Cal. Wat. Code § 31149.1
A district may, by using any water or water supplies furnished to the district or used by the district, construct, maintain, and operate one or more plants for the generation of hydroelectric power from the water, and the transmission lines for the conveyance thereof.
"Plant for the generation of hydroelectric power" includes water driven generators and appurtenant facilities for the generation of electric power and structures for the protection of the generators on appurtenant facilities.
The plant or plants so constructed shall be operated in a manner which is compatible with the proper operation of the district's water storage, transmission, and distribution system. Construction of the plant or plants and transmission lines may be financed by the issuance of general obligation bonds or revenue bonds or any other method of financing district works authorized in this division.
Ca. Water Code § 31149.1