Posted on 07/18/2002 11:29:54 PM PDT by Ernest_at_the_Beach
Claiming the California's Independent System Operator has failed the state's energy users and suppliers, the Federal Regulatory Commission has declared its intention to unilaterally overhaul California's state-controlled transmission-grid operator.
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The move is a hard slap in the face to Gov. Gray Davis and his efforts to keep some kind of state control over its electricity transmission grid system, FERC says California needs to fully integrate its transmission system with the rest of the western United States in order to increase efficiency and the easy flow of electricity.
"The current operation of the California transmission grid serves only to prolong, if not exacerbate, the conditions that led to the California energy crisis and the ripple effects of that crisis to other western states," according to the FERC order released late Wednesday afternoon.
The report claims Cal-ISO "is not capable of operating its interstate transmission facilities on a non-discriminatory basis."
The order requires Cal-ISO to be disbanded by Dec. 31, 2002 and replaced with a two-tiered system.
The "top tier" would be made up of independent, non-stakeholder board members while the "lower" board will consist of an advisory committee or committees of stakeholders. The top tier would have sold decision-making authority on all matters, the FERC order states.
FERC officials say Gov. Gray Davis' restructuring of the Cal-ISO board from a 16-member board of energy users and suppliers to a five-member board did not meet the "independent" requirement.
FERC noted that two members have close business ties, including Carl Guardino, executive director of the Silicon Valley Manufacturers Group, and two are state state employees.
Under the order, Davis is required to appoint "truly independent" Cal-ISO board members that are made up of "qualified professionals that do not have any financial or political ties to any of the parties."
The order also declares that all actions taken by the current board are "voidable."
"I strongly disagree with the statement by FERC that the Board is insufficiently independent to implement needed market design changes," says Michael Kahn, Cal-ISO board chairman. " The current ISO Board is responsible for helping the state heal from the energy crisis and I feel the decision on the governance issue is an affront to Californians."
The order comes as a result of complaints from a variety of energy suppliers, including Mirant Corp., Duke Energy, Enron Power Marketing, Reliant Energy Power Generation and a host of others that Cal-ISO was essentially an instrument of the state and acting against the interstate electricity market. The energy suppliers claimed the board "lacked adequate knowledge of the industry" and that it holds a conflict of interest since the state Department of Water Resources is the single-largest buyer of electricity in California.
"It is often said we are known by the company we keep -- or in this case by the enemies we make. Being attacked by Enron and their collegues I consider a great compliment," says Carl Guardino, CEO of the Silicon Valley Manufacturintg Group and member of the Cal-ISO board.
He added that there is only one Cal-ISO board member on the state's payroll.
Cal-ISO's charter requires the group to look after the state's transmission grid to make sure the transmission grid is run as "reliably and cost-efficiently as possible," he says.
Guardino says he did not know what actions, if any, that Cal-ISIO or the state would take regarding the FERC decision.
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Added to the title!
Would you know anything about Carl Guardino?
Yep, without Ernest's ping list where would we be?
I am not keeping up with everything, can I share banners, ping lists anything with youun's!
Yup, these days FR is more like a chat room than the research engine that it used to be. Sigh...
Well regardless, the demise of the Cal-ISO was still posted first on FR, 24 hours before the media picked it up.
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