Schwarzenegger will lay out a wide-ranging water policy in his State of the State speech that will continue his emphasis on bipartisan cooperation but delve into divisive policy issues.

The speech will illustrate a daunting task for the governor this year: getting along with lawmakers with widely differing ideologies while turning his attention to topics like health care reform, an overhaul of the state's floundering prison system and water.

"If he can find agreement and have success on these kind of issues that have for so long had such intense trench warfare, he will show that he truly has created a different dynamic in Sacramento," noted Tim Hodson, executive director of the Center for California Studies at Sacramento State University.

The governor abandoned his first effort to address water policy last year, saying the topic was like a holy war to some in the Capitol.

Tonight, Schwarzenegger will call for building two dams -- one in Northern California and one north of Fresno -- that the governor will portray as vital to the state's water supply as the population increases, according to sources familiar with the plan. Schwarzenegger is expected to frame the need for the dams by noting that global warming will probably reduce the amount of water in the state, requiring aggressive measures.

Dams that create new reservoirs to store water for use in dry years "is one way to manage the effects of climate change," noted Lester Snow, director of Schwarzenegger's Department of Water Resources. Snow said that some forecasts suggest the state's snowpack could decrease by 25 percent by 2050, and that more reservoirs are needed to boost supply.

Building new dams is popular with legislative Republicans and powerful agricultural and water interests, but it has plenty of opposition.

Senate President Pro Tem Don Perata and Assembly Speaker Fabian Núñez have come out against new dams. Assemblyman Jared Huffman, D-San Rafael, the new chairman of a key Assembly environmental committee, called the dam proposals "half-baked."

"There are a lot of better things we can do with several billion dollars to improve water supply and quality," said Huffman, who was an attorney for the Natural Resources Defense Council before being elected to the Assembly in November.

Schwarzenegger is expected tonight to call for a $4 billion to $5 billion water spending plan, with most of the money going toward building the Sites Reservoir in Colusa County and the Temperance Flat Reservoir near Friant Dam.

The Temperance Flat Reservoir would be created with a new dam on the San Joaquin River; the Sites Reservoir would require a dam diverting water from the Sacramento River.

Snow said the administration will propose that state taxpayers pay for some portion of the dams but that water districts and other groups would pay for a portion as well. Voters could be asked to approve the state portion of the funding next year.

Although Snow would not confirm the two dams the governor will propose, Temperance Flat and Sites were confirmed by two other sources who have been briefed on the proposal but declined to be named because they were given the specifics in confidence.

No major dams have been built in California in more than 30 years. Backers of the proposal note that the state's population is expected to grow by more than 600,000 per year and that new reservoirs are needed to store water collected during wet years for use during dry years. Supporters also say the dams could contribute to flood management.

"We haven't really added any storage in 30 years, and we think these new projects can make economic and environmental sense," said Steve Hall, executive director of the Association of California Water Agencies.

"Many of us in the Central Valley understand that you cannot conserve your way out of this," said Assembly Republican Leader Mike Villines of Clovis (Fresno County).

Villines said the new dams were a top priority for Assembly Republicans, who have often disagreed with Schwarzenegger on topics like global warming. The governor's proposal may be a key to cementing a good relationship with Republican lawmakers.

It's unclear if water districts would be willing to put up some of the money for the new dams. Hall said final costs would have to be calculated first.

The proposals may split differing water agencies, with some in the water-rich northern part of the state being less supportive. Randy Kanouse, a lobbyist for the East Bay Municipal Utilities District, said his district was wary of any water project that would be paid for -- even partially -- by taxpayers but only benefit some.

Environmentalists argue that new dams will cost taxpayers too much money and that federal studies of the two dams that Schwarzenegger is expected to back may be several years from completion.

"There are so many questions: Who will benefit from the water? How much will it cost?" said Barry Nelson, a senior policy analyst at the Natural Resources Defense Council.

Nelson and other environmentalists say the state should put more emphasis on things like promoting water conservation, such as more efficient toilets and dishwashers, and cleaning up unusable groundwater.

Snow, the governor's head water guru, said that Schwarzenegger will support groundwater storage and water conservation programs as part of an overall water policy, but that new reservoirs are necessary.

"We need to do it all," he said.