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In a major development for both water rights and the environment on the North Coast, an unlikely coalition of five regional entities today filed a plan with the Federal Energy Regulatory Commission (FERC) to take over the Potter Valley Project, a hydroelectric facility that diverts water from the Eel River.

For Humboldt County residents in particular, the plan is significant because it calls for the removal of Scott Dam, a 98-year old hydroelectric wall that has had major detrimental impacts to native migratory fish populations, including salmon and steelhead. 

The five entities in the coalition known as the Two-Basin Partnership include the County of Humboldt, the Mendocino County Inland Water & Power Commission, the Round Valley Indian Tribes, California Trout and the Sonoma County Water Agency.

These groups have distinct and sometimes conflicting objectives for the water that’s at stake, with environmental interests clamoring for fisheries restoration while agricultural users in the Potter Valley and water agencies in the Russian River basin have their own uses in mind. Agricultural interests in the Potter Valley and upper Russian River basin want the water to irrigate their crops, primarily vineyards. Sonoma and Mendocino water agencies want it to supply their customers and meet their contract obligations.

“The glue that has held this two-basin solution together is that everybody has a heck of a lot to risk here,” Congressman Jared Huffman told the Outpost this morning. “Nobody has a slam dunk on what they want.”

That includes PG&E. The bankrupt utility decided not to relicense the Potter Valley Project and tried unsuccessfully to auction it off. If the plan proposed by the Two-Basin Partnership falls through, FERC would almost certainly require PG&E to decommission the facility — an expensive and involved proposition.

“Their incentive is to cut their losses,” Huffman said. 

But today’s proposal to FERC leaves many questions unanswered, not least of which is who will pay for it all. Alicia Hamann, executive director of environmental nonprofit Friends of the Eel River, said in a press release that PG&E should be made to pony up a significant amount of cash.

“Nobody wants to pay to keep Scott Dam,” she says in the release. “But will PG&E be held accountable for the damage its dams and reservoirs have done to the Eel River over the last century? If PG&E doesn’t pay its fair share to take out its Eel River dams, who will? The plan suggests a potentially enormous price tag. Getting part way to dam removal won’t do any good for Eel River salmon and steelhead.”

Humboldt County Second District Supervisor Estelle Fennell, who has been an active part of negotiations in this process, agreed. “PG&E’s going to have to pay their share,” she said. Nevertheless, she said today’s submission of a Feasibility Study Report Project Plan is a major accomplishment.

“Obviously it’s the fruit of a lot, a lot of hard work and two different interests getting together, the Russian and Eel, with an understanding that we’re committed to respect [each other’s] needs,” she said.

But she also warned that this is just the beginning. Moving forward will require extensive studies on both the ecological and economic impacts of the proposal, and the FERC review process and public review period will take time. Plus, a formal regional entity must be formed to take over and manage the license.

Still, Fennell said the plan’s inclusion of Scott Dam removal reveals the importance of Humboldt County’s involvement in the stakeholder group. 

The ambitious project involves more than just dam removal, though. It also calls for construction of a new pipeline to supply water to the Potter Valley Irrigation District. The cost of the entire project dam removal and infrastructure improvements is expected to run between $100 million and $400 million, with the pipeline accounting for as much as $120 million of that total on top of that amount.

Huffman said state and federal funding may be available. “If we can hold this two-basin project together, the public benefits are really broad and unique,” he said. “That’s what unlocks the possibility of state and federal support.”

The path forward will be long and involved, he said: “Nothing happens quickly with FERC relicensing.” A lot of negotiating and technical analysis needs to be completed. Asked what the best-case-scenario timeline for dam removal might be, Huffman said, ” It’s not going to be the next couple of years, but I don’t think it needs to be more than a decade either.”

Dam removal may have to be completed in stages, lowering it incrementally in order to manage the sediment impacts of water release, Huffman said. And while the five parties involved in developing this plan have managed to balance their respective interests thus far, negotiations and compromise must continue as the project moves forward.

“This is a ‘trust but verify’ process between the interests in the two basins,” Huffman said. “You really don’t want one side to get what matters to them without making roughly parallel progress on the other side.”

The motive for continued cooperation is retaining control our own destiny, rather than leaving matters in the hands of FERC, the congressman said. 

“Nobody has a lock on everything they want. That’s the Gordian knot. And honestly I think it’s why this has held together for the last couple years, because we have a chance to control the outcome,” Huffman said. And in a nod to the Rolling Stones he added, “Maybe nobody gets everything they want, but the technical work and negotiations say, maybe everybody can get what they need.”

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We’ve got a series of press releases below, starting with the official release from the Two-Basin Partnership:

Santa Rosa, Calif. – Today, five diverse entities jointly proposed an ambitious plan to advance restoration of Eel River fisheries while maintaining water security for Russian River basin water users. The Feasibility Study Report (Report) Project Plan was filed with the Federal Energy Regulatory Commission (FERC) as the next step in the effort toward securing a new license for the Potter Valley Project, which is currently owned by PG&E.

The Potter Valley Project (PVP) is a hydroelectric facility that, in addition to generating a small amount of electricity, diverts water from the Eel River into the Russian River basin. The PVP’s main facilities include two dams on the Eel River, a diversion tunnel and a hydroelectric plant.

Citing economic concerns, current PVP owner PG&E announced in January 2019 that it would not seek a new license from FERC to continue operating the facilities.

PG&E’s decision to not re-license the PVP left an uncertain future for both Eel and Russian River interests. Instead of leaving it up to the utility and federal regulators to determine the region’s water future, local leaders decided to work together to protect the interests of both river basins.

California Trout, the Round Valley Indian Tribes, the County of Humboldt, Mendocino County Inland Water and Power Commission and Sonoma Water formed the Two-Basin Partnership last fall. The Partnership developed the Feasibility Study Report filed with FERC today. The group is also exploring options for developing a governance structure for future ownership and operations of the facilities.

The Partnership is an outgrowth of an ad hoc committee convened by Congressman Jared Huffman. That group identified co-equal goals for a two-basin solution. These include minimizing or avoiding adverse impacts to water supply reliability, fisheries restoration, water quality improvements and recreation enhancements in the Russian and Eel River basins. One specific priority is improving fish passage and habitat on the Eel River with the goal of recovering native migratory fish like salmon and steelhead, including full access to habitat upstream of Scott Dam.

“I’m pleased to see this diverse coalition moving forward toward a two-basin solution. The filing of this feasibility study with its well-defined project description is a significant step toward a win-win outcome for the North Coast and North Bay: robust restoration of Eel River fisheries, and long-term certainty and reliability for Russian River water users,” said Rep. Huffman. “We still have a long way to go including an extensive study plan, determining an appropriate financial contribution from PG&E, and securing state and federal financial support to reflect the broad public benefits of this plan. But today’s filing is an important milestone and I remain committed to supporting and securing the resources necessary to move the two-basin solution forward.”

The Report submitted to FERC identifies key elements that must be in place to realize the vision for a two-basin solution. These include:

• A new regional entity with authority to own and operate the Project, governed by a diverse group of regional stakeholders.
• Removal of Scott Dam, which completely blocks fish passage to the headwaters of the Eel River, and modifications to Cape Horn Dam and the associated water diversion to improve upstream and downstream fish passage.
• Modification of PVP facilities to ensure continued power generation and water supply reliability in the Russian River.
• A fisheries restoration plan that considers watershed-wide efforts in the Eel River to improve conditions for threatened and endangered native fish.
• Construction of new infrastructure to provide water supply reliability for farmers and ranchers in Potter Valley.

Although the proposed project plan submitted to FERC is a significant step in the effort to realize a two-basin solution, the process for securing a new license for the PVP is still in the early stages. The Report’s Project Plan must be studied further, including analyzing the effects of removing Scott Dam on the communities around Lake Pillsbury, tribal interests, recreation and other activities on the Eel River.

Additional studies will be required to identify the best way to manage the sediment behind Scott Dam, how to improve upstream and downstream fish passage at Cape Horn Dam and what the ultimate cost of capital modifications of the PVP will be. These and other pressing issues will be addressed through the relicensing studies undertaken as part of the next phase of the FERC process.

To date, only very preliminary studies have been completed to inform cost estimates for this effort. Based on these initial studies, direct capital costs in 2020 dollars for the proposed licensed Project facilities will range from $100 to $400 million. Developing new infrastructure to improve water supply reliability for the Potter Valley Irrigation District is estimated to cost between $30 to $120 million. The studies proposed for the next phase of the effort will further define and inform cost estimates. Annual operating costs are projected to be in the $5 million to $10 million range.

Because transferring the PVP to a new regional entity would relieve PG&E of substantial financial obligations for decommissioning, the Partnership anticipates working with PG&E to secure funds to pay for some of the proposed capital upgrades as part of the transfer of ownership and liabilities.

The public will now have opportunities to comment and provide input through both the FERC proceedings and at local public meetings hosted by the member organizations of the Two-Basin Partnership. If accepted by FERC, the Report will lead to a new licensing process that will take several years to complete.

Quotes from the leaders of the Two-Basin Partnership

President James Russ of the Round Valley Indian Tribes said, “The Tribes believe that this Feasibility Study Report puts us one step closer to achieving the Tribes’ goal of restoring the Eel River fishery to a sustainable and healthy condition. We still have a long road ahead of us. And the challenges facing the Partnership are real. But there is good will among all parties to work together to see if we can keep moving forward to solve this problem. The Tribes are making a good faith effort to work with all parties to keep moving forward in a positive manner.”

Curtis Knight, Executive Director of California Trout, said, “It’s encouraging to see the diverse stakeholders in this partnership coming together to support the removal of Scott Dam, which will allow Eel River salmon and steelhead to once again access critical headwaters habitat. Today’s submittal to FERC makes it clear that we can find a way forward that improves water security for Russian River water users while significantly improving conditions for native fish.”

Sonoma County Supervisor and Sonoma Water Director James Gore said, “The Feasibility Study Report represents the culmination of collaboration, bold leadership and resilience for our region. Sonoma Water shares the vision outlined in the study report and looks forward to working with the Two Basin Partnership and our community during the Federal Energy Regulatory Commission process.”

Janet K.F. Pauli, Ph.D., Chair of the Mendocino County Inland Water and Power Commission said, “The Mendocino County Inland Water and Power Commission believes that filing this Feasibility Study Report with FERC is a significant step forward towards the goal of assuring water supply reliability for our region. What is truly important is that we will have the opportunity to control our future. While we have a very long road ahead of us we are looking forward to continuing to work with our Planning Partners, and other stakeholders, in the ongoing Potter Valley Project licensing process to ensure that the shared goals of water supply reliability and improvement of the riverine ecosystems of both the Eel and Russian Rivers are realized.”

Humboldt County Supervisor Estelle Fennell said, “Scientific studies indicate that removal of Scott Dam is urgently needed to improve Eel River fisheries. I really appreciate the team approach our regional partners have taken and look forward to working with them, PG&E, the State of California and Congressman Huffman on a detailed path forward to make this locally driven solution a reality.” To learn more, go to www.twobasinsolution.org.

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Next we’ve got a press release from Friends of the Eel River:

Today, a coalition of five Eel and Russian River parties filed a Feasibility Study Report with the Federal Energy Regulatory Commission (FERC). The report outlines a proposal to take over PG&E’s Potter Valley Project, including Scott and Cape Horn Dams on the upper Eel River. Most notably, the plan proposes to remove Scott Dam, which has blocked fish passage to and from the upper Eel completely for nearly a century.

Friends of the Eel River has been fighting for decades to remove Scott Dam so Eel River salmon and steelhead can return to the hundreds of stream miles of prime headwaters habitat above the dam. Today’s filing vindicates our understanding that removal of Scott Dam is both necessary to allow fisheries recovery, and an economic inevitability.

Nonetheless, Friends of the Eel River must reserve judgment on the plan proposed in today’s filing. FOER’s Executive Director, Alicia Hamann said, “We applaud the Two Basin Partnership for recognizing that Scott Dam must come down, but too many questions remain unresolved in the plan filed today.”

“Nobody wants to pay to keep Scott Dam,” Hamann noted. “But will PG&E be held accountable for the damage its dams and reservoirs have done to the Eel River over the last century? If PG&E doesn’t pay its fair share to take out its Eel River dams, who will? The plan suggests a potentially enormous price tag. Getting part way to dam removal won’t do any good for Eel River salmon and steelhead.”

As well, it’s not clear who will be represented in the proposed Regional Entity. Nor is it revealed who would pay for parts of the proposed plan that wouldn’t come under FERC jurisdiction. Critically, this would include a pipeline proposed to pump water uphill from the Lake Mendocino Reservoir to the Potter Valley Irrigation District.

“While the Eel River’s salmon and steelhead have paid a devastating price, going from a million fish a year to the brink of extinction, Potter Valley has had the benefits of nearly free water for the last century,” said FOER’s Conservation Director, Scott Greacen. “Those who benefit from water diverted from the Eel River in the future will have to cover the associated costs.”

Despite these concerns, today’s filing does make it very likely Scott Dam will be removed, and Cape Horn Dam removed or modified to the extent necessary to insure passage for salmon, steelhead, lamprey, and other native fish. This is because, if the plan proposed in today’s filing were to fail, PG&E and the Potter Valley Project will go directly to FERC’s Decommissioning Process.

After its latest bankruptcy filing, PG&E terminated its application to FERC for a new license for the Potter Valley Project. This foreclosed any possibility the utility could keep the project. The Two Basin Partnership was the only entity to respond to FERC’s subsequent invitation to take up PG&E’s abandoned license renewal.

While the FERC Decommissioning Process would likely be protracted, and its outcome uncertain, it’s likely FERC would order PG&E to remove Scott Dam. With such an order in hand, PG&E would likely be allowed by the California Public Utilities Commission to recover the costs of dam removal from its ratepayers, who have benefited from operation of the project over the last century.

Thus, Friends of the Eel River must consider the plan outlined today not as the only hope of Eel River dam removal, but as one possible path to that goal. The question is whether it offers Eel River fisheries a better, faster and more equitable resolution than FERC’s Decommissioning process would.

FOER’s Greacen emphasized, “Removing Scott Dam, ensuring Eel River salmon and steelhead can return to their upper Eel River habitat, is our core mission at Friends of the Eel River. We will bird-dog this and every other process necessary to get Scott Dam removed and our fisheries restored. One way or another, Scott Dam is coming down.”

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And finally, here’s one from the California Salmon and Steelhead Coalition:

Santa Rosa, CA – A partnership of counties, Tribes, water users and a conservation group today submitted a plan to the Federal Energy Regulatory Commission (FERC) on how the Potter Valley Project on California’s upper Eel River could continue to operate after its current license expires in 2022. The plan calls for removal of Scott Dam, which blocks access for salmon and steelhead to nearly 300 miles of prime spawning and rearing habitat, as well as new facilities to enable continued diversion of water from the Eel to the Russian River. 

The Eel River is California’s third largest watershed and, prior to the construction of the Potter Valley Project and other human uses, once saw salmon and steelhead runs of as many as one million fish annually. Today, most of these salmonid species are threatened or endangered. The plan submitted to FERC will improve conditions for fish in the Eel River and increase water supply reliability for communities in Mendocino, Marin and Sonoma Counties. These communities rely on water diverted from the Eel River into the Russian River watershed through the Project’s operations. 

Pacific Gas & Electric Co. (PG&E) announced in January 2019 that it does not plan to relicense the project due in part to annual losses exceeding $5 million. With no other party to acquire the facilities, PG&E put the Project on a path for decommissioning. The company’s decision creates uncertainty around the security of water supplies in the Russian River watershed and the future of salmon in the Eel River.  

“I’m pleased to see this diverse coalition moving forward toward a two-basin solution. The filing of this feasibility study with its well-defined project description is a significant step toward a win-win outcome for the North Coast and North Bay: robust restoration of Eel River fisheries, and long-term certainty and reliability for Russian River water users,” said Rep. Huffman. “We still have a long way to go including an extensive study plan, determining an appropriate financial contribution from PG&E, and securing state and federal financial support to reflect the broad public benefits of this plan. But today’s filing is an important milestone and I remain committed to supporting and securing the resources necessary to move the two-basin solution forward.”

Today’s plan was submitted by the Two-Basin Partnership, composed of the County of Humboldt, Mendocino County Inland Water & Power Commission, the Round Valley Indian Tribes, Sonoma Water and California Trout. Last year FERC gave the Two-Basin Partnership ten months to come up with the outlines of a plan for operating the project in a way that meets the goals of both water supply security and fisheries restoration.

Curtis Knight, Executive Director of California Trout, said, “I’m encouraged by the broad areas of agreement we’ve identified among the diverse stakeholders represented in the Partnership. We have a way to go before we can realize the twin goals of securing water supplies in the Russian River and recovering the Eel River’s legendary salmon and steelhead runs, but today’s filing is a significant first step. Importantly, the public can now comment on the proposal.”

The Potter Valley Project includes the Scott and Cape Horn dams, water diversion facilities, and a powerhouse. Scott Dam blocks migratory access for federally listed Chinook and coho salmon, winter steelhead, and potentially summer steelhead. The 100-year-old project now generates only a small amount of hydropower but diverts significant amounts of Eel River water into the Russian River watershed, where it supports agriculture and residential uses in Mendocino, Sonoma and Marin Counties.  

“Today, the Eel River is a shadow of its former self,” noted Charlie Schneider, president of Trout Unlimited’s Redwood Empire Chapter. “The good news is, there’s a lot of intact habitat left here, and we know that salmon and steelhead can rebound if we help them to reach that habitat. And the way to get there is by working cooperatively with all the folks that depend on water from the Eel to make sure everyone’s needs—people and fish—are met.”

Today’s filing follows the completion of an initial feasibility study that evaluated options for the Potter Valley Project with the goal of increasing water supply reliability for Russian River water users while improving fish habitat. One key conclusion from the study is that the removal of Scott Dam is the best and most cost-effective way to address fish passage concerns related to the project’s current operations.

“The existing Potter Valley Project is no longer economically viable and does not provide reliable water supplies or essential fish habitat, especially in the face of future droughts and climate change,” said Monty Schmitt, Senior Project Director with The Nature Conservancy’s Water Program. “Today, we have an opportunity of a lifetime for stakeholders to work together to restore struggling salmon and steelhead runs by reconnecting the river to its headwaters and modernize this project to improve water supply reliability for farms and communities.”

For more information about the California Salmon & Steelhead Coalition, visit: https://www.casalmonandsteelhead.org

About the California Salmon & Steelhead Coalition 

The Salmon & Steelhead Coalition is a strategic partnership between The Nature Conservancy, Trout Unlimited, and California Trout to increase streamflows in California’s North and Central Coast watersheds, with the goal of restoring and protecting wild salmon and steelhead and creating water reliability for people.