CHICO, Calif. February 2, 2017 – Reflecting California’s changing energy landscape and rising operating costs at the DeSabla-Centerville hydroelectric facility in Butte County, Pacific Gas and Electric Company (PG&E) announced today that it will withdraw its application for a new license for the facility from the Federal Energy Regulatory Commission (FERC).
PG&E’s withdrawal of the application, expected in mid-February, will start a process led by FERC to determine the future of the small hydroelectric facility. PG&E will request FERC initiate its “orphan project” process, which would allow for other qualified entities to apply for a license to operate the facility in the future. The FERC process could take 5-10 years.
“PG&E recognizes the importance of the DeSabla-Centerville facility to the local communities, including its role in supporting environmental resources, meeting the needs of farms and other water users, and providing public recreation. We will continue to focus on the safe and environmentally friendly operation of the facility under existing license conditions as FERC moves forward with its process,” said Debbie Powell, senior director of power generation operations at PG&E.
PG&E made this decision as the DeSabla-Centerville facility is no longer economically viable for PG&E’s electric customers. This is due to renewable energy markets becoming increasingly more competitive, customer demand from PG&E declining due to customer-owned solar and community choice aggregation programs, and increasingly costly regulatory requirements to operate the hydroelectric facility.
Other entities may be able to generate power more economically at DeSabla-Centerville due to potential differences in financing mechanisms and business models. PG&E is supportive of qualified entities filing for a FERC license to operate DeSabla-Centerville.
Any new owner would be required to obtain a FERC license and be bound by license condition requirements, including protections for fisheries, notably the salmon population in Butte Creek. Also, should FERC choose a decommissioning path for the facility, any decommissioning plan would have to follow all FERC requirements.
The DeSabla-Centerville facility includes the DeSabla, Toadtown, and Centerville powerhouses, the DeSabla, Philbrook and Round Valley reservoirs, and canals and flumes in the foothills and mountains of Butte County.
The facilities were initially developed in the early 20th century by predecessor companies later acquired by PG&E. Some of DeSabla-Centerville’s canals and flumes stem from the Gold Rush era.