PG&E Begins Auction of the Potter Valley Project Which Diverts Some Water From the Main Stem of the Eel River

Scott Dam which is part of the Potter Valley Project.

Scott Dam which is part of the Potter Valley Project. [Photo cropped by one from PG&E]

Press release from the Pacific Gas and Electric Company (PG&E):

Pacific Gas and Electric Company (PG&E) today began the auction process for soliciting proposals from parties interested in purchasing its Potter Valley Project, a hydroelectric facility in Mendocino and Lake counties.

The Potter Valley Project consists of two dams along the upper Main Stem Eel River, a powerhouse in Potter Valley, and about 5,600 acres of land, including Lake Pillsbury in Lake County.

PG&E is in the second year of the minimum five-year process of obtaining a new operating license from the Federal Energy Regulatory Commission (FERC) for the project. PG&E will continue to own, operate and relicense the project throughout the auction process.

The new owner will take over the relicensing process after the project sale and transfer is complete. The current FERC license expires in 2022, but Potter Valley Project will continue to operate on annual licenses if the relicensing process goes beyond the current license expiration date.

PG&E announced it would auction the project last May, and today’s action begins the marketing phase of the auction process. PG&E is using a “request for offers” type of auction process that is intended to meet the needs of both seller and buyer – and considers other factors in addition to price.

“PG&E wants to find a new owner with the appropriate qualifications and experience to operate the project in a safe and compliant fashion. The project has unique characteristics and we believe they have the potential to yield significant value for the right owner,” said Alvin Thoma, Senior Director of Power Generation at PG&E.

The project diverts about one-fifth of the average annual flow of the upper Main Stem Eel River at Van Arsdale Reservoir through a tunnel and penstock to a powerhouse located in Potter Valley where it is used to generate electricity. The amount of water diverted by the project represents only 2 percent of the total flow of the Eel River at its mouth. Before it is diverted, some of the water is collected during the wet season and stored in Lake Pillsbury for later release – also providing lake-based recreation opportunities.

After the diverted water leaves the Potter Valley Powerhouse, it enters a canal and the East Branch of the Russian River, where it provides water to farms and communities in southern Mendocino and northern Sonoma counties as well as improving fish habitat in the Russian River. Per the conditions of the project’s operating license, water flows in the upper Main Stem Eel River below the Van Arsdale Reservoir are managed to closely mimic the upper Main Stem Eel River’s natural flow.

PG&E is seeking a new owner for the project as it no longer serves as an economical source of electricity generation for its customers. Potter Valley Project is far from PG&E’s other hydroelectric facilities and regional headquarters, making it especially costly for PG&E to operate. An increasingly competitive energy market, lower generation needs forecasted on PG&E’s system, and the increasing cost of operating the facilities were all factors in PG&E’s decision.

Depending on how many proposals are received and need to be evaluated, PG&E expects to select proposals and begin formal negotiations with a buyer by mid-2019. If all goes well, the sale and transfer of the project could be completed within one-and-a-half to two years.

Approval by FERC and the California Public Utilities Commission (CPUC) will be needed prior to transfer of ownership.

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13 comments

  • I would rather not sell our water but if we have too I’m demanding a dollar a gallon. I hope Humboldt County will appoint a new negotiator for us.

    Estelle is so corrupt and in the pockets of big business. It’s not up for debate, the tapes show she is trying to sell us out.

  • We all live down river.Let the water flow free .Let the salmon swim free.
    A fish ladder should be part of re licensing agreement.

    “What did the salmon say when she came to lake Pillsbury ? Dam It”

  • Some water ?
    Can anyone find the public access website that has the daily rate of diversion for this said “Potter Valley Project “
    It’s not available on their website. they only have a percentage of the entire eel river water shed. That includes many square miles of mountains and all the surface area of land in the entire water shed , so obviously that percentage seems very small. now do the math with the percentage of water that gets diverted, that number is private information for some very odd reason
    That diversion has the coldest water contribution to the eel river that greatly affects large algae blooms and many other impacts
    Why are these important facts not being discussed ?
    Anyone?

  • Sell it to the counties impacted by dam project, it’s a asset for all the people not just the few trying to line their own pockets!

  • Sue humboldt county.

    Estelle is a snake, A rip off extortionast to her constituents.the 300 or so people who got permits love her [edit] What about the other 35 thousand of us isn’t she great representation????

  • Sue humboldt county.

    Remove the dam!! All this blaming people downstream for using there own water on there own property ,which is our rite stated in the constitution is bs.they sell our river and then steal our riperian water rites.this regime needs to be removed we the people need to make america great again!!!! Slimy sneaky politicians will only steal from us

  • Shit, lets buy it! Keep all the water and power for the worlds largest indoor, call gennis.

  • The Russian would be dead if not for the Eel diversion, ergo, the Eel must die…

  • I can’t figure out why the same people want to stop the diversion but want to save the fish. Educate yourself the Russian has a great fish program and have made a huge steelhead comeback. Now there has been many generations of fish on the Russian. And as for the eels fish very few salmon make it very far beyond the Cape Horn damn. Salmon start to deteriorate after hitting fresh water coming from the ocean. And it’s a far far swim to get to pillsbury. Keep the diversion and the damn.

  • Sue humboldt county.

    They made the state take out the benbow dam for the salmon and it had a fish ladder ,whats the difference. Oh yeah slimy sneaky powers that be are making millions.

    • Sue, who is “They”? Just to set the record straight, the reason was?

      “This project would help restore the natural flow of the SFER and reestablish fish passage. In addition, due to lack of funding for maintenance, the dam structure continues to degrade, becoming an ever-increasing safety hazard to the public.”

      So if by “They”, you mean the public, then yes, you are correct! It took 7 years of non-stop letters, meetings, talks, phone calls, emails, legal, private, public advocacy and a BIG fat grant from a Wild & Scenic River advocate to pull that off:

      http://www.parks.ca.gov/pages/980/files/11507_Benbow_Dam_Removal_Project_MND.pdf

      This THING, this monster of a boondoggle, this PVP is something completely different. PG&E is hoping to sell it, so they will not have to pay to remove it or modify its function, they want to pass the buck to the new owners and walk away as fast as they can…

  • You should read this, its also from September 6, 2018:

    https://eelriver.org/2018/09/06/scott-dam-report/

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