Part II: Reflecting on CAISO’s 25th Anniversary

Prepared by By Ziad Alaywan, P.E.

Soon will be the silver anniversary of the California ISO. It was 25 years ago, on March 31, 1998, that the ISO ushered in a new era as one of the first fully competitive wholesale energy markets in North America.

There was an air of excitement within the major utilities in California, and many of us including me took a hard look at our careers, gauging the risks and benefits of joining what would be called the historic ISO Start-up Team. We knew there was no guarantee that competition in the wholesale electricity market would work. It was a new frontier. Some called it the Wild West.

I believed in markets, and, for me, it was not a tough decision to leave PG&E. In October 1996, I left my position as a real-time manager and signed a two-year contract with the Governor’s Office to help get the ISO running. My utility colleagues thought I had lost my mind. However, I accepted the challenge because I believed a well-designed ISO would be beneficial to ratepayers, suppliers, and utilities.

My first assignment was to find a location for the control center within 18 months. Former ISO Communications Director Stephanie McCorkle, also part of the start-up team, told people the term “Ziad” became synonymous with excruciatingly long troubleshooting sessions where the prerequisite was a Teflon bladder because there were no bathroom breaks allowed. The first Chair of the ISO Board of Governors, Jan Smutny-Jones, said in press release, “Few organizations have been built from scratch in the time frame that the Cal-ISO was completed. It went from ink on paper to a dynamic, multifaceted operation less than a year after incorporation. All Californians should be justly proud of this achievement.”; Little did we know that would be the easy part.

One thing that most people forget is the primary mission of the ISO was not reliability, as local utilities did a good job keeping the lights on. The objective was to open the market and allow competition.

It is a good thing we celebrated our successes along the way because there were many more painfully long meetings ahead. Soon after the ISO was incorporated, I was one of the first employees. We hired hundreds of mostly ex-utility Staff just as eager as the start-up team to make sure the ISO remained a solid industry leader.

As I look back on the accomplishments, the risk was worth it as we were able to obtain state, federal and utility certification and completed the implementation in record time. I think I speak for the entire start-up team when I say this was the most memorable time in our careers. It was a true honor to be part of this incredible group of committed tireless advocates for competitive markets. Sacrifices were made and our families deserve a lot of credit for supporting us through this remarkable period. The ISO proved to be mostly what I dreamed and hoped it would become. I say “mostly” because it seems that the ISO is still struggling with its identity and trying to establish what and who they are. Are they a state agency? Are they independent or are they a fully regulated federal entity, destined to be a regional organization?

Despite the identity question, this objective was accomplished. So, congratulations to the ISO on a job well done!