BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 568


                                                                    Page  1





          Date of Hearing:  May 11, 2015


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                Anthony Rendon, Chair


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


          SUBJECT:  Reclamation District No. 108:  hydroelectric power


          SUMMARY:  This bill authorizes Reclamation District No. 108 (RD  
          108) to construct and operate a hydroelectric power plant.   
          Specifically, this bill:  


          a)Authorizes RD 108 to do the following:


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


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


             3)   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. 










                                                                     AB 568


                                                                    Page  2





          a)Allows the construction of the plant and transmission lines to  
            be financed by the issuance of time warrants and allows the RD  
            108 Board of Trustees, by resolution, to only use the proceeds  
            from the hydroelectric power plant, instead of assessments, to  
            pay for the time warrants.  


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


          c)Allows the RD 108 Board of Trustees to pledge the plant,  
            transmission lines, and related facility and the revenues from  
            the operation of the hydroelectric plant as the sole security  
            for the payment of the time warrants.


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


          EXISTING LAW:  


          1)Authorizes Reclamation District No. 1004 (RD 1004), in  
            conjunction with the County of Colusa, to construct, maintain,  
            and operate a plant for the generation of hydroelectric power.  
             (Water Code Section 50906)


          2)Allows RD 1004 to lease the hydroelectric plant, transmission  
            lines, and related facilities, and sell the power generated to  
            a public utility or public agency engaged in the distribution,  
            use, or sale of electricity.  (Water Code Section 50906)


          3)Allows the construction of the plant and transmission lines to  








                                                                     AB 568


                                                                    Page  3





            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.  (Water Code  
            Section 50906)


          4)Requires proceeds from the sale of electricity to be utilized  
            to retire any time warrants issued for construction of the  
            facilities and otherwise for the powers and purposes for which  
            the district was formed.  (Water Code Section 50906)


          5)Prohibits RD 1004 from selling the power directly to the  
            customer, other than to a public utility or public agency.   
            (Water Code Section 50906)


          FISCAL EFFECT:  Unknown.


          COMMENTS:  


           1)Author's Statement:   "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."  








                                                                     AB 568


                                                                    Page  4








           2)Background:   Reclamation Districts are districts formed to pay  
            for the cost of reclaiming land that may be subject to  
            frequent overflow or flooding, such as swamps, salt marshes,  
            or tidelands.  Reclamation Districts provide a means for  
            counties to finance the reclamation of the land for future  
            use, such as creating facilities for land irrigation or sewage  
            and waste removal.  Reclamation Districts are formed by a  
            petition of at least 50% of the owners of the assessed value  
            of land in the area.  The petition is then presented to the  
            county which notifies all affected property owners and hold  
            public hearings to consider the petition.  A vote of all  
            landowners will then be conducted on whether or not to form  
            the Reclamation District.



           3)Reclamation District No. 108:   RD 108 was formed in 1870 under  
            the Reclamation District Law of 1868.  RD 108 is located along  
            the western edge of the Sacramento River and delivers water to  
            nearly 48,000 acres of farmland within the southern Colusa  
            County and northern Yolo County.  RD 108 was created for the  
            purpose of forming a district to build levees and reclaim land  
            subject to periodic overflowing or flooding.  RD 108 is  
            surrounded by levees on three sides and works in collaboration  
            with the Sacramento River Westside Levee District and the  
            Knights Landing Ridge Drainage District to maintain over 90  
            miles of levees.  
             


           4)Sites Project Joint Powers Authority:   In August 2010, RD 108,  
            the Glenn-Colusa Irrigation District, the Tehama-Colusa Canal  
            Authority, the Maxwell Irrigation District, the County of  
            Glenn, the County of Colusa, and the Yolo County Flood Control  
            and Water Conservation District created a joint powers  
            authority (JPA) to pursue the development and construction of  








                                                                     AB 568


                                                                    Page  5





            the Sites Reservoir Project.  The Sites Reservoir Project,  
            also referred to as North of Delta Offstream Storage, is a  
            proposed project between the Bureau of Reclamation and the  
            California Department of Water Resources, in cooperation with  
            other federal, state, and local agencies, to increase surface  
            storage north of the Sacramento-San Joaquin Delta.  Due to the  
            location of each member of the JPA relative to the Sites  
            Reservoir, the JPA provides a way for each member to help  
            design, acquire, construct, manage, govern, and operate the  
            project for the purposes of improving water management and  
            restoring the ecological health of the Sacramento-San Joaquin  
            Delta and the Sacramento River watershed.



           5)Hydroelectric Power Plant:   Existing law provides RD 1004  
            authority to generate hydroelectric power.  This authority was  
            granted by statute almost 30 years ago.  Although there is  
            currently no hydroelectric plant in RD 108, nor are their  
            active plans for the construction of one, according to the  
            author, because RD 108 is a member of the Sites Reservoir JPA,  
            RD 108 is the only JPA member to lack the authority to  
            participate in the creation of a hydroelectric plant should  
            the JPA decide to do so in the future, depending on if or when  
            the Sites Reservoir Project is completed.  This bill would  
            give RD 108 the authority to construct, maintain, and operate  
            a hydroelectric power plant consistent with other members of  
            the JPA should the JPA decide to do so in the future. 

             Given the fact that RD 1004 is the only Reclamation District  
            currently allowed to generate hydroelectric power but has yet  
            to use such authority, the author may wish to consider an  
            amendment to sunset RD 108's authority after five years,  
            should RD 108 not use such authority as well.
             


           6)Arguments in Support:   According to the Northern California  
            Water Association (NCWA), the sponsor of the bill, "NCWA is  








                                                                     AB 568


                                                                    Page  6





            committed to advancing the economic, social, and environmental  
            sustainability of the Sacramento Valley by enhancing and  
            preserving its water rights, supplies, and water quality for  
            the rich mosaic of farmlands, refuges and managed wetlands,  
            meandering rivers that support fisheries and wildlife, and  
            cities and rural communities in the region.  AB 568 would  
            provide RD 108 with similar authorities to those possessed by  
            other entities providing irrigation water, including  
            irrigation districts and water districts."



           7)Arguments in Opposition:   According to the opposition, "This  
            legislation is premature.  Sites dam would pull water off the  
            Sacramento River to be stored for later use.  The impacts of  
            its operations would largely be on the Sacramento River and  
            Delta.  It would be a net user of electricity as more gigawatt  
            hours would be used for pumping water into the reservoir than  
            would be released in releasing this water.  It's estimated  
            cost is $3.8 billion.  It, when coupled with other potential  
            but expensive Cal Fed dams, is modeled to add about one  
            percent to California's available water supply.  That is not  
            much.  Sites dam is not currently authorized by the state or  
            federal governments.  It is not clear who would own and  
            operate the facility, nor how it would be operated, nor just  
            about anything on how it would be paid for."



           8)Suggested Amendment:  
           
            The construction of this amendment sunsets the authority for  
            Reclamation District 108 and preserves the authority of  
            Reclamation District 1004 to develop hydroelectric generation.

            50906  (e) This section shall remain in effect only until  
            January 1, 2021, and as of that date is repealed, unless a  
            later enacted statute, that is enacted before January 1, 2021,  
            deletes or extends that date.








                                                                     AB 568


                                                                    Page  7






            50906.1 (a)  A reclamation district specified in subdivision  
            (d) may construct, maintain, and operate a plant for the  
            generation of hydroelectric power, together with transmission  
            lines for the conveyance thereof and with other facilities  
            that may be necessary or appropriate for the construction,  
            maintenance, and operation of that plant. Construction of the  
            plant and transmission lines may be financed by the issuance  
            of time warrants pursuant to Article 3 (commencing with  
            Section 53040) of Chapter 1 of Part 9 to pay the cost of  
            construction of the plant, transmission lines, and related  
            facilities, except that the board may, by resolution, provide  
            for the payment of those time warrants solely from the  
            proceeds derived from the operation of the hydroelectric  
            powerplant, in lieu of the assessment described in Section  
            53040, and may, in that event, pledge the plant, transmission  
            lines, and related facilities and the revenues from the  
            operation of the hydroelectric plant as the sole security for  
            the payment of the time warrants.

            (b)  The hydroelectric plant, transmission lines, and related  
            facilities constructed pursuant to this section may be leased  
            for operation to, or the power generated may be sold to, a  
            public utility or public agency engaged in the distribution,  
            use, or sale of electricity, but shall not be offered for sale  
            directly by the district to customers other than a public  
            utility or public agency.

            (c)  Proceeds from the sale of electricity shall be utilized  
            to retire any time warrants issued for construction of the  
            facilities and otherwise for the powers and purposes for which  
            the district was formed.

            (d) This section applies only to the following reclamation  
            districts:

               (1)  Reclamation District No. 1004 acting in conjunction with  
               the County of Colusa.









                                                                     AB 568


                                                                    Page  8





              (e) This section shall become operative on January 1, 2021.

          1)Double Referred:   This bill was previously heard in the  
            Assembly Committee on Local Government and passed out on a 9-0  
            vote. 
          REGISTERED SUPPORT / OPPOSITION:




          Support


          Northern California Water Association (Sponsor)


          California Municipal Utilities Association


          County of Colusa


          County of Yolo


          Water Resources Association of Yolo County




          Opposition


          American Whitewater


          California Outdoors










                                                                     AB 568


                                                                    Page  9





          California Sportfishing


          Foothill Conservancy


          Friends of the River


          Sierra Club California




          Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083