Chief Sponsor: Joel Ferry

Senate Sponsor: Scott D. Sandall


8     General Description:
9          This bill requires a study and makes changes regarding the use of electrolysis to create
10     hydrogen from water.
11     Highlighted Provisions:
12          This bill:
13          ▸     adds to the powers of the state engineer the power to conduct studies regarding use
14     of water;
15          ▸     requires the state engineer to conduct a study regarding:
16               •     the current effect on the water cycle of the use of water to cool power plants;
17               •     the potential effect on the water cycle of the use of water to create hydrogen
18     through coal gasification or steam methane reforming; and
19               •     the potential effect on the water cycle of the use of electrolysis with water to
20     create hydrogen to power a power plant;
21          ▸     establishes a reporting requirement for the results of the study; and
22          ▸     requires the state engineer to administer the river distribution accounting report.
23     Money Appropriated in this Bill:
24          This bill appropriates in fiscal year 2023:
25          ▸     to the Division of Water Rights -- Water Rights Administration, as a one-time
26     appropriation:
27               •     from the General Fund, One-time, $230,000.
28          ▸     to the Division of Water Rights -- Water Rights Administration, as an ongoing
29     appropriation:

30               •     from the General Fund -- $150,000.
31     Other Special Clauses:
32          None
33     Utah Code Sections Affected:
34     AMENDS:
35          73-2-1, as last amended by Laws of Utah 2020, Chapters 60 and 352
36     ENACTS:
37          73-2-1.7, Utah Code Annotated 1953
38          73-5-17, Utah Code Annotated 1953

40     Be it enacted by the Legislature of the state of Utah:
41          Section 1. Section 73-2-1 is amended to read:
42          73-2-1. State engineer -- Term -- Powers and duties -- Qualification for duties.
43          (1) There shall be a state engineer.
44          (2) The state engineer shall:
45          (a) be appointed by the governor with the advice and consent of the Senate;
46          (b) hold office for the term of four years and until a successor is appointed; and
47          (c) have five years experience as a practical engineer or the theoretical knowledge,
48     practical experience, and skill necessary for the position.
49          (3) (a) The state engineer shall be responsible for the general administrative
50     supervision of the waters of the state and the measurement, appropriation, apportionment, and
51     distribution of those waters.
52          (b) The state engineer may secure the equitable apportionment and distribution of the
53     water according to the respective rights of appropriators.
54          (4) The state engineer shall make rules, in accordance with Title 63G, Chapter 3, Utah
55     Administrative Rulemaking Act, consistent with the purposes and provisions of this title,
56     regarding:
57          (a) reports of water right conveyances;

58          (b) the construction of water wells and the licensing of water well drillers;
59          (c) dam construction and safety;
60          (d) the alteration of natural streams;
61          (e) geothermal resource conservation;
62          (f) enforcement orders and the imposition of fines and penalties;
63          (g) the duty of water; and
64          (h) standards for written plans of a public water supplier that may be presented as
65     evidence of reasonable future water requirements under Subsection 73-1-4(2)(f).
66          (5) The state engineer may make rules, in accordance with Title 63G, Chapter 3, Utah
67     Administrative Rulemaking Act, consistent with the purposes and provisions of this title,
68     governing:
69          (a) water distribution systems and water commissioners;
70          (b) water measurement and reporting;
71          (c) groundwater recharge and recovery;
72          (d) wastewater reuse;
73          (e) the form, content, and processing procedure for a claim under Section 73-5-13 to
74     surface or underground water that is not represented by a certificate of appropriation;
75          (f) the form and content of a proof submitted to the state engineer under Section
76     73-3-16;
77          (g) the determination of water rights; or
78          (h) the form and content of applications and related documents, maps, and reports.
79          (6) The state engineer may bring suit in courts of competent jurisdiction to:
80          (a) enjoin the unlawful appropriation, diversion, and use of surface and underground
81     water without first seeking redress through the administrative process;
82          (b) prevent theft, waste, loss, or pollution of surface and underground waters;
83          (c) enable the state engineer to carry out the duties of the state engineer's office; and
84          (d) enforce administrative orders and collect fines and penalties.
85          (7) The state engineer may:

86          (a) upon request from the board of trustees of an irrigation district under Title 17B,
87     Chapter 2a, Part 5, Irrigation District Act, or another local district under Title 17B, Limited
88     Purpose Local Government Entities - Local Districts, or a special service district under Title
89     17D, Chapter 1, Special Service District Act, that operates an irrigation water system, cause a
90     water survey to be made of the lands proposed to be annexed to the district in order to
91     determine and allot the maximum amount of water that could be beneficially used on the land,
92     with a separate survey and allotment being made for each 40-acre or smaller tract in separate
93     ownership; and
94          (b) upon completion of the survey and allotment under Subsection (7)(a), file with the
95     district board a return of the survey and report of the allotment.
96          (8) (a) The state engineer may establish water distribution systems and define the water
97     distribution systems' boundaries.
98          (b) The water distribution systems shall be formed in a manner that:
99          (i) secures the best protection to the water claimants; and
100          (ii) is the most economical for the state to supervise.
101          (9) The state engineer may conduct studies of current and novel uses of water in the
102     state.
103          Section 2. Section 73-2-1.7 is enacted to read:
104          73-2-1.7. Water for power study.
105          (1) As used in this section:
106          (a) "Coal gasification" means the process of using a gasifier to convert coal into
107     synthesis gas which can then be converted to hydrogen.
108          (b) "Electrolysis" means the process of using electricity to split water into hydrogen
109     and oxygen.
110          (c) "Steam methane reforming" means the process of chemical synthesis to use a
111     catalyst to produce hydrogen from methane derived from natural gas.
112          (d) "Water cycle" means the biogeochemical cycle that describes the continuous
113     movement of water on, above, and below the surface of the earth.

114          (2) The state engineer shall commission a study to determine the quantitative impacts
115     to the state's water cycle from:
116          (a) electrolysis;
117          (b) the generation of electricity by burning as fuel hydrogen resulting from electrolysis;
118     and
119          (c) the generation of electricity by burning as fuel a blend of natural gas and hydrogen.
120          (3) The study shall compare the quantitative impacts to the water cycle to generating
121     electricity by:
122          (a) burning coal;
123          (b) burning natural gas;
124          (c) solar energy;
125          (d) wind energy;
126          (e) burning a combination of hydrogen and natural gas; and
127          (f) burning hydrogen produced from:
128          (i) electrolysis;
129          (ii) coal gasification; and
130          (iii) steam methane reforming.
131          (4) The impacts quantified in Subsections (3)(e) and (f) shall include the quantitative
132     impacts to the water cycle of:
133          (a) burning the hydrogen; and
134          (b) producing the hydrogen from fuel through:
135          (i) electrolysis;
136          (ii) coal gasification; and
137          (iii) steam methane reforming.
138          (5) The study described in Subsection (3) shall describe factors that influence the
139     findings described in Subsection (3), including efficiency of the power.
140          (6) The state engineer shall report the findings of the study described in Subsection (3)
141     to the Public Utilities, Energy, and Technology Interim Committee and to the Legislative Water

142     Development Commission on or before November 1, 2022.
143          Section 3. Section 73-5-17 is enacted to read:
144          73-5-17. River distribution accounting report.
145          (1) As used in this section:
146          (a) "Natural flow" means the computed amount of water available within a defined
147     portion of a river system.
148          (b) "River system" means a portion of a natural stream and its tributaries where
149     regulation and accounting are required.
150          (2) The state engineer may conduct a review of distribution and accounting procedures
151     on a river system in the state.
152          (3) After conducting the review described in Subsection (2), the state engineer shall
153     provide a report identifying:
154          (a) actively administered:
155          (i) water rights;
156          (ii) diversions; and
157          (iii) reservoirs;
158          (b) accounting practices, including:
159          (i) computation of natural flow;
160          (ii) apportionment of natural flow to individual water rights;
161          (iii) storage delivery and loss of storage;
162          (iv) accounting for imports and exports; and
163          (v) system losses including:
164          (A) conveyance losses; and
165          (B) reservoir losses;
166          (c) recommendations for:
167          (i) additional measurement and automation; and
168          (ii) refinement of distribution or accounting practices in accordance with:
169          (A) existing water rights;

170          (B) the prior appropriation doctrine; and
171          (C) relevant court decrees; and
172          (d) the data and computations relied upon to provide the information described in
173     Subsections (3)(a) through (c).
174          (4) The state engineer shall make the report described in Subsection (3) available to the
175     public on the Division of Water Rights website annually at least one week prior to the annual
176     distribution system meeting.
177          Section 4. Appropriation.
178          The following sums of money are appropriated for the fiscal year beginning July 1,
179     2022, and ending June 30, 2023. These are additions to amounts previously appropriated for
180     fiscal year 2023. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
181     Act, the Legislature appropriates the following sums of money from the funds or accounts
182     indicated for the use and support of the government of the state of Utah.
183     ITEM 1
184          To Division of Water Rights - Water Rights Administration
185               From General Fund, One-time

186               Schedule of Programs:
187                    Water for Power Study                    $150,000
188                    River Distribution Accounting Report     $80,000
189               From General Fund

190               Schedule of Programs:
191                    River Distribution Accounting Report     $150,000