Stacy Crowley, vice president of external affairs at the California ISO, summarized an ongoing governance initiative intended to create more independent, regional oversight for Western markets and explained how California legislation (SB540) connects to a longer‑term “step 2” pathway.

Crowley said the ISO evolved a joint governance model to include a Western Energy Markets governing body that shares authority with the ISO board. Under a step‑1 package approved last summer, the governing body’s role was elevated with a new mission emphasis on consumer interest and preservation of state and local authority, plus a dual‑filing dispute mechanism for FERC if the board and governing body disagree.

"We expect that trigger to be met very soon," Crowley said, referring to the step‑1 implementation trigger the ISO set (sufficient outside‑California load and geographic diversity among EDAM participants). If that trigger is reached, primary authority over market rules would shift toward the governing body, ISO staff said.

Crowley described step 2 as a possible transfer of market‑rule governance to a separate regional organization that would be independent of the ISO’s corporate structure while the ISO would continue to operate the market’s systems and control center. She said the step‑2 path is reflected in California Senate Bill 540, which authorizes tariff changes that would permit a regional governance arrangement but requires statutory criteria be met before the ISO’s board could approve a transfer.

ISO officials said SB540 passed the California Senate unanimously but that an amendment creating a five‑member regional oversight council was inserted in the assembly and drew objections from supporters of the original proposal. The ISO indicated it is working with California legislators and stakeholders to revise the bill language before the assembly’s committee deadlines.

The ISO said it will continue stakeholder outreach, retain existing independent market‑monitoring and surveillance structures, and revisit governance choices depending on implementation experience and the pace of EDAM expansion.