A Deeper Look at PG&E’s Auctioning of the Potter Valley Project

Scott dam

Scott Dam which was built on the Eel River as part of the Potter Valley Power Project

PG&E has now announced it is accepting proposals from entities interested in assuming responsibility for the Potter Valley Project.  The PVP produces 9mw of hydropower and transfers tens of thousands of acre-feet of water to the Russian River from the Eel River. PG&E’s plans to divest itself of the small power generation station have Russian River water suppliers flummoxed because they have come to rely on the diversion.

Back on the 22nd of August, PG&E’s plan-to-sell dominated the most recent Eel-Russian River Commission meeting in Upper Lake, Ca. With the aroma of recently extinguished fire hanging in the air, the meeting began with an update from the CDF Chief overseeing the Mendocino Complex, moved through reports on the ongoing FERC relicensing procedure, to PG&E’s progress toward auctioning the project, and then the heart of the Eel Russian River Commission meeting really began pounding at the end of the meeting when Commissioner Carre Brown of Mendocino County laid down the gauntlet most of the rest of the room, especially Commissioner Estelle Fennell, had, until then, been unaware of: the Mendocino County Board of Supervisors resolution 18-131 Regarding the Future of the Potter Valley Project which supports the acquisition of the Potter Valley Project by the Mendocino County Inland Power and Water Commission.

Mendocino Resolution 18-131

The ‘Whereas’ sections of Mendocino County’s resolution focus on the water rights beginning in 1905 for the purpose of energy production and “irrigating Potter Valley and places downstream within the Russian River Watershed” and the resulting wealth created, estimated at $775 million, and population supported, estimated at a half million people, by the water transfer caused by the Potter Valley Project.

The resolution also notes the 50% reduction in the water transfer from the Eel River to the Russian River caused by the  2004 FERC (Federal Energy Regulatory Commission) adoption of the 2002 National Marine Fisheries Service (NMFS) Reasonable and Prudent Alternative (RPA) to its Biological Opinion  to protect the endangered species being affected by the dam and the water transfer.

And it notes the degraded condition of the Eel River from the economic activities in its watershed including logging, roads, commercial fishing and “illegal diversions;” while pointing out the benefit of Lake Pillsbury to release water in low flow conditions to help offset these degradations when needed.

The Mendocino County Board of Supervisors, therefore, resolved that it prefers to maintain the reservoir and the water transfer for the health of both rivers and that it supports the Mendocino County Inland Water and Power Commission’s (IWPC) proposal to acquire the Potter Valley Project from PG&E.   On its website, the IWPC website describes itself as “a Joint Powers Authority representing the County of Mendocino, City of Ukiah, Redwood Valley County Water District, Potter Valley Irrigation District and the Mendocino County Russian River Flood Control and Water Conservation Improvement District.”

Mendocino County Inland Water and Power Commission

PGE almost sold off the project during its Chapter 11 Bankruptcy back in 2001.  In anticipation of that possibility, according to Commissioner Carre Brown at the August Commission meeting, the IWPC was formed for the purpose of acquiring and maintaining the Potter Valley Project. Brown said, “This is an entity that was set up, and has continued ever since, and is in the position to do this.”

David Moller, PG&E’s Director of Power Generation noted in his report during the Commission meeting, that he had met with IWPC the preceding Friday and said only, “We talked about their interest, but no agreements were reached.  [PG&E] intends to proceed with auction as planned.”

Moller also mentioned the auction is receiving a lot of attention, and that, “It’s a seller’s market.”  Moller said, “We’ve had many expressions of interest in this project including all of the sectors we thought might have an interest in it.”  Moller listed these as “power supply interests, water interests, tribal interests and possibly also conservation interests.”

Commissioner Steele of Lake County speculated the power interests likely seek hydropower because it can be generated at night and in the winter when solar is offline.  Moller neither confirmed nor countered Steele.

Mendocino seeks the diversion

Back on the topic of Mendocino County’s resolution to support the IWPC effort to acquire the Potter Valley Project, Brown said,

We are moving forward with the auction process…. We did meet with PG&E to discuss their letter, and the processes they described. Basically the Inland Water and Power Commission and its member agencies are moving forward.

When asked why the IWPC would not be seeking the transfer option offered by PG&E to government entities instead of the auction process, Brown said

We have had no discussion, there is not much time. PG&E is moving forward with the auction process. I believe Mr. Moller stated that they are going forward as of September [4th.]

And when asked for clarification that the IWPC was opting for the auction process ‘because it provides a little more time for the IWPC to act,” Brown answered crisply, “I didn’t say that. I said that is the process we will be going into.”

Who Gets the Short End of the Stick?

A man who lives in Mendocino County, but in the Eel River watershed said he feels the Eel River “has gotten the short end of the stick for a very long time.”

He went on to say that he thinks,

In a truly just world, not only would the diversions be stopped, but people on the Russian River side would be paying reparations to the people on the Eel River side on all the profits they’ve been making.

Brown responded,

The County of Mendocino depends very much on the diversion.  It’s one that started occurring, the conception of it, back in 1905. Back then it was Eel River Irrigation and Power.  It was conceived back then, with the first dam, that water would go through to create electricity….but those original owners of that company were also looking at irrigation. And the original water rights filed also include irrigation water for Potter Valley and beyond.  That is what was applied for, through the state, in 1905.

PG&E began its national marketing campaign requesting offers this past week. Interested parties must sign a non-disclosure agreement and then submit what Moller called “an indicative proposal.”  The indicative proposal spells out how the interested party will be able to meet the requirements of FERC and all environmental regulations.  Moller said that in the auction the bid price is not the most important factor and that there is no minimum bid requirement.


As the auction process goes forward, the re-licensing process also continues.  Moller said there is no easy way for PG&E or anyone else to simply shut down the PVP.  All options require detailed environmental analysis.

At this time, the precise study questions for the continuation of the PVP are being released for public comment.  One of the most closely watched elements is fish passage to the spawning grounds above Scott Dam.  Designing and installing a fish ladder that actually works sufficiently seems nearly as daunting as removing the dam and finding a reliable source of water for the Russian River.

The auction should have an identified buyer within about a year and that buyer will “step into PG&E’s shoes” in the re-licensing process, according to Moller.  He also said that Licenses almost never finish on time and that projects often operate on annual license extensions for up to 20 years.

Dam Safety

While Scott Dam is deemed “high hazard” due to the likelihood that people may die if it fails, Moller said the dam shows no sign of damage or other safety concerns.  Moller also said that the Bartlett Springs fault that runs under the upper end of Lake Pillsbury is unlikely to shake hard enough to cause the dam to fail.




  • Give us our river back!

    • Mendocino county won’t let cannabis growers use springs on their land for legal cannabis growing, they call it surface water, but they want to divert a “wild and scenic river”. MS Brown why dont you play by the rules the cannabis growers a forced to, and forbear your water rights in the summer months.
      They act like it’s for the health of the river, but it’s for money. The Russian river is destroyed. Too many straws in that stream.

      • That’s basically how the project works: PG&E collects water in the winter for use in the dry months. They are required to release water past the project to mimic natural summer flows.

        • that’s not how this one works. PGE runs large amounts in the winter for electrical generation. I was fishing in my canoe one brisk February day in the mid 90s and PGE dropped the water level 15 feet. I couldn’t get back to the launch and had to drag my canoe thru the cabin neighborhood to the road.

        • Yeah except it’s called a in stream lake which cannabis growers can’t use

  • “Brown responded, “The County of Mendocino depends very much on the diversion. It’s one that started occurring, the conception of it, back in 1905. Back then it was Eel River Irrigation and Power.”

    Won’t get it back as long as it stays in the hands of our politicians from the south.

    • I understand the economic impact it would have. It’s just crazy how the cannabis growers are treated like they are responsible for drying up the Eel but the Mendocino county Government is supporting a giant diversion out of the Eel river. I want to see the LSAA from fish and wildlife on this project.

  • Is there anyone with the interests of Humboldt or the eel river trying to get rights to the dam at all?

    • No. There was abrief moment when the Eel Russian River commission thought about it. Estelle Fennell tried to use that and expand it’s membership to include tribes and cities in the Eel River basin to gain leverage.
      Because the commission is populated by one Supervisor from Humboldt, Mendocino, Lake and Sonoma Counties, she doesn’t have a winning vote alone.
      So that wasnt a strong possibility of meeting Humboldt county interests, and then Friends of the Eel thought Fennell was siding with the Russian River interests and their Public Records Request deflated the commission’s interest in that idea.
      They haven’t said officially the commission won’t pursue the PVP, but there’s not much steam toward it.
      The strongest leverage Humboldt County residents have is the Clean Water Act permit at the end of the FERC relicensing process. Scott dam doesn’t warm the river like the dams on the Klamath, but it prevents access to hundreds of miles of stellar spawning grounds.

  • Whiskey’s for drinkin, waters for fightin.

  • Good Question!!

  • The wine lobby will win at the end of the day. Water will go to the Russian.

  • Stupid, lake Mendo ( army corps engineers) who finishes the sale to Russian River. Lake Pillsbury is the holding pool. Good luck with this one, Santa Rosa executives will be the one buying this up.

    • ?? I’m not sure I understand you.
      Lake Pillsbury is mentioned here as an environmental factor. Mr Steele from Lake County is a big fish guy. His point was that fish in both streams are benefitted by the reservoir. (I’m not corroborating his statement, only reporting it.)
      And for the record, what will be sold by PG&E is the PVP and all it’s infrastructure. That includes the transfer tunnels and the dams on the Eel River as well as the power station.
      If the Mendocino county iwpc bought it, they would own it then.
      The Sonoma County Water Agency so far has taken a pass on the expensive proposition. I think they feel they can meet Sonoma County’s needs elsewhere, but they have not said that in front of me.

      • this is not rocket science, Santa Rosa needs this water, the question is with environmentalist on Potter Valley jock who wants to take this risk or reward on.

        • No, Santa Rosa really doesn’t. They are a customer of the Sonoma County Water Agency, who has plenty of water behind Lake Sonoma. The interests upstream of Healdsburg are those that need this project’s water. Really, it’s mostly the Mendocino County interests, as water could be piped from Lake Sonoma to Cloverdale and Alexander Valley.

  • Sue humboldt county.

    Meeting at the redwood playhouse in garberville sunday September 16th at 2 pm to discuss how to stop the county from ruining so humboldt and ripping off most of its residents for tens of thousands of dollars.95% of us are seriously effected by this.lets unite, unify,and take back our land and town from this wolf in sheeps clothing

  • “I’m your damn guide. Take all the damn pictures you want. Ask me any damn questions you want.”

  • Let the Bulgarian’s buy it.

  • For those of you who want to really dig deep into the history of the PVP and its water rights, check this out http://www.krisweb.com/biblio/russian_scwa_beach_2002.pdf

    Big thanks to Virginia Gratziani for the link.

    • I sure do miss reading Virginia’s contributions to our local paper.

    • Thank you for your researched and clear answer. Is there anything or any group that normal citizens of Humboldt and lovers of the eel can contact or do to at least try to have a chance at getting the dam???

      • Well, anyone who feels they can fulfill the requirements of the license is welcome to make a bid. And Moller said “money is not the.most important factor” in which bid is selected.
        However, A little fact that didn’t make the article is that NOT COUNTING environment monitoring costs, dam maintenance costs on Scott Dam alone is over a million dollars a year.
        I don’t know any environmentally oriented groups who have the kind of ongoing funding needed to manage the PVP, even if their idea is to shut it down. Because it seems like it will take a minimum of ten years to get to that, probably longer with legal wrangling.
        But maybe the tribes can coordinate an effort?
        All this is speculation. It’s not meant to put down anyone’s thinking or effort. I’m just answering from my limited vantage point.

  • I speak For the fish,Please let the cool water flow all year.Russian river Be natural and free like eel river should be.Maybe folks along eel river could make a living along a free flowing river.like the stealing water Russians do .Thieves.
    Pretend to be lovers of the planet ,but are OK on floating on Eel river water that kills life Down steam.

    DAMMIT DAMIT DAMMMMIT Thats what the salmon said at Lake Pillsbury.

    I had such a bright future and so far to go .”I Had dreams Of Going to my home my perfect gravel spawning grounds” Dammit you Humanitarians help me I’m dyeing in front of your eyes.

    • The “cool water” comes off the bottom of Lake Pillsbury. The water flowing into the reservoir is pretty hot already. There is no Eel River temperature benefit from removing Lake Pillsbury.

    • “Moose” is accurate for the most part. Idk the inflow data to lake Pillsbury for flow and temperature from July through October, but that would be most of the flow for the mainstem eel without Scott Dam.
      At this time, the flow into the Eel comes from the “needle valve” at the bottom of the dam. That’s the coldest water available. Free flow will only warm in the sun without the reservoir.
      There are certainly tributaries, but those are already flowing in. They won’t get colder.

      But, there are hundreds of miles of ideal spawning grounds upstream,

      and if the river is going to remain impounded, what share should come to the economic interests in the Eel River basin?
      The Eel has farmers that are having to come under a groundwater basin monitoring in the lower Eel.
      How much water from the impound would they need to be “whole?”
      How much does the emerging cannabis cultivation economy along the mainstem need?
      What do water rights say in a case where water was taken from riparian users before they developed an economy or industry to use it?

      None of this is advocacy. This is just.my mind asking a thousand questions. I don’t have answers, just endless questions.

      • Yes, there are hundreds of miles of spawning grounds above Lake Pillsbury that are not currently accessible, and access to those areas for salmon and steelhead is the biggest benefit of removing Scott Dam, in my mind. There are some water quality issues that the dam creates, as well, but those issues aren’t currently understood very well. The FERC process will result in an in-depth analysis of those issues.

        If the dam is removed and the diversion went away the biggest change to flows would happen during winter storms. The summer flows would not change much without the dam in place, as the releases are required to mimic natural summer flows since 2005.

        Kelley, you are identifying a lot of good questions. Riparian rights don’t apply to stored water, though. The loss to riparian users is in the winter, when most farmers don’t need it. The water rights law is based on “first in time, first in right” for appropriative rights, which is probably why Carre Brown is referring to the beginning of the project in 1905.

  • One truth is that most of the vineyards down there would produce better wine if they were dry farmed, and it’s definitely doable.

  • Get more late summer flow and a fish hatchery as a compromise.

  • With two massive pipes currently being built from the Sacramento River delta in SF to Los Angeles it’s pretty apparent what’s going on. It’s called rob Peter to pay Paul effect on Nor Cal Rivers, probably no coincidence that the sale of Pillsbury dam is happening now. I mean come on, LA needs green lawns and no accountability for water woes, right?

  • As of today. The Eel at Alderpoint is ALMOST dry.. It ALMOST looks as bad as at the end of the six years drought. Come over and have a look. [ Would bet Estell hasn’t been there since she made a trip to Blocksburg to plead for votes.] ..This 1905 date seems to be a new ploy to make the whole show look even more Grandfatherly. If we dont get some ducks in a row here soon, it will be a done deal..Business as usual. Water is worth more than gold in case you haven’t been watching. Grapes -Pot.———–About 25 years ago , the chowderhead Scott Downey of Fish and Game declared the Eel River DEAD.The Eel is not dead, but it will eventually have the life completely choked out of of if we dont get that dam down.As a former sheriff of Alderpoint once said.. Money talks and bullshit walks. Lets stop these greedy life suckers. There are Green Sturgeon in the Eel , dont think that Fish and wildlife even recognizes that they exist here. Are they on the endangered species list?

    • As of today. The Eel at Alderpoint is ALMOST dry.. It ALMOST looks as bad as at the end of the six years drought. Come over and have a look. [ Would bet Estell hasn’t been there since she made a trip to Blocksburg to plead for votes.] ..This 1905 date seems to be a new ploy to make the whole show look even more Grandfatherly. If we dont get some ducks in a row here soon, it will be a done deal..Business as usual. Water is worth more than gold in case you haven’t been watching. Grapes -Pot.———–About 25 years ago , the chowderhead Scott Downey of Fish and Game declared the Eel River DEAD. The Eel is not dead, but it will eventually have the life completely choked out of of if we dont get that dam down . As a former sheriff of Alderpoint once said.. Money talks and bullshit walks. Lets stop these greedy life suckers. There are green sturgeon in the Eel, aren’t they on the endangered species list?

  • “At this time, the precise study questions for the continuation of the PVP are being released for public comment.”
    Where do we go to make a public comment?

  • It shouldn’t be relicensed. It should be decommissioned and removed.

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