Power can be transmitted to areas inside of CA that already have hydro reservoirs or ones at higher elevations can be built.
Since it's already wired up to the same grid, does the storage have to be near the generating plant?
In most cases the answer is "no, but it helps". Close physical proximity reduces transmission loss (both inward and outward). And hydro storage requires a very specific sort of topography. If you have fortunately built solar energy plants near these sites, great! Otherwise you will probably have to build new transmission infrastructure (likely HVDC), which costs money.
I think the point of paying AZ to take excess power is to lower the load on CA grids.
So long distance transmission cannot solve the immediate problem.
> So long distance transmission cannot solve the immediate problem.