CA Joint Legislative Audit of ISO/PX Begins
California's State Auditor General formally began contacting the state's
nonprofit electric grid operator (Cal-ISO) and wholesale spot power market
(Cal-PX) Wednesday in a state legislature-ordered investigation that could
lead to the merger of the two entities. The state's electricity price spikes
and supply shortfall this summer prompted legislative action in August
ordering the probe.
"We will begin cooperation with the auditors," a spokesperson
for the power exchange (Cal-PX) said. There is no specific indication on
the time frame for the investigation, although the spokesperson said. "I
think they were going to turn that around quickly (by Dec. 1)."
State Sen. Steve Peace, the outgoing lawmaker who was the chief legislative
author of the state's 1996 electric industry restructuring law, requested
the joint legislative investigation, saying that the summer's electricity
problems "raised serious concerns about the operation of the Cal-ISO
He specifically asked that the audit look into seven areas:
- Cal-PX and ISO structures to determine how their interactions affect
the state's wholesale power market.
- Determine how effective the two nonprofit organizations' own market
surveillance activities are.
- Determine if the two entities' market activities contribute to creating
- Assess the level and effectiveness of the ISO/PX coordination and how
it impacts the wholesale power market.
- Review the auction or bid methodologies used in the ISO and PX markets.
- Review the ISO's effectiveness in assuring reliability and minimizing
the cost of doing so.
"Recommend changes to the institutional structures or activities
of the ISO and PX, including, but not limited to, addressing whether the
organizations should continue as separate institutions and the potential
value, if any, of merging the two institutions or insuring that their operations
are more closely coordinated."
"Given that everyone is targeting other studies to the end of November,
I imagine that is the time frame because the legislature comes back for
a week at that time," the Cal-PX spokesperson said.
Richard Nemec, Los Angeles
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