BILL ANALYSIS
Appropriations Committee Fiscal Summary
426 (Richman)
Hearing Date: 8/28/03 Amended: 7/10/03
Consultant: Lisa Matocq Policy Vote: A & W 10-2
E, U & C 5-2
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BILL SUMMARY:
AB 426 requires the Department of Water Resources (DWR) to
establish a program to lease space above the state water
project to private entities for the purpose of installing
solar panels to generate electricity.
Fiscal Impact (in thousands)
Major Provisions 2003-04 2004-05
2005-06 Fund
DWR Increased of costs of $280-300 annually,
General/
offset by lease revenues
Various
STAFF COMMENTS: SUSPENSE FILE.
The bill, among other things, requires DWR to, upon
request, evaluate proposals for installing solar
photovoltaic systems. The requester pays for the
evaluation. It also allows requires DWR to recover its
costs from lease revenues.
DWR leased space to wind energy producers to install
facilities in the Altamont area. The arrangement resulted
in litigation which, to date, has cost state water project
contractors more than $3.5 million. DWR also negotiated an
agreement with a telecommunications company to use the
state water project right-of-way to install a fiber optic
cable, in exchange for communications and surveillance
services by the company. Apparently, this arrangement has
been successful.
Recent author amendments reduce costs by (1) requiring,
rather than authorizing, DWR to charge lease fees that are
at least sufficient to cover its costs, (2) clarifying that
the lessee is responsible for connecting the solar panels
to the grid, and (3) requiring that contracts include a
hold harmless agreement protecting the state from liability
arising out of any injury or damage resulting from the
installation, operation or maintenance of the solar panels.
STAFF RECOMMENDS that the bill be amended to require that
DWR negotiate lease revenues based on fair market value.