By -- Source, the Contra Costa Times
High Voltage Maintenance Training Online
Our customized live online or in‑person group training can be delivered to your staff at your location.
- Live Online
- 12 hours Instructor-led
- Group Training Available
The audit found that the California Independent System Operator has been compromised by a lack of independence, and that there is an overwhelming perception among energy companies that the governor controls the board.
Though it concentrated on the ISO's operations, the audit also found fault with generators for maximizing profits last year at the expense of the long-term health of their industry.
"To jeopardize the very business we depend on for the benefit of this quarter's bonus is surely not a trait of responsible management," the audit noted.
Commissioned by the Federal Energy Regulatory Commission, the audit looks at ways to improve the California energy markets and concludes that one of the first steps should be to replace the ISO board, which was formed last year as one of Davis' first moves to address what was at the time a crisis that was careening out of control.
That board did a good job during the worst of the crisis but its time is past, according to the report.
"Despite fair and strong leadership by its chairman and professional efforts by its members, the overall results have led to a series of major problems," the audit said.
In particular, the audit found that ISO officials were pressured to provide state energy buyers with access to key market information; the ISO has failed to act on meaningful long-term planning and board members do not understand important but complex issues.
Although ISO officials have stopped providing information to buyers in the state's energy-buying organization, they continue to suffer from extreme wariness on the part of generators and traders who are convinced that they are unduly influenced by Davis.
Industry members have repeatedly asked FERC to reform the ISO, and one industry spokesman said he hopes the audit's findings lead to a federal order to disband the board.
"It was an overriding displeasure (on the part of industry members) with the way things were being run at the ISO that they decided to do an audit," said Gary Ackerman, director of the Western Power Trading Forum.
"It's mismanagement at the highest level and it filters down to every element of the grid," Ackerman added.
Davis spokesman Steve Maviglio said the governor would consider the audit's findings, but that he believes the board ought to remain in place until the state's electricity picture is more stable.
"He believes the board of governors ought to be accountable to the people of California and not the generators," Maviglio said.
FERC officials had no comment on the 115-page audit, which was done by Vantage Consulting Inc.
ISO spokesman Gregg Fishman said the ISO was pleased with the praise that the audit had for the organization's ability to perform well under extreme pressure but beyond that had no comment.
"We're still digesting the audit," he said.
The ISO controls the flow of electricity on the grid used by customers of Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. Its decisions and orders determine the reliability of electricity and the ability of generators and traders to gain access to the market.
Before the state's electricity crisis began bubbling to the surface in the summer of 2000, the board was run by "stakeholders," who were mostly business interests but also a couple of environmentalists and consumer group representatives.
When the market started going haywire, that board became paralyzed and Davis, with the backing of the Legislature, replaced it with a much smaller board made up of his own appointees.
