PG&E withdraws Potter Valley hydro relicensing, FERC opens orphan project solicitation

California electric utility Pacific Gas and Electric Company has withdrawn its expression of intent to seek a new license for the Potter Valley Hydroelectric Project, saying its relicensing would be contrary to the interests of its electric ratepayers. The withdrawal has prompted federal hydropower regulators to institute an "orphan project" process to find interest from other entities in seeking a license for the project. If no other entity seeks and obtains a new license for the project, PG&E would be responsible for surrendering the existing project license.

The Potter Valley Project is located on the Eel and East Fork Russian Rivers in northern California, about 15 miles northeast of the city of Ukiah. Originally licensed by the Federal Power Commission in 1922, and owned by PG&E since 1930, the project includes Lake Pillsbury, impounded by Scott Dam; the Van Arsdale Reservoir, impounded by the Cape Horn Diversion Dam; and a tunnel, penstock and powerhouse located in the headwaters of the Russian River Basin. PG&E estimates the average annual generation of the project to be 19,900 megawatt-hours, with an installed capacity of 9.4 megawatts. The current license issued by the Federal Energy Regulatory Commission expires on April 14, 2022, requiring PG&E to submit a new license application by April 14, 2020.

On April 6, 2017, PG&E filed a pre-application document (PAD) and notice of its intent (NOI) to file an application for a new license. But on January 25, 2019, PG&E filed notice of the withdrawal of its NOI and PAD, indicating it is no longer seeking a new license for the project and is terminating its efforts to transfer and sell the project.

In that notice, PG&E said it has "determined that it would be contrary to the interests of its electric ratepayers to continue relicensing the Potter Valley project." PG&E said it had long recognized hte project as "uneconomic for PG&E's ratepayers (i.e. the cost of production exceeding the cost of alternative sources of renewable power on the open market)." PG&E cited "continued declining energy markets, potential increased costs associated with anticipated new license conditions, and challenging financial circumstances" as leading the company to conclude it cannot justify to its ratepayers further expenditures associated with the project.

PG&E noted its anticipation that the Commission would institute its "orphan project" process under the Commission's rules to solicit license applications for Potter Valley from other entities, and expressed its understanding that PG&E would be responsible for surrendering the existing license if no other entity seeks and obtains a new license for the project. PG&E closed by saying it "recognizes the value of Potter Valley to local communities because it provides for the protection of important environmental resources, consumptive water uses, public recreation, and other economic values" which the utility said should be appropriately considered if it is required to file a surrender application.

In response, on March 1, 2019, the Commission issued a Notice Soliciting Applications for a new license for the Potter Valley project within 120 days. The Commission noted that if no other applicant files an application for a license by April 14, 2020, PG&E would be provided with written notice that no timely application for the project has been filed, and would then have 90 days within which to file a schedule for the filing of a surrender application for the project.

FERC relicenses Poe hydro project

The Federal Energy Regulatory Commission has issued an order issuing a new hydropower license to utility Pacific Gas & Electric Company for its Poe Hydroelectric Project.

The 143-megawatt project is located on the North Fork Feather River in northern California, and includes land within the Plumas National Forest. Originally licensed in 1953, the project includes two dams impounding reservoirs, a 33,000-foot-long pressure tunnel bypassing about 7.6 miles of the river, and a powerhouse with two turbines.

The Commission issued a new 40-year license for the Poe project to PG&E on December 17, 2018. In relicensing proceedings, the Commission considers a number of public interest factors, including the economic benefits of project power. In general, the Commission evaluates the economics of a hydropower project by comparing the current costs of the project to likely alternative power, without considering forecasts concerning potential future inflation, escalation, or deflation beyond the license issuance date. The Commission says the basic purpose of its economic analysis is to provide a general estimate of the potential power benefits and the costs of a project, and of reasonable alternatives to project power.

In the Poe project's case, the Commission noted that after considering mandatory conditions and other measures suggested by Commission staff, PG&E's annual cost of operating the project would be about $9,590,000. Assuming that the project would generate an average of 498,113 megawatt-hours of energy annually, this works out to $19.3 per megawatt-hour. By comparison, the Commission found that the project's the corresponding alternative energy cost plus the value of its dependable capacity gave this power a value of $50,800,000, or $102 per megawatt-hour in the first year of operation, the project would cost $41,210,000 or $82.7 per megawatt-hour less than the likely alternative cost of power.

Substation security and the Garkane shooting

As the U.S. strengthens protections for its electricity grid, much of the discussion focuses on cybersecurity -- but physical security is also important, as shown by an attack on a Utah utility's substation.  On September 25, an unknown gunman fired at least 3 shots into a distribution system substation, damaging a transformer and causing power outages.  The incident may place renewed pressure on utilities to secure their infrastructure against vandalism and terrorism.

As reported by the Deseret News, the damage occurred at a substation owned by Garkane Energy Cooperative.  An assailant reportedly shot the main transformer's oil-cooled radiator system, causing the transformer to overheat and fail.  About 13,000 customers lost power across most of Kane and Garfield counties.  A spokesman for the cooperative said damage to the transformer could reach $1 million; repairs could take 6 to 12 months.  The utility has offered an unusually high reward -- $50,000 -- for information leading to the arrest of the shooter.

This is not the first time someone has used firearms to damage utility infrastructure.  Some incidents, such as the 2012 shotgunning of 167 insulating discs on Vermont's transmission system, may be considered vandalism.  Others, like the 2013 sniper shooting of a PG&E substation in San Jose, California, are considered terrorism.  That attack led the Federal Energy Regulatory Commission to implement new physical security protections for utility infrastructure known as CIP-014, through its Order No. 802.

The Garkane incident remains under investigation.  More broadly, it may strengthen calls for further hardening of the utility system against physical attack.  Meanwhile, efforts continue to strengthen cybersecurity protections for the grid.

Topaz Solar becomes largest solar power project

A recent expansion has made a California solar energy project the world’s largest solar facility. Built in three phases, MidAmerican Renewables LLC’s Topaz Solar project in San Luis Obispo County now sports 550 MW total generating capacity.

A small distributed solar photovoltaic installation in Arches National Park, Utah -- much smaller than the Topaz Solar project.

Iowa-based MidAmerican Renewables LLC is a subsidiary of Berkshire Hathaway Energy formed to handle its expansion into the unregulated renewables market.  Its subsidiaries MidAmerican Solar, MidAmerican Wind, MidAmerican Geothermal and MidAmerican Hydro each focus on particular types of renewable energy generating technology.  In all, MidAmerican controls over 3,000 MW of renewable generating capacity in the U.S.

MidAmerican acquired the Topaz Solar project from First Solar in January 2012, after First Solar had acquired previous project developer OptiSolar, Inc.  Project construction began in November 2011, and proceeded in three phases.  Earlier phases came online in February 2013 and in January 2014, for a total of 300 MW of capacity.  With the recent expansion, the 550-megawatt project includes over 8 million photovoltaic modules, installed on 4,700 acres of the Carrizo Plain in the southern California desert.

The power produced by the project is sold to utility Pacific Gas and Electric Company under a 25-year power purchase agreement.  Topaz Solar won the long-term contract rights through its response to a 2007 solicitation by PG&E for renewable power.

According to the Federal Energy Regulatory Commission, the Topaz Solar project is now the world's largest solar energy plant.