BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 426 - Richman Hearing Date:
June 24, 2003 A
As Amended: May 8, 2003 FISCAL B
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DESCRIPTION
Current state policy encourages the installation of photovoltaic
(PV) panels on state buildings, and provides a subsidy for the
installation of PV systems.
This bill requires the Department of Water Resources (DWR) to
establish a program for leasing space above State Water Project
(SWP) conveyance facilities for installing PV panels.
This bill limits DWR to charging only the actual cost incurred
by the department for installing the panels.
This bill requires all DWR PV leases to be conditioned so that
any electricity generated during a Stage 3 emergency may not be
sold out of state.
BACKGROUND
The SWP is a series of reservoirs, dams, aqueducts, and
powerhouses which transfer water from Northern California down
through the Central Valley, primarily to irrigation districts
and the Metropolitan Water District of Southern California.
Costs of building and operating the SWP are born exclusively by
its users, not state taxpayers. Because it's one of the primary
means of supplying southern California with water (the others
being the Los Angeles aqueduct to the Owens Valley and the
Colorado River aqueduct), the SWP is considered critical
infrastructure for homeland security purposes.
COMMENTS
1.Turning An Option Into A Requirement . Nothing in current law
precludes DWR from allowing PV panels to be installed over the
SWP, but to date, DWR hasn't embarked on any such project.
This bill requires DWR to develop a program authorize private
entities to lease space above appropriate conveyance
facilities for the installation of PV panels.
What's unclear is whether this requires DWR to develop a
program to allow a private entity to lease space above any
part of the SWP that the entity wants, even if DWR believes
such a lease would jeopardize the function of the SWP.
If the goal is to put in place policies and procedures for
handling requests by developers to install PV panels, and to
allow DWR to deny such requests should it determine a project
isn't appropriate, the author and committee may wish to
consider amending the bill to reflect this by:
Page 2, Line 2: Replace "program to authorize private
entities" with "procedure for evaluating whether".
Page 2, Line 5: At the end of the sentence add, "Upon
request, the DWR shall evaluate proposals for installing
solar photovoltaic systems. The cost of such evaluation
shall be paid by the requestor."
1.DWR's Prior Experiences . DWR has had some experience with
allowing third parties to use SWP facilities for energy
purposes. Apparently, SWP negotiated agreements with wind
energy producers to install facilities near the SWP aqueduct
as it approaches the windy Altamont area. That project didn't
work out as envisioned and cost SWP contractors more than $3
million in litigation expenses.
One such arrangement that has worked out is a request to use
the SWP right-of-way by a telecommunications company in the
early 1990's. The company was allowed to install fiber optic
cable in exchange for in-kind communications and surveillance
services by the company.
2.Requiring The SWP To Subsidize A Private Entity? Because the
cost of the SWP is paid for directly by the SWP contractors,
there's an incentive for the SWP contractors to allow
additional uses of the SWP assets as a means of defraying
expenses.
In the case of the arrangement with the telecommunications
company, the SWP recovered much more than its cost to provide
the right-of-way. A similar circumstance arises when the
state negotiates market-based rate deals with cellular
companies that want to put cellular antennas on top of state
buildings to house cellular antennas. Allowing market-based
rates to be charged would provide an incentive to the seller,
give the SWP contractors an opportunity to reduce their costs,
and allow the SWP to compete with other property owners who
have space available for PV installations.
However, this bill precludes DWR from charging a private
entity that wants to put PV panels over the SWP any more than
the "actual costs incurred by the department." The author and
committee may wish to consider whether it's appropriate to
require the SWP to essentially provide its land for free and
subsidize a private entity that wants to install PV panels so
it can sell electricity at a profit for the benefit of its
shareholders and investors.
3.If You Offer it, Will They Come? The SWP is likely to be one
of the more costly locations for a company to install a PV
system. Access for builders and maintenance staff will be
very limited for safety and security reasons, access to
electric lines for distributing the generated electricity is
generally poor, and the plot of land where the PV system can
be installed is very narrow with an inconvenient wide,
slow-moving river right in the middle.
4.Double Referral . This bill is double-referred to Senate
Agriculture and Water Resources Committee.
ASSEMBLY VOTES
Assembly Floor (71-4)
Assembly Appropriations Committee (23-1)
Assembly Utilities and Commerce Committee
(9-2)
Assembly Water, Parks and Wildlife Committee
(12-5)
POSITIONS
Sponsor:
Author
Support:
California Solar Energy Industries Association
Clean Power Campaign
Independent Energy Producers
Oppose:
Association of California Water Agencies
Randy Chinn
AB 426 Analysis
Hearing Date: June 24, 2003