FERC Sues State Over Defiance on Cal-ISO
The Federal Energy Regulatory Commission sued California on Friday in U.S. District Court for defying its order to dissolve the board that oversees much of the state’s electricity grid.
The suit comes nine days after Gov. Gray Davis’ appointees to the board of the California Independent System Operator voted to ignore a FERC order that they disband and create a board free of political influence.
Davis press secretary Steven Maviglio said Friday afternoon that the state had not been notified of the lawsuit. But Kevin Cadden, director of external affairs for FERC, said the suit had been filed in federal court in Washington.
“It would be inappropriate of the agency to comment until such time as the Cal-ISO has had the opportunity to review our filing,” said Cadden.
The suit asks the court to compel California to follow an order issued last month by FERC, the nation’s top regulator of wholesale electricity.
FERC called the existing Cal-ISO board of five Davis appointees “insufficiently independent” to operate transmission lines that cross state lines.
The agency ordered Cal-ISO to create a two-tiered governing body, with an independent decision-making board advised by a panel of people with a stake in the operation of the transmission grid, such as power plant owners, consumer advocates and utility officials.
Davis’ four appointees--there is one vacancy--voted unanimously Aug. 7 to ignore the FERC order. State officials said then that the dispute seemed destined for court.
Davis addressed his appointees before the vote, calling the order “nothing less than a hostile takeover of California’s electricity grid by the federal government.”
The governor blames the federal commission for failing to step in aggressively when exorbitant prices and power shortages plagued the state’s electricity market in 2000 and 2001. California has accused private power sellers, who are ultimately regulated by FERC, of rigging the market to keep prices high.
On a related issue, Davis is waiting for FERC to rule on California’s request for $9 billion in refunds from various companies accused of overcharging.
During the power crisis, the Cal-ISO board had 26 members representing various interests, and it bogged down in lengthy debates over whether to cap the price of electricity.
Davis signed a bill in January that replaced that board with his own appointees. FERC questioned his authority to do so, but did not challenge him until last month.
California and FERC have been battling over the Cal-ISO board since the transmission agency was created in 1997.
Under the deregulation plan designed by California and approved by FERC, Cal-ISO is to serve as an unbiased traffic cop for the movement of electricity along an electricity grid serving three-quarters of California. The state’s regulated utilities gave up control of the grid as part of the deregulation plan.
