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HomeMy WebLinkAbout2025-05-29 CC Packet - Special Joint Mtg with IWPCPage 1 of 2 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: • Call (toll free) 1-669 900-6833 • Enter the Access Code: 882 4994 3594 • To Raise Hand enter *9 • To Speak after being recognized: enter *6 to unmute yourself Alternatively, you may view the meeting (without participating) by clicking on the name of the meeting at www.cityofukiah.com/meetings. 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 Page 1 of 43 Page 2 of 2 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 Page 2 of 43 ALL-BOARDS MEETING: MENDOCINO COUNTY INLAND WATER AND POWER COMMISSION & MEMBER AGENCIES May 28, 2025 May 29, 2025IWPC All Boards 1 Page 3 of 43 A. CONTEXT: PG&E AND THE FEDERAL ENERGY REGULATORY COMMISSION May 29, 2025IWPC All Boards 2 Page 4 of 43 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). May 29, 2025IWPC All Boards 3 Page 5 of 43 B. PROPOSAL FOR A NEW DIVERSION STRUCTURE: THE NEW EEL RUSSIAN FACILITY (NERF) May 29, 2025IWPC All Boards 4 Page 6 of 43 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 May 29, 2025IWPC All Boards 5 Page 7 of 43 May 29, 2025IWPC All Boards 6 EXISTING DIVERSION Page 8 of 43 May 29, 2025IWPC All Boards 7 PROPOSED DIVERSION Page 9 of 43 May 29, 2025IWPC All Boards 8 EXISTING DIVERSION Page 10 of 43 May 29, 2025IWPC All Boards 9 PROPOSED DIVERSION Page 11 of 43 POTENTIAL OVERALL SURRENDER AND CONSTRUCTION SCHEDULE May 29, 2025IWPC All Boards 10 Page 12 of 43 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 May 29, 2025IWPC All Boards 11For example: 2012 and 2013 rainfall Note how rainfall tends to end in April/May, which will be the end of the season for diversion. Page 13 of 43 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 the PVP B C D E IWPC All Boards Page 14 of 43 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 Page 15 of 43 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. May 29, 2025IWPC All Boards 14 Page 16 of 43 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 15May 29, 2025IWPC All Boards Page 17 of 43 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 Page 18 of 43 May 29, 2025IWPC All Boards 17 POTENTIAL ANNUAL COST FOR ERPA OPERATIONS OF NERF Page 19 of 43 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 May 29, 2025IWPC All Boards 18 Page 20 of 43 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 May 29, 2025IWPC All Boards 19 Page 21 of 43 C. THE WATER DIVERSION AGREEMENT: FRAMEWORK FOR THE RIGHT TO DIVERT WATER May 29, 2025IWPC All Boards 20 Page 22 of 43 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 Page 23 of 43 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 Page 24 of 43 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 Page 25 of 43 D. THE NEED FOR ADDITIONAL STORAGE OF WATER IN THE RUSSIAN WATERSHED (USACE FEASIBILITY STUDY AND OTHER STORAGE OPTIONS) May 29, 2025IWPC All Boards 24 Page 26 of 43 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 May 29, 2025IWPC All Boards 25 Page 27 of 43 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. May 29, 2025IWPC All Boards 26 Page 28 of 43 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 May 29, 2025IWPC All Boards 27 Two non-Federal sponsors: MCIWPC Lytton Rancheria Study Budget Estimate: Current Capacity = $1,316,000 FCSA = $3,000,000 Estimated = $6,500,000 Page 29 of 43 USACE PROJECT DELIVERY PROCESS May 29, 2025IWPC All Boards 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 Page 30 of 43 USACE STUDY OVERVIEW May 29, 2025IWPC All Boards 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 Page 31 of 43 USACE STUDY MILESTONES May 29, 2025IWPC All Boards 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? Page 32 of 43 PROGRESS & NEXT STEPS May 29, 2025IWPC All Boards 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 Page 33 of 43 E. NEXT STEPS: LIKELY COSTS, NEEDED ACTIONS, AND TIMING May 29, 2025IWPC All Boards 32 Page 34 of 43 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 Page 35 of 43 •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 Page 36 of 43 35 Page 37 of 43 •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 Page 38 of 43 CLOSED SESSION May 29, 2025IWPC All Boards 37 Page 39 of 43 Page 40 of 43 Page 41 of 43 Page 42 of 43 Page 43 of 43