
On January 31, 2025, PG&E released its Final Draft Application for Surrender of License for the Potter Valley Project (PVP), a hydroelectric facility that has historically diverted water from the Eel River to the Russian River watershed. The 2,086-page document outlines PG&E’s plans for decommissioning the century-old project and details the expected effects on Russian River water users, including agricultural, municipal, and recreational interests in Mendocino, Sonoma, and northern Marin counties. This summary highlights key takeaways relevant to the Russian River community.
Overview of the Potter Valley Project
From PG&E’s January 31 press release:
"The Potter Valley Project hydroelectric facility in Mendocino and Lake counties has a long history of generating power and diverting water from the main stem of the Eel River to the Russian River watershed, which has benefited agriculture and communities in southern Mendocino, Sonoma and northern Marin counties."
The project infrastructure, all of which is over a century old, includes:
- The Potter Valley powerhouse (built in 1908)
- Cape Horn Dam and Van Arsdale Reservoir
- A fish passage and salmon and steelhead counting station at Cape Horn Dam
- A tunnel and penstock
- Scott Dam (built in 1922) and Pillsbury Reservoir
PG&E’s Rationale for Decommissioning
PG&E ceased hydroelectric generation at the facility in 2021, citing financial losses. Additionally, Scott Dam has been classified as seismically at risk by the Division of Safety of Dams. With no buyers willing to take on the project’s costs and liabilities, PG&E decided not to pursue relicensing. The company states its primary goals in the Draft Application:
"PG&E’s goals upon conclusion of the decommissioning process are to (1) remove the Project facilities and features including but not limited to Scott Dam and Cape Horn Dam, (2) remove the Project from FERC and Division of Safety of Dams jurisdiction; and (3) no longer operate or maintain the Project and Project features in the future."
The “Two-Basin Solution” and Water Diversion Plans
After years of negotiations, stakeholders on both sides of the project reached a consensus—endorsed by U.S. Congressman Jared Huffman—known as the “Two-Basin Solution.” This agreement allows for the removal of the dams while permitting continued, albeit seasonal, water diversions to the Russian River.
PG&E’s Draft Application asks FERC to authorize the Eel Russian Project Authority (ERPA)—a coalition of regional water agencies—to file for Non-Project Use of Project Lands and to construct a new seasonal diversion facility, the New Eel Russian Facility (NERF). This facility would pump water into the existing tunnel, directing flows into the East Branch of the Russian River.
The primary Russian River stakeholders negotiating with PG&E include:
- Sonoma County Water Agency
- Mendocino County Inland Water & Power Commission
These agencies, both ERPA members, are seeking funding for the construction and operation of the new diversion system, as well as exploring additional water storage solutions, such as raising the dam height at Lake Mendocino.
Regulatory Hurdles and Permitting
To construct the new diversion facility, ERPA will need approvals from multiple agencies, including:
- U.S. Army Corps of Engineers
- National Marine Fisheries Service
- U.S. Fish & Wildlife Service
- California State Water Board
- California Department of Fish & Wildlife
Additionally, ERPA must prepare environmental, cultural, tribal, and socioeconomic mitigation plans for NERF’s construction. Meanwhile, PG&E is responsible for similar studies regarding dam removal. However, ERPA lacks PG&E’s financial resources, making funding a critical issue.
Socioeconomic and Environmental Impacts
PG&E plans to remove all campgrounds, boat launches, and recreational facilities associated with the reservoirs and restore the inundation zones. The Draft Application acknowledges potential negative effects:
"The removal of Scott Dam would result in a change from a lacustrine to riverine environment at Lake Pillsbury and a return to unimpaired Eel River flows that may result in changes in and could have unavoidable effects on recreation value, community way of life, and population and housing in the Scott Dam area. These effects may be offset by restoration. . . ."
"In the Russian River Watershed, there may be unavoidable adverse impacts to water reliability and cost, economic opportunity (particularly farming and ranching), recreation value in the Russian River Watershed, and community way of life because diversions to the East Branch Russian River would no longer occur under the Proposed Action. . . ."
The decommissioning process is expected to take two years, with the new diversion facility constructed over two seasons. However, no official start date has been set.
Tribal Concerns and Water Rights Uncertainty
Tribal groups have voiced concerns regarding the project’s history and future impacts. The Potter Valley Tribe, in a December 22, 2023 letter, reiterated its claim to ancestral lands:
"While the Tribe did benefit from a donation of land from PG&E during the Stewardship Council process, the Tribe has continued to seek the return of the balance of the property retained by PG&E. Now that PG&E seeks to decommission the projects that were retained based on an assertion that they could not be transferred because they were subject to a FERC license, the Tribe again seeks the return of our aboriginal lands, which were taken by what would be considered unlawful means today."
Other tribal groups, such as the Pinoleville Pomo Nation, expressed concerns about the financial and social implications of the proposed water management structure. In a December 13, 2023 letter, Chairperson Leona L. Williams stated:
"This is a very costly proposal without clear sources of funding. . . . Future rate hikes increase the risk of socially disadvantaged communities facing water disconnections due to inability to pay higher rates and curtailments while providing water to the more affluent communities and segments of the economy. . . ."
The Draft Application contains extensive scientific studies on ecological impacts, but water rights are addressed only briefly. While PG&E provides a table of its current water rights, it does not detail how the transition to seasonal diversions will affect the nearly 1,000 downstream rights holders on the Russian River.
Next Steps and Public Comment Period
Public comments on PG&E’s Draft Application are due by March 3, 2025. PG&E will continue consulting with resource agencies and tribal groups through June. The Final Surrender Application and Decommissioning Plan is scheduled for submission to FERC on July 29, 2025.
To submit comments:
Email: PVSurrender@pge.com
Attn: Tony Gigliotti, Senior Licensing Project Manager, Power Generation
We would like to be included in future communication about this project
This action by PG&E is disastrous to ranching, farming, and all other water users downstream.
Thanks I will write pge about tribal concerns
California regulatory expense and environmental activism caused this. It is time to reduce business unfriendly, virtue signaling regulation, and to pay less attention to the more strident voices.
PG&E spent billions of dollars on lawsuits and damage from the 2017 fires that ravaged much of the North bay area. The Dam is one more expense they don’t want to be obligated to pay for in the future. Mendo and Sonoma don’t have economies of scale (I.e. funding) to maintenance this Dam pure and simple.
PG&E built the dams almost 100 years ago and should be responsible for them for life. Or until they can legally find a buyer who can continue maintaining them. Just because it’s no longer profitable doesn’t mean they can simply say they’re done and walk away after a century. The costs of maintaining those 2 dams and watershed are pennies out of their 23 billion dollar profits in 2024. If this is allowed to happen, the next time the area goes up in flames there won’t be water to put it out with.
PG&E didn’t exist in 1900 so this is not true, if you bothered to look up the history. PG&E is under no legal or business obligation to maintain this Dam. PG&E earned $5.99B in revenue in 2024 and $2.2B in profit in 2023. These lawsuits nearly destroyed PG&E as a company and they are recovering those loses by reducing liabilities, like this Dam.
This is a bad idea. With all the wild fires Lake Pillsbury’s location is a great water source to fight future fires. Not to mention all the water for the farmers.
At whose expense? It’s not the farmers footing the bill (and future bills) for all this infrastructure.
Ca state congressman Jared Huffman could stop this but he is controlled by the environmental lobbyists who contribute to his reelection campaign funds. A solution to stabilize Scott’s dam at lake pillsbury has been discussed in the past including a concrete anchor at the base. You could gut the powerhouse and just use the tunnel and penstock for water diversion to the east fork of the Russian river which would greatly reduce cost and keep lake Mendocino full. Huffman is controlled by the environmentalist with no regard to potter valley irrigation and users of the waters that the east fork of the Russian river provides including lake Mendocino and all the benefits citizens of inner Mendocino county rely on
Russian River white people seem to think its ok to steal native peoples water from the Eel River because it benefits them.
Allowing a criminal activity to continue as an ongoing enterprise just because some people have become dependant on its abundence is unlawful and morally wrong.
Stop the steal, return the waters to the Eel.
I grew up fishing along the eel river. Many fish were there back then. In the summertime, the river flow was poor and swimming in algae infested water was not a good thing. I was just a boy back then, but I could see the negative impact of the loss of water that was sent to the Russian River. Please return the flow of the Eel to nature who owns it.
Why does anyone believe all the hype & diversion tactics about this dam removal? No matter what the people want or say…this has already been decided. It’s interesting the Tribes now want rights which they claim? But the actual use for many years has been Mendocino & Sonoma counties. It’s ambiguous & there is no legal paperwork about all these claims. If history is the basis, then Mexico has rights because they had California also? Going back isn’t possible. We are the United States now. United in goals & United in decision making. Why does not a soul on demolishing side care about the Eagles, Otters, Trout, Bears and many other wildlife that needs this Lake to survive the summers? It makes no sense to demolish a dam with a fortune…instead of rebuild it with Hydropower & water storage for future droughts? When something makes no sense…its smells fishy!!