Mendocino LAFCO reviews Potter Valley Irrigation District MSR as PG&E decommissioning raises storage and funding questions

The Mendocino Local Agency Formation Commission on Feb. 3 held a workshop on the Potter Valley Irrigation District (PVID) municipal service review, where district representatives outlined reliance on the Potter Valley Project and described ongoing planning and funding work while PG&E's project decommissioning proceeds.

The review matters because the Potter Valley Project historically diverts water from the Eel River that supports the district's irrigation deliveries. The commission and district officials said decisions about the project's future affect local irrigation water availability, potential storage projects, and long-term costs for district customers.

The staff presentation summarized the district's history and system. PVID was formed in 1924 and serves about 6,966 acres and roughly 275 agricultural customers. The district's system includes 18 miles of canals, 18 miles of laterals, four flumes and six siphons. Water for irrigation is diverted through the Potter Valley Project tunnel; PVID holds contract rights with PG&E for up to 19,000 acre-feet annually, with an additional 3,600 acre-feet when available.

District representatives told the commission that PG&E's Federal Energy Regulatory Commission license for the Potter Valley Project expired in 2022 and PG&E is proceeding with decommissioning steps. The Eel–Russian River Project Authority (IRPA) and the Inland Water Power Commission (IWPC), among other partners, are pursuing options to maintain diversion infrastructure and plan post‑project operations. Steven Elliott, retired superintendent for PVID, said the district has been contributing to regional planning efforts and to IWPC. "We've been putting every penny we can make... Last year it was $50,000 out of our budget," Elliott said, referring to PVID's contributions to regional studies and planning.

Commissioners pressed district staff on where funds for future storage would appear in PVID's financial statements and whether the district had identified capital plans for storage, recharge or deeper wells. District representatives said some planning studies are underway and that the district has a self‑declared moratorium on extending services at this time. Don Brown, PVID's superintendent, described system improvements the district has pursued: "Specifically, over the last 10 years our efforts have been to install pipe in areas where we found significant loss of water due to seepage...and the installation of pipe in our main canals and laterals when we can afford it," he said.

Commissioners and staff recommended the MSR document be amended in places to clarify wording and data. Commissioner Roden asked staff to add explicit language that the MSR's reference to "significant uncertainty" should specify uncertainty around a continuing water supply. Staff said they would incorporate that revision for the public‑hearing draft.

Several commissioners urged the MSR to document contributions PVID has made to IWPC and to link the MSR to the ongoing regional studies that are evaluating storage, recharge and other options. Elliott and other district representatives said work with IWPC and Sonoma Water on planning and funding is active and that they expect clearer milestones this year; one speaker said the regulatory and planning process may be clearer by midyear when IRPA plans are included in PG&E's decommissioning filings.

The workshop was informational; staff said no formal action was taken and a public hearing on the MSR is expected during a later meeting. Commissioners asked staff to add specified clarifications, to reference IWPC materials, and to record the district's reported contributions and moratorium status in the public‑hearing draft.

Ending — The commission scheduled further revision and a public hearing on the Potter Valley Irrigation District MSR; staff said they would add the commissioners' requested clarifications and additional references to regional planning work and funding contributions.