Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: APPROVAL OF AGREEMENTS TO COORDINATE AND FUND
LEGAL RESEARCH AND ANALYSIS REGARDING THE
IMPACT OF POTTER VALLEY PROJECT DIVERSIONS
Date: April 23, 2024
Written by: Craig Scott, Director of Public Works/City Engineer Recommendation
It is recommended the City of Cotati City Council approve by motion: 1. A Confidentiality and Common Interest Agreement and 2. A Letter Agreement between Marin Municipal Water District and Cities of Santa Rosa, Rohnert Park, Petaluma, Sonoma, Cotati, Town of Windsor, North Marin Water District, and Valley of the Moon for Funding Legal Research and Analysis regarding the Impact of Potter Valley Project Diversions on the Sonoma County Water Agency’s Water Rights and Obligations.
Background
Sonoma Water for decades has diverted water discharged into the Russian River Basin by PG&E’s Potter Valley Project (PVP). With PG&E’s intentions of surrendering its license to operate the PVP and decommissioning the facility, Sonoma Water and its Water Contractors face the risk of losing this water supply. Sonoma Water and the Contractors have been working together to analyze the impacts of PG&E’s delicensing on future water deliveries. This collaboration requires sharing sensitive information that is protected by attorney-client privilege.
The proposed confidentiality agreement is to maintain this confidentiality. Separately, but related through the PVP, Marin Municipal Water District, is proposing to conduct research and analysis regarding the impact of PVP diversions on Sonoma Water’s water rights and obligations. The second agreement is for the Contractors to share in the cost for this research.
Analysis/Discussion
In 2019, PG&E announced it will not seek to relicense its FERC license to operate the PVP.
Since that time, Sonoma Water and its Water Contractors have been meeting under a confidentiality agreement, to discuss the surrender and decommissioning proceedings and analyze what it could mean to Sonoma Water deliveries to its Water Contractors. With PG&E now developing a final surrender and decommissioning plan, for submittal to the Federal Energy Regulation Commission by January 29, 2025, an Eel-Russian Water Authority has been formed and has the power to negotiate with PG&E and to own, construct and operate a new water diversion facility. The increased certainty of PG&E’s plans to decommission the PVP and the creation of the Eel-Russian Authority, have prompted the Water Contractors to renew the confidentiality agreement and to perform research on the diversions impacts on Sonoma Water’s water rights. By signing onto these agreements, the City will be able to participate in the regular collaborative meetings to track the decommissioning process and continue to develop a better understanding of the impacts of the decommissioning and subsequent design, construction and operation of a new diversion facility on the deliveries to the Water Contractors.
Financial Considerations
The City’s share of the $100,000, water rights analysis effort is $6,983. Of which $6,250 is the equal 50% ($50,000) cost share, and the remaining $733 is for the proportional 50% ($50,000) cost share based on the number of service connections (Exhibit A). This cost is to come from the water operations fund. For Fiscal Year 2023/24, these funds are available for reclassification of available budget for the portion of the unspent utility rate review. For Fiscal Year 2024/25, the balance will be accounted for within the proposed budget to be presented to Council at the next budget study session, and for adoption in June 2024. As such no budget adjustment or additional appropriation of fund balance is required currently.
Environmental Issues
Signing the Confidentiality and Cost Sharing agreements do not constitute a project under the California Environmental Quality Act (CEQA), per the definition of a project identified in Section 15378 of CEQA in that there will be no direct, or reasonably foreseeable indirect physical change in the environment.