Business

PCWA files lawsuit against PG&E related to Drum-Spaulding hydroelectric

PCWA files lawsuit against PG&E related to Drum-Spaulding hydroelectric

Placer County Water Agency (PCWA) has filed suit against Pacific Gas & Electric Company (PG&E) in Sacramento County Superior Court for breach of contract related to the Drum-Spaulding Hydroelectric Project.

This action follows disclosure of PG&E’s intent to transfer substantially all of its power generating assets, including Drum-Spaulding in Placer County, to a subsidiary recently formed by PG&E. Under a Water Supply Agreement with PG&E, PCWA is entitled to about 125,000 acre-feet of water from this project, which is the principal source of water for Placer County residents and businesses. PCWA began purchasing water from Drum-Spaulding in 1968 as part of an agreement in which PCWA bought PG&E’s distribution canals and treated water systems serving western Placer County. That water supply arrangement was expanded in 1982 when PCWA purchased the remainder of PG&E’s retail water system in the foothills of Placer County.

In 2015, the Water Supply Agreement was extended for 20 years and amended to require PG&E to give PCWA at least six months advance notice if it intends to sell some or all of the Drum-Spaulding Hydroelectric Project facilities. During this time, PCWA has the right to discuss its interests and options to secure this source of water for Placer County. PG&E failed to honor this six-month window, PCWA said.

“PCWA is required to ensure adequate water supplies for the people of Placer County,” said PCWA Board Chairman Robert Dugan. “This lawsuit is being filed to protect those supplies and the interests of the people of Placer County by compelling PG&E to comply with our water supply contract.”

On Sept. 28, 2022, PCWA was notified by PG&E, for the first time, that it had filed an application with the California Public Utilities Commission to seek approval to transfer its generation assets in the Drum-Spaulding Project to a wholly owned subsidiary company.

PCWA said this lawsuit is unrelated to its lawsuit filed in December 2022 against PG&E for damages related to the Mosquito Fire.

On Dec. 20, PCWA announced it had filed suit in Placer County Superior Court for damages related to the Mosquito Fire, which burned nearly 77,000 acres across the Tahoe and El Dorado National Forests. The Mosquito Fire damaged electricity transmission infrastructure and halted energy production along the Middle Fork American River Project, a water supply and hydroelectric energy project owned and operated by PCWA. According to the suit, the ultimate amount of damages sought by PCWA is undetermined, but the fire caused PCWA to lose tens of millions of dollars in power sales alone.

“The work to recover from the Mosquito Fire’s impacts will be significant, long-term and costly,” Fecko said. “Our Board is committed to taking every measure possible to protect the interests of our citizens and the investments they have made in our infrastructure. Today’s filing is an important step in fulfilling our responsibility to those we serve and ensuring that we are in a position to recover damages associated with the Mosquito Fire as fully and quickly as possible.”

PCWA’s Middle Fork Project is California’s eighth largest public power project, providing water supplies, hydroelectric energy, public recreational opportunities and environmental benefits in the American River watershed. The powerhouses are capable of generating up to 1 million MWh of clean energy per year and were providing critical supplies during California’s record-breaking heat wave in late August and early September. These clean energy supplies are also important in winter months when sources such as solar are limited, PCWA said.

“In addition to the financial burden of mitigating Mosquito Fire impacts, ultimately, the people of Placer County are suffering financial losses with the Middle Fork Project still disconnected. And as a result, California is missing a critical source of clean energy,” Dugan said.

PCWA is the primary water resource agency for Placer County, with responsibilities including water resource planning and management, retail and wholesale supply of drinking water and irrigation water, and production of hydroelectric energy.