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February 4, 2022 \u2014 The fate of the Potter Valley Project took a few more turns this week, with a regional coalition declaring it will not file for the license application and PG&E taking steps to operate the project under an annual license until the next development.\nPG&E, which owns and operates the project, announced in 2019 that it would not renew the license or continue to try to sell it. A regional coalition that includes Mendocino and Humboldt counties, California Trout, Sonoma Water Agency and the Round Valley Indian Tribes was the only entity willing to take on the license, which involves multi-million dollar studies and ongoing maintenance and operation costs. In July, a transformer bank went down in the powerhouse, which severely curtailed the amount of water the project is able to divert from the Eel River into the Russian River. PG&E estimates it would cost five to ten million dollars to custom-engineer a replacement and take two years to replace.\nOn Monday, the coalition sent a letter to the Federal Energy Regulatory Commission, admitting that it was unable to raise enough money for the required studies and that it will not file an application by the time the current license expires in mid-April.\nTwo days later, PG&E informed the coalition leaders that it had decided to \u201creturn the powerhouse to full operational status.\u201d PG&E spokesman Paul Moreno said that, although the exact costs are unknown, the company expects to recoup the costs of the repair within five years. \nAlicia Hamann, Executive Director of Friends of the Eel River, is advocating for a speedy decommissioning process. She has some idea of who will pay for the repairs.\n\u201cThe main transformer bank actually failed in July,\u201d she said. \u201cAnd there weren\u2019t many folks who were made aware of that right away. So when we found out, Friends of the Eel immediately sent a letter to the California Public Utilities Commission, notifying them that this was happening and giving them a heads up that PG&E may try to replace this infrastructure, and then may seek their approval to get recovery of those costs on the backs of ratepayers, which we think is just totally inappropriate.\u201d\nCongressman Jared Huffman, who convened an ad hoc committee dedicated to making recommendations about the Potter Valley Project, doesn\u2019t think the repairs will have an effect on the timeline of what he views as the inevitable decommissioning of the project. While he said in the short term, \u201cit\u2019s a sigh of relief for Russian River water users,\u201d he suspects the company made \u201ca cold-blooded business calculation\u201d and decided to make some money generating power \u201cduring X number of years it takes to decommission.\u201d With the coalition out of the running for taking over the license, PG&E is responsible for the facility, and Huffman doesn\u2019t think FERC will let them out of their obligations \u201cquickly or cheaply.\u201d\nJanet Pauli, chair of the Mendocino County Inland Water and Power Commission, said \u201ceven if everything had gone perfectly,\u201d it\u2019s doubtful the license would have been completed in time. During the last application process, which lasted from 1972-2006, PG&E operated on annual licenses for eleven years. For now, though, Pauli says, \u201cprotecting the diversion has to be our main concern.\u201d The Commission is itself a coalition consisting of the county of Mendocino, the city of Ukiah, the Potter Valley Irrigation District, the Redwood Valley County Water District, and the Russian River Flood Control and Water Conservation District. It\u2019s asked each of its five members for $50,000 to pay for the legal expenses it\u2019s incurred in its efforts to satisfy the requirements to apply for the license. Now it\u2019s pursuing the water rights associated with the project. Just this week, a consultant, Brian Godbey and Associates, sent out a survey to people who are dependent on project water to find out if they\u2019d be willing to pay for it. All of the expenses to secure the water since 2019 have been paid by the public entities in the Commission.\nDarren Mireau, the North Coast Director for California Trout, thinks there may be a way to continue the diversion without the project. Last year, the California Department of Fish and Wildlife funded a study of three alternatives for diverting water. Mireau favors a scenario that involves removing both dams and pumping water. Operation and maintenance costs are estimated at about $200,000 a year. \u201cAny water management, any water diversion at that location is going to have some operations and maintenance costs, that\u2019s unavoidable,\u201d he said, shortly after the study was released. \u201cThe advantage of the full removal of Cape Horn Dam with that pumped diversion approach is you get all of the obstruction out of the river that might impair fish passage\u2026it does shift the cost, I think, to the water users, instead of the fish side, where it appropriately needs to be. In other words, we\u2019re committed to that water supply reliability, but I think the water users have ...