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October 18, 2021 — Efforts to take over the license for the Potter Valley Project have had some significant setbacks lately. One is an expensive equipment failure that could take up to a year and a half to repair. The other is that the Two Basin Partnership, a coalition of entities seeking to take over the license from PG&E, has not been able to secure the funding it needs for studies that are necessary for a final license application. The Partnership asked the Federal Energy Regulatory Commission (FERC) for some extra time to come up with the money, but FERC refused. Now the Partnership is worried that the Commission could ask PG&E to surrender the project. Meanwhile, with the license set to expire in mid-April, the Friends of the Eel River, who have long called for the removal of Scott Dam and eventually full decommission, think that their objective might be nearer than they expected.
For Alicia Hamann, the Executive Director of Friends of the Eel River, the failure was a stroke of good luck. “Even with all the in-depth work we’ve done (on Scott Dam) looking at seismic stability and landslides and potential failure of the needle valve and problems with the foundation and all kinds of problems, the failure of the transformer bank is something we never considered,” she reflected. “So this just kind of goes to show that there are a great number of ways that this project is really aging, and really unreliable.”
But Janet Pauli, of the Potter Valley Irrigation District and the Inland Water and Power Commission, which is part of the Two Basin Partnership, says that if PG&E surrenders the project without an heir, nobody knows what will happen next.
Much of the uncertainty could be resolved with studies that would answer questions about what it would take to operate the project. But the source of the money to pay for those studies is uncertain, too. The Partnership had hoped PG&E would foot the bill, which the company did not do. And state and federal funds haven’t materialized, either.
The Partnership’s current plan includes removal of Scott Dam and modifications to Cape Horn Dam, a plan that requires extensive examination. Pauli says it would take $12-15 million to complete all the studies that the Partnership has submitted to FERC in order to answer questions about water rights, the impacts of the sediment that would be released from Lake Pillsbury, the impact that removing the dam and lake infrastructure would have on Lake County, and what future diversions would look like. Initial due diligence on all those studies, she said, would take about a million and a half dollars.
Now there’s another expense: the five to ten million dollars PG&E estimates it will cost to repair or replace the transformer bank at the powerhouse. Hamann expects that if PG&E gets stuck with that bill, the company could gte authorization from the California Public Utilities Commission to pass it along to ratepayers, plus ten percent.
Right now, the project is diverting about ten cubic feet of water per second, a drastic reduction due to the drought. Pauli explained that greater water generation depends on the project’s ability to produce power.
That has significant implications for Lake Mendocino. Under the current license, and with the ability to produce power, diversion through the Potter Valley Project could exceed 250 cubic feet per second (cfs). But “if they can’t produce power, they physically cannot put that volume of water through the powerhouse,” Pauli said. In the wintertime, minimum flows through the East Branch of the Russian River, plus contract flows for the Potter Valley Irrigation District add up to 45 cfs, “And that’s a far cry from the 270 or so cfs that they normally would be able to divert,” Paui noted. “That means the amount of water going into Lake Mendocino would only be the 45 cfs plus whatever other natural flow there would be from Cold Creek drainage in Potter Valley.”
Hamann thinks the partners have had enough time . She wants them to withdraw their notice of intent to apply for the license, and let the dam removal begin.
“What we would hope to see in a license surrender process is surrender, decommissioning, and then dam removal,” she said. She thinks “options for an ecologically appropriate continued diversion” are still possible, but “it just means the folks down in the Russian River who benefit from that water are going to have to pay up for some new infrastructure to be built.”

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KZYX reporters cover local news for Mendocino County, California, Monday through Friday in six and a half minute reports. Featuring Sarah Reith, Sonia Waraich, Michelle Blackwell, Jim Culp, Marty Durlin and Alicia Bales.