Independent System Operator: independent regional organization: California Renewables Portfolio Standard Program.

Senators Becker and Stern's electricity market reform legislation authorizes the California Independent System Operator (ISO) to participate in voluntary regional energy markets while establishing new oversight mechanisms to protect state interests. The bill creates a Regional Energy Market Oversight Council, composed of key energy policy leaders, to approve or reject utilities' participation in these markets based on specific criteria including renewable energy requirements and ratepayer protections.

The legislation requires any regional market organization to maintain nonprofit status, respect state authority over energy policy, and provide public access to market data and decision-making processes. The ISO must retain its technical capability to operate energy markets independently and continue its existing responsibilities as a balancing authority. Regional market participation cannot begin before January 2028 and requires both ISO board approval and council authorization following public review.

To safeguard California's clean energy goals, the bill prohibits regional markets from establishing mandatory capacity requirements or requiring California utilities to subsidize out-of-state fossil fuel generation. It also clarifies renewable energy credit eligibility rules for resources outside California balancing authority areas, requiring either dynamic scheduling agreements or firm transmission rights to deliver power to the state. The ISO must study potential employment impacts of market integration by December 2026 and report biennially on implementation progress once markets launch.