###

UPDATE: Friends of the Eel has responded to this announcement. The organization’s response posted below.

###

From Pacific Gas and Electric:

Today PG&E submitted a letter to the Federal Energy Regulatory Commission (FERC) providing our “Notice of Withdrawal of Notice Of Intent to File License Application and Pre-Application Document” for the Potter Valley Project.  As a result, PG&E will expeditiously cease all activities related to the relicensing of the Project.  Our decision to cease Project relicensing will also result in the stoppage of our efforts to sell the Project via the Request for Offers (RFO) process.

Although the timing is unclear at this point, we anticipate that PG&E’s action will result in FERC initiating its Orphan Project process.  In accordance with the Orphan process, FERC will provide interested parties the opportunity to submit an application for a new Project license.  We believe this path will allow interested parties more time to prepare for the acquisition of the Project and the ability to submit a License Application on their own terms rather than assuming PG&E’s current application.  If the Orphan process does not result in the issuance of a new Project License, it is expected FERC will order PG&E to prepare and submit a Surrender Application and Decommissioning Plan. 

PG&E will continue to own and operate the Project in accordance with the terms and conditions of the current Project license and all laws, rules, and regulations governing the operation of the Project until a new license is issued or the Project is decommissioned.  PG&E also intends to support the Orphan process through provision of work products and information developed to date in the relicensing process to those who apply to FERC for a new Project license.

PG&E recognizes that many stakeholders have invested significant effort in the relicensing process and we are very appreciative.  We apologize for any challenges or inconvenience this action might cause.

###

From the Friends of the Eel:

Friends of the Eel River welcomes today’s announcement by PG&E that the utility is withdrawing its formal notice of intent to seek relicensing of the Potter Valley Project (PVP) before the Federal Energy Regulatory Commission (FERC), and ceasing its efforts to sell off the two dams and associated diversion works. The two dams and diversion works of the Potter Valley Project divert water from the upper mainstem Eel River to the upper Russian River.

“This is by no means the end of the story,” said FOER Conservation Director Scott Greacen. “But this is the turning point. Removal of at least Scott Dam is now more likely than not.”

In its notice to FERC, PG&E admits that “Potter Valley has long been recognized as uneconomic for PG&E’s ratepayers,” and points to “declining energy markets … increased costs associated with anticipated new license conditions, and challenging financial circumstances …” as reasons to withdraw its relicensing application.

FOER cautions, however, that the full picture of the liabilities associated with the Eel River dams has yet to emerge. “PG&E may be facing financial reality here, but they have yet to come clean either about the potentially disastrous safety situation at Scott Dam, or about the ecological impacts of the dam on Eel River salmon, steelhead, and lamprey,” said David Keller, FOER’s Bay Area director.

For its part, FERC is now likely to move the PVP to its ‘orphan project’ process. While the agency will probably repeat the utility’s apparently unsuccessful effort to find a new buyer for the dams, FOER thinks the ultimate outcome is now likely to be decommissioning and removal of at least Scott Dam.

“The good news here is that the stakeholders’ group convened by Rep. Huffman to address PVP relicensing has already done most of the work to lay out a truly sustainable solution to needs of both the Russian and Eel River watersheds,” said Greacen. “Now it’s time to move forward with an agreement to remove Scott Dam and restore the Eel River’s fisheries.”