BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 568


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          Date of Hearing:   April 8, 2015


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                              Brian Maienschein, Chair


          AB 568  
          (Dodd) - As Introduced February 24, 2015


          SUBJECT:  Reclamation District No. 108:  hydroelectric power.


          SUMMARY:  Authorizes Reclamation District No. 108 to generate  
          and sell hydroelectric power.  Specifically, this bill:  


          1)Extends to Reclamation District No. 108 (RD 108) the authority  
            already granted to Reclamation District No. 1004 (RD 1004), to  
            do the following:


             a)   Construct, maintain and operate a plant and transmission  
               lines for the generation of hydroelectric power;


             b)   Sell the power generated to a public utility or public  
               agency engaged in the distribution, use, or sale of  
               electricity; and,


             c)   Lease the hydroelectric plant, transmission lines, and  
               related facilities to a public utility or public agency  
               engaged in the distribution, use, or sale of electricity.  










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          2)Requires proceeds from the sale of electricity to be utilized  
            to retire any time warrants issued for the construction of the  
            facilities and for the powers and purposes for which the  
            district was formed. 


          3)Allows the construction of the plant, transmission lines and  
            other facilities to be financed by the issuance of time  
            warrants and allows the RD 108's Board of Trustees (Board), by  
            resolution, to only use the proceeds from the hydroelectric  
            power plant, instead of assessments, to pay for the time  
            warrants.  Allows the Board to pledge the plant, transmission  
            lines, and other facilities, and revenue as the sole security  
            for the payment of the time warrants.  


          4)Prohibits the direct sale of hydroelectric power to customers  
            other than a public utility or public agency. 


          EXISTING LAW:  


          1)Establishes powers and duties for reclamation districts. 


          2)Authorizes a reclamation district to levy assessments and  
            allows the board of trustees to each reclamation district to  
            issue time warrants.   


          3)Authorizes Reclamation District No. 1004, in conjunction with  
            Colusa County, to construct, maintain, and operate a plant for  
            the generation of hydroelectric power.


          4)Allows RD 1004 to lease the hydroelectric plant, transmission  
            lines, and related facilities and to sell power generated to a  
            public utility or public agency engaged in the distribution  








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            use or sale of electricity. 


          5)Prohibits RD 1004 from selling the power directly to the  
            customer other than to a public utility or agency.  


          6)Allows the construction of the plant, transmission lines, and  
            other facilities to be financed by the issuance of time  
            warrants and allows the RD 1004 Board of Trustees, by  
            resolution, to only use the proceeds from the hydroelectric  
            power plant, instead of assessments, to pay for the time  
            warrants.  Allows the RD 1004 Board of Trustees to pledge the  
            plan, transmission lines, and other facilities, and revenue as  
            the sole security for the payment of the time warrants. 


          7)Requires proceeds from the sale of electricity to be utilized  
            to retire any time warrant issued for construction of the  
            facilities and otherwise for the powers and purposes for which  
            the district was formed. 


          FISCAL EFFECT:  None


          COMMENTS: 


          1)Background.  Existing law allows several types of special  
            districts to generate hydroelectric power including water  
            conservation districts, county water districts, municipal  
            water districts, irrigation districts, and community service  
            districts.  Current law allows these districts to use the  
            hydraulic force of the water they deliver to generate  
            electricity.  In all of these examples, the generation of  
            hydroelectric power is the secondary product of the district's  
            primary purpose.  









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            In addition to including the generation of hydroelectric power  
            on the list of powers and duties for several special district  
            principal acts, the Legislature has also authorized individual  
            special districts to generate and sell hydroelectric power.   
            The Legislature granted authority to RD 1004 to generate and  
            sell hydroelectric power in 1986. 

          2)Bill Summary.  This bill extends, to RD 108, the authority  
            currently granted to RD 1004 to construct, maintain, and  
            operate a plant for the generation of hydroelectric power.   
            This bill also allows RD 108 to sell the hydroelectric power  
            and to lease related facilities to a public utility or public  
            agency that is engaged in the use or sale of electricity.   
            This bill is sponsored by the Northern California Water  
            Association.  


          3)Author's Statement.  According to the author, "RD 108 is  
            responsible for water supply, levee maintenance, drainage and  
            flood control within its boundaries.  In 2009, RD 108  
            completed construction of a 386KW DC solar generation facility  
            on seven acres adjacent to the District's Sycamore Slough Pump  
            Station.  Water and recycled water enters and leaves the  
            District through the pumping facilities along the Sacramento  
            River.  The pump station is used to recycle water within the  
            district boundaries and is partially powered by the solar  
            facility.  Energy is a significant operating expense for RD  
            108.  Potential future water storage facilities in the  
            vicinity of RD 108 present opportunities for the District to  
            develop power from clean hydro-electric generation provided  
            that the District has the authority to construct, maintain,  
            and operate a hydroelectric facility."  

          4)RD 108.  RD 108 was formed in 1870 under the Reclamation  
            District Law of 1868.  According to the Colusa Local Agency  
            Formation Commission's Municipal Service Review in 2010, RD  
            108 began construction of irrigation canals and began pumping  
            plants in 1916, shortly after becoming the first reclamation  








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            district in California to deliver irrigation water.  RD 108  
            includes 74,000 acres and delivers water from the Sacramento  
            River to nearly 48,000 acres of farmland within southern  
            Colusa County and northern Yolo County.  

            RD 108 overlaps with the service area of the Knights Landing  
            Ridge Drainage District and the Sacramento River Westside  
            Levee District and provides administration for the two  
            districts.  RD 108 is also party to a joint powers authority  
            with Glenn-Colusa Irrigation District, Tehama-Colusa Canal  
            Authority, Maxwell Irrigation District, Glenn County, Colusa  
            County, and the Yolo County Flood Control and Water  
            Conservation District.  

          5)Local Agency Formation Commission (LAFCO).  As a special  
            district, RD 108 would need to get the approval of the Colusa  
            LAFCO in order to activate the powers contained in this bill.   
            The Cortese-Knox-Hertzberg Act establishes the process to  
            activate a latent power including passing a resolution by the  
            Board, holding a public hearing, and submitting a petition to  
            LAFCO which includes a plan for services and the estimated  
            cost of the new service.  

          6)Policy Consideration.  The Committee may wish to consider  
            adding a sunset date to this bill.  The Legislature allowed RD  
            1004 to generate and sell hydroelectric power almost thirty  
            years ago, yet they have never used the authority.  Without a  
            plan in place for either district, the Committee may wish to  
            include a sunset date which would allow the Legislature to  
            reconsider the necessity of this authority if it remains  
            unused for another ten years.  

          7)Arguments in Support.  Supporters argue that this bill would  
            provide RD 108 with the similar authority to generate and sell  
            hydroelectric power possessed by other entities providing  
            irrigation water, including irrigation districts and water  
            districts.  

          8)Arguments in Opposition. None on file. 








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          9)Double-Referral.  This bill is double-referred to the  
            Utilities and Commerce Committee. 

          REGISTERED SUPPORT / OPPOSITION:




          Support


          Northern California Water Association [SPONSOR]




          Opposition


          None on file




          Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958