Regional agencies outline pump-station plan to keep Russian River diversions as PG&E moves to decommission Potter Valley project

Interagency officials outlined a plan Thursday to build a new pump-and-intake facility to keep water flowing from the Eel River into the Russian River watershed after PG&E’s planned decommissioning of the Potter Valley project.

The project team told representatives from multiple local water and irrigation agencies that PG&E has informed regulators and the public it intends to surrender the license for the Potter Valley project and remove dams, and that the proposed New Eel River Facility (NERF) would pump water into the existing tunnel that conveys water to Potter Valley and the Russian River.

Why it matters: The Potter Valley project historically has moved Eel River water into the Russian River and into Lake Mendocino for municipal and agricultural use. PG&E’s decision to stop operating the project and remove the dams would end that flow unless a replacement infrastructure and legal arrangement is in place. Agency officials said they persuaded PG&E to include a community-backed proposal in PG&E’s Federal Energy Regulatory Commission (FERC) filing, enabling a coordinated transition rather than a post‑decommissioning retrofit.

Tom Johnson, an engineer consulting to the interagency partnership, described the physical design. He said NERF would place a pump station just upstream of the existing Cape Horn Dam site, lift roughly 30–35 feet, and force water into the project's tunnel when diversion criteria and river flows permit. Johnson said the pump station would be robust enough to operate in high flows and sized to move from small diversions in low flow periods up to flows that match tunnel capacity during high runoff. He estimated peak power draw around 1 megawatt and said the facility would be designed to operate seasonally when water is available.

"We narrowed down to something called the NERF — basically a pump station — because Cape Horn Dam won’t remain as-is once the project is decommissioned," Johnson said. "We will build the pump station at the same time PG&E removes Cape Horn Dam so the transition can be synchronized on site."

Cost and schedule: Consultants gave a wide cost range to reflect many unknowns. Johnson said an initial construction estimate for NERF was roughly $40 million (with an engineering contingency range roughly minus 30% to plus 50%). Agency staff and consultants said annual operating, reserve and lease costs for NERF (not including any storage work) could be roughly $10 million per year in current nominal-dollar estimates, producing a sample per‑acre‑foot cost on the order of several hundred dollars if 30,000–35,000 acre‑feet are moved annually.

Scott Shapiro, counsel to the lead agency, said PG&E intends to file its application with FERC by July 31. He said FERC review typically takes at least 24 months and could take longer; construction start dates for the combined removal-and-replacement effort were described as likely in a broad window between about 2031 and 2034, depending on permitting and funding.

Legal and governance framework: Agency counsel and consultants said the parties negotiated a memorandum of understanding (MOU) and are drafting a binding water diversion agreement to be filed with PG&E’s application. Key negotiated points explained to the boards included: (1) the Round Valley Indian Tribe would hold the underlying water rights, (2) IRPA/other local entities would receive a long-term lease of those rights for diversion use, and (3) the lease would include a waiver of sovereign immunity so the parties could enforce contract terms.

Scott Shapiro said the allocation of legal title to water rights was contentious, but parties concluded that giving the paper water right to the Round Valley Indian Tribe with a 30-year initial lease term and a renewable 20-year extension created the best practical path forward given legal uncertainty about tribal Winters claims and California Public Utilities Commission notice requirements for utility land disposition.

"We ended up with a pragmatic decision: the Tribe holds the rights, and IRPA and partnering agencies obtain a 30‑year lease with an option for a further 20 years," Shapiro said. "That arrangement provides operational certainty and enforcement mechanisms — for example, waiver of sovereign immunity — that are necessary for financing and operations."

Coalition and permits: Presenters said the project team built a coalition across the two watersheds — including Sonoma County, the Round Valley Tribe, regional NGOs and state agencies such as the California Department of Fish and Wildlife (CDFW) — to persuade PG&E to include the community’s diversion plan in its FERC filing. Consultants listed likely federal and state permits that will be required (FERC process, Clean Water Act 401 water-quality conditions, U.S. Army Corps Section 404, California Fish & Wildlife 1600, and others) and warned those reviews add time and uncertainty.

Ownership, operations and revenue: The project team said the NERF facility and associated assets would transfer to a local joint-powers authority (IRPA/IWPC or similar) after PG&E’s surrender and remediation. The team said IRPA would be set up to contract for operations and could use Sonoma Water, City or district staff or independent contractors to operate the pump station on seasonal schedules. Funding sources discussed included state and federal grants already awarded for study and design work (CDFW and Bureau of Reclamation grants were cited), potential state contributions, and a local share financed through bonds, assessments or water sales. Consultants said they hoped public funding would cover a significant share of construction, with the remainder financed by revenue bonds backed by water-sale contracts.

What was not decided: No agency voted on a construction contract or adopted final financing. Consultants and agency counsel said several details remained under negotiation in closed session, including the exact renewal triggers for the tribal lease, the initial lease payment timing, and the precise allocation of water among members in shortage years.

Quotes and attributions: All direct quotes in this account come from board meeting speakers: Scott Shapiro (counsel), Tom Johnson (consulting engineer), Eric Nagy (consultant on storage and federal study), and David Manning (Sonoma Water project manager). Other board and public comments were recorded but did not change the described plan.

What’s next: Agency staff said they will finish negotiating the water diversion agreement to coincide with PG&E’s FERC filing and continue engineering design and permitting. Officials urged boards to budget for interim expenses in 2025–2028 for design, permitting, and organization setup. Consultants repeated earlier cautions that timelines and cost estimates are preliminary and contain substantial contingencies.

Ending note: Agency leaders told participating boards the planned pump station and legal arrangements are a negotiated path intended to preserve diversions into the Russian River as PG&E removes project infrastructure; they emphasized the plan still faces regulatory, legal and funding steps before construction can begin.