The state of California is disputing the legality of the Federal Energy Regulatory Commission’s (FERC) order to install new leadership at the agency that runs the state power grid. The July 17 directive from FERC directed the California Independent System Operator (ISO) to change its bylaws to provide a two-tier governing board, replacing a board that Gov. Gray Davis installed in January 2001.

According to Bill Lockyer, California state Attorney General, the ISO cannot amend its bylaws in the way dictated by FERC without directly violating California law. “In effect, FERC has ordered the ISO to either violate California law or change California law,” he wrote in a letter made available August 7. “The ISO may not do the former and cannot do the latter.”

Davis signed into law a bill replacing the original ISO board on Jan. 18, 2001. After reviewing the board Davis had selected, FERC ruled that the new members were “insufficiently independent to operate its interstate facilities.” California now has until Jan. 1, 2003, to create a two-tiered board composed of independent members, who would have sole decision-making power, and stakeholders in the grid-like generators, utilities, and consumer groups, who would advise the independent board.