Water agency sounds alarm over PG&E move

Published: Thursday, Sep. 19, 2013 - 10:57 pm

The agency that provides water for much of Placer County has gone public with what it sees as an ominous federal filing by its longtime partner, Pacific Gas and Electric Co.

For 45 years, the Placer County Water Agency and PG&E have been attached at the hip. PG&E has collected water from Sierra Nevada tributaries and used it for hydroelectric power before passing the water on to the water agency, which treats the water and delivers it to area homes and businesses.

But as PG&E renews its federal license to collect the water and operate the conveyance system, Placer officials are concerned by signs the utility intends to sell part of its Drum-Spaulding Project, which it proposes to split into two pieces.

“The only reason for PG&E to do this is to divest part of the system,” said Einar Maisch, PCWA’s director of strategic affairs. “The idea that PG&E would sell the lower system to some third party … is just untenable.”

Maisch said a third-party operator might resort to unscrupulous tactics to boost revenue, as was the case during the 2000 California energy crisis. He said profit, not stable water delivery, would be the motivating factor for a third-party buyer.

PG&E spokesman Paul Moreno sought to alleviate the concerns.

“We met with them a few weeks ago to assure them we have no plans to sell while a new license is being sought,” Moreno said.

The Drum-Spaulding Project includes 29 reservoirs, 12 powerhouses, six overhead transmission lines, three diversion dams and various conduits, recreation facilities and associated structures. The hydroelectric powerhouses generate 190 megawatts.

PCWA officials say they are concerned about a federal power license amendment PG&E filed in May. That amendment proposes to split the Drum-Spaulding Project into the section above Rollins Reservoir and the section below.

The relicensing is expected to take a couple of years, Moreno said. Should the utility sell the lower portion of the project, which includes four smaller power plants, the new owner would be bound by existing water transfer agreements, Moreno said. While the current agreement expires in 2014, Moreno said PG&E is seeking a 30- to 50-year water transfer agreement with the water agency.

“In the event we decide to divest, we’d make advance public notice so (PCWA) could prepare to participate in a sale,” Moreno said.

On Aug. 22, PCWA officials sent their protest to the Federal Energy Regulatory Commission, which handles the relicensing process. Commission officials said they couldn’t comment beyond acknowledging receipt of PCWA’s comments. Maisch said the agency asked that the split be approved only upon several conditions, including that PCWA be given the first right to buy the system, PG&E still be held responsible for water delivery after a sale and that water delivery remain a priority for the new entity.

The water agency approached PG&E about purchasing the system, but PG&E said it was not ready to have that discussion, according to Maisch.

He said the situation does not currently affect customers, but the water agency is working to head off potential future problems.

Maisch said the agency took the unusual step of going public with its concerns in hopes of nudging PG&E.

“It’s a way of applying not too subtle, but gentle, pressure on PG&E,” Maisch said.

Call The Bee’s Ed Fletcher, (916) 321-1269. Follow him on Twitter @NewsFletch

Read more articles by Ed Fletcher

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