BILL ANALYSIS AB 426 Page 1 Date of Hearing: April 22, 2003 ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE Joseph E. Canciamilla, Chair AB 426 (Richman) - As Introduced: February 14, 2003 SUBJECT : State Water Project: solar panels. SUMMARY : Would require the Department of Water Resources (DWR) to establish a program which would allow private entities to lease space above State Water Project (SWP) conveyance facilities for solar panels. Specifically, this bill : 1)Requires DWR to establish a program to authorize private entities to lease space above SWP conveyance facilities deemed appropriate for the installation of solar panels used to generate electricity. 2)Authorizes DWR to impose charges that cover only the actual cost incurred to implement the program. FISCAL EFFECT : Unknown. COMMENTS : The SWP extends more than 660 miles and includes 33 storage facilities, 20 pumping plants, 4 hydroelectric plants, and 4 pumping-generating plants. The SWP originates on tributaries of the Feather River and extends down the Sacramento River, through the Delta and San Joaquin Valley and over the Tehachapi Mountains into Pyramid and Castaic lakes in Southern California. The SWP supplies drinking water to 22 million Californians, and irrigation water for 750,000 acres of farmland. Solar electric or photovoltaic (PV) systems convert some of the energy in sunlight directly into electricity. PV cells are made primarily of silicon, the same semiconductor material used for computers. When the silicon is combined with one or more materials, it exhibits unique electrical properties in the presence of sunlight. Electrons are excited by the light and move through the silicon. This is known as the PV effect and results in direct current (DC) electricity. PV modules have no moving parts, and have a working life of 20-30 years. A PV system includes an array (a group of panels which consist of modules that are wired together), and other equipment like AB 426 Page 2 charge controllers, storage (batteries) and tracking and monitoring equipment, collectively called balance of system (BOS) components. The author states that it has been the policy of the state to maintain a diversified energy portfolio in order to minimize risk during periods of volatile fuel prices. Technological advances have increased overall efficiencies and lowered costs of solar technology, and solar power is available when it is needed at peak demand periods, during daylight hours. The author believes that many miles of the SWP's open canals and pipelines could be suitable for the deployment of solar electricity generating facilities. A secondary benefit mentioned would be to reduce evaporation from the canals and attract investment and jobs to the state. The Association of California Water Agencies (ACWA) is in opposition to the bill. ACWA maintains that the placement of solar panels above SWP conveyance facilities will interfere with the operation and maintenance of those facilities. Further, ACWA believes that the placement of these solar panels would compromise SWP system security measures. ACWA suggests that there are multiple other locations owned by the State that would be more appropriate for the placement of solar panels such as placement on the roofs of state buildings where there is easy access to the electrical distribution grid. In response to an inquiry by committee staff, DWR states that they have the current authority to lease parts of the SWP, but have never been approached by solar energy companies for use of the SWP. Currently, the issue of placement of any structure within the SWP right-of-way is one that DWR evaluates on a case-by-case basis. Considerations include, among other things, potential adverse effects on Aqueduct facilities, potential impacts to water operations and water deliveries, DWR personnel safety while conducting maintenance activities, potential environmental impacts, and the ability of DWR to maintain water system security. Committee staff notes that while the bill authorizes DWR to impose charges to cover the actual cost incurred to implement the program, the charges would not cover potential increased costs for other activities in and around the SWP right-of-way, such as maintenance, that may be impacted by the presence of PV AB 426 Page 3 system equipment. By not allowing DWR to negotiate a market price for space leasing SWP contractors would be required to absorb any additional costs. The California Solar Energy Industries Association (CAL SEIA) states that the bill would make available space in areas of the state where the best solar resource in the U.S. exists. CAL SEIA notes that the California Aqueduct runs directly through an area near Barstow where the existing Solar Electrical Generating Systems are currently producing 354 megawatts of solar generated electricity, and that this area has the highest solar resource in the entire world, making it an ideal location for installing PV systems. REGISTERED SUPPORT / OPPOSITION : Support California Solar Energy Industries Association Independent Energy Producers Opposition Association of California Water Agencies Analysis Prepared by : Kathy Mannion / W., P. & W. / (916) 319-2096