Kilarc-Cow Creek Hydroelectric Project Decommissioning

FERC Project No. 606

Shasta County Board of Supervisors

March 4, 2008

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Project Features

Kilarc-Cow Creek Hydroelectric Project – approximately 30 miles east of Redding near the Community of Whitmore

• Cow Creek Development 1.8 MW

• Kilarc Development 3.2 MW

• Operated by PG&E, under license from the Federal Energy Regulatory Commission (FERC)

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Background

• PG&E initially sought to renew the operating license and filed a Notice of Intent (NOI) with FERC in 2002.

• In 2004, 2 years into the relicensing process, after environmental studies, and consultation with resource agencies and NGOs, PG&E decided not to relicense the project.

• PG&E developed a Project Agreement with resource agencies and NGOs to define parameters of decommissioning, if no other entity relicensed the Project

• Decision Not to Relicense Based On:

– Project economics

– Anticipated new license conditions

– Environmental benefits of decommissioning

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FERC Regulatory Process

• When an existing licensee decides not to relicense a project, FERC regulations provide an opportunity for other entities to apply for the project license.

• On April 7, 2005, FERC issued a public notice soliciting applicants, pursuant to 18 CFR §16.25.

• Synergics Energy Services filed an NOI, but did not file a license application by FERC’s December 2006 deadline

• FERC then ordered PG&E to develop a decommissioning plan and file a License Surrender Application by March 2009.

• Federal Power Act prohibits PG&E from obtaining a new license to operate the project

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Decommissioning the Project

• PG&E is required by FERC to file a Surrender Application by March 2009

• To solicit public input, PG&E held several public meetings and conducted a site visit

• In response to requests from the public, on January 24, 2008 FERC held public meetings to discuss the decommissioning process and answer questions

• FERC will conduct an environmental assessment on PG&E's proposed decommissioning plan and then will issue an order for PG&E to remove the project facilities.

• Once PG&E’s decommissioning work is completed and FERC’s order becomes final, other entities can file Notices of Intent for proposed projects at the site (18 CFR § 5).

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Potential Future Recreation and/or Public Uses

• Kilarc Forebay – PG&E has prepared a paper that outlines, to the best of our knowledge, what would be required for another entity to operate the Forebay as a recreation facility

• Kilarc Powerhouse – PG&E is in the process of completing a paper outlining requirements and opportunities for future public use, recreational or historical in nature.

• Entities with interest in these facilities will need to develop a preliminary plan for PG&E’s approval to submit with the Surrender Application by March 2009

• PG&E will issue a solicitation of interest form for Kilarc Forebay and Kilarc Powerhouse to interested parties for PG&E’s initial assessment of qualifications.

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FERC Processing of PG&E’s License Surrender Application

1. PG&E Files Application With FERC (3/2009)

4. FERC issues order for PG&E to develop engineering removal and site restoration plans

2. FERC requests additional information (if needed)

3. FERC Staff Prepares NEPA Document (1 to 2 years, 2009-2011)

5. PG&E files plans (6-12 months)

7. PG&E Decommissions Project (2010 to 2013)

9. FERC issues final approval

6. FERC Orders PG&E to discontinue generation and remove Project facilities

8. Follow-up Monitoring (2012 to 2015)

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Contact Information

Stacy Evans, Project Manager

Pacific Gas and Electric Company

415- 973-4731

Janet Walther, Governmental Relations

Pacific Gas and Electric Company

530-518-6790

Stacy Evans, Project Manager

Pacific Gas and Electric Company

415- 973-4731

Janet Walther, Governmental Relations

Pacific Gas and Electric Company

530-518-6790