City Council
Special Meeting
AGENDA
Joint Meeting with
INLAND WATER AND POWER COMMISSION ALL BOARDS MEETING
Ukiah Valley Conference Center ♦ 200 South School Street ♦ Ukiah, CA 95482 To participate or view the virtual meeting, go to the following link: https://us02web.zoom.us/j/88249943594 Or you can call in using your telephone only:
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May 29, 2025 - 5:30 PM
1. ROLL CALL
2. AUDIENCE COMMENTS ON NON-AGENDA ITEMS
The City Council welcomes input from the audience. If there is a matter of business on the agenda that you are interested in, you may address the Council when this matter is considered. If you wish to speak on a matter that is not on this agenda that is within the subject matter jurisdiction of the City Council, you may do so at this time. In order for everyone to be heard, please limit your comments to three (3) minutes per person and not more than ten (10) minutes per subject. The Brown Act regulations do not allow action to be taken on audience comments in which the subject is not listed on the agenda.
3. IWPC ALL BOARDS WORKSHOP - INFORMATION BRIEFING - Issues Related to the Water Supply from PG&E's Potter Valley Project
3.a. Context: PG&E and the Federal Energy Regulatory Commission (FERC).
3.b. Proposal for a New Diversion Structure: the New Eel-Russian Facility (NERF).
3.c. The Water Diversion Agreement – Framework for the Right to Divert Water.
3.d. The Need for Additional Storage of Water in the Russian Watershed (U.S. Army Corps of Engineers Feasibility Study and Other Storage Options)
3.e. Next Steps: Likely Costs, Needed Actions, and Timing.
4. CLOSED SESSION
4.a. Conference with Real Property Negotiators (Gov’t Code §54956.8) Property: PG&E Potter Valley Project
Agency Negotiators: Scott Shapiro, Janet Pauli, Tom Johnson Negotiating Parties: IWPC and PG&E
Under Negotiation: Price and Terms
4.b. Report out of Closed Session.
5. ADJOURNMENT
Please be advised that the City needs to be notified 72 hours in advance of a meeting if any specific accommodations or interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to reasonably accommodate individuals with disabilities upon request. Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business hours, Monday through Friday, 8:00 am to 5:00 pm. Any handouts or presentation materials from the public must be submitted to the clerk 12 hours in advance of the meeting; for handouts, please include 10 copies.
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than 24 hours prior to the meeting set forth on this agenda.
Kristine Lawler, CMC/CPMC
Dated: 5/23/25
ALL-BOARDS MEETING:
MENDOCINO COUNTY INLAND
WATER AND POWER
COMMISSION & MEMBER
AGENCIES
May 28, 2025
IWPC All Boards May 29, 2025 1
A. CONTEXT: PG&E AND THE
FEDERAL ENERGY REGULATORY
COMMISSION
IWPC All Boards May 29, 2025 2
CONTEXT
• PG&E operates the Potter Valley Project (PVP) which moves water from the Eel River Watershed to the Russian River Watershed. All of that water has historically flowed in the Russian and was available for use.
• Because the PVP generates power, it is regulated by the Federal Energy Regulatory Commission, which issued it a license to operate. • PG&E has decided to stop operating the PVP because it is cost inefficient and after failing to find someone to purchase the PVP with its license, it has informed FERC that it intends to surrender the license and decommission the PVP.
Decommissioning the PVP means removing the dams.
• Legally that decision cannot be revisited, and now FERC’s decommissioning process controls.
• PG&E is to submit its application to FERC by July 31. That application includes a regional success: the concept that Russian River interests will continue to divert water through the New Eel-Russian Facility (NERF).
IWPC All Boards May 29, 2025 3
B. PROPOSAL FOR A NEW DIVERSION
STRUCTURE: THE NEW EEL RUSSIAN
FACILITY (NERF)
IWPC All Boards May 29, 2025 4
PROPOSED DIVERSION DESIGN AND
IMPLEMENTATION
• With the removal of the PVP dams, the gravity-fed diversion will no longer work.
Instead, a new diversion structure is required.
• NERF development was led by SWA, supported by IWPC and funded in part by DWR and USBR grants
• NERF design and construction will be in close coordination with PG&E’s removal of Cape Horn Dam (CHD)
• Coffer dams and river diversion will be required for both PG&E’s and our efforts. • Scott Dam fast removal and coffer dam removal will likely be in the same winter season
• NERF will allow pumping from 15 cfs up to 300+ cfs, when water is available • Pumping rules vary by season, and include a floor (minimum bypass) then increased pumping allowed as Eel River flow increase
• Improvements in powerhouse include a new bypass valve, and control system IWPC All Boards May 29, 2025 5
IWPC All Boards May 29, 2025 6
EXISTING DIVERSION
IWPC All Boards May 29, 2025 7
PROPOSED DIVERSION
IWPC All Boards May 29, 2025 8
EXISTING DIVERSION
IWPC All Boards May 29, 2025 9
PROPOSED DIVERSION
POTENTIAL OVERALL SURRENDER AND
CONSTRUCTION SCHEDULE
IWPC All Boards May 29, 2025 10
FUTURE DIVERSION POTENTIAL
Over the past decades the amount of water from the Eel has been decreasing due to the Endangered Species Act.
Further, without dams on the Eel River, water through the new diversion structure will be available only in the winter and spring months when sufficient water is flowing.
The Russian River will no longer have the benefit of nearly year-round water flowing into the Upper Russian River
IWPC All Boards For example: 2012 and 2013 May 29, 2025 11 rainfall
Note how rainfall tends
to end in April/May,
which will be the end of
the season for diversion.
TUNNEL DIVERSION VOLUMES, OBSERVED
(1922 – 2023)
May 29, 2025 12
• Columns B, C, & D show
historic operations in different
years.
• Diversions through 2005 averaged
approximately 150,000 acre-feet
• Diversions from 2006-2020
averaged approximately 62,000
acre-feet.
• Diversions in 2021 and 2022
averaged approximately 37,000
acre-feet.
• Column E shows current
operations (approximately
35,000 acre-feet)
• NOTE that diversions were
significantly reduced before
PG&E elected to decommission
thPVP
B C D E
IWPC All Boards
TUNNEL DIVERSION VOLUMES
AND PROPOSED FUTURE DIVERSION
13 • Column F shows
diversions allowed
under WDA criteria.
• Column G shows
diversions constrained
by limited winter storage
available in Lake
Mendocino and limited
year-round storage in
Potter Valley
• This demonstrates the
need for more storage!!!!
A B C D E F G
Approx
32,000A
F
Approx
60,000A
F
FUTURE STORAGE NEEDS
Some of the winter diverted water can be stored in Lake Mendocino, but Lake Mendocino storage is limited due to the way in which the Lake is operated.
Water that can be stored in Lake Mendocino when storage space is available will not be available upstream of the reservoir because of the high cost of pumping uphill and water rights issues that would likely make it prohibitive. Thus, it is necessary to explore how to store winter and spring Eel River water both in and upstream of Lake
Mendocino to maximize use in the summer irrigation
season.
IWPC All Boards May 29, 2025 14
CATEGORIES OF NEW DIVERSION COSTS
TO BE INCURRED BY ERPA
• Operation of the diversion structure
• Administration and insurance of Eel-Russian Project Authority (ERPA) • Construction of the diversion structure
• Actual construction plus soft costs (engineering, permitting, environmental, etc)
• Public funds and/or bonds to fund the local share of construction costs
• Bonds and/or annual costs to fund the cost of storage • Contingency
• Other costs - to be determined
• Use fee/forbearance fee to RVIT
• Monitoring costs
IWPC All Boards May 29, 2025 15
ANNUAL ERPA OPERATIONAL AND FINANCING
ASSUMPTIONS
Operational assumptions:
• ERPA will contract with another entity for operation. • Five to eight months of operation per year.
• O&M costs includes $750K annually to build reserves.
Financing assumptions:
• Construction will be funded through combination of public funds and ERPA bond funds.
• NERF construction cost bonds assume ERPA contribution of $20M ($10 to $30M) to supplement public funds.
• Storage improvements & bonds assumes ERPA contribution of $35M ($25 to $60M) to supplement public funds.
May 29, 2025 16
IWPC All Boards May 29, 2025 17
POTENTIAL ANNUAL COST FOR ERPA
OPERATIONS OF NERF
SCHEDULE & KEY TASKS FOR ERPA
Interim:
o Commissioning of ERPA
o Design NERF (underway, but need next grant for final
design)
o Investigate storage (COE study, consultant for other RR storage options)
o Work with PG&E through FERC process
o Work with PG&E on asset transfer, easement, and other agreements for construction of NERF
Long Term:
o Construction (specs, bid & construct)
o Operations
IWPC All Boards May 29, 2025 18
EXPENSES & REVENUE SOURCES - NERF
Interim tasks (NERF) – studies, design & planning, ERPA admin, etc. o Potential Expenses: $2M to $5M over 4-5 years
o Potential Revenues: membership contributions, grants
Construction of NERF –
o Potential Expenses: $40M to $60M, should be no sooner than 2032 o Potential Revenues: grants, ERPA bonds, membership contributions, other (e.g. assessment)
Operations of NERF and storage –
o Potential Expenses: $7M to $12M per year
o Potential Revenues: water sales, other (e.g. assessment) NERF costs are pre-design level, but more developed than most estimates IWPC All Boards May 29, 2025 19
C. THE WATER DIVERSION AGREEMENT:
FRAMEWORK FOR THE RIGHT TO DIVERT
WATER
IWPC All Boards May 29, 2025 20
APPROACH TO GET TO A WATER DIVERSION
AGREEMENT
• WDA was anticipated to be the document that creates our legal right to divert water
• It was needed to justify to PG&E that PG&E should include the NERF in its application
• We first developed an MOU to get agreement on the essential terms prior to PG&E’s public draft of its application
• Now negotiating a formal WDA to coincide with PG&E’s application that will be binding on the parties and provide a framework of support through the process:
• Russian River interests want reliable, long-term water • Eel River interests want removal of dams, money for restoration, and confirmation that further diversions will not hurt the endangered species • PG&E wants to show that the two basins are in agreement (not take sides) 21
FEBRUARY 7, 2025 MOU BETWEEN
MCIWPC, SCWA, RVIT, CT, TU, HC, AND CDFW
• Purpose of MOU
• Method of permitting vis-à-vis PG&E’s application
• Water rights ownership
• Land ownership
• NERF ownership and operation
• Water rights lease (ownership, cost, waiver of sovereign immunity)
• Term (30 + 20)
• Funding obligations and commitments 22
JULY XX, 2025 WATER DIVERSION AGREEMENT
• The essential terms have not changed
• There has been significant discussion around renewal terms • There is also significant discussion around extent of water rights • We have extensive development of enforcement mechanisms • We are considering the relationships and timing between activities
• A more detailed briefing will be provided in closed session • We are on track for execution later this year
23
D. THE NEED FOR ADDITIONAL STORAGE
OF WATER IN THE RUSSIAN WATERSHED
(USACE FEASIBILITY STUDY AND OTHER
STORAGE OPTIONS)
IWPC All Boards May 29, 2025 24
D. THE NEED FOR ADDITIONAL STORAGE
OF WATER IN THE RUSSIAN WATERSHED
(USACE FEASIBILITY STUDY AND OTHER
STORAGE OPTIONS)
• Federal Project & Study Authority
• Federal Funding & Cost-Sharing
• USACE Project Delivery Process
• USACE Study Overview
• USACE Study Milestones
• Progress & Next Steps
IWPC All Boards May 29, 2025 25
FEDERAL PROJECT & STUDY
AUTHORITY
• Existing Project Authority:
• River and Harbor Act of 1950 (P.L. 81-516) authorized Russian River Basin Project • Includes Coyote Valley Dam as a feature
• Project authority includes flood control, water conservation, and related purposes • Included “immediate” and “ultimate” flood control plans • New Study Authority:
• Water Resources Development Act of 2016 (P.L. 114-332) authorizes feasibility study of modifications to Coyote Valley Dam
• Investigate addition of environmental restoration and/or increase water supply and improve reservoir operations.
IWPC All Boards May 29, 2025 26
FEDERAL FUNDING & COST-SHARING
• Feasibility Study Cost-Sharing:
• Requires at least one non-Federal
sponsor
• 50% Federal / 50% non-Federal cost
sharing
• Not a grant
• Cash or in-kind services
• Funding:
• Fiscal Year 2024 = $500,000
• Fiscal Year 2025 = $0
• Fiscal Year 2026 = ?
• Tribal Credit = $658,000
IWPC All Boards May 29, 2025 27
Two non-Federal sponsors:
MCIWPC
Lytton Rancheria
Study Budget Estimate:
Current Capacity = $1,316,000
FCSA = $3,000,000
Estimated = $6,500,000
USACE PROJECT DELIVERY
PROCESS
IWPC All Boards May 29, 2025 28
Feasibility
Study
Preconstructio
n Engineering
and Design
Construction
Operations
and
Maintenance
• USACE or non-Federal
sponsor assumes O&M
responsibility after
construction.
• USACE retains O&M
responsibility for navigation
and multi-purpose dams.
• Other project types are
transferred to non-Federal
sponsor for O&M
responsibility.
• USACE oversees project
construction through one or
more construction contracts.
• Requires Congressional
authority and “new start”
appropriations.
• Requires non-Federal
sponsor and an executed
Project Partnership
Agreement (PPA).
• USACE initiates engineering
and design while waiting for
Congressional approval.
• Design activities subject to
receipt of appropriations.
• Requires non-Federal
sponsor and an executed
Design Agreement.
• USACE produces a feasibility
study and associated NEPA
document.
• Phase concludes with a
Chief’s Report which
recommends a project to
Congress
• Congressional approval is
required for construction.
Anticipated Duration:
3 to 5 years
Anticipated Duration:
N/A
Anticipated Duration:
4 to 8 years
Anticipated Duration:
2 to 3 years
USACE STUDY OVERVIEW
IWPC All Boards May 29, 2025 29
Scoping &
Alternatives
Identificatio
n
Alternatives
Evaluation
& Analysis
Selected
Plan
Developme
nt
Final Report
Processing
• Draft Final Feasibility Report
transmitted to Washington DC
for processing.
• Draft Chief of Engineer’s
Report developed for Agency
/ State review.
• Final Chief of Engineer’s
Report submitted to Congress
for authorization.
• Draft Feasibility Study
released tech / agency /
public review.
• Tentatively Selected Plan
(TSP) becomes
Recommended Plan.
• Recommended Plan is further
developed to improve
certainty of implementation
cost, project performance and
benefits, and environmental
impacts.
• Existing conditions
established as baseline.
• Alternatives developed to
sufficient level of detail to
evaluate and compare.
• Comparison results in
selection of preferred
alternative or “tentatively
selected plan” for USACE /
Sponsor support.
• Problems, opportunities,
objectives, and constraints
identified.
• Detailed scope of work,
budget, and schedule
developed for USACE /
Sponsor approval.
• Initial array of alternatives
identified for evaluation and
comparison.
Anticipated Duration:
4 to 8 months
Anticipated Duration:
6 to 10 months
Anticipated Duration:
12 to 21 months
Anticipated Duration:
14 to 21 months
USACE STUDY MILESTONES
IWPC All Boards May 29, 2025 30
Scoping &
Alternatives
Identificatio
n
Alternatives
Evaluation
& Analysis
Selected
Plan
Developme
nt
Final Report
Processing
Alternatives
Milestone
Oct 25 (est.)
Execute
FCSA
Mar 25 (a)
Vertical Team
Alignment
Memo
Dec 25 (est.)
Planning
Charrette
Jul 25 (est.)
Tentatively
Selected Plan
Milestone
Draft Study
Public Review
Command
Validation
Milestone
Draft Final
Study
Transmitted to
HQUSACE
Agency / State
Review of Draft
Chief’s Report
Final Chief’s
Report to
Congress
NF Sponsor
Support?
NF Sponsor
Support?
NF Sponsor
Support?
PROGRESS & NEXT STEPS
IWPC All Boards May 29, 2025 31
• Progress:
• Initial Federal funding received in FY 2024
• Lytton Rancheria agreed to serve as joint non-Federal sponsor in February 2025 • Local Agreement executed w/ Lytton Rancheria in March 2025 • Feasibility Cost-Sharing Agreement (FCSA) executed in March 2025 • Next Steps:
• Schedule Planning Charrette w/ USACE for June / July 2025 • Advance scoping w/ USACE
• Strong orientation toward new water storage including (and beyond) Coyote Valley Dam • Independent validation / expansion of technical work commissioned by IWPC • Define initial work product non-Federal sponsors can use to determine continued participation
E. NEXT STEPS: LIKELY COSTS,
NEEDED ACTIONS, AND TIMING
IWPC All Boards May 29, 2025 32
üBuilt a coalition to support continued diversion
üConvinced PG&E to support the coalition’s proposal
üObtained grants to plan and design a new diversion structure üGot DWR grant to study groundwater in Potter Valley
üNegotiating a Water Diversion Agreement to confirm diversion plan üStarting a Federal study for Lake Mendocino raise and other storage qPrepare a CEQA document to support construction
qWork on Lake Mendocino study
qExplore other storage opportunities
qParticipate in FERC proceeding
qRaise funds to ramp up activity 33
WE ARE TRAVELING ALONG A PATH
• IWPC/ERPA overhead costs
• Coyote Valley Dam Feasibility Study cost share
• Coyote Valley Dam Feasibility Study consultant costs
• Financing costs (consultant to pass an election; bonding costs) • Support for existing grant from USBR
• Potter Valley groundwater assessment (capital, O&M, grant admin, consultant costs)
• Potter Valley Project transaction with PG&E
• Permitting and data collection
• Water Diversion Agreement process
34 CATEGORIES OF INTERIM COSTS FOR IWPC
35
• IWPC needs to finish negotiations on the WDA
• IWPC and SWA need to negotiate water allocation and financial responsibility
• IWPC needs to engage with Lytton and USACE on Lake
Mendocino Study
• IWPC member agencies need to review IWPC structure and ensure it is adequate for future needs
• ERPA needs to develop a staffing and funding model
• IWPC needs to develop a funding model
• We all need to be ambassadors to advance this effort and secure water for the region’s future.
36 NEXT FEW STEPS
CLOSED SESSION
IWPC All Boards May 29, 2025 37