Today PG&E and the Tuolumne Utilities District (TUD) jointly announced they have entered into exclusive negotiations to potentially transfer PG&E’s Phoenix Project to TUD ownership. The Phoenix Project (FERC License No. 1061) includes the 2-megawatt Phoenix Powerhouse, the Main Tuolumne Canal, and the Lyons Dam and Reservoir.
In addition, the potential transfer would include the Strawberry Dam and Pinecrest Reservoir, which are part of PG&E’s Stanislaus-Spring Gap Project. PG&E will continue to own the Stanislaus and Spring Gap powerhouses and would draw water from Pinecrest Reservoir for generation.
The Phoenix Project is no longer a cost-effective source of electric generation for PG&E’s customers, but the powerhouse, water storage and conveyance systems are important to TUD, which makes TUD a natural owner. TUD views the potential acquisition of the Phoenix Project and Pinecrest Reservoir as an important opportunity to secure water rights and strengthen water supply reliability for the community.
While negotiations and a transfer effort are underway, PG&E will continue to own and operate the Phoenix Project in accordance with the terms and conditions of the current project licenses and all laws, rules, and regulations governing the operation of the projects.
If PG&E and TUD execute an agreement, the transfers will require approvals from both the Federal Energy Regulatory Commission, which normally treats such transfers as administrative actions, and the California Public Utilities Commission. PG&E would file a FERC License Amendment for a water storage only License to facilitate the transfer of Strawberry Dam and Pinecrest Reservoir.
Once ownership is transferred, TUD would “step into PG&E’s shoes” and operate Pinecrest Reservoir consistent with the applicable terms and conditions in the Spring Gap-Stanislaus FERC license, and the Phoenix Project consistent with the terms and conditions in that existing FERC license. In addition, once the transfer is complete, TUD would “step into PG&E’s shoes” to continue the relicensing process for the Phoenix Project, whose FERC license expires on August 31, 2022.
Please feel free to contact me with any questions about this notice.
Janet Walther, Sr. Manager