The California Independent System Operator (Cal-ISO) is an unbiased, not-for-profit corporation that on March 31, 1998 assumed computerized command of the long-distance, high-voltage power lines that deliver electricity throughout California and between neighboring states and Mexico.

The power grid, a transmission system made up of high-voltage power lines supported by 100 to 150 foot towers, delivers 164 billion kilowatt hours of electricity each year, or enough power to serve the annual energy needs of 27 million current customers of investor-owned utilities. In addition, the grid will transport significant amounts of power for others in the region.

The mission of the California ISO is to ensure the power grid is safe and reliable and that there is a competitive market for electricity in California. Increased competition should ultimately lower the cost of purchasing electricity. Cal-ISO is key to enabling Californians to shop for power and creating open competition in the electricity industry.

California is the first state in the nation to offer large-scale retail choice and a competitive generation market. The Cal-ISO was created by the state in 1996 to act as the electricity traffic control center for California's "electron highway", covering 124,000 square miles or three-quarters of the state. Power plants meeting up to 45,000 megawatts of peak demand will be connected to Cal-ISO, making Cal-ISO's control area the second largest in the U.S. (Pennsylvania-New Jersey-Maryland Interconnection is the largest) and fifth largest in the world.

Some of the first participants in the Cal-ISO will be the state's three investor-owned utilities (IOUs): Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. These utilities are mandated by landmark state legislation (AB 1890, September, 1996) to release control, but not ownership, of their long-distance transmission lines to the Cal-ISO. The legislation guarantees that all power marketers (non-utility companies generating or brokering electricity) who wish to do business in California will have the opportunity to generate and/or deliver power over the state's electricity grid. These companies will use Scheduling Coordinators to schedule their deliveries of electricity over the Cal-ISO controlled power grid.