Project Activity - Proposed Potter Valley Authority

            According to the published "Russian River Water Plan" of 1969, The Sonoma and Mendocino Districts in 1959 filed Applications 18785 and 18786 to establish a right to appropriate water in the Eel River for water supply purposes.  The existing water rights held by the PG&E Company for the diversion at Potter Valley are primarily for power generation purposes.  The Sonoma Districts also entered into an agreement with Pacific Gas and Electric Company (PG&E) which provides for the Districts to acquire the diversion facilities under certain circumstances.  Under Decision 1610, Potter Valley is considered the area of origin for the water supplies taken by SCWA at the Wohler intakes. The 160,000 acre feet of free, pre-1914 water is alleged to be equivalent to an amount able to serve 640,000 people. 
            Randy Poole, General Manager and Chief Engineer of the SCWA is advocating that legislation be passed authorizing the creation of a new government agency, the Potter Valley Authority to raise the money to buy the PG&E Potter Valley facilities.  Former SCWA employee and current consultant, Bob Beach states in his analysis of the Potter Valley Project proposal that the 1908 Potter Valley diversion works and powerhouse consisted of the Cape Horn Dam on the Eel River, a tunnel through a mountain, and the Potter valley powerhouse to provide power for the City of Ukiah.  The original project was changed in 1921 when Scott Dam was built 12 miles upstream from the Cape Horn Dam in Lake County.  The Scott Dam holds the Lake Pillsbury water in order to provide a continuous diversion of water through the tunnel.  
            Potter Valley, once known as Ba-Lo-Kai or valley of shade, once had merely a valley drain or watershed from the nearby hills surrounding the valley.  In 1905, Eel River Power and Irrigation Company (W.W. Van Arsdale and George Scott) began construction of a diversion dam at Cape Horn on the Eel River and blasted out a 5,826 foot tunnel to carry water to a Power house in Upper Potter Valley. Van Arsdale Dam was built at Cape Horn and Scott Dam formed Lake Pillsbury (E.S.. Pillsbury, Esq.) and in 1906 a new company, Snow Mountain Water and Power Company took over. This of course was done prior to 1914 when a State statutory scheme was created whereby application for appropriative right is to be with State Water Resources Control Board.  Thus the water rights were "pre-1914" or "grandfathered".
            By 1908, electrical power was available in Ukiah and Potter Valley.  In the original agreement, five ranchers living below the power house were guaranteed water for irrigation and this was used until 1929.  In 1929, PG&E acquired the company and in 1933 they constructed 18 erosion control dams in the tail race canal and river channel.  In 1928 an Irrigation District was formed covering 5,969 acres and the original contract with the power company was for 50 years ending in 1972.  In 1967, the Potter Valley Irrigation District petitioned PG&E to extend the term 50 years more. In 1982, a new contract had still not been settled.  
            In January, 1991, the SCWA analyzed its supply deficiencies and supply outlooks and included an analysis of the Potter Valley Project Reliability in the event of the abandonment of the Hydroelectric Project by PG&E. The Reliability Study concentrated on three elements; the loss of the Scott Dam Gates, loss of Scott Dam, and loss of the Potter Valley Tunnel.  
            With the loss of the Scott Dam Gates current agricultural and urban demands between Coyote Valley Dam and Dry Creek could still be satisfied.  In a critically dry year, a 30 percent curtailment would have to be taken to avoid dewatering Lake Mendocino.  Under Decision 1610 stream flow criteria, stream flows would be affected between Coyote Valley Dam and Dry Creek.  In normal years stream flow would be reduced from 185 cfs to 150 cfs from April through August and occasionally from 150 cfs to 75 cfs from October through December.  The total annual lower Russian River urban demand which could be satisfied would be reduced by approximately six percent (6%).
            With the loss of Scott Dam, the PG&E diversion would continue to be made to the extent flows in the Eel River were available for diversion (while maintaining current Eel River minimum flows).  Under Decision 1610 stream flow rates, 75 cfs between Coyote Valley Dam and Dry Creek would apply from June 1 to December 31 of every year.  Adequate water would be available to satisfy the current agricultural and urban demands between Coyote Valley Dam and Dry creek.  The total annual Lower Russian River urban demand could be satisfied but would be reduce by approximately 15 percent (15%).
            With the loss of the Potter Valley Tunnel, minimum stream flows between Coyote Valley Dam and Dry Creek would have to be reduced to 25 cfs in all years.  The current agricultural and urban demands could be satisfied provided a 30 percent curtailment were taken in critically dry months.  The Lower Russian River urban demand would be reduced by approximately 15 percent (15%).  The Agency anticipates that in the event of the loss of the Dam or the Tunnel, the State Water Resources Control Board would alter the stream flow requirements.  Historically, the 125 cfs minimum in the lower Russian River was based in 1959 on the reliance on the Dam and the Tunnel.  The agency feels that a good case could be made that the Municipal water supply of Lake Sonoma should not be sacrificed to totally compensate for the loss of the upper river supply and that the loss should be compensated for with stream flow reductions.
            An average of 159,000 acre feet of Eel River water is diverted into the East Fork of the Russian River.  Since the creation of the diverted water system, downstream dependence on the water has developed.  The Potter Valley Irrigation District was formed in 1924 and buys water from PG&E under a 1936 contract for agriculture irrigation.  Next is the Coyote Valley Dam Project in Mendocino County built in 1959 which holds the waters of Lake Mendocino and stores Russian River flows that are augmented by the Potter Valley diversions.  Coyote water has been used to provide water used to maintain instream flows in the entire downstream Russian River.  According to Beach, of the 159,000 acre feet of Eel River water, 100,000 is needed to maintain normal year Russian River instream flows.
            PG&E's Potter Valley project is regulated by the Federal Energy Regulatory Commission (FERC).  FERC has exclusive jurisdiction to set instream flow standards on federally-licensed hydroelectric projects and would have primary authority to review the instream flow standards in the Eel river associated with the Potter Valley Project.  FERC has specified that the Potter Valley Project must have a new fish screen to prevent outmigrating salmonids in the Eel River from being sucked into the powerhouse and killed.  The fish screen could cost between $14 and 15 million.  In addition, the Scott Dam needs seismic retrofitting with a subsequent cost of $6 to 8 million.  With new California Public Utility Commission decisions to deregulate the selling of electrical power, the project will probably be a duck dead in the water.  Acquisition of the Potter Valley Project and the continued operation of the hydroelectric project under Pre-1914 water rights would not require approval of the State water Resources Control Board.  However, the Pre-1914 right does not authorize use for consumptive purposes.  A National Marin Fisheries designation of Coho and/or steelhead listing as endangered species could affect the operation of the Potter Valley project and the amount of water diverted from the Eel River into the Russian River.
            Through prior negotiations, local customers will be given first chance at bidding on the project in it's entirety.  The newly proposed Potter Valley Authority would be comprised of three counties, Marin, Sonoma and Mendocino.  It is to be governed by a seven member board: two members from Marin County (one each appointed by the Marin Municipal Water District and the North Marin Water District), two from Mendocino (with undetermined appointing entity), and three from Sonoma County (appointed by the Board of Supervisors).  Representation from Lake and Humboldt Counties is not specified even though water withdrawals effect their areas.  In September, 1994, Bob Beach stated that "this water is regarded as abandoned water and is subject to appropriation."
            The State legislation, as proposed in early 1995, proposes a maximum assessment of $20 per acre foot for municipal, industrial and commercial uses and $10 per acre foot for agricultural uses. 
            Federal legislation passed by Congress in early November, 1995, as an amendment to a federal energy and water appropriations bill prohibits the Federal Energy Regulatory Commission (FERC) from approving a license transfer until it determines the trade will not adversely affect existing water rights. ."