UPDATE: 

• PG&E Releases Statement Addressing Electricity Transmission Limits, Says Short-Term Improvements Will Allow Garberville Hospital Project to Proceed

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State and local officials are demanding answers after learning in recent weeks that Pacific Gas & Electric has all but reached the limits of its capacity to transmit electricity to new projects across southern Humboldt County, including the cities of Fortuna, Rio Dell and Garberville.

In meetings with local leaders, PG&E has said it could cost more than $900 million and take up to a decade to make the upgrades necessary to increase capacity for the utility’s substations and its two main transmission lines for the region — one coming in from Cottonwood to the east and the other from Laytonville to the south.  (A third transmission line, coming from the Redding, does not have the same capacity issues.)

In interviews with the Outpost, local officials say PG&E’s failure to adequately plan for the area’s growing electricity demands could have devastating impacts on future development, jeopardizing a major hospital project, scaring off potential investors, torpedoing new housing developments and stymying local governments’ efforts to adapt to climate change.

In a phone interview this morning, Second District Humboldt County Supervisor Michelle Bushnell said that after weeks of requesting a meeting to get more information, she and fellow supervisor Rex Bohn finally met with PG&E officials two weeks ago. 

“What they told us was that from basically Fortuna to the Mendocino County-Humboldt County line [and] east to west from Dinsmore to Shelter Cove … there’s no room to add any kind of infrastructure,” she said, noting that Shelter Cove generates its own power. “So Fortuna has a little bit of power to give, a little tiny bit, and Rio Dell has about three hookups that can be accommodated in the next year to two years, is what they told us. [But] from there south there is no availability.”

PG&E, an investor-owned utility whose history of legal troubles includes pleading guilty to 84 counts of involuntary manslaughter for causing the 2018 Camp Fire, has issued numerous “will serve” letters to local business applicants in recent months, only to inform some of them later that they cannot accommodate the hookup requests.

Reached by phone on Friday, Fortuna City Manager Merritt Perry said he and other city staffers met with PG&E personnel last Tuesday and were surprised to learn about the projected $900 million price tag and 10 year timeline to address the problem.

‘It basically shuts off a lot of our economic development efforts and puts projects in question.’ —Fortuna City Manager Merritt Perry

“It puts the city in a situation where it basically shuts off a lot of our economic development efforts and puts projects in question,” including housing developments, Perry said. A key component of the city’s Climate Action Plan calls for transitioning the city’s fleet of vehicles to electric models. “If PG&E is already limited in its ability to provide service, how are we going to accomplish that?” Perry asked.

Asked whether county officials felt blindsided by this revelation from PG&E, Humboldt County Planning and Building Director John Ford laughed for a few moments before responding.

“Yeah,” he said finally. “Yeah.”

He and other county personnel had been hearing “whispers” about transmission capacity problems for months, Ford said, but it took them a long time to set up a meeting with PG&E officials. They finally did meet this past Thursday, and at the meeting the utility’s representatives agreed to make a presentation before the Board of Supervisors. But that, too, is proving difficult to pin down. 

The presentation was originally scheduled for October 4, then got moved to the meeting of October 18, and Ford said PG&E is now looking to move the presentation back even further.

Ford said PG&E electricity transmission limits will impact countless cannabis applicants who’ve been planning to convert to new electric hookups.

“There is a site I’m aware of [in Redway] that has been built, and they can’t occupy their buildings because they don’t have power,” Ford said. “And that’s right on Redwood Avenue, too.”

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The other big implication from this news concerns the county’s Climate Action Plan, which outlines the county’s attempts to meet the challenges posed by climate change.

‘It has a huge implication on our ability to effectively address climate change.’ —Humboldt County Planning and Building Director John Ford

“And a core strategy of that is to move away from carbon-based fuels, which would include generators, natural gas, propane — and if there’s not the power supply to be able to convert to renewable, non-carbon-produced electricity, [then] there is no ability to implement those measures,” Ford said. “So it has a huge implication on our ability to effectively address climate change.”

Bushnell said the potential impacts to Southern Humboldt County would be hard to overstate.

“It’s dire,” she said. “It’s dire. Like, there can be no new housing.” The electricity transmission limits could also threaten a long-planned new community hospital facility in SoHum, she said. In order to meet the state’s seismic safety requirements, Jerold Phelps Community Hospital must relocate its emergency and acute care departments into a new hospital building, which is slated to be built on the former College of the Redwoods site on Sprowel Creek Road in Garberville. 

“The hospital purchased the property, they’ve raised funds, they’ve gotten grants — they’re well on their way to getting that building going [along with] apartments to house their staff,” Bushnell said. But PG&E has yet to say whether it will be able to provide electricity to these facilities.

Fortuna officials first became concerned about PG&E’s service limits back in January. The city had finished installing a Tesla battery backup system at its Kenmar lift station, a project completed with hefty state grant funding, only to be informed by PG&E that its nearby substations are incapable of providing service to the system. The batteries can’t be connected to the grid until improvements are made.

In July, Fortuna staff learned that a business owner’s request for increased capacity service at an existing building at the former Pacific Lumber Company mill site had also been denied by PG&E. Staff, at the time, was in the process of reviewing a proposed distribution facility at the mill site that had requested 3,000-amp service.

PG&E had issued a “will serve” letter to the applicant, indicating its intent to provide the requested electricity, but Fortuna officials have since been unable to confirm that commitment with PG&E. Instead, the utility asked for additional time to analyze the situation, according to a Fortuna staff report.

Perry wrote an informal complaint letter to the California Public Utilities Commission (CPUC), and the city council will consider whether to make a formal complaint at its meeting tonight. Perry said CPUC officials seem to be viewing the local situation as part of the normal processes — identify needed improvements, review potentially affected projects, set a timeline, etc.

“But there’s a real disconnect,” Perry said. “The timeline for PG&E to supply this service essentially slams the brakes on all new power demand projects” for the next decade. City staff has been working closely with a developer who’s interested in buying the former PALCO mill site. “It concerns us that somebody could walk away because power can’t be supplied for 10 years,” Perry said.

Rio Dell City Manager Kyle Knopp shares his frustration. In a meeting last Thursday, PG&E officials encouraged city staff to forward details about specific development opportunities to help PG&E justify the cost of infrastructure upgrades. Knopp described this as akin to a “chicken and the egg scenario.”

“Our obligation to people looking to do business in this community is to tell them the whole truth — so, the good, the bad and the ugly,” he said. “So when people come to the city looking initially at investments, we’re going to have to disclose that the power supply is questionable at best.”

In other words, PG&E wants to know that there’s sufficient demand to justify investments in infrastructure upgrades, but any potential developers interested in setting up shop in Rio Dell are unlikely to even submit plans once they find out they may not get power for up to a decade.

Rio Dell Mayor Debra Garnes sent a letter to the California Public Utilities Commission back in May expressing “extreme concerns” over PG&E’s “inaction” when it comes to upgrading its “substandard electrical distribution and substation facilities.”

She cited a $4.5 million development project that promised to generate $44,000 in annual tax revenues for the city, plus much-needed jobs. But PG&E had recently informed the developer that there was no power available for the project, and it couldn’t give a timeline for when the power would be available.

“This lack of clarity from PG&E risks the developer pulling the project and potentially locating out of this region,” Garnes wrote in her letter.

A CPUC commissioner responded the following month, saying PG&E had submitted its latest utility grid capital improvements application in June 2021, proposing projects and investments for the 2023-2026 timeframe. The letter did not identify any details about these proposed projects and investments, which are scheduled to be approved or denied by the middle of next year, though it said Rio Dell’s capacity issues “may be considered” during that proceeding.

The letter also said PG&E should be “as transparent as possible about the timeline and next steps with local governments.”

Like Fortuna, the City of Rio Dell recently commissioned a large Tesla battery facility. This one has enough capacity to run the city’s corporation yard, including its wastewater treatment plant and water plant, for up to 19 hours. Knopp asked whether its fair to ask cities to bear the cost of such electricity storage facilities or whether PG&E should be on the hook due to its lack of planning.

Knopp noted that in a statement provided to the North Coast Journal, PG&E identified the cannabis industry as one source of growing electricity demands. Rio Dell has been hosting stakeholders meetings regarding cannabis since 2017 — meetings that PG&E officials attended. “So they’ve known for quite a while that this development was coming,” Knopp said. “And at that point in time [the utility said] it was three years down the line that they could do some of these upgrades and be able to serve everybody.”

The phrase he remembers PG&E employing at the time was, “We’re in the business of providing power.”

At the city’s meeting with PG&E last week, Rio Dell staff asked about those cannabis statements published in the Journal. 

“We brought that up in our in our meeting and they [PG&E] were apologetic about it,” he said. “They insisted that it was not an intentional [slight on the industry] and they recognize that, obviously, it’s legal and it should be treated just as any other customer on the system.”

Knopp said one benefit of cannabis legalization has been to drive many energy-intensive indoor grow operations out of business while professional facilities are highly regulated, with some located just minutes from City Hall. 

‘That is maybe a bit of a convenient whipping horse, to blame cannabis. … It obscures the general fact that there hasn’t been any planning for any kind of capacity growth in this region, and that’s highly problematic.’ —Rio Dell City Manager Kyle Knopp

“And so, to me, that is maybe a bit of a convenient whipping horse, to blame cannabis,” Knopp said. “But in reality, it obscures the general fact that there hasn’t been any planning for any kind of capacity growth in this region, and  that’s highly problematic.”

A wide range of large developments have been proposed in Rio Dell, including a lumber processing facility that wants to generate its own power, Knopp said, but he worries that developers will choose to go elsewhere once they learn about these capacity issues. PG&E won’t give city officials a list of applicants in the queue they believe they can serve, he said.

“It’s terrible. It’s just terrible,” Bushnell said, though she added that in subsequent meetings PG&E employees have been “very cooperative.”

Local officials noted the added complications posed by California’s recently adopted rule stating that by 2035, all new cars and trucks sold in the state will be zero-emission vehicles, including plug-in hybrid electric vehicles. Plus, regional climate action plans call for eliminating natural gas hookups in favor of all-electric utilities for new developments. Updated building codes going into effect next year will also require all new homes to have 225-amp hookups, a significant increase over the current 125-amp requirement.

“So these [electric infrastructure] investments have to be made, and they need to be made quickly,” Knopp said. 

Bushnell said she’s been in touch with our region’s representatives in the state legislature, including Assemblymember Jim Wood and Senator Mike McGuire. The Outpost reached out to their offices for comment and received the following statements.

From Wood:

I was not happy to learn about the electricity transmission capacity concerns that will likely affect projects in the Humboldt area and I have conveyed to PG&E that I have an expectation that communication among all parties improves immediately.

Unfortunately, we are experiencing capacity issues in every part of the state and that’s reflected by the number of Flex Alerts that have been issued in the past several months alone.

This summer, the legislature was actively engaged in deciding whether or not to keep the Diablo Canyon plant open beyond its pending closure and in doing so, demanded that there be an emphasis on jump starting and completing green energy projects to ensure that California meets our ultimate capacity issues.

McGuire’s office sent along the following statement:

When we heard late last week about this asinine proposal from PG&E to deny new service hookups throughout huge swaths of Humboldt County, we immediately went to work and spoke with the CEO of PG&E [Patricia K. Poppe] to let her know this half-baked initiative won’t stand and they must do better.

We’ve continued to meet with utility representatives and we’ve let them know we’re expecting alternate solutions. We’ve also been in constant communication with county officials and we’ll be bringing local elected leaders and PG&E together soon to discuss potential alternatives.

The Outpost reached out to PG&E’s regional media representative Deanna Contreras with a list of questions shortly before 9 a.m. today. She replied via email, saying she’d work on getting answers by 2 p.m. Shortly after 2, however, she emailed again, saying she was unable to meet that deadline. We replied, asking when she expected to get answers to our questions but had not received a response by the time of this post.

Ford, meanwhile, said the county’s state lobbyist is in town to give a presentation to the Board of Supervisors at tomorrow’s meeting. Today, the lobbyist is meeting with county department heads and supervisors to discuss the county’s legislative platform and top priorities.

“And as you can probably imagine,” Ford said, “this [PG&E situation] will be probably the thing that goes from not even on the list to the top of the list, in terms of things that need to be addressed.”