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LAKE COUNTY, Calif. — Pacific Gas and Electric said it has filed the necessary documents to decommission — and eventually remove — the Potter Valley Project, which includes the Scott Dam and Lake Pillsbury in Lake County.
The utility announced on Friday that it had filed the final surrender application and decommissioning plan for the project with the Federal Energy Regulatory Commission, or FERC.
The Potter Valley Project is located in Lake and Mendocino counties.
It consists of two dams along the upper main stem of the Eel River, the Scott Dam and the Cape Horn Dam — as well as the Potter Valley powerhouse, the 80,000-acre-foot Lake Pillsbury in Lake County, the Van Arsdale Reservoir, a fish passage structure and salmon and steelhead counting station at the Cape Horn Dam, and and 5,600 acres of land.
The filing comes six years after PG&E initially informed FERC that it would not pursue a renewed operating license.
The draft of the surrender application and decommissioning plan was released for public comment at the end of January and closed in March.
Dave Gabbard, vice president of power generation for PG&E, said the filing “marks the next step of a thoughtful and transparent decommissioning journey for the Potter Valley Project — but it does not change our operational responsibilities or obligations. We remain fully committed to meeting all current FERC requirements as we work through the decommissioning up until the license is terminated by FERC. As stewards of public resources and partners to the communities we serve, our priority is clear: to move forward responsibly, collaboratively, and with the continued reliability our stakeholders expect."
While Gabbard said PG&E will “move forward responsibly, collaboratively, and with the continued reliability our stakeholders expect,” the company’s announcement doesn’t specifically mention working with Lake County while referencing numerous other regional stakeholders, many of whom have participated in a “two basin solution” that sought to exclude Lake County’s interests from the beginning, according to local leaders.
“As PG&E moves forward with plans to decommission and eventually remove Cape Horn and Scott dams, PG&E continues to coordinate closely with parties to support a new water diversion facility, including Sonoma County Water Agency, Inland Water & Power Commission of Mendocino County, Round Valley Tribes, Humboldt County, Cal Trout, Trout Unlimited and California Department of Fish & Wildlife,” the company said.
PG&E said its FERC submittal includes a request to allow the Eel-Russian Project Authority to construct the New Eel-Russian Facility at the current location of Cape Horn Dam. That facility will provide diversion flows from the Eel River to the Russian River watershed after PG&E’s removal of Cape Horn Dam and Scott Dam.
Reached for comment on the documents’ release, Lake County District 2 Supervisor Bruno Sabatier said Friday that neither he nor the rest of the county of Lake’s leadership were prepared at that point to offer a comment on the massive filing.
PG&E’s five documents for the application and plan released Friday — four days ahead of schedule — total 2,324 pages.
The documents can be downloaded at the PG&E Potter Valley Project Surrender Application and Decommissioning Plan Stakeholder website. Select “Documents” and enter the credentials “PV_Surrender” when the “Guest Area” comes up.
Project history and importance
PG&E acquired the Potter Valley Project in 1930.
In May of 2017, the company said it planned to begin auctioning off the project the following year.
When that auction began the following year, PG&E said it wanted 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, then the senior director of power generation at PG&E. He retired in 2021.
Since then, however, PG&E has taken a different approach. The company changed course from seeing it continue and instead decided to abandon the project and support its removal, emphasizing improved habitat for salmon and steelhead and removal of the project due to seismic concerns that Lake County officials have questioned.
The company’s main justification for not continuing to operate the project has been its claim that it’s not economic for its customers, which was a determination made “after years of internal analysis,” PG&E said in the Friday afternoon announcement.
Estimates have put PG&E’s annual losses from the project at between $5 million and $10 million.
These estimates have arisen at the same time as PG&E has been criticized for the compensation given to its chief executive officer, Patricia Poppe, who is reported to be the highest paid utility CEO in the nation, taking home $17 million in 2023.
To get rid of the project, PG&E also intends to pass the cost on to customers.
During a May 28 town hall held in Lakeport on the future of the project, Lake County District 3 Supervisor EJ Crandell — who along with Sabatier has led the county’s effort to advocate against the project’s removal — said the cost analysis is $100 million for fish passage and $300 for seismic retrofit, while decommissioning could cost $500 million and will increase PG&E rates.
“They’re forcing us and you to pay for the decommissioning costs,” Crandell said.
At that town hall, opponents of the decommissioning plan also pointed repeatedly to the importance of Lake Pillsbury as a source of water to fight the region’s many wildland fires.
With the surrender application and decommissioning plan now submitted, PG&E said the official FERC proceeding will begin. It includes a 30-day public comment period that the federal agency will announce.
To register for the FERC distribution list for the Potter Valley Project, which is FERC Docket No. P-77-000, visit the FERC website.
This past week, PG&E also announced that it will have an online meeting on the surrender application and decommissioning plan, the regulatory process and public participation opportunities from 3 to 5 p.m. Aug. 11. That meeting can be accessed here.
The company previously held an online meeting about its plans to abandon the project earlier this year, but so far has not been willing to hold an in-person meeting in Lake County regarding the matter.
PG&E representatives also weren’t present at the May 28 town hall held in Lakeport in which leaders from around the region shared their views and concerns about the plans to decommission and remove the Potter Valley Project.
County officials push back against project removal
County officials including Sabatier and Crandell have fought to stop the project’s removal, arguing that Lake County has been kept out of much of the process of negotiation when it comes to the future of the project and, in particular, Lake Pillsbury.
In 2023, the county of Lake released a video titled “Keeping Lake County Whole: The True Cost of Decommissioning” that looks at the matter from the perspective of Lake Pillsbury residents, firefighters, community leaders and county officials. That video is shown above.
In February, the Board of Supervisors voted unanimously to submit comments to PG&E opposing its plans.
At the same time, it approved a letter to Gov. Gavin Newsom raising issue with the state taking sides in the process when they said it should have been neutral. That letter points out that removal of the Scott Dam contradicts Newsom’s own January executive order on maximizing water storage, and that the California Department of Water Resources is a party to a memorandum of understanding on the process to remove the project that does not include Lake County.
The board also wrote to President Donald Trump’s secretaries of Energy, Interior, Agriculture, Defense, Homeland Security, Commerce and U.S. Attorney General Pam Bondi, asking them to intervene and pointing out that destroying and draining Lake Pillsbury “would constitute an expensive and irresponsible gamble with regional water supply in an area that has repeatedly been threatened by catastrophic wildfire events.”
In its communication with the federal government, county leadership said that if FERC approved the dam’s removal, it would directly contradict Trump’s Executive Order No. 14181, “Emergency Measures To Provide Water Resources in California and Improve Disaster Response in Certain Areas.”
More stakeholders tout plan excluding Lake County
In related news, on Friday, the Mendocino County Inland Water and Power Commission released a statement heralding its “landmark” water diversion agreement with other partners, in tandem with the filing of the PG&E surrender application and decommissioning plan.
The Mendocino County Inland Water and Power Commission said the agreement, developed by it and “key” regional and tribal partners, “will guide how future water diversions are managed after PVP [Potter Valley Project] facilities are removed. The agreement also supports environmental restoration and ensures that communities relying on Russian River water have a sustainable, reliable supply.”
The commission said the agreement is anchored in a memorandum of understanding signed earlier this year, and that the agreement “protects the water supply relied upon by communities, farms, and businesses throughout Mendocino, Sonoma, and Marin counties.”
The statement, which touts collaboration, notably makes no mention of Lake County or its interests as being among the key regional partners.
“Water diversions through the Potter Valley Project have been the backbone of our regional water system for generations,” said Mari Rodin, Ukiah City council member and Inland Water and Power Commission representative. “We knew we couldn’t stop PG&E from exiting, but we could work to create a viable plan for the future for our communities. That’s exactly what we’ve done.”
The statement goes on to state that, “With both the Water Diversion Agreement advancing and the license surrender filing submitted, the region is positioned to move forward with critical infrastructure planning, including environmental review of the New Eel-Russian Facility, and pursuit of long-term strategies for increased water storage like the potential modernization of Coyote Valley Dam.”
Rodin said that due to the pressure of drought, climate change and aging infrastructure, “We must be proactive about storage, diversions, and environmental stewardship. These agreements help us do exactly that – they’re the foundation of a future water system that works for people, farms, fish, and the environment.”
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