PG&E and PacGen: A risky proposal for the Yuba River, our community, and ratepayers.

Published 11/14/2023 | South Yuba River Citizens League

While many people are familiar with the miles of transmission lines that Pacific Gas and Electric (PG&E) owns, not as many know about their large portfolio of hydroelectric assets – the dams, reservoirs, and powerhouses — they operate. On the Yuba and Bear Rivers, PG&E owns the Drum Spaulding project that currently includes 24 dams and reservoirs (such as Spaulding, Fordyce, Lake Valley, and Fuller) and 7 powerhouses (including the Drum powerhouse). For the last 10 years, SYRCL has been an active participant in intervening and negotiating PG&E’s license for that project. Our aim in relicensing is to ensure that the new license conditions of the project give equal consideration to energy conservation, power generation, water supply, protection of fish and wildlife, public benefit, protection of recreation opportunities, cultural resources, and monitoring of natural resources.

Now, PG&E proposes to transfer all its hydroelectric assets to a new company – Pacific Generation (PacGen) This is the biggest and first-ever transfer of hydropower assets in California. SYRCL believes that this transfer would benefit PG&E shareholders at the expense of California ratepayers, the Yuba River, dam safety, and the public interest.

The California Public Utilities Commission (CPUC) is expected to release a draft decision on the proposal very soon. Your input is needed to make sure that the CPUC doesn’t simply rubberstamp PG&E’s proposal. Write a letter today!

The Deal

PG&E doesn’t own just the hydroelectric projects on the Yuba and Bear rivers – they own and operate projects on many California waterways. Currently, they have 62 powerhouses, 97 reservoirs, 72 diversions, 167 dams, and 400 miles of pipes and canals. PG&E wants to transfer these projects and other assets to PacGen, a new company that PG&E will own 51% of. (The other 49% will be sold to unknown investors.). Just to reiterate, PG&E proposes to own the majority of PacGen.

PG&E hopes to make $1.1 to $2.5 billion from this deal. This is a huge amount of money by any standards, and yet it’s not much compared to their total stated capital need of $40-$53 billion for 2022 through 2026.

Liability and Risk

Key to the plan is that PacGen will take over all the responsibility and liability for their newly transferred assets. They will have just one single employee – the president of PacGen. They will also have a board of managers with PG&E officers (and possibly some investors.) PacGen will hire PG&E to run the hydroelectric assets, but the investors will have voting rights that could change conditions for their own benefit and according to their interests.

What’s Wrong with this Picture?

Frankly, there’s a lot to be concerned about. Let’s start with:

Shareholders benefit, but the public does not. Since PG&E anticipates making billions of dollars, this deal is good for PG&E shareholders but bad for California ratepayers and the public. The CPUC should put the public interest first when deciding on such a big transfer of public utilities and infrastructure. That public interest includes flows needed for fish and wildlife, and other public benefits like recreation.
Aging Dams and Public Safety. PG&E’s dams are old and need careful inspections and maintenance. PG&E’s plan falls short of explaining how dam safety will work, critically failing to explain how maintenance decisions would be prioritized and financed and which company would be legally responsible for issues like take violations of the Endangered Species Act.
Environmental Impacts to the Yuba River. We care about the Yuba River and protection of the watershed, fish, and wildlife. This deal could harm our rivers and ecosystems if not done right. We need a thorough review and monitoring of the environmental impacts of this deal.
Investment Incentives: This deal could favor some hydropower projects over others based on profit-based decisions. Some projects like Fordyce are facing maintenance issues that are currently being fixed. Other projects like Butte Creek and Battle Creek are currently in disrepair because of poor maintenance. Unfortunately, this deal could make things worse by neglecting less profitable projects.

PG&E Ignores Our Concerns

SYRCL is currently working with our allies at the California Hydropower Reform Coalition (CHRC). American Whitewater and the California Sportfishing Protection Alliance submitted comments in this proceeding outline the issues we’ve outlined above. Unfortunately, PG&E has not addressed our concerns. In fact, they urged the CPUC to dismiss the issues we raised and basically ignore them altogether and argue that they aren’t relevant.

The CPUC has a duty to protect the public interest and make sure that PG&E’s hydroelectric assets are safe, reliable, and environmentally sound.

Please join us in urging the CPUC to not approve this deal without looking at these facts. The CPUC is expected to make a decision by December 18, 2023. Your comments are needed before December 4^th.

SAMPLE COMMENT IN OPPOSITION TO PG&E’s PROPOSED ASSET TRANSFER

Dear Honorable Members of the California Public Utilities Commission,

Begin by sharing your background and personal experience with rivers and this issue.

I am writing to express my concerns and opposition to PG&E’s current application to transfer its non-nuclear assets, including hydropower projects, to Pacific Generation LLC (PacGen). The CPUC has a responsibility to protect the public interest, particularly when ensuring that PG&E’s transferred facilities operate safely, reliably, and in line with environmental protection principles. I urge the CPUC to stand with Californians who believe this asset transfer is not in the public’s best interest. A decision of this magnitude should not be rubber-stamped without due diligence and thorough consideration of its widespread implications.

Add your concerns (Environmental impacts, Liability and Risk, Dam Safety, etc…)

Thank you for your time and consideration. I look forward to hearing your position on this issue.

Submit your comments electronically:

HOW TO PROVIDE PUBLIC COMMENTS TO THE CPUC

Go to the following California Public Utilities Commission Docket link: California Public Utilities Commission Docket
Enter A2209018 in the box next to the Proceeding Number Search and click the Search button.
Click on the blue A2209018 ACTIVE link under the heading Proceeding Number.
Click the Public Comments tab at the top of this page
On the “A2209018 – Public Comments” page, click the Add Public Comment button (in the middle of the page) and click OK to the Public Records Acts Disclaimer. Then add in your comments as a PG&E Ratepayer, a member of the public, or a stakeholder whom the proposed asset transfer would impact. Fill in your name, city, state, zip code, email & phone number. Verify you are not a robot and hit submit.