California regulators want federal regulators to use new transmission rules "to prevent any further balkanization" of the California grid. "After all, such balkanization runs directly counter to the Federal Energy Regulatory Commission's long established and clearly enunciated policy in favor of unified grid operations" such as those of the California Independent System Operator, the California Public Utilities Commission stated November 22. State regulators were responding to FERC's invitation to comment on changes needed in the commission's open-access transmission tariffs. While federal regulators are concerned about transmission discrimination, that's not a problem in California because the major transmission owners participate in CAISO, the CPUC said. Problems do exist, however, in connection with the 20 percent of the state?s power provided by governmental entities that the commission does not regulate and that do not participate in CAISO. The latter group includes the Los Angeles Department of Water & Power - which has never participated in CAISO - and two agencies that have withdrawn from the grid operator's control by forming their own control areas - the Sacramento Municipal Utility District and the Western Area Power Administration. The Northern California Power Agency disagreed with the rosy picture the commission painted of unity within the grid operator's control area. It claims CAISO's failure to coordinate Pacific Gas & Electric maintenance outages forced the use of higher-cost replacement power. The remedy, the agency told FERC, is "true joint planning of the bulk transmission system" with the risk of an inadequate system being shifted to the transmission provider. To avoid further grid breakups, the CPUC called on FERC "to develop a set of disincentives and/or penalties" that will make it more difficult for entities to leave a grid operator. Those could include "hefty mandatory surcharges" on the use of an ISO-controlled grid by previous participants in that ISO. The CPUC also proposed incentives for entities that rejoin an ISO