The Electricity Oversight Board (EOB) was established as part of California's effort to restructure the electricity market in 1996. The goal of the EOB was to ensure that wholesale energy markets and the electric transmission system function reliably and provide electricity at fair costs to California's consumers and businesses. The EOB's primary means of pursuing these goals has been to monitor electricity markets in order to guard against price manipulation by electricity producers, and to pursue refunds of alleged overcharges during the energy crisis of 2001.

In recent years, other entities have taken on major responsibilities related to the activities engaged in by the EOB. The California Independent System Operator has developed extensive procedures for market oversight, and the California Public Utilities Commission has intervened with Federal Energy Regulatory Commission and the courts in pursuit of refunds due to overcharges. In view of these developments, the continued operation of the EOB is no longer necessary. Therefore, the Administration has reduced the current year budget with the intent that the EOB cease operations on April 1, 2008, and the 2008-09 proposed Governor's Budget contains no further funding for the EOB.