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b'December 29, 2022 \\u2014 The license for the Potter Valley Project is undergoing a variety of considerations.\\n\\nAs PG&E prepares its plan for decommissioning the inter-basin hydropower project that diverts water from the Eel River into the Russian River, the Federal Energy Regulatory Commission, or FERC, announced that it is considering reopening the license. That means that, although it granted PG&E an annual license in April, it\\u2019s thinking about adding requirements for a number of wildlife protection and habitat monitoring measures that were proposed in March by the National Marine Fisheries Service, another federal regulatory agency. PG&E argues that the decommissioning process will provide plenty of opportunity to review protective measures, and that there\\u2019s no evidence of harm to embattled salmon. But FERC appears to have taken notice of legal threats by environmental groups claiming the project violates the Endangered Species Act.\\n\\nFERC has accepted comments for and against the proposed reopening of the license, and PG&E has pledged to submit its decommissioning documents by January of 2025. By that time, the project may technically be under new ownership.\\n\\nThis month, PG&E asked FERC to allow it to transfer a list of hydropower projects to a new Delaware-based LLC called Pacific Generation, writing that the transfers \\u201care part of a broader corporate reorganization being undertaken to facilitate raising equity for PG&E\\u2019s utility needs.\\u201d PG&E spokesman Paul Moreno noted in an email that, \\u201cNothing will change for Potter Valley or the decommission process. Pacific Generation LLC will be a majority-owned subsidiary of PG&E, which will own other PG&E hydropower facilities as well as natural gas power plants and some solar arrays and battery storage. It was not created just for (the) Potter Valley Project.\\u201d \\nPG&E assured FERC that it plans to \\u201cremain the majority and controlling owner of Pacific Generation;\\u201d and that its employees \\u201cwill continue to operate and maintain the assets\\u2026just as they do today.\\u201d\\n\\nThe restructuring would have to be approved by the California Public Utilities Commission (CPUC) , which in 2023 will also set the rates for the next four years. In September, PG&E requested that CPUC expedite the process, completing testimony, hearings, and filing of briefs by May first.\\n\\nMark Toney, the Executive Director of The Utility Reform Network, or TURN, a ratepayer advocacy group, said TURN is \\u201copposing the deal strenuously.\\u201d One of TURN\\u2019s many worries is that if PG&E goes bankrupt again, its assets could be out of reach of settlements. TURN filed an objection to PG&E\\u2019s proposal and the request for expediting the proceeding, declaring that, \\u201cthis application benefits shareholders, and an expedited schedule would only serve to benefit shareholders\\u2026not avoid ratepayer harm.\\u201d TURN also asked if it was reasonable for PG&E to indemnify Pacific Generation for wildfire damages caused by PG&E\\u2019s equipment, writing that \\u201cThe Commission should examine whether this would result in an unreasonable transfer of risks.\\u201d\\n\\nEnvironmentalists are concerned, too. Redgie Collins is legal counsel for California Trout, one of the groups that filed a notice of intent to sue PG&E for harming endangered species. Collins is also a steering committee member of the Hydropower Reform Coalition, a statewide consortium of environmental groups dedicated to \\u201crestoring environmental and recreational values at hydropower projects presently being relicensed,\\u201d according to its website. The licenses for three of the 21 hydropower plants PG&E wants to transfer to Pacific Generation are being surrendered, while seven are up for renewal. Collins suspects that PG&E is \\u201ctrying to sneak bad assets into its portfolio,\\u201d in part by overstating how viable they are. \\n\\nIn its transfer application to FERC, PG&E wrote that Potter Valley is a 9.4-megawatt project, though it hasn\\u2019t generated any power since a transformer broke down over the summer. Earlier this year, Moreno said the utility expected to recoup the unspecified costs of replacing the failed equipment within five years. But by mid-December, PG&E filed a brief update with FERC, stating that, \\u201cPG&E is currently in the process of considering long-term planning associated with Power Generation\\u2019s portfolio. As a result, numerous projects are being reassessed to ensure resources are utilized prudently, including the Potter Valley transformer replacement project.\\u201d \\n\\nCollins also speculates that if the transfer is approved, the company could raise debt on some of its projects. The utility insists that the transfer should enable Pacific Generation to issue debt at lower rates than PG&E, but TURN worries that \\u201cthe total amount of debt could very well increase as a result of this transaction.\\u201d \\n\\nOne thing is certain: ratepayers will cover the costs of decommissioning.\\n\\nMark Pocta, a program manager at the Public Advocate\\u2019s Office at the California Public Utilities Commission (CPUC), doesn\\u2019t believe the transfer would make much of a difference from a regulatory perspective. PG&E would still be regulated on a cost of service basis, and he does not believe that the rates would be set any differently if the assets are held by a subsidiary. The Public Advocate\\u2019s Office is an independent group within the CPUC that is charged with representing the interests of ratepayers. Its members participate in proceedings, but they do not set rates or make decisions.\\n\\nPocta noted that the cost of decommissioning hydropower plants is \\u201ctypically funded through rates;\\u201d but that no money has been set aside for the purpose, because when hydro projects were built, there was an assumption that they had economic value. Before the Potter Valley license expired in April of 2020, PG&E tried hard to sell it. And a regional coalition tried unsuccessfully to drum up enough money to pay for the studies that were required to take over the license. \\n\\nEven without the costs that could accrue if FERC orders additional environmental monitoring and mitigation measures, PG&E estimates that decommissioning the project could cost $93 million in 2020 dollars. CalTrout estimated that it could cost between $133-$155 million. Pocta said a stipulation to set aside $48 million per year for the next four years to decommission Potter Valley and Battle Creek, a hydropower project in Shasta county, will come before the CPUC at its general rate case hearings in 2023.\\n\\nDecommissioning hydropower projects isn\\u2019t something that happens frequently, so there are no set procedures in place. But Pocta remembers when plans to decommission another set of dams first got underway: Klamath, he remembers thinking, will take longer than ten years.'