AB 825: Independent System Operator: independent regional organization.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

(1)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 ISO’s governance structure, through changes to its bylaws or other corporate governance documents, will not become effective until the ISO, the Public Utilities Commission (PUC), the State Energy Resources Conservation and Development Commission (Energy 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 to use voluntary energy markets governed by an independent regional organization, only if specified requirements are satisfied. The bill would authorize the ISO, on or after January 1, 2028, 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 has adopted a resolution, as specified, finding that each of the specified requirements have been, or will be, adopted by the independent regional organization. The bill would require the PUC to make a determination through a formal decision in an existing or new proceeding that these requirements have been satisfied before electrical corporations participate in an energy market governed by an 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.

This bill would require the ISO to develop, publish, and annually update a report on certain activities of the ISO and, if applicable, an independent regional organization, as provided. The bill would require the chair of the board of governors and the chief executive officer of the ISO to annually appear before the appropriate policy committees of the Legislature to present the report, as specified.

(2)Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-customers during specified compliance periods. The program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all retail sellers procure a balanced portfolio of electricity products from eligible renewable energy resources, as specified, referred to as the portfolio content category requirements.

This bill would require the PUC and the Energy Commission to coordinate to revise any relevant rules, regulations, or guidance to ensure that the transition to a regional energy market governed by the ISO or the independent regional organization does not expand the types of transactions that meet the portfolio content category requirements, as compared to the transactions that would otherwise meet those requirements on December 31, 2025.

(3)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.

Sponsors

Sponsors by party (alphabetical): Democratic 3

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. September 19, 2025Chaptered by Secretary of State - Chapter 116, Statutes of 2025.
2. September 19, 2025Approved by the Governor.
3. September 13, 2025Enrolled and presented to the Governor at 1:30 p.m.
4. September 13, 2025Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 74. Noes 1. Page 3490.).
5. September 13, 2025Assembly Rule 63 suspended. (Page 3490.)
6. September 13, 2025Joint Rules 61(a)(14) and 51(a)(4) suspended. (Ayes 59. Noes 20. Page 3413.)
7. September 13, 2025In Assembly. Concurrence in Senate amendments pending.
8. September 13, 2025Read third time. Passed. Ordered to the Assembly. (Ayes 34. Noes 0. Page 3050.).
9. September 12, 2025Senate Rule 29 suspended. (Page 2961.)
10. September 12, 2025Joint Rule 10.5 suspended. (Ayes 29. Noes 8. Page 2958.)
11. September 12, 2025Read second time. Ordered to third reading.
12. September 11, 2025Assembly suspended Joint Rule 62(a). (Page 3312.)