BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                       AB 568


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          ASSEMBLY THIRD READING


          AB  
          568 (Dodd)


          As Amended  May 14, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Local           |9-0   |Maienschein,         |                     |
          |Government      |      |Gonzalez, Alejo,     |                     |
          |                |      |Chiu, Cooley,        |                     |
          |                |      |Gordon, Holden,      |                     |
          |                |      |Linder, Waldron      |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Utilities       |15-0  |Rendon, Patterson,   |                     |
          |                |      |Achadjian, Bonilla,  |                     |
          |                |      |Burke, Dahle,        |                     |
          |                |      |Eggman, Cristina     |                     |
          |                |      |Garcia, Hadley,      |                     |
          |                |      |Roger HernŠndez,     |                     |
          |                |      |Obernolte, Quirk,    |                     |
          |                |      |Santiago, Ting,      |                     |
          |                |      |Williams             |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
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                                                                       AB 568


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          SUMMARY:  Authorizes Reclamation District No. 108, until January  
          1, 2021, to generate and sell hydroelectric power.  Specifically,  
          this bill:  


          1)Extends to Reclamation District No. 108 (RD 108) until January  
            1, 2021, 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.  


          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.  









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          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 RD 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 use  
            or sale of electricity. 


          5)Prohibits RD 1004 from selling the power directly to the  
            customer rather 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, 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 to pledge the plan, transmission lines, and other  
            facilities, and revenue as the sole security for the payment of  
            the time warrants. 








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          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.  


            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, until January 1,  
            2021, 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  








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            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 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 (JPA) 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.   








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            The JPA was formed to pursue the development and construction of  
            the Site Reservoir Project, a proposed project with 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.  


          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)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.  


          7)Arguments in Opposition.  Opposition argues that this bill would  
            authorize RD 108 to participate in the generation of electricity  
            with other potential partners at the proposed Sites dam.   
            Opposition argues that Sites dam is not currently authorized by  
            the state or federal government; therefore, both the Site dam  
            and this bill are premature.  




          Analysis Prepared by:                                               
                          Misa Lennox / L. GOV. / (916) 319-3958  FN:  
          0000454









                                                                       AB 568


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