Calif Officials Examine Cal-ISO, CalPX Merger 
  
09/21/2000 
Dow Jones Energy Service 
(Copyright (c) 2000, Dow Jones&Company, Inc.) 
LOS ANGELES -(Dow Jones)- California officials are examining the possibility 
of a merger between the state's Independent System Operator and the 
California Power Exchange. 
The state auditor's office met Monday with the ISO to look into the ISO's 
operations and its relationship with the CalPX, according to documents 
obtained by Dow Jones Newswires. 
The audit was requested by state senator Steve Peace, D-El Cajon, who 
believes a merger between the ISO and the CalPX would make California's 
electricity market more competitive, said Jan Smutny-Jones, chairman of the 
ISO Board of Governors. 
The ISO controls 75% of the state's electricity grid and real-time 
electricity market. The CalPX is the spot market where electricity is bought 
and sold in the state. 
Monday's meeting, which lasted approximately 1 1/2 hours, was largely 
introductory, said ISO legal counsel Charles Robinson. 
"There were five or six people from the auditor's office, and they talked 
briefly about the scope of the audit and the time frame. We provided 
information on how the markets work and the ISO's organizational structure," 
Robinson said. 
The auditor's office will meet with the ISO Monday for 4-5 hours for a 
"training session on ISO 101," Robinson said. Once the office has a sense of 
the ISO's activities, he said, a more intensive document and on-site review 
will take place. 
The audit is expected to be finished by spring, said state auditor Mary 
Noble. 
Senator Peace requested the audit in mid-August due to concern over high 
wholesale electricity costs and the doubling of electricity rates paid by San 
Diego customers. 
San Diegans are the first to pay market-based electricity rates under the 
state's 1998 deregulation law. A recent report by the Electricity Oversight 
Board and the California Public Utilities Commission showed that wholesale 
electricity prices in the state have increased 270% over the same period in 
1999. 
In his audit request, Peace said he also wanted to examine how effective the 
ISO and CalPX were at detecting and correcting market problems. 
Peace, who is running for California Secretary of State, is the architect of 
the state's deregulation law and has sponsored several bills to refine that 
law. 
-By Jessica Berthold, Dow Jones Newswires; 323-658-3761, 
jessica.berthold@dowjones.com 

Folder Name: Utilities, Electric: Retail Wheeling 
Relevance Score on Scale of 100: 56

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