BILL ANALYSIS
AB 515
Page 1
Date of Hearing: April 11, 2005
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
AB 515 (Richman) - As Amended: April 6, 2005
SUBJECT : State Water Project: solar photovoltaic panels and
systems.
SUMMARY : Requires the Department of Water Resources (DWR) to
establish a program to authorize private entities to lease space
above the State Water Project (SWP) to install solar panels and
generate electricity from those panels. Specifically, this
bill :
1)Requires DWR to establish a program to authorize private
entities to lease space above the SWP for the purpose of
installing solar photovoltaic (PV) panels and generating
electricity from those panels.
2)Requires DWR to evaluate proposals for installing PV systems
upon request and requires the requestor to pay the cost of the
evaluation.
3)Permits DWR to negotiate any level of compensation for an
agreement for the installation of solar PV panels and related
systems that is equal to or greater than the cost to the
department.
EXISTING LAW provides for DWR operation of the SWP.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office, the purpose of
this bill is to conserve resources and promote projects that
further that interest. According to the author, PV-generated
power correlates well with the utilities' daily load patterns
because the power is available when it is needed most during the
peak demand periods in the daylight hours. In addition,
secondary benefits include reducing evaporation from the canals
and attracting investment and jobs to California.
1)Background : The SWP extends more than 660 miles and includes
33 storage facilities, 20 pumping plants, 4 hydroelectric
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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. Costs of building and operating the SWP are borne
exclusively by its users, not state taxpayers. Because the
SWP is 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.
Solar electric or 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 electricity. PV modules have no
moving parts, and have a working life of 20-30 years.
2)Turning an option into a requirement : Nothing in current law
precludes DWR from leasing space over the SWP for PV panels.
To date, DWR has not received any requests and has not
embarked on any such project. This bill requires DWR to
develop a program to authorize private entities to lease space
above appropriate conveyance facilities for the installation
of PV panels. The author and committee may wish to consider
amending the bill to require the establishment of engineering
criteria or perform a study to determine the appropriateness
of the project or project location.
3)DWR prior experiences : DWR has leased space to wind energy
producers to install facilities in the Altamont area. DWR also
negotiated an agreement with a telecommunications company to
use the SWP right-of-way to install a fiber optic cable in
exchange for in-kind communications and surveillance services.
4)The bill may assist the SWP with defraying operating expenses
or retiring bond debt : Because the cost of the SWP is paid for
directly by the SWP contractors, there may be an incentive for
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the SWP contractors to allow additional uses of the SWP assets
as a means of defraying expenses or generating revenue to
retire its bond debt. In the case of the arrangement with the
telecommunications company, the SWP recovered much more than
its cost in the in-kind arrangement by reducing its
telecommunications costs. According to DWR, all actual
revenues generated by the SWP must be applied toward retiring
the SWP construction bond debt. This bill does not preclude
DWR from charging market-based rates, which could provide an
opportunity to retire bond debt for the SWP.
RELATED LEGISLATION :
1)SB 1 (Murray Campbell) implements the Governor's Million Solar
Roof's initiative.
2)AB 1574 (Levine) creates the Solar Energy Peak Procurement
Act, which creates a declining rebate program to incentivize
the installation of new solar energy system on residential and
business properties in California.
3)AB 1383 (Pavley) creates a revolving loan program to fund
installation of new solar energy systems on low income
housing.
4)AB 426 (Richman) in the 2003 session would have required DWR
to establish a program for leasing space above SWP conveyance
facilities for installing PV panels. This bill was placed on
the Senate Appropriations Suspense File but was later amended
to perform another function.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
Coalition of California Utility Employees (CUE)
Analysis Prepared by : Gina Mandy / U. & C. / (916) 319-2083