Relates to providing oversight and monitoring the operations of an independent system operator

BILL NUMBER:S665

Title of bill

An act to amend the public service law, in relation to providing oversight and monitoring the operations of an independent system operator

Purpose or general idea of bill

This legislation intended to provide consumer representation at an independent system operator approved by the United States federal energy regulatory commission to operate in the state and to administer and monitor wholesale electricity markets. The bill addresses issues related to the makeup of the Board of Directors, consumer participation in the ISO functioning process, market transparency and monitoring by the Public Service Commission.

Summary of specific provisions

Section 1(a) provides definitions for "independent systems operator" and "end use sector member".

Section 1(b) authorizes and directs the Public Service Commission to provide oversight and monitor the market operations of an independent system operator.

Section 1(c) requires bid disclosure and bidder identification no later than three months after transactions in each of the markets facilitated by an independent systems operator.

Section 1(d) provides for appointments to an independent system operator's board of directors. The Governor and the respective leaders of the majority parties in the State Senate and Assembly will each have the authority to appoint one consumer representative to the board.

Section 1(e) requires an independent system operator to retain the services of a consumer liaison. The consumer liaison will be responsible for communicating with consumer representatives on the Board and market participants on a regular basis for the purposes of providing information on developments in working groups/sub-committees and proposals that may have ramifications on consumers. The liaison will also be responsible for communicating consumer concerns in internal independent system operator meetings.

Section 1(f) will require the Public Service Commission to monitor and assess independent system operator finances, market performance, market reliability, competition and the extent to which the markets are advancing the state's goals for fuel diversity and efficiency. The Commission will be required to report to the Legislature and the Executive at least annually.

Justification

The health, welfare, and prosperity of all New York residents require the provision of adequate, efficient, reliable, environmentally sound, and lowest-cost electric service at affordable prices. Many of the decisions that govern the sale, purchase and transmission of

electricity in New York State are made by a federally approved independent system operator with limited input from New York consumers.

The intent of this legislation is to recognize and remedy the fact that individual action by residential consumers, small businesses and farmers for the purposes of participating in independent system operator processes and communicating their views is rendered impracticable by reason of the disproportionate expense of taking such action.

Independent system operator proceedings are offered in a way that minimizes public participation. It is incredibly difficult for typical New Yorkers to remain on top of the day to-today activities of an independent system operator. In many instances, the only people who can attend and participate in the decision making processes of an independent system operator are most likely those whose job depends on it, representatives of generators, transmission owners, utilities and other special interests.

Requiring consumer representation on the board of directors, a consumer liaison and increased transparency will spur a more open and accountable independent system operator processes that may yield creative socially responsible solutions to the difficult issues associated with electricity markets in New York State.

Prior legislative history

None.

Fiscal implications for state and local governments

None.

Effective date

This act shall take effect immediately.