Potential Potter Valley Project buyer suggests PG&E failed to tell 'actual truth'

This month, Agricultural Secretary Brooke Rollins tweeted that the U.S. Department of Agriculture had been in contact with a potential buyer for the Potter Valley Project, a PG&E-owned hydroelectric project currently in the process of surrendering its license and decommissioning its facilities.

The vice president of that potential buyer's board, Elsinore Valley Municipal Water District Darcy Burke, appeared on the podcast of ranching advocacy blog UNWON last week and made a series of claims about PG&E's efforts to decommission the project. Burke suggested that the plan that is currently in place - a plan in which the project's assets, including the Scott and Cape Horn dams, would be removed and replaced with a New Eel-Russian Facility to maintain seasonal diversions from the Eel to the Russian River - is "criminal."

She also cast doubt on the process whereby PG&E attempted to sell the project. Proponents of dam removal have noted that the Potter Valley Project's hydroelectric facilities have been inoperable for roughly five years and are in disrepair and potentially at serious seismic risk.

‘Maybe not the actual truth'

On the UNWON podcast, host Keely Covello said that Rollins' tweet "went off like a bomb in Potter Valley, in our community, in a very positive way" this month, offering a glimmer of hope for members of that community who see dam removal as an existential threat.

Burke described, in broad strokes, having become acquainted with the Potter Valley Project last fall. She said that the idea of decommissioning dams at a moment when the state of California is attempting to shore up water security did not sit right with her.

"As a board, when I brought this issue to my board, they said this was criminal - their words, not mine - and that they were going to do what they could to figure out how we can make this work if we could," Burke said.

Burke also cast doubt on PG&E's claims that the utility had attempted to secure a buyer for the Potter Valley Project.

"My understanding is, from them, that they had approached local entities to purchase it, and they expressed to us that there was no interest," Burke told UNWON in a podcast published on April 23. "That has not been the scenario that was told to us when we actually went to visit. That might be a version of the truth - maybe not the actual truth, but there's two sides to every story, and I get that.

"They also said they used a broker to go out to sell the project, and there were no takers. I find it interesting that in one tweet, I had multiple phone calls yesterday of people like, ‘Do you need a partner? Do you need a partner? Do you need a partner?'"

PG&E's response

Reached for comment last week, PG&E spokesperson Paul Moreno strenuously objected to Burke's characterization, saying: "We were very interested in finding a buyer."

"There were numerous windows of opportunity for interested parties to take ownership of PG&E's Potter Valley Project (PVP) and continue to operate it as a hydropower facility. These opportunities were widely known and reported in the press," a statement furnished by Moreno via email reads. "While the PVP was non-economic for PG&E, we understood there were water delivery benefits for others, and they may have wanted to take over the project, so in 2017, PG&E approached local stakeholders to see if there was any interest. When no firm proposals came forward, we widened the net and announced we would issue a public request for offers (RFO) in the fall of 2018. PG&E used a broker in the industry to solicit interest in the project nationwide. However, no viable proposals came forward.

"In January 2019, PG&E announced to FERC that it would not seek a new license for the project. In March 2019, FERC publicly noticed the initiation of their ‘orphan process.' … No one applied during the several-month-long window period, even when FERC granted after an extension of time. After no party filed a license application by the statutory deadline, FERC required PG&E to develop a plan and schedule for the current surrender process. PG&E submitted our surrender application and decommissioning plan to FERC in July 2025.

"PG&E has been and remains open to reviewing and considering any proposal from an entity or entities that have the technical and financial capability to own and operate the dams. To date, the only proposal we received is from Sonoma County Water Agency, Inland Water & Power Commission of Mendocino County, Round Valley Tribes, Humboldt County, Cal Trout, Trout Unlimited and California Department of Fish & Wildlife.

"PG&E and the parties met over the last few years to determine the best path forward for the construction of the New Eel-Russian Facility (NERF). PG&E included the construction of NERF in our submittal to FERC as part of our surrender application. The Eel Russian River Project Authority (ERPA) was formed to be the new owner and operator of the project facilities to facilitate future water transfers to the Russian River and we continue to work with these groups."

Operating a large-scale hydroelectric project

The Potter Valley Projects' hydroelectric facilities have not generated power since 2021, and a member of the Association of California Water Agencies confirmed to the Times-Standard, on background, that the dams are in a serious state of disrepair, despite claims to the contrary from opponents of dam removal.

In her tweet earlier this month, Rollins suggested that Elsinore Valley Municipal Water District would resume operation of the Potter Valley Project as a hydroelectric facility, calling the district a "legitimate buyer who expressed strong interest in purchasing the project from PG&E and operating the dams as hydroelectric or water-diversion facilities."

"This (offer from the Elsinore Valley Municipal Water District) would allow @POTUS and @SecretaryBurgum to restart/expand reliable hydroelectric electric (sic) generation while keeping both in place," Rollins' tweet reads. "I hope @PGE4Me is taking them seriously!"

Reached for comment via phone this weekend, Elsinore Valley Municipal Water District spokesperson Sylvia Ornelas told the Times-Standard that, while the district does have assets outside of the district's Lake Elsinore home (including a water right in Colton, some 40 miles north of the district's headquarters), Elsinore Valley doesn't have experience managing or operating hydroelectric facilities.

Ornelas confirmed that the district is in the exploratory phase of potentially acquiring the Potter Valley Project and noted that the district is still taking input from community members as it examines its options for making what Burke characterized as a "big bold" shot at exploring new water sources.

"We had a board meeting last week, and we had a handful of people that called in, and I would like to just express our appreciation for the community members and the different stakeholders who called in and provided their input, both in support and opposition to the project," Ornelas said. "Our board really appreciates this feedback. It really is important, and they take every single call or email - or however they want to get a hold of us - into consideration as we continue our evaluation."

PG&E clarified the state of their negotiations with Elsinore Valley in an email.

"PG&E met with Elsinore Valley Municipal Water District in January 2026," that statement reads. "During this meeting, PG&E provided background on the PVP and the NERF, encouraging Elsinore to reach out to ERPA and ERPA's partners to better understand their plans for the construction and operation of the NERF to facilitate future water diversions.

"PG&E also urged Elsinore to reach out if they had further questions, and we would be ready to sign a Non-Disclosure Agreement (NDA) with them to have further discussions. PG&E also expressed the importance of the timing of a proposal and the need to move discussions forward quickly as PG&E has a final surrender application and decommissioning plan (application) filed with FERC. Any change from PG&E's current decommissioning plan would require an amendment to PG&E's Application. At this time, Elsinore has not reached out to PG&E to have further discussions or sign an NDA."

A ‘Southern California water grab'?

It's unclear what the best case scenario for Elsinore Valley Municipal Water District might be should the water district ultimately attempt to acquire and operate the Potter Valley Project, but U.S. Rep. Jared Huffman (D-San Rafael) has suggested that the water district's efforts may be just one part in a broader effort to capture Northern California water rights and infrastructure and eventually work to funnel that water out of the area into Central and Southern California.

"I think we need to remember that the tweet came from the Secretary of Agriculture. This was not some random, low-level operative, or some MAGA influencer," Huffman told the Times-Standard earlier this month. "You have to take this seriously, and (Rollins) is suggesting very publicly now that she is pushing to federalize the Potter Valley Project, to make it part of the Department of Interior. She's copying Doug Burgum, bringing him into their scheme, and now she's announcing that she has found a Southern California buyer of PG&E's water rights and infrastructure. You have to connect all those dots, and if you do, you should be very alarmed."

Huffman announced that he is opening an investigation into the federal government's role in the Elsinore Valley Municipal Water District's plans.

In her podcast interview with UNWON, Burke noted that the initial plan would involve water banking and selling or trading water locally in the Russian River watershed, but she did not rule out the idea of eventually pumping water from the two watersheds into the California State Water Project.

"We're not pumping it and moving it," Burke said. "It's staying right locally. Long-term, in, you know, 50 years, I can't tell you what that would look like. It's hundreds and hundreds of miles away. Right now, that doesn't pencil out to do that."

An asset 500 miles from home

Sonoma Water Agency Environmental Resources Manager and ERPA Executive Director David Manning told the Times-Standard that, while acquiring assets outside of a water district might not be unheard of, making a large-scale capital investment in a hydroelectric facility some 500 miles away from a water district's headquarters is not something that he has ever encountered, nor is it something that Sonoma Water has ever undertaken.

He also warned of misinformation being spread that the loss of some diversionary flows would result in catastrophic water loss for 750,000 water users in the Russian River watershed (as Rollins' tweet suggested). Sonoma Water and its partners throughout the watershed, including the Mendocino County Inland Water and Power Commission, are currently undertaking to increase water storage to offset flows lost during parts of the year that the Eel River will not be diverting water.

PG&E filed its license surrender and decommission plan in July of last year and also included a request for "Non-Project Use of Project Lands," which would authorize the newly formed ERPA to continue water diversion from its new NERF facility, to be built in concurrence with PG&E's efforts to remove the dams and other project infrastructure.

Manning said that ERPA was aware of the tumult that recent news had caused throughout the area, but said that the coalition remains "undeterred" in its efforts to ensure water continues to flow to the area's water users.

"We are curious … about what's been mentioned publicly by the secretary, by this Southern California water district, but we're committed to make the diversion continue to meet the needs of both the Eel and Russian River for decades to come," he said.

Robert Schaulis can be reached at 707-441-0585.

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