Hot Potato: PG&E Offered the Potter Valley Project to the Eel Russian River Commission
At the gathering, PG&E offered to transfer the Potter Valley Project to the Eel Russian River Commission (ERRC). The conversation began in February and is causing the ERRC to reevaluate its sleepy role. The Potter Valley Project, a 9mw hydro-power plant has been transferring scores of acre-feet of water from the upper reaches of the mainstem of the Eel River into the Russian River for over a century now. Santa Rosa and farming communities down the Russian River in both Mendocino and Sonoma counties have grown up depending on that free water transfer.
David Moller, PG&E Director of Power Generation, told the Commission PG&E’s need for power generation has declined due to the popularity of community produced solar power. Moller went on to explain the auction process and how the sale will fit into the FERC re-licensing process that continues apace.
Commissioner Estelle Fennel, representing Humboldt County, presented an approved Resolution from the Humboldt County Board of Supervisors defining Humboldt County’s interest in the Eel River, its perception that the dams need decommissioning, and its intention to work collaboratively toward a solution that meets the needs of both basins.
Tthe Commission scheduled an entire meeting to evaluate whether it might expand the role and membership of the ERRC to include the voices of the tribes and cities on the Eel River who have been denied access to a large portion of the river they depend on. In August, the Commission will consider its own powers and will look at its role in determining the best path forward for these two rivers.
David Moller of PG&E reviewed PG&E’s decision to sell the hydropower project, the reasons for the sale, the process for selling the project, and how it intersects with the FERC (Federal Energy Regulatory Commission) relicensing process that is underway.
Moller said the PVP [Potter Valley Project] is no longer profitable to PG&E, selling it will have a negligible impact on PG&E’s renewable energy portfolio, and that the PVP is inconveniently located as all PG&E’s other hydropower projects are located in or near the Sierra Nevada and Southern Cascade Mountains.
Moller said PG&E recognizes the non-power benefits of the project, primarily environmental, recreational and water supply. Moller explained, “As I said in the letter, as we are preparing for the auction this fall, we are open to exploring with government entities the prospect of possibly transferring the project to a regional or local entity as an alternative to the auction. If there actually is such a discussion, we would assess progress on that and then decide whether to actually initiate an auction in the fall. Meanwhile, we will be preparing for [an auction.]
“We anticipate interest and participation from power suppliers, water suppliers, conservation groups, and tribes.”
When explaining why PG&E chose to auction the project over other options, Moller said,
The decision is complicated. It took us quite a while to reach this. In particular it’s complicated by the ongoing relicensing decision, and also consideration of the non-power benefits of the project and how that plays out and how it affects the communities…. We don’t look at it just from a power generation perspective. The auction was selected from among the options because we think it makes the most sense because it provides the opportunity for all entities to basically pursue their interests.
..As I noted in the letter, PG&E is open to transferring the project to a regional entity while we prepare for the auction. And this is really to provide a reasonable opportunity to put this regional asset into regional control.
..PG&E is continually in the middle, being pulled from both sides. No matter what we do most people are unhappy. So, the idea is to provide an opportunity to put this regional asset into regional control….what we are trying to do here is to create a process that doesn’t just focus on the continued operation of the project for power generation, but opens up the door for any interested party who has an interest in the future of the project to step forward and offer up their proposal.”
Moller said PG&E is currently selling off several small hydropower projects. Merced Irrigation District is in the process of acquiring the 3.5 mw Merced Falls Project and the Yuba County Water Agency may be acquiring the 12mw Narrows Project on the Yuba River. And hydropower projects on the Kern River and Tulle River are also going to auction currently according to Moller.
Moller said that offers are coming into PG&E for the Potter Valley Project and that he is “optimistic” the PVP will transfer during an auction process if it begins. Moller expects the Request for Offers phase of the sale to begin in September. Interested parties determined by PG&E to have the capacity to afford the project and to successfully fulfill the FERC process and requirements will then sign Non-Disclosure Agreements and begin to look at PG&E internal documents before the interested parties submit offers of intention.
As far as the FERC re-licensing application for the PVP that is already underway, Moller said that the FERC deadline is statutory and must be met despite a transfer of ownership of the Project. Moller explained that any entity that adopts the PVP will jump into the re-licensing process where-ever it stands at the time of sale. Moller said, “They will simply slip into our shoes” in the FERC process.
Commissioner Jim Gore of Sonoma County asked for guidance from the County Council staff from Mendocino County that was present, saying he had to understand how to conduct himself as the Commission faced “a litany of frivolous and petty accusations. I say that very directly to a couple of people who haven’t even contacted me…” Addressing Moller, Gore continued, “The real thing that I would say is … we don’t know what we are going to do with this. I don’t know what we are going to do with this. I don’t think anybody on this board knows what we are going to do with this.”
For background Friends of the Eel has accused Commissioner Fennell of abandoning Humboldt County’s interests in the Eel River to the interests on the Russian River, and all the Commissioners of violating the Brown Act by having discussions outside of the public sphere. The Commission has received a PRA (Public Records Act) request made by Friends of the Eel River last month.
Gore didn’t understand how an organization operating under the Brown Act could negotiate a contract under an NDA. Moller explained that the entity would explain in broad terms to its constituency that it is negotiating to acquire the project, but would not disclose PG&E’s proprietary information. And Commissioner Fennel reminded him that Closed Door Sessions are rather routine in government.
During Public Comment Friends of the Eel River’s new Executive Director, Stephanie Tidwell said that while the accusations may be in error they are not frivolous.
I had a more prepared statement but when our organization gets hostilely called “frivolous” from the dais, I feel obligated to respond with some of the facts as we see them. When we hear PG&E saying we are interested in transferring the Potter Valley Project to a regional entity and we see the Eel Russian River Commission saying we are interested in strengthening ourselves as a regional entity, it’s pretty easy to draw the dots and think there is something going on behind the scenes that we aren’t privy to. And that may not be the case, but the fact of the matter is these are not frivolous concerns. Yes, we want our river back, and we want to know what’s going on.
Gore’s assertions that the ERRC has not yet agreed upon a plan rang true during the next two agenda items. Commissioner Fennel of Humboldt County read into the record the entirety of Resolution 18-56 from the Humboldt County Board of Supervisors which begins “Whereas, the County of Humboldt believes that decommissioning a full or partial removal of the Potter Valley Project is inevitable due to the aging infrastructure, low power production, and high cost of upgrading the facility to comply with current dam safety and environmental regulation….’
Humboldt County’s Resolution 18-56 defines Humboldt County’s interest in the water saying, “The County of Humboldt will advocate strongly on behalf of the water users and natural resources within the County for water supply reliability, fish population that supports sustainable harvest opportunities, and full restoration of beneficial uses within the Eel River.” And, “The County of Humboldt will advocate for elimination of summer and fall water diversions and restoration of the Eel River’s natural flow regime to restore and enhance fisheries, water quality, water supply and recreational opportunities.”
After reading this, Fennell invited Wyott Chairperson, Ted Hernandez, to read a tribal Resolution into the record stating the Wyott Tribe’s interest in being included in the Commission.
When the Commission took up the ad hoc committee recommendations on expanding the membership and authority of the Eel Russian River Commission under the JPA, Commissioner Carre Brown of Mendocino County reminded the Commissioners that the Commission has always been a forum that has never taken any action. Brown said that had always been the Commission’s role. Brown also said she feels Native Americans have plenty of power in the process as it stands. Twice Brown mentioned that the Tribes enjoy an elevated position in federal processes over local government.
Mr. Hernandez took the time to make public comment afterward. Hernandez said the Wyott Tribe was excluded from having a seat on the original Commission because in the 1970s, when the Commission was formed, tribes were still being excluded from recognition. He went on to say that since gaining a voice, the Wyott have endeavored to restore damage done to the ecosystems.
Commissioner Gore from Sonoma County questioned why the Commission would expand if they aren’t going to take over operation of the Project. Gore expressed concern that the ERRC doesn’t have staff or funding to move toward accepting responsibility for the PVP. However, he did add, “I could be proven wrong.”
The Counties each have a differing interest in the Potter Valley Project’s water transfer. Commissioner Jim Steele of Lake County is clear that Lake County is primarily interested in the fishing and recreational opportunities of Lake Pillsbury. Steele emphasized relying on the health of the fisheries in as the guiding principle for the Commission to base its decisions on. Steele feels the diversion aids fisheries in the Russian River, and that the PVP’s infrastructure provides summer flow to the Eel River that will not be available if the dams get removed.
Sonoma County counts on the Potter Valley Project’s diversion from the Eel River to make water available in the Russian River for fish habitat after the Sonoma County Water Agency (SCWA) makes its withdrawals for urban users. SCWA serves regional suppliers, primarily in the Santa Rosa area, but including districts as far south as Marin County.
And Mendocino County depends on the water transferred by the PVP for many of its agricultural communities. Potter Valley Irrigation District has long explained that without the Eel River, it has no water source whatsoever from late spring through the winter rains in October.
Both Ellen Faulk who lives near the dam and Friends of the Eel questioned the safety and integrity of the dam infrastructure. Dave Keller of Friends of the Eel said that the Dam is built on unstable ground. And he said in the event of a dam failure there could be a “30 foot wall of water” that would travel over an 8 hour period to the sea.
Keller explained that the public is shut out of the information that impacts their safety by FERC. Keller also says that FERC refers to its ongoing dam safety schedule and will not allow dam safety concerns to be addressed in the relicensing process.
The counties that gain benefit from the dam do not have to live downsteam of its potential failure. Scott Dam did not enjoy positive peer review even at the time it was constructed. It has no emergency spillway. It operates with a single electric gate available to release water from the top of the reservoir, and one bottom of the reservoir release known as the needle valve. Furthermore, the dam’s alignment is askew due to the geology of hard stone sitting in a fractured matrix that slips around on occasion. At the Commission meeting, Keller noted there are two fault seams running under the lake.
Faulk also expressed concern about the role the shallow reservoir plays in the bio-accumulation of mercury in the food chain. Faulk said blue-green algae makes mercury in the environment bio-available.
Ultimately, the Commission determined it needs to devote an entire meeting to the prospect of increasing the size and scope of the Eel Russian River Commission. Commissioner Gore complimented the scope and thoughtfulness of the Humboldt County Resolution and Commissioner Fennell encouraged her fellow Commissioners to engage in a similar process with their Boards of Supervisors.
- PG&E Says It May Sell the Potter Valley Hydroelectric Project
- Representative Huffman Comments on PG&E’s Plans for the Potter Valley Project
- ‘We Need to Talk About Removing Scott Dam,” Say Friends of the Eel River
- PG&E Plans to Auction off the Potter Valley Hydroelectric Project