Electricity: Power Exchange.

Assembly Member Petrie-Norris proposes abolishing California's Power Exchange and restructuring oversight of the state's electricity market through comprehensive amendments to the Public Utilities Code.

The legislation eliminates the nonprofit Power Exchange, which currently operates competitive electricity auctions, while preserving and strengthening the Independent System Operator's role in managing transmission access and reliability. The bill establishes a five-member Electricity Oversight Board to monitor the Independent System Operator, serve as an appeals body for its decisions, and investigate wholesale electricity market issues affecting California consumers.

Under the amended code, electrical corporations must transition from regulated retail service providers to competitors in the generation market. The bill maintains existing cost recovery mechanisms through 2001 for utilities' generation-related assets and obligations, including power purchase contracts and employee transition costs. These charges apply on a nonbypassable basis to prevent individual customer rate increases. The legislation preserves the goal of achieving a 20 percent rate reduction for residential and small commercial customers by 2002 compared to 1996 levels.

The bill requires the Independent System Operator to incorporate as a nonprofit public benefit corporation subject to state oversight while coordinating with federal regulators on transmission access and pricing. It establishes a phased implementation of direct customer choice in electricity suppliers, to be completed by 2002, with earlier eligibility for customers sourcing at least half their power from certified renewable providers.