Water worries rise as leaders plan for life after the Potter Valley Project

On May 29, the Mendocino County Inland Water and Power Commission (IWPC) convened an All Boards meeting at the Ukiah Conference Center, uniting representatives from local water agencies and governments to discuss the region’s water future after Pacific Gas & Electric (PG&E) exits the Potter Valley Project (PVP). Participating entities included the Mendocino County Board of Supervisors, Ukiah City Council, and board members from the Redwood Valley County Water District, Potter Valley Irrigation District, and the Russian River Flood Control and Water Conservation Improvement District.

PG&E is moving ahead with plans to surrender its license for the PVP and remove the Scott and Cape Horn Dams, which have long diverted Eel River water to the Russian River via a tunnel. The utility cites financial losses, seismic risk, and outdated infrastructure as reasons for the decommissioning.

New Agreements and Regional Collaboration

After years of negotiations among Russian and Eel River stakeholders, a Memorandum of Understanding (MOU) was signed in February 2025. Parties include IWPC, Sonoma County Water Agency, the Round Valley Indian Tribes, Humboldt County, Trout Unlimited, California Trout, and the California Department of Fish and Wildlife. The MOU outlines how water resources will be managed after the dams are removed.

On April 11, Congressman Jared Huffman attended a signing ceremony for a three-year Feasibility Study to explore modernizing Coyote Valley Dam and evaluating new water storage options, potentially unlocking federal investment.

Legal and Engineering Framework for Transition

IWPC’s counsel Scott Shapiro and consulting engineers Tom Johnson and Eric Nagy provided legal, financial, and engineering overviews of the MOU and Feasibility Study. Shapiro explained that the Federal Energy Regulatory Commission (FERC) must approve PG&E’s license surrender and any subsequent changes. Originally built to power Ukiah more than 100 years ago, the PVP is no longer economically viable.

The water historically diverted by the PVP was once considered “abandoned” and has supported agricultural growth in Mendocino, Sonoma, and Marin counties for decades.

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The Push to Keep Water Flowing

Responding to questions about saving Lake Pillsbury, Shapiro estimated that exploring alternative ownership of the PVP would cost $20 to $30 million—and no entity has stepped forward since PG&E’s 2019 surrender announcement. A group known as the Russian River Water Forum concluded the most viable path forward is forming a Joint Powers Authority (JPA).

That new entity, the Eel Russian Project Authority (ERPA), will oversee the construction of a New Eel Russian Facility (NERF)—a pump station to continue diverting water after dam removal. ERPA’s members include IWPC, Sonoma County, Sonoma Water, and the Round Valley Indian Tribes.

Timeline Unclear as PG&E Moves Toward Surrender

PG&E is expected to submit its final license surrender application in late July. Johnson estimated that it may take FERC two years to process, with additional reviews from the State Water Resources Control Board, Army Corps of Engineers, and California Department of Fish and Wildlife. He projected that construction could begin between 2031 and 2039.

The NERF will only divert water during the rainy season—typically December through April—with possible extensions depending on yearly rainfall. In drought years, diversions may halt entirely, underscoring the need for expanded storage capacity.

A Steep Price Tag for Future Water

The projected annual water volume diverted by NERF is between 32,000 to 35,000 acre-feet, similar to current reduced levels. But the cost will rise significantly—from as little as $18 per acre-foot to an estimated $300.

IWPC will need to spend $2 to $5 million in the coming years on preliminary design and planning. The full NERF construction is estimated at $40 to $60 million, with annual operation costs between $7 to $12 million. Sonoma County has so far shouldered more than half the financial burden.

Supervisors raised concerns about affordability. “How are farmers paying $18 per acre-foot supposed to pay $312?” asked Supervisor John Haschak. Shapiro acknowledged the concern but warned, “The alternative is no water.”

Seismic Safety and Hydropower Questions

Guiness McFadden questioned PG&E’s reasoning for removing Scott Dam, asking if seismic risk is being used as a pretext. Shapiro responded that seismic studies are confidential due to FERC’s national security policies, but he agreed to file a public records request. Johnson reiterated that PG&E is “adamant” about removal, citing the dam’s location on an earthquake fault and poor original design.

McFadden also asked why no one has proposed generating hydropower using the tunnel’s 400-foot drop. Johnson said the NERF will not be regulated by FERC and that hydropower may be considered in the future.

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Tribal Water Rights and Political Compromise

The Water Diversion Agreement, supported by the Round Valley Indian Tribes (RVIT), is central to the MOU. Shapiro said RVIT will likely obtain the water rights PG&E is relinquishing and that these rights would likely withstand legal challenge. “It’s a necessary political compromise,” he said.

Future Costs and Construction Outlook

Over the next four to five years, ERPA will need to raise $2 to $5 million for NERF design. Construction, potentially beginning in 2032, will be supported by grants from the California Department of Fish and Wildlife and the Bureau of Reclamation. Bonds and customer fees will cover the remainder.

Nagy noted that while raising Coyote Valley Dam could take 9 to 16 years—or even up to 27—smaller, interim storage projects could be pursued. The Lytton Rancheria, a major agricultural operator on the Russian River, is a study partner alongside IWPC and the Army Corps of Engineers. Congressman Huffman secured $500,000 for the study, but matching funds are needed.

Next Steps: Environmental Review and Outreach

Shapiro outlined major upcoming tasks, including CEQA and NEPA reviews, hiring an administrative manager, and groundwater studies in Potter Valley. Sacramento-based KP Public Affairs has been retained to guide messaging and public engagement, particularly as opposition to dam removal persists.

Board Member Tom Schoeneman asked whether PG&E could better explain why Lake Pillsbury can’t be saved. Shapiro also flagged that many local water users are not part of formal water districts and will require targeted outreach.

Federal Takeover Unlikely, Officials Say

Sonoma Water’s David Manning described his recent trip to Washington, D.C., where efforts to preserve the dams and urge federal takeover were discussed. “We think the reality of that happening as a final result is slim,” he said. If the federal government took control, he warned, “all those costs will be borne by locals.”

The meeting concluded with a closed session between IWPC boards, attorneys, and consultants.

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