On Friday, Feb. 23 in the Humboldt County Board of Supervisors Chambers, PG&E publicly stated its ambivalence toward continuing operation of the Potter Valley Project at the Eel-Russian River Commission. Despite rumors over the last year that PG&E might want out of the project, the company has pursued the relicensing application through the Federal Energy Regulatory Commission (FERC). In the meantime, the FERC timeline is rigid and has already proceeded to the point where the areas to be studied for the environmental analysis have been established unless a federal regulatory agency intervenes by March 7th. FERC has refused to include topics in the Study Plans that relate to dam removal because PG&E was applying to relicense and continue the project.
The Potter Valley Project (PVP) is a 9 MW hydro-power station that uses between 31,200 (2015) and 65,200 (2012) acre-feet of water annually from the main stem of the Eel River impounded way upstream in Lake County, to generate 9mw of power in Mendocino County at Potter Valley in the upper reaches of the Russian River. The PVP has been in place 112 years and in the intervening century, the quantity of power produced has become irrelevant, but the water involved has become vital to farms and populations in the Russian River watershed. On the other hand, the fish and salmonid populations in the Eel River, California’s fourth largest river, have all but disappeared.
The Potter Valley Project impacts four California counties and a Joint Powers Agreement between these counties authorizes the Eel-Russian River Commission to govern the project. The four Commissioners are Members of the Board of Supervisors from each County. The current primary Commissioners are Supervisor Estelle Fennel of Humboldt County, Supervisor Jim Steele of Lake County, supervisor Carre Brown of Mendocino County and Supervisor Jim Gore of Sonoma County. Each Commissioner has an alternate.
Representative Jared Huffman knew of PG&E’s desire to divest from the Potter Valley Project a year ago. In a California Trout video called Craig’s Corner, Representative Huffman talks about a new era of river restoration projects in the region. Toward the end he says, “And last but not least, is the Eel River.” Referencing the FERC relicensing process he says PG&E has “indicated they no longer want to operate that as a hydroelectric project going forward.”
At about that time Huffman set up a series of informal stakeholder meetings so the vested parties could begin a conversation on the issues related to the Potter Valley Project.
During these meetings, PG&E has remained silent about potentially divesting from the project and has continued to pursue its application to relicense the Potter Valley Project. Even now, the announcement leaves every option open.
David Moller, Director of Power Generation for PG&E, addressed the Eel Russian River Commission emphasizing PG&E’s commitment to the water transfer component of the project.
“To date, PG&E has been proceeding with the relicensing process, really driven by that license expiration date out there in 2022. That really forces a licensee to start that process if they want to have the option of having a new operating license from FERC.
“So clearly, and I think this has come through in all our communication on this topic, PG&E recognizes that the PVP has very important regional and state significance particularly on water supply, recreation and about the project’s effects to the fisheries resources in both the Eel and Russian Rivers.
“…I wanted to… advise you that while we’ve been working on this relicensing process, we’ve also been evaluating whether the project is a good fit for PG&E’s generation portfolio and a good fit for PG&E’s electric generation customers going forward ….
“…[T]he options we’ve been considering include the option of selling the project… We are considering the option of potentially withdrawing our notice of intent… And of course, we are considering the option of continuing to own and operate the generation facility as part of our portfolio.
“We are also evaluating how each of these options fit into the statutory framework of the licensing process as they are somewhat tied together.
“We want to let you know that PG&E favors a solution of a future for the project that supports the project’s important regional benefits, as I described earlier, achieves sound environmental stewardship and makes sense for PG&E electric generation customers.
“Although PG&E has made no final decision on its direction forward with the project, it is my expectation that PG&E will make such a decision in the next couple of months.”
Commissioner Gore of Sonoma County thanked PG&E for its “long standing commitment to this project,” continuing, “and I think if somebody looks at it, you can talk about power generation, but it’s not just power, as you’ve said, it’s water and water flow, and that’s what we’re really talking about here, is water. We are not talking about energy creation, we are talking about water.”
As Moller mentioned, FERC’s relicensing process mandates timelines for determining the areas of environmental study to be addressed. PG&E has waited to make this announcement until after FERC has determined the areas of focus for the environmental analysis. The plans were determined by FERC as of February 15th. The areas of study will not be altered unless a federal agency intervenes by March 7, 2018.
Moller said if no one purchases the Project and if PG&E withdraws its application, FERC would declare the project “abandoned,” and invite interested parties to apply for the license. That party would enter the process with FERC for the environmental and safety analysis at PG&E’s place on the application timeline. Moller said if no one applied for the license, FERC would return to PG&E and order them to begin steps for decommissioning the project.
Moller said, from PG&E's perspective, the PVP doesn’t have much value as a power generation facility. He told the Commissioners PG&E has about 40,000 MW of hydroelectric generation capacity and 1,500 MW of other alternative power generation. By comparison the PVP produces 9 MW of power. However, Moller stressed that other companies may view the project’s production capacity very differently and may value “the other components of the project, the recreation and especially the water supply.”
The water supply issue highlights the opposing needs of the Eel and Russian Rivers. Commissioner Steele of Lake County frankly worried about an impending water war in the wake of this potential change.
From the Eel River, calls for decommissioning the dams and returning
thousands hundreds of miles of spawning habitat in the upper Eel come from the fish, the fishing industry, and the Endangered Species Act. Additionally the Wyott and other tribes argue for a return of their cultural resource. Those voices note FERC’s omission of study criteria that would inform a decommissioning of the Project.
Friends of the Eel River Executive Director Stephanie Tidwell said it was “refreshing to hear PG&E talk the real talk of options,” because none of the public’s “requests for study criteria were incorporated in terms of seriously looking at decommissioning in the FERC process … FERC never proceeds with decommissioning unless it’s what the dam owners want. Then, she reminded the Commission, “Humboldt County gets nothing from retaining these dams other than more dead fish.”
Vivian Helliwell of the PCFFA (Pacific Coast Federation of Fishermen’s Associations) said, “the Study Plan should have included various scenarios of project decommissioning. Major agencies support this. We’ve asked for socio-economic studies and FERC says they don’t know how to do that.…Economic studies on the Klamath [River] show that it’s easily done. There are many models for doing the economic studies.”
On the Russian River, the issues are primarily driven by human needs. However, over the century, federal recovery plans rely on the water transfer for the benefit of fish in the Russian River.
Commissioner Gore grappled with the complexities aloud, “We need to talk about the reality that there is a regional system. …whether someone calls us an original water thief…
“… I have communities, Healdsburg, Geyserville, Cloverdale, and some in Mendocino County too, that have grown up around this….
“[We] have 37,500 acre feet of water rights out of Lake Mendocino. Does that disappear if this disappears?
“We have hundreds of millions of dollars we put into fisheries recoveries. If we don’t have the stream flows that all of that has become dependent upon, to save Central Coast Coho, then what does that do?”
Remembering the Eel River watershed, Gore finished with, “What are the needs in this area? How much water is being pulled out for cannabis? What is the fish passage issue? I wanna let people know, very authentically, that I’m here to play ball.”
In an interview with KMUD News after the Commission meeting, Representative Jared Huffman, who is working with stakeholders, summarized the situation, “This is not a simple extraction. As fungible as the power is, the truth is that for the last hundred years, this has been largely a water project. Even though the water rights and other aspects of it don’t necessarily reflect that. The politics certainly do.”
There is no definite timeline for this decision. In fact, Paul Moreno, spokesperson for PG&E, said, Friday March 2, that PG&E has another option of continuing to operate the PVP on an annual license without completing the application for relicensing the project.