PG&E’s License to Operate Potter Valley Project Expires

Aging Eel River dams headed for license surrender and decommissioning

Today, PG&E’s license to operate the Potter Valley Project (PVP) expires. The Federal Energy Regulatory Commission (FERC) – the agency tasked with regulating hydropower projects – will now ask PG&E to surrender their license to operate the project and propose a plan to decommission it.

Located about fifteen miles northeast of Ukiah, the Potter Valley Project consists of two dams, a diversion tunnel and powerhouse on the mainstem Eel River. Project owner PG&E indicated they did not plan to re-license the dams in 2019. Shortly after that announcement, a coalition of local stakeholders dubbed the Two-Basin Partnership formed with the goal of developing a plan to acquire the project. Due to a lack of funding, the group recently stated it will not pursue such a plan. With no party willing to take over the aging, seismically vulnerable dams, the only remaining course of action is for PG&E to surrender the operating license for the project.

“For over 100 years, Eel River salmon and steelhead have been excluded from the river’s headwaters, which is some of the highest quality, most climate resilient habitat in the watershed,” said Alicia Hamann, Executive Director for Friends of the Eel River. “If PG&E and FERC move swiftly, we will have time to secure a future for the Eel River’s still-wild salmon and steelhead.”

Removing Scott and Cape Horn Dams would provide salmon, lamprey, and steelhead, including endangered summer steelhead, access to more than 280 miles of prime spawning and nursery habitat. Recent research by the National Marine Fisheries Service describes the area blocked by Scott Dam as containing significant amounts of habitat suitable for salmon and steelhead and a higher proportion of suitable habitat compared to most other areas in the Eel watershed – even in warm years.

The Eel is one of California’s largest and most remote watersheds. Much of the river offers high quality fishing and recreational opportunities and has been designated by both the state and federal governments as a wild and scenic river. Dam removal would make it the longest free flowing river in the state and would reconnect its headwaters in the Snow Mountain Wilderness to the coastal redwoods in Humboldt County.

Adam Canter, Natural Resources Director for the Wiyot Tribe, notes that the dams have damaged traditional subsistence practices associated with culturally important species like salmon, lamprey and sturgeon. “Wiya’t translates as “abundance” in the Soulatluk language. The damming of this sacred river, the theft of unceded Eel River water without due protections to our endangered salmon and lamprey, it’s damaging to the Wiyot’s river culture. We must ensure that FERC, PG&E, and government representatives do not let the status quo continue to sacrifice the health of the watershed and our communities. The license expiring today is a hopeful moment.”

Brian Johnson, California Director of Trout Unlimited, said, “The Eel represents one of the best – if not the best – opportunities to recover wild salmon and steelhead in California. Our habitat restoration work on dozens of projects in the Eel watershed has provided hard evidence of this: where we take out fish migration barriers and restore habitat complexity, fish come back. Restoring the Eel to its full potential as a wild salmon and steelhead stronghold is one of our highest priorities in California and dam removal is the single biggest step we can take to make that happen.”

Additional benefits of dam removal include eliminating reservoirs that warm water and provide habitat for invasive pikeminnow, which eat juvenile salmon and steelhead and eliminating poor water quality conditions. Dam removal would also provide economic benefits.

Because the dams make very little electricity, PG&E maintains the Project at a loss, which ultimately results in higher rates for PG&E customers. A forthcoming economic analysis has shown that the benefits of dam removal to local communities could also be significant. “In total, this project will result in $250 million in economic activity over the five-county region of study (Humboldt, Lake, Marin, Mendocino, and Sonoma), approximately $100 million of which is related to increased business activity and wages,” says Patrick Kallerman, Vice President of Research at the Bay Area Council Economic Institute, which undertook the study.

California Trout, a member of the Two-Basin Partnership, is ready for PG&E to move into decommissioning. “We have given PG&E all the tools to move right into a surrender application for the Project,” says Curtis Knight, Executive Director of CalTrout. “CalTrout and our partners have built the necessary coalitions and have produced $2 M in engineering, economic, and ecological analyses that provide a roadmap for removing Cape Horn and Scott Dams. We are ready to work with PG&E, water users, and state and the federal agencies to craft a deal today that works for fish, water, and people.”

Dam removal is also important to Northern California commercial salmon fishermen that have seen harvest opportunities for family-owned commercial fishing vessels decline in recent decades.

“Dam removal on rivers like the Eel and Klamath have the potential to save our industry and thousands of fishing-dependent jobs in places like Eureka, Bodega Bay and Fort Bragg,” explains Glen Spain with Pacific Coast Federation of Fishermen’s Associations. “Salmon have long supported local communities on the North Coast, so removing fish killing dams gives us real hope for a better future.”

In a recent letter to FERC, the National Marine Fisheries Service acknowledged that both Scott and Cape Horn Dams are causing ongoing harm to salmon and steelhead populations that are listed under the Endangered Species Act. The letter proposed additional protective measures that PG&E should implement right away to help mitigate the dams’ impacts on these fish as the project awaits decommissioning.

In the coming months, FERC will ask PG&E for a schedule for the license surrender process. A plan for project decommissioning could be ready within a few years if PG&E is properly motivated to act swiftly.