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
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          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