California Gov. Gavin Newsom reiterated support for the proposed bill that would allow CAISO to relinquish market governance to an independent “regional organization” (RO), saying during a July 31 press conference that the legislation can reduce electricity costs and improve reliability.

In a LinkedIn post, the California Community Choice Association (CalCCA) said the governor expressed his support for SB 540 during a press conference. The governor’s office confirmed with RTO Insider that Newsom supports the efforts but noted that it “may not be SB 540 itself — could be a different vehicle.”

Newsom commented on regionalization efforts during the press conference, saying “this is a very significant legislative effort that can actually impact the cost of electricity in this state, improve our reliability, mitigate the impacts on our access to supply, particularly during extreme heat events.”

Newsom said the effort is about California’s ability to maintain its authority to set its own “low-carbon green growth goals,” and referenced amendments aimed at limiting the federal government’s ability to intervene in those.

The governor praised the coalition behind the bill, saying it “is really with few precedents. I’m not aware of a more diverse and large coalition I’ve seen on an issue of energy in some time.” Backers of the bill include the state’s labor unions and publicly owned utilities, groups that strongly opposed previous efforts to “regionalize” CAISO, as well as CalCCA.

“I am supportive, directionally, and I look forward to the final product … that lands on my desk subject to final review of any amendments that will be made over the course of the next few weeks,” Newsom said.

Newsom previously signaled his support for efforts to expand California’s involvement in regional electricity markets. When RTO Insider asked the offices of Newsom and Assembly Speaker Robert Rivas (D) about the potential for other strategies that don’t include SB 540, including adding the bill’s provisions to another proposed piece of legislation, both declined to comment.

However, a source in the governor’s office told RTO Insider that the administration will not take the lead on the bill but will defer to the legislature.

SB 540, which passed in the California Senate in June, was set for a first hearing in the Assembly’s Utilities and Energy Committee on July 16 but was delayed until after the legislature’s summer break at the request of the bill’s author, Sen. Josh Becker (D). (See Calif. Pathways Bill Delayed After Orgs Withdraw Support, While Newsom Signals Backing for Effort.)

The delay came after 21 organizations pulled their support for the bill following an amendment that would establish a new Regional Energy Market Oversight Council responsible for ensuring CAISO’s participation in the regional energy market “serves the interests of the state.” The new council would be authorized to mandate withdrawal if those interests are compromised.

The coalition requested lawmakers remove the amendment, stating “the language in this section mandates the withdrawal of California entities from the market without exception or discretion, which is unacceptable.”

SB 540 is a result of the work of the West-Wide Governance Pathways Initiative, an effort to create an independent RO to govern CAISO’s Western Energy Imbalance Market and the soon-to-be-launched Extended Day-Ahead Market (EDAM). The effort aims to assuage concerns that the ISO — whose Board of Governors are appointed by California’s governor — would act primarily in the state’s interest.

Robert Mullin contributed to this story.