Potter Valley hydropower project license lapse sets stage for plans to remove Eel River dam

The future of a little-known dam on the Eel River in Lake County may be shaped this year as the license expires on a broken-down PG&E hydropower project that plays a critical role in providing water to 600,000 Sonoma and Marin county residents.

Demolition of Scott Dam, a 138-foot concrete structure built a century ago to impound Lake Pillsbury, is an “absolute requirement” for a coalition that includes Sonoma, Mendocino and Humboldt counties interested in picking up the license, said Rep. Jared Huffman, the North Coast congressman.

But the coalition — known as the Two-Basin Partnership — has fallen short on fundraising and planning for the complex and costly process of taking over the project owned and operated by Pacific Gas & Electric since 1930.

It’s not a David vs. Goliath competition. PG&E renounced its interest in the small, unprofitable power plant in Mendocino County’s bucolic Potter Valley in 2019. When the federal agency in charge of licensing opened the door to new owners, only the partnership registered interest.

It now faces an April 14 deadline to submit an application to the Federal Energy Regulatory Commission.

“It’s very much right around the corner,” said Pam Jeane, assistant general manager of Sonoma Water, the county agency that delivers water to more than 600,000 residents in parts of Sonoma and Marin counties.

The power plant’s turbines produced a mere 9 megawatts of power, accounting for about 0.1% of PG&E’s 7,700 megawatt total, prior to a recent shutdown due to a transformer failure. PG&E has not decided on whether to replace it, a spokesman said.

The Eel River water that now flows around the shuttered powerhouse and into the upper Russian River, however, is critical to sustaining farms, ranches, vineyards and thousands rural residents.

Scott Dam is 11 miles upstream from the much smaller Cape Horn Dam that pools water at the entrance to a mile-long tunnel bored through a mountain and a series of pipes that divert about 20 billion gallons of water a year from the Eel River into the Potter Valley powerhouse, completed in 1908.

Potter Valley Powerhouse, map
Potter Valley Powerhouse, map

The diversion, which critics consider a water grab that diminishes the wild and scenic Eel River, transformed 7,000-acre Potter Valley into a cornucopia producing $34 million worth of wine grapes, pears, cattle and other products a year.

Flowing south in the East Fork of the Russian River, the diverted water empties into the Lake Mendocino reservoir near Ukiah and ultimately into the Russian River’s main stem, sustaining agriculture worth $743 million from Redwood Valley to the famed Alexander Valley vineyards near Healdsburg.

Sonoma Water depends on the diversion to provide mandated flows for federally protected fish in the upper Russian River.

Maintaining the diversion is “very critical,” Jeane said.

Without it, Lake Mendocino would be “consistently lower and would likely drain in four out of 10 years” based on the agency’s studies, she said.

Upper Russian River flows would shrink to “similar or worse” than the paltry levels seen last year, Jeane said.

The diversion typically adds 60,000 acre feet of water a year to the river, while Sonoma Water delivered an annual average of 45,591 acre feet to its customers in the past five years.

An acre foot is 326,000 gallons, a year’s supply for about two households.

The premise of the coalition organized by Huffman is that Eel River interests would be served by removal of Scott Dam while the diversion to the Russian River is maintained — hence a “two-basin solution.”

The biggest loss would be Lake Pillsbury, a 2,300-acre recreational reservoir deep in the Lake County portion of the Mendocino National Forest, about 100 miles from Santa Rosa.

Lake Pillsbury, Dec. 13, 2018. (Kent Porter / The Press Democrat)
Lake Pillsbury, Dec. 13, 2018. (Kent Porter / The Press Democrat)

The Potter Valley Project is a remnant of the Old West, hatched in 1905 when a San Francisco entrepreneur had the answer to Ukiah’s quest for an alternative to burning coal for power at the county seat and commercial center of Mendocino County with about 2,000 residents.

W.W. Van Arsdale had discovered a point at the north end of Potter Valley where a narrow ridge separated the upper Eel River from the headwaters of the Russian River’s East Fork, about 475 feet lower in elevation.

He drilled an eight-foot diameter tunnel a mile through the mountain and built the pipes and penstocks that delivered gravity-weighted water to spin the turbines in the powerhouse that began operating in 1908.

Scott Dam, built to insure a year-round supply of Eel River water, completed the Potter Valley Project in 1922.

Van Arsdale operated free of the mandates that have hamstrung the Two-Basin Partnership, including voluminous studies required by the Federal Energy Regulatory Commission.

Huffman said he took a request to cover $18 million in planning costs to PG&E’s senior management team, including the CEO, last year and received “a hard no.”

“We were surprised and disappointed by that,” he said.

PG&E is not providing funds to the partnership “in support of their licensing proceeding” but is providing information “consistent with FERC requirements,” said Paul Moreno, a utility spokesman.

Should the partnership or a governing agency it intends to create secure a license for the project, PG&E would negotiate the sale of the project facilities in a transfer subject to FERC regulations and approval by the California Public Utilities Commission, he said in an email.

In a November letter to FERC Secretary Kimberly Bose, the partnership said it was “highly improbable” that a license application will be submitted by April 14, noting their deliberations will continue and a progress report submitted Jan. 31.

Asked what options the partnership might have after the deadline, Celeste Miller, a FERC spokeswoman said, “We can’t speculate at this time.”

In addition to the three counties, the partnership includes California Trout, a 50-year-old environmental organization, and the Round Valley Indian Tribes, which hold Eel River water rights.

If the license expires in April, FERC will issue an annual license allowing PG&E to continue to own and operate the project until the federal agency names a new license holder or issues a license surrender and decommissioning order, she said.

Decommissioning the plant without the partnership’s involvement would “be on PGE’s dime” and cost millions, Huffman said.

FERC could stipulate removal of Scott Dam, which would cost $106 million to $118 million, according to an engineering firm’s report prepared for the Two-Basin Partnership and funded by the state Department of Fish and Wildlife.

“That’s a lot of money and so far nobody’s stepped up and said ‘I’ll pay for it,’” Jeane said.

Breaching the 106-foot San Clemente Dam built on the Carmel River in Monterey County in 1912 is the largest dam removal in state history. The 2015 project cost $101 million in 2022 dollars.

Currently targeted for removal are four dams on the Klamath River, the 168-foot Matilija Dam in Ventura County and Scott Dam, according to a Public Policy Institute of California report.

Eliminating Matilija Dam would restore access to 17 miles of steelhead spawning habitat. Scott Dam bars the Eel River’s imperiled salmon and steelhead from 288 miles of spawning habitat.

Lake Pillsbury with Scott Dam in foreground, in Mendocino County. (M. Weir / CalTrout)
Lake Pillsbury with Scott Dam in foreground, in Mendocino County. (M. Weir / CalTrout)

The Eel River represents “perhaps the greatest opportunity in California to restore a watershed to its former abundance of wild salmonids,” California Trout said in a 2019 report.

Should Scott Dam end up in decommissioning “it’s not the end of the world,” Huffman said. The partnership’s goals — continued water diversion and a free-flowing Eel River — could be achieved in the FERC-controlled process.

“Some have argued that might be easier,” he said. “It is in some ways cheaper and more certain.”

The dam’s fate, in any case, won’t be determined for years.

“None of this is going to happen quickly,” Huffman said.

You can reach Staff Writer Guy Kovner at 707-521-5457 or On Twitter @guykovner.

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