specified, and would require the ISO to continue its functions and responsibilities as a balancing authority, as provided.
Existing law requires the Power Exchange to provide an efficient competitive auction, open on a nondiscriminatory basis to all suppliers, that meets the loads of all exchange customers at efficient prices, and authorizes the Power Exchange governing board to form appropriate technical advisory committees composed of market and nonmarket participants to advise the governing board on relevant issues.
This bill would delete these provisions.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 337 of the Public Utilities Code is amended to read:337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.SEC. 2. Section 345.6 is added to the Public Utilities Code, to read:345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.SEC. 3. Section 352 of the Public Utilities Code is repealed.SEC. 4. Article 4 (commencing with Section 355) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.SEC. 5. Article 5 (commencing with Section 359) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.SEC. 6. Article 5.5 (commencing with Section 359.5) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 337 of the Public Utilities Code is amended to read:337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.
SECTION 1. Section 337 of the Public Utilities Code is amended to read:
### SECTION 1.
337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.
337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.
337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.(c) (1) All appointments shall be for three-year terms.(2) There is no limit on the number of terms that may be served by any member.(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.
337. (a) The Independent System Operator governing board shall comprise a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate. Any reference in this chapter or in any other provision of law to the Independent System Operator governing board means the independent governing board appointed under this subdivision.
(b) A member of the independent governing board appointed under subdivision (a) may not be affiliated with any actual or potential participant in any market administered by the Independent System Operator.
(c) (1) All appointments shall be for three-year terms.
(2) There is no limit on the number of terms that may be served by any member.
(d) The Oversight Board shall require the articles of incorporation and bylaws of the Independent System Operator to be revised in accordance with this section, and shall make filings with the Federal Energy Regulatory Commission as the Oversight Board determines to be necessary.
(e) For purposes of the initial appointments to the Independent System Operator governing board, as provided in subdivision (a), the Governor shall appoint one member to a one-year term, two members to a two-year term, and two members to a three-year term.
SEC. 2. Section 345.6 is added to the Public Utilities Code, to read:345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.
SEC. 2. Section 345.6 is added to the Public Utilities Code, to read:
### SEC. 2.
345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.
345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.
345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.(4) The notice provides an opportunity for written comments on the proposed findings.(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.(C) The Independent System Operator may use its subscriber participating transmission owner tariff.(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.(e)(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.(f)(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.
345.6. (a) In lieu of the Independent System Operator managing related energy markets as provided in subdivision (b) of Section 345.5, the Independent System Operator and the electrical corporations that are participating transmission owners whose transmission systems are operated by the Independent System Operator may use voluntary energy markets governed by an independent regional organization if all of the following requirements are satisfied:
(1) The independent regional organization is a nonprofit corporation whose governance documents include a corporate obligation to respect the authority of each state that has a load-serving entity or balancing authority participating in the market to set its own procurement, environmental, reliability, and other public interest policies.
(2) The governing board of the independent regional organization maintains a public policy committee consisting of members of the governing board of the independent regional organization that engages with states, local power authorities, and federal power marketing administrations about potential impacts to state, local, or federal policies before it approves a tariff change for filing at the Federal Energy Regulatory Commission.
(3) The governing board of the independent regional organization maintains a relationship with and seeks input from a body of state regulators or similar body to receive the views of state regulators.
(4) The independent regional organization makes funding available for a consumer advocate organization that represents the interests of one or more consumer advocate offices authorized in state law and facilitates engagement by those offices in the markets governed by the independent regional organization.
(5) The independent regional organization maintains an office of public participation to provide information and education to members of the public about issues and initiatives at the independent regional organization, including facilitating engagement in those processes.
(6) In addition to any independent market monitoring activity required by a Federal Energy Regulatory Commission order, the independent regional organization maintains access to independent market analysis for the governing board of the independent regional organization on the impacts of market dynamics or rule changes to minimize overall costs to end-use consumers.
(7) Subject to appropriate confidentiality provisions, market data is available to the commission and the Public Advocates Office, and other states commissions and public advocate offices, to the same or greater extent as existed on December 31, 2024, for the markets governed by the Independent System Operator.
(8) There is a stakeholder process designed to provide nonbinding advice to the governing board of the independent regional organization.
(9) The independent regional organization is obligated to conduct meetings and make decisions in an open process with transparent, documented rationales, and all meetings of the governing board of the independent regional organization are publicly noticed and, excluding executive sessions, are available to remote participants, recorded and posted on the independent regional organizations internet website, open to the public, and subject to open record requirements.
(10) The Independent System Operator continues to operate the energy markets, subject to the market rules determined by the independent regional organization as accepted by the Federal Energy Regulatory Commission.
(11) The market rules of the independent regional organization continue to provide greenhouse gas emissions information and protocols sufficient to enable entities subject to the State Air Resources Boards rules to demonstrate compliance.
(12) The independent regional organization permits and provides a procedure for unilateral withdrawal by any participant with reasonable prior notice. notice and without any further approvals.
(b) On or after January 1, 2027, the Independent System Operator may implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization, as provided in subdivision (a), if the governing board of the Independent System Operator adopts a resolution finding that each of the requirements of paragraphs (1) through (12), inclusive, of subdivision (a) have been or will be adopted by the independent regional organization. The governing board of the Independent System Operator may adopt the resolution if the Independent System Operator satisfies all of the following requirements:
(1) The meeting is open to the public, available to remote participants, recorded, and posted on the Independent System Operators internet website.
(2) The Independent System Operator issues a notice of the meeting and proposed findings not less than 90 days before the meeting.
(3) The notice explains the basis for finding that each requirement of paragraphs (1) through (12), inclusive, of subdivision (a) will be met.
(4) The notice provides an opportunity for written comments on the proposed findings.
(5) The Independent System Operator issues written responses to any comments not less than 20 days before the meeting.
(c) (1) The Independent System Operator shall maintain the necessary technical capability to operate energy markets in a manner that enables California electrical corporations, local publicly owned electric utilities, and other applicable market participants to withdraw from the markets governed by the independent regional organization and instead the Independent System Operator would provide separate market services for those entities.
(2) This section does not modify the commissions authority to direct an electrical corporation to withdraw from an energy market governed by an independent regional organization in response to federal action or any other significant change in market rules or operations detrimental to California consumers or California procurement, environmental, reliability, or other public interest policies.
(d) (1) The Independent System Operator shall continue its functions and responsibilities as a balancing authority as they existed before enactment of this section, and maintain compliance with applicable reliability standards as developed, adopted, and enforced by the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, or the Federal Energy Regulatory Commission.
(2) The Independent System Operator shall not change its balancing authority area from that which existed on December 31, 2024, except as follows:
(A) Standard accretion of new transmission lines, substations, and other equipment by participating transmission owners.
(B) The Independent System Operator may combine its balancing authority area with another California balancing authority if the combination is mutually agreed upon.
(C) The Independent System Operator may use its subscriber participating transmission owner tariff.
(3) This Except as provided in subdivision (a) with respect to managing energy markets as provided in this section, this section does not change the responsibilities of the Independent System Operator under Section 345.5, including managing the transmission grid, planning for transmission expansion, and complying with Section 25308 of the Public Resources Code.
(e) (1) This section does not change any requirement related to the California Renewables Portfolio Standard Program as provided in Article 16 (commencing with Section 399.11).
(2) This section does not change the policy of the state to reach specified targets by specified dates for supplying eligible renewable energy resources and zero-carbon resources as provided in subdivision (a) of Section 454.53.
(e)
(f) The Independent System Operator may act as a vendor, through a contract with the independent regional organization, of market operation services, generation dispatch services, transmission operation services, transmission planning services, reliability coordination, balancing authority compliance or operation services, or other electrical system services.
(f)
(g) For purposes of this section, the terms balancing authority, balancing authority area, and California balancing authority have the same meanings as provided in Section 399.12.
SEC. 3. Section 352 of the Public Utilities Code is repealed.
SEC. 3. Section 352 of the Public Utilities Code is repealed.
### SEC. 3.
SEC. 4. Article 4 (commencing with Section 355) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
SEC. 4. Article 4 (commencing with Section 355) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
### SEC. 4.
SEC. 5. Article 5 (commencing with Section 359) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
SEC. 5. Article 5 (commencing with Section 359) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
### SEC. 5.
SEC. 6. Article 5.5 (commencing with Section 359.5) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
SEC. 6. Article 5.5 (commencing with Section 359.5) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.
### SEC. 6.