HomeMy WebLinkAbout03.09.20 Email from FERC - Comment of Conservation Groups on Licensee's updates on sale or transfer of DeSabla - Centerville Hydroelectric Project under P-803.
From:Schuman, Amy
To:Alpert, Bruce;Bennett, Robin;Clerk of the Board;Connelly, Bill;Cook, Holly;Lambert, Steve;Lucero, Debra;
McCracken, Shari;Ring, Brian;Ritter, Tami;Rodas, Amalia;Sweeney, Kathleen;Teeter, Doug
Subject:FW: Comment on Filing submitted in FERC P-803-087 by California Sportfishing Protection Alliance,et al.
Date:Monday, March 9, 2020 12:59:19 PM
Good afternoon,
Please see the email below from FERC.
Amy Schuman
Associate Clerk of the Board
Butte County Administration
25 County Center Drive, Suite 200, Oroville, CA 95965
T: 530.552.3308 | F: 530.538.7120
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Sent: Monday, March 9, 2020 12:53 PM
Subject: Comment on Filing submitted in FERC P-803-087 by California Sportfishing Protection Alliance,et al.
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On 3/9/2020, the following Filing was submitted to the Federal Energy Regulatory Commission (FERC),
Washington D.C.:
Filer: California Sportfishing Protection Alliance
Friends of Butte Creek
American Whitewater
Friends of the River
INDIVIDUAL (as Agent)
Friends of Butte Creek (as Agent)
American Whitewater (as Agent)
Friends of the River (as Agent)
Docket(s): P-803-087
Lead Applicant: Pacific Gas and Electric Company
Filing Type: Comment on Filing
Description: Comment of Conservation Groups on Licensee's updates on sale or transfer of DeSabla - Centerville
Hydroelectric Project under P-803.
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COMMENTS OF CONSERVATION GROUPS ON
S ON IMPLEMENTED PLAN AND
SCHEDULE, AND PROGRESS ON SALE AND TRANSFER
OF THE
DESABLA CENTERVILLE HYDROELECTRIC PROJECT
DeSabla Centerville Project (FERC No. 803)
Docket No. P-803-087
Licensee: Pacific Gas & Electric Co.
March 9, 2020
Ms. Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
(via electronic filing)
Dear Ms. Bose:
The California Sportfishing Protection Alliance, Friends of Butte Creek, American
Whitewater, and Friends of the River (collectively, Conservation Groups) respectfully comment
on the February 27, 2020 quarterly update and previous quarterly updates regarding the sale and
transfer of the DeSabla Centerville Hydroelectric Project (Project) (FERC No. 803) by Pacific
Gas and Electric Company (PG&E or licensee).
The overarching interest of Conservation Groups in the DeSabla Centerville Project is
the continued export of water from the West Branch Feather River to Butte Creek and the
maintenance or improvement of summer water temperatures in Butte Creek. Both of these
-run Chinook salmon, the sole
1
currently viable population of wild spring-run Chinook in the Central Valley.
Conservation Groups are concerned about the slipping timeline for sale or transfer of the
Project, the failure to report substantive progress on sale or transfer in the most recent and
previous quarterly updates, and the unwillingness of PG&E to engage interested stakeholders
concerning the future disposition of the Project. We discuss these and related issues, and request
specific action by the Federal Energy Regulatory Commission (FERC or Commission), below.
I. Background
On February 16, 2017, PG&E filed a Notice of
2
Withdrawal of Application for New License G&E is withdrawing its
3
1
Staff from PG&E and resource agencies have done an excellent job of managing Project resources and facilities to
protect and enhance the population of spring-run Chinook salmon in Butte Creek over the last seven years.
2
PG&E, Notice of Withdrawal of Application for New License, eLibrary no. 20170216-5038. (Notice of
Withdrawal).
3
Id., p. 1.
1
Order Disallowing Withdrawal and
4
Soliciting Statements of Interest in Project The Order Pacific Gas and Electric
Statements
of interest for acquisition of the DeSabla-Centerville Project license must be filed within 60 days
5
The Order further states
to take, the Commission will consider all statements of interest and comments filed in response
6
Between April 24 and May 1, 2017, five parties filed letters of interest on the FERC
7
docket for Project 803.
On April 28, 2017 The United States Department of Agriculture Forest Service filed
8
comments in response to the Order. The comments recommend a one-year timeline for
A formal conclusion to this proceeding should not take more than 3 years in
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total.
10
On May 1, 2017, Conservation Groups filed comments in response to the Order. The
comments requested that the Commission:
1. Provide a time period of no less than six months for PG&E and prospective new
Project owners to negotiate the framework of a transfer of ownership, and consider
extending such time period should PG&E demonstrate substantial progress in transfer
of ownership.
2. Define a process and associated timeline for PG&E and prospective transferees to
report progress to the Commission and also to interested stakeholders.
3. Define a process and associated timeline for PG&E and prospective transferees to
directly engage interested stakeholders, including at minimum resource agencies,
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Conservation Groups, and local residents.
On May 19, 2017, PG&E wrote a letter to FERC
12
-step process and associated timelines for the sale of the Project.
4
FERC, Order Disallowing Withdrawal and Soliciting Statements of Interest in Project (Mar. 3, 2017), eLibrary no.
20170302-3027. (Order). The Order at § 3 reviews some of the history of the relicensing proceeding: PG&E Notice
of Intent, October 4, 2004; PG&E Final License Application, October 2, 2007; Commission staff Final EA, July 24,
2009; State Water Resources Control Board final (modified) Water Quality Certification, September 27, 2016.
5
Id., p. 3.
6
Id., p. 2.
7
In order of filing, letters of interest were filed on the FERC docket as follows: Paradise Irrigation District (Apr. 24,
2017), eLibrary no 20170424-5013; Eagle Creek Renewable Energy LLC (Apr. 26, 2017), eLibrary no. 20170426-
5187; Butte Creek Improvement Company (Apr. 27, 2017), eLibrary no. 20170427-5281;Valtec Power (Apr. 28,
2017), eLibrary no. 20170428-5060; KC Hydro (May 1, 2017), eLibrary no. 20170501-5398.
8
Forest Service comments on Order (Apr. 28, 2017), eLibrary no 20170428-5247.
9
Id., p. 1.
10
0501-5065.
11
Id., p. 2.
12
PG&E letter to FERC (May 19, 2017), eLibrary no. 20170519-5103.
2
HydropowerLicensing, sent a letter approving PG,
13
subject to conditions stated in that letter. Mr. Yearick stated:
According to the plan and schedule, the sale and transfer of the project is expected to take
between 18 and 45 months. Given that the project is currently operating under an annual
license, we request that you complete the sale and transfer in a timely manner, making
every effort to expedite it to the extent possible.
In addition, to keep interested parties informed of your progress toward the sale and
transfer of the project, please file quarterly progress reports starting September 1, 2017.
The reports should include the following information: (1) an update on the implemented
plan and schedule; (2) the progress you have made in negotiating the sale and transfer of
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the project; and (3) any other relevant information.
From September 1, 2017 through February 27, 2020, PG&E has submitted 11quarterly
15
progress reports regarding the sale and transfer of the Project.As of February 27, 2020,the
16
expectation to execute a Purchase Agreement has been deferred to early Q3 2020.
II.Discussion
A.The outside timeline for sale and transfer of the Project no longer appears
achievable.
schedule
summarized the schedule by saying: According to the plan and schedule, the sale and transfer of
17
the project is expected to take between 18 and 45 months.
It has been 33 months since FERC staff
and schedule. That leaves 12 months remaining on the outside timeline of 45 months to
complete sale and transfer of the Project. There is not enough time left in the schedule to
achieve approval from the Commission, let alone from the California Public Utilities
Commission or other jurisdictional agencies.
13
Letter from Vince Yearick (FERC staff) to Annette Faraglia (PG&E counsel) (June 16, 2017), eLibrary no.
20170616-3006.
14
Id.,pp.1-2.
15
PG&E filed updates on the sale of the Project on August 31, 2017 (eLibrary no. 20170901-5020); December 1,
2017 (eLibrary no. 20171201-5115); March 1, 2018 (eLibrary no. 20180301-5141); June 1, 2018 (eLibrary no.
20180601-5059); August 28, 2018 (eLibrary no. 20180828-5061); December 3, 2018 (eLibrary no. 20181203-
5168); February 28, 2019 (eLibrary no. 20190228-5166); May 30, 2019 (eLibrary no. 20190530-5); August 29,
2019 (eLibrary no. 20190829-5170); November 26, 2019 (eLibrary no. 20191126-5216); and February27, 2020
(eLibrary no. 20200227-5258).
16
PG&Eupdate(February27,2020),p.
17
Yearickletter(June 16, 2017),op.cit.,p.1.
3
Any further delay in the execution of a purchase agreement between PG&E and its
counterparty shortens the 12-month window. Yet there is no firm
February 2020 update of when (or if) the parties will reach an agreement.
The present slippage in the timeline and lack of substantive reporting of progress are
consistent with past slippage and lack of substantive reporting. This is shown in the table below,
which begins with the August 2018 update in which PG&E reported the selection of a
prospective buyer.
Date of update Progress reported (direct quotes)
August 28, 2018
Following evaluation of the proposals PG&E selected a prospective
buyer for the Project and executed a non-binding Letter of Intent with
said prospective buyer on June 21, 2018. (p. 2)
PG&E and the prospective buyer are working diligently on the sale
and transfer agreements with an aggressive goal to complete
negotiations before the end of 2018. (p. 2)
December 1, 2018
Although PG&E and the prospective buyer of the Project are well into
negotiations on the Asset Purchase and Sale Agreement and related
Exhibits, Schedules, and ancillary agreements, progress on
negotiations has been adversely impacted by the Camp Fire. (p. 2)
A new schedule for completing negotiations will be established with
the prospective buyer following our respective evaluations of Project
conditions. (p. 2)
February 28, 2019
Although PG&E and the prospective buyer of the Project are well into
negotiations on the Asset Purchase and Sale Agreement and related
Exhibits, Schedules, and ancillary agreements, progress on
negotiations has been adversely impacted by the Camp Fire. (p. 2)
Discussions regarding a new schedule for completing negotiations are
underway and are expected to be formalized during the second quarter
of 2019. (p. 2)
May 30, 2019
PG&E and the buyer are working diligently to finalize transaction
terms over the next few months. (p. 2)
August 29. 2019
PG&E and the prospective buyer are working diligently to finalize
transaction terms, with an expectation to execute a Purchase
Agreement by the end of 2019. (p. 2)
November 26, 2019
The prospective buyer has completed confirmatory due diligence
activities, including evaluation of real property title and other legal
records and requirements. Negotiations are nearing completion
regarding specific business terms for the potential sale and transfer of
the facilities, including the resolution of risks or impediments to
progress related to PG&E's bankruptcy process, interconnection
requirements, and environmental liabilities. (p. 2)
PG&E and the buyer are working diligently to finalize transaction
terms, with an expectation to execute a Purchase Agreement during
the first quarter of 2020. (p. 2)
4
February 27, 2020
Due to unanticipated delays in the development of technical
requirements related to the interconnection of facilities, the
expectation to execute a Purchase Agreement has been deferred to
early Q3 2020.
Each update professes a vague hope for near-term resolution. The timeline has slipped
from the end of 2018 to early in the third quarter of 2020.
B. unresponsive to the Commission and have
provided little substantive information to stakeholders.
To date, PG&E has filed 11 updates. The updates are largely identical. For lack of new
information, they consist primarily of information that is cut and pasted from previous updates.
An extreme example of this cutting and pasting is the fact that the first paragraphs in the
updates of December 1, 2017, March 1, 2018, June 1, 2018, August 28, 2018, December 3, 2018,
February 28, 2019, May 30, 2019, and August 29, 2019, and February 27, 2020 are exactly the
same. Each introductory paragraph even identifies the current update
such, PG&9 separate times. The November 26, 2019 update
identifies that (tenth) update as the third update.
Over a series of 11 updates, one could fairly summarize their substance as follows:
PG&E selected a prospective buyer. PG&E is negotiating a purchase agreement with the
prospective buyer. Negotiations with the prospective buyer were delayed by the Camp Fire.
PG&E and the buyer have not concluded a purchase agreement.
C. PG&E has made no effort to substantively engage stakeholders on Project
disposition and has rebuffed efforts of diverse stakeholders.
The DeSabla Centerville Project is a multi-benefit project. In its Notice of Withdrawal,
PG&E acknowledged:
PG&E recognizes DeSabla is important to local communities supporting protection of
environmental resources, consumptive water uses, public recreation, and other economic
values.
Accordingly, PG&E is committed to working with stakeholders to ensure these values are
appropriately considered and to limit adverse impacts caused by its decision to withdraw
18
its Application for New License for the Project.
In determining the appropriate
action to take, the Commission will consider all statements of interest and comments filed in
19
response to this notice. In comments on the Order, Conservation Groups explicitly requested
a process and associated timeline for PG&E and prospective
18
Notice of Withdrawal, pp. 3-4.
19
Order, p. 2.
5
transferees to directly engage interested stakeholders, including at minimum resource agencies,
20
Conservation Groups, and local residents.
PG&E proposes
this plan with an objective to provide opportunity to achieve an outcome that fully considers the
21
unique characteristics and extensive stakeholder interest in DeSabla.
In fact, PG&E has made no effort at all to work with stakeholders in the three years since
it filed its Notice of Withdrawal. It has engaged in a closed-door negotiation under a non-
disclosure agreement (NDA) with a prospective buyer that PG&E has not publically identified.
In so doing, it has placed all its eggs in one basket. This leaves stakeholders with the prospect of
a take-it-or-leave-it outcome should there be a purchase agreement, and the prospect of starting
from square one (following a delay of over three years) should there be no purchase agreement.
Regrettably, the prospective buyer has also declined to engage with stakeholders, even to
discuss general or overarching concerns, including the condition of Project facilities, as
discussed below. This decision may in part be due to concern over breaching the non-disclosure
agreement. This decision has also precluded opportunities to discuss opportunities for multi-
position in the event of purchase.
D. The aging condition of Project infrastructure adds to concerns over delay.
The DeSabla - Centerville Project is old. Much of the Project infrastructure was built a
century ago or thereabouts. PG&E has continued to maintain most of the Project pending
prospective disposition, but PG&E has little incentive to remediate or upgrade facilities.
The Centerville Powerhouse has been off line since February 2011. PG&E has not
22
operated the Lower Centerville Canal since 2013. Conservation Groups directly observed
multiple instances of sloughing of embankments along Lower Centerville Canal in 2019.
In 2017, the Butte Canal was damaged by storms. PG&E restored the canal to full
23
service in the summer of 2017.
In 2017, the Toadtown Canal and Toadtown Powerhouse bypass were off line for several
24
weeks in an unplanned outage.
In addition, there are ongoing issues and concerns with Round Valley Dam and spillway
and with Hendricks Head Dam. A July 8-9, 2019 inspection
Dams identified spalls in the Round Valley spillway, a wet spot at the toe of the Round Valley
20
21
PG&E May 19, 2017 draft plan and proposed schedule, p. 2.
22
2019 DeSabla Centerville Operations Plan, eLibrary no 20190628-5252, p. 4.
23
See letter from Neil J. Wong to Frank Blackett (Dec. 20, 2017), Status Update on 2017 Storm Damage, eLibrary
no. 20171220-5005.
24
The outage is reported in eLibrary no. 201706233-5091; this document is subject to CEII restrictions.
6
25
Dam, and deterioration of Hendricks Head Dam including a leak at its base. There has been
ongoing correspondence in the past three years between PG&
Safety and Inspections over seismic and other conditions at Round Valley Dam and its spillway.
The age and condition of Project infrastructure are
stated description of Project economics. When faced in 2019 with the need to repair the Kilarc
Main Canal in the Kilarc-Cow Project (FERC no. 606), PG&E elected to simply abandon the
26
canal and decommission the forebay that the canal feeds. Similarly, on the Battle Creek
Project (FERC no. 1121), the Inskip Diversion Dam has been undermined by high flows. As of
27
March 2019, PG&E was considering whether to repair or breach the dam.
Conservation Groups are concerned that there may be a similar catastrophic infrastructure
failure in the DeSabla Centerville Project that PG&E simply elects not to repair. This could
affect the short-term or long-term viability of the export of water from the West Branch Feather
River to Butte Creek or other operations that affect the well-being of spring-run Chinook salmon
in Butte Creek.
III. Request for Order
The timeline for concluding a purchase agreement for the Project has slipped with no
apparent date for resolution. Stakeholders remain uninformed and are paralyzed in pursuing
alternative outcomes for the Project while prospective sale remains in abeyance.
ule has motivated PG&E management to
meaningfully update and inform stakeholders and the general public about the disposition of the
Project.
December 2018, but our take home
needed to play out. Other stakeholders have sought and in some cases had calls or meetings with
PG&E management; those who have described such interaction with PG&E management came
away with the same wait-out-the-process message. PG&E has rebuffed efforts by an informal
group of stakeholders representing resource agencies, water purveyors and users, NGO
local residents to provide a forum for discussion of the future of the Project.
In the absence of clear and explicit directives, PG&Es management has not shown in
28
practice that it is committed to working with stakeholders. Conservation Groups therefore
respectfully request that the Commission issue an Order that states the following requirements:
25
Letter from Frank Blackett (FERC staff) to Mike Jones (PG&E) (Oct. 15, 2019), eLibrary no. 20191015-3028.
26
PG&E, Report on Repairs to Kilarc Main Canal and Status of the Kilarc Day Use Area (Nov. 14, 2019), eLibrary
no. 20191114-5154.
27
See Letter of Janet Walther (PG&E) to Kimberly Bose (FERC) (Mar. 28, 2019), eLibrary no. 20190329-5258.
28
Notice of Withdrawal, p. 4.
7
1)PG&E must submit a report within 90 days of the remaining issues and tasks
prerequisite to achieving a purchase agreement, with the opportunity for the
prospective buyer to respond if it so desires. The Order should exempt both PG&E
and the buyer from the NDA for purposes of the response(s).
2)PG&E and the prospective buyer must either conclude a purchase agreement by a
date certain or report that they are at an impasse. Conservation Groups recommend
August 31, 2020, which would fall well past PG&Esmost recently stated estimate of
the timeline for completion.
3)PG&E must hold a public meeting or series of meetings with stakeholders in August
2020, inviting the prospective buyer to participate. The Order should exempt both
PG&E and the buyer from the NDA for purposes of the meeting (either could decline
to answer questions, but neither would be constrained by the NDA). The purpose of
the meeting would be for PG&E (and the prospective buyer if it chooses to attend) to
update stakeholders on the progress of efforts to sell the project. If PG&E and the
buyer have concluded an agreement, the purpose of the meeting would be to brief
stakeholders on the terms of sale and the allocation of future responsibilities for
associated infrastructure,and compliance with regulatory requirements, and other
public values of the Project.
4)The Commission should order any other relevant actions that would support the
public interest in the disposition of the DeSabla Centerville Project.
IV.Conclusion
Conservation Groups have spent 15 years pursuing an outcome fortheDeSabla
-run salmon andthat supports the other
public values that the Projectprovides. In addition,the Project is linked in many ways to the
local community, whichwas heavily affected by the Camp Fire in 2018; further delay in
disposition of the Project may foreclose opportunitiesfor the Project to be part of a multi-benefit
solution that aids in local recovery efforts. Conservation Groups believe that it isnowin the
publicinterestfor the Commission to take a more activerole in theProjects disposition.
Thank you for the opportunity to comment on PG&
update and previous updates regarding the saleand transfer of the DeSabla Centerville
Hydroelectric Project.
Respectfully submitted,
_______________________
Chris Shutes
FERC Projects Director
California Sportfishing Protection Alliance
1608 Francisco St., Berkeley, CA 94703
blancapaloma@msn.com
8
___________________________
Allen Harthorn
Executive Director
Friends of Butte Creek
P.O. Box 3305
Chico, CA 95927
ahart@harpos.to
___________________
Dave Steindorf
California Stewardship Director
American Whitewater
4 Baroni Drive
Chico, CA 95928
dave@americanwhitewater.org
_______________________
Ronald Stork
Senior Policy Advocate
Friends of the River
th
1418 20 Street, Suite 100
Sacramento, CA 95814
rstork@friendsoftheriver.org
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CERTIFICATE OF SERVICE
I, Chris Shutes, hereby certify that I have this day served these Comments of Conservation
Groups on on Implemented Plan and Schedule, and Progress on
Sale and Transfer of the DeSabla Centerville Hydroelectric Project upon each person on the
official service list compiled by the Secretary for the P-803 docket by e-mail or surface mail as
directed on the service list.
th
Dated this 9 day of March, 2020 at Berkeley, California.
By:
Chris Shutes
FERC Projects Director
California Sportfishing Protection Alliance
1608 Francisco St., Berkeley, CA 94703
(510) 421-2405
blancapaloma@msn.com
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