BILL ANALYSIS Ó AB 1925 Page 1 Date of Hearing: March 29, 2016 ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE Marc Levine, Chair AB 1925 (Chang) - As Amended March 16, 2016 SUBJECT: Desalination: statewide goal SUMMARY: Establishes a statewide goal to desalinate 300,000 acre-feet of water a year by 2025 and 500,000 acre-feet a year by 2030 Specifically, this bill: Makes findings that water supplies are diminishing, that there is a need for greater certainty in access to high quality water, and that desalinated water can meet a portion of future water demands. EXISTING LAW: 1)Declares interest in desalination to assist in meeting future water needs. 2)Establishes a statewide goal to recycle 700,000 acre-feet of water annually by the year 2000 and 1,000,000 acre-feet by the year 2010. AB 1925 Page 2 3)Requires all urban water suppliers to prepare and adopt an urban water management plan and update them every five years. Among other requirements, urban water management plans must identify and quantify water resources, including desalination. 4)Appropriates $50 million for ocean water desalination and $784 million for groundwater cleanup including drinking water. FISCAL EFFECT: Unknown. COMMENTS: The bill establishes a statewide goal to desalinate water. 1)Authors Statement: Establishing goals for the production of water through ocean desalination will steer the entire state in the direction of providing significant amounts of potable water on a daily basis regardless of rainfall. There is no one water source California can depend on, we need an "all of the above" approach that includes drought-proof sources like desalination. 2)Background: This bill presumes that desalination is a desirable option at the local level across the state. However the role of desalination in local water needs is inherently a local decision. Questions about the ability to meet water needs through conservation, stormwater capture, and recycling water must be put into context with the relative environmental and economic cost of desalination. There is broad agreement that the state's water management system is currently unable to satisfactorily meet both ecological and human needs. Under current water use, demands surpass supply. Especially, in times of drought. The State has taken action through the Water Action Plan to lay out a path to sustainable water management. This and other AB 1925 Page 3 documents, necessarily put all options on the table to improve the water management system. Those options include but are not limited to conservation, efficiency, stormwater capture, groundwater replenishment, recycled water, and desalination. Due to limited resources it is important that the state invest first in actions of the highest value to create the greatest improvements in water reliability for human and natural requirements. 3) State in the State of Ocean Water Desalination: The State Water Resources Control Board (State Water Board) in May 2015 adopted an amendment to its Water Quality Control Plan for Ocean Waters providing for the first time a uniform and consistent guideline for ocean water desalination facilities. The factsheet on the amendment states "There is broad agreement that the state's water management system is currently unable to satisfactorily meet both ecological and human needs, too exposed to wet and dry climate cycles and natural disasters, and inadequate to handle additional pressures of future population growth and climate change. Solutions are complex and expensive, and they require the cooperation and sustained commitment of all Californians working together. To be sustainable, solutions must strike a balance between the need to provide for public health and safety, protect the environment and support a stable economy. Desalination is no exception." Desalinating ocean water typically requires pulling in oceanwater through intake pipes using energy to push that ocean water through membranes which leaves behind equal parts fresh water and a dense brine that is twice as salty as the ocean. The technology to desalinate oceanwater through this AB 1925 Page 4 process was largely developed in the 1950's and first utilized on a large scale in the United States in 1977. Fundamentally, the technology has changed very little over the last 50 years. There is both an environmental and economic cost to desalinating oceanwater. The construction of a plant will have impacts. The intake can have significant impact on sea life if it is directly in the ocean. The source of power can have impacts on greenhouse gas emissions. How the brine is disposed of can have significant impacts on sea life and ocean water quality. Recognizing that the costs or traditional sources of water are going up oceanwater desalination remains relatively expensive. The large facilities constructed or planned in California cost in the range of $1 billion. The fresh water produced will likely cost in the range of $2,000 per acre-foot. About half of the cost of desalination comes from energy requirements. In comparison higher priced sources of urban fresh water today cost in the range of $1,000 per acre-foot. The cost of conserving an acre-foot of urban water is in the $100-200 range. While there has been extensive evaluation of oceanwater desalination for decades there has been limited adoption because of cost and environmental considerations. There are just over a dozen facilities around the state that have been, will be, or may be constructed. At this time there is approximately 55,000 annual acre-feet of oceanwater AB 1925 Page 5 desalination in production with an estimated additional 80,000 annual acre-feet likely to be desalinated in the next 5 to 10 year period. The total projected volume of currently known ocean desalination sites, existing and under evaluation, are projected to be 380,000 acre-feet annually. The state has set other water use goals: By resolution the State Water Board has the goal of increasing the use of recycled water in the state over 2002 levels by at least 1,000,000 acre-feet per year by 2020 and by at least 2,000,000 acre-feet per year by 2030. That resolution builds on law that set a goal to recycle 700,000 acre-feet per year by the year 2000 and 1,000,000 acre-feet per year by the year 2010. Existing law requires that urban water per capita use be reduced by 20 percent over 2011 levels by 2020. The state has taken steps to advance desalination: The administration through the Water Action Plan has taken an "all of the above" approach to improving water management in the state. The Water Action Plan lays out a multi-action agenda that includes conservation, stormwater capture, recycled water, and desalination. The Water Action Plan coordinates and directs the states approach to water management. AB 1925 Page 6 Executive Order B-29-15 from April of 2015 directs permitting agencies to prioritize approval of infrastructure projects that increase local water supplies. Included in those infrastructure projects are desalination plants. Existing law requires urban water suppliers through urban water management plans to consider the role of desalination in their water portfolio. The Legislature appropriated $50 million of Proposition 50 (2002) for oceanwater and brackish water desalination. The Legislature has appropriated $50 million out of a total of $100 million of Proposition 1 (2014) bond funds directly for oceanwater desalination. Additionally some of the appropriated $784 million of Proposition 1 bond funds for ground water cleanup could be used for brackish water desalination. Right level of Emphasis: While the state has clearly taken an active role in promoting desalination it has not gone further than making it a viable option. The determination of the viability of that option has to date been left up to local decision making. AB 1925 Page 7 The ultimate effect of this legislation is to drive greater state funding toward desalination. The committee may wish to consider whether desalination should be elevated to a higher funding priority which may ultimately serve to reduce prioritization of and spending on other options such as conservation, efficiency, stormwater capture, and recycled water. This may be appropriate for various local levels, but the committee may wish to consider whether this is appropriate as a statewide goal. 4)Prior and Related Legislation: a) AB 2717 (Hertzberg) Chapter 957, Statues of 2002, convenes the California Water Desalination Task Force to look into potential opportunities and impediments for using oceanwater and brackish water desalination. b) AB 541 (Ducheny), Chapter 833, Statues of 1997, establishes a statewide recycled water goal. c) SB7 x 7 (Steinberg), Chapter 4, Statues of 2009, AB 1925 Page 8 establishes a 20 percent urban water conservation over 2011 levels by 2020. d) AB 1471 (Rendon), Chapter 188, Statutes of 2014, placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote. 5)Supporting Arguments: AB 1925 would help advance desalination for both ocean water and brackish groundwater cleanup in California as it establishes goals for future development of desalinated water. Local water managers throughout the state must be given the flexibility to consider several options to diversify their water supply portfolio in order to assure their customers of a safe, reliable water supply. Desalination is an excellent option to help provide California's clean, safe, and reliable drinking water. AB 1925 highlights the importance of desalinated water, and emphasizes the need to prioritize desalinated water as a resource. 6)Opposing Arguments: Setting a statewide desalination goal inappropriately prioritizes development of desalination projects, which have significant environmental impacts, as well as high AB 1925 Page 9 costs to the public. California should not waste funds on this type of investment at this time. Desalination is more expensive than conservation, efficiency, stormwater capture, and wastewater recycling. The State of California should prioritize less environmentally harmful, less expensive water resources and only pursue ocean water or groundwater desalination when more cost-effective and less environmentally damaging water resource options have been exhausted. REGISTERED SUPPORT / OPPOSITION: Support Association of California Water Agencies (and amend) CalDesal Eastern Municipal Water District Mesa Water District Poseidon Water AB 1925 Page 10 South Coast Water District Opposition California League of Conservation Voters Natural Resources Defense Council Sierra Club California Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916) 319-2096