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PG&E's lack of electric capacity puts major projects on shaky ground

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Local and state officials are raising concern and demanding answers about PG&E's professed inability to provide new electric hookups across the southern portions of the county, threatening major economic development from Fortuna down to the Mendocino County border and putting future projects, including a new Garberville hospital, at risk.

Second District Supervisor Michelle Bushnell and city managers from Fortuna and Rio Dell, who all met with PG&E representatives in recent weeks, said they were informed it would take an estimated $900 million and up to 10 years to make the needed upgrades to increase capacity in those areas.

During a Fortuna City Council discussion Monday, Bushnell described the situation as "very, very dire" and called the seven- to 10-year timeline "not acceptable."

"I have a hospital that has to go in Garberville, and it has to be powered," she told the council. "It's the only hospital in 100 miles from Willits."

The lack of capacity on two main transmission lines — one coming from Cottonwood over State Route 36 and the other out of Laytonville — not only jeopardizes major development projects but also the county's Climate Action Plan and local governments' ability to meet state requirements for new residential housing.

In an interview with the Journal, Bushnell said PG&E representatives told her there are currently only a handful of hookups available in the cities of Fortuna and Rio Dell, and "zero from Rio Dell to the Humboldt-Mendocino line."

Bushell said she also questioned the company about the nearly $1 billion price tag and how the utility planned on paying for the improvements, concerned the costs will be passed on to local ratepayers.

"They didn't have a definitive answer," she said. "They didn't commit at all."

The supervisor also said she's taken the issue to state Sen. Mike McGuire and they are going up the chain of PG&E in a search for answers and possible solutions.

"It's a top priority right now to figure this out," she said.

McGuire said in a statement he's told the utility's CEO "this half-baked initiative won't stand and they must do better."

"We've continued to meet with utility representatives and we've let them know we're expecting alternate solutions," he said. "We've also been in constant communication with county officials and we'll be bringing local elected leaders and PG&E together soon to discuss potential alternatives."

PG&E representatives are scheduled to again meet with local officials in the next week and give presentations to the Humboldt County Board of Supervisors and the Fortuna City Council in November.

In a statement, the utility did not address Journal questions about how the situation got to this point but said its "multi-year grid plan is addressing needs in this area through projects already in progress, and others planned over the next few years."

"These include a line reconductoring project and upgrades to the Rio Dell substation to increase capacity in Fortuna and Rio Dell; transmission and distribution system line reconductoring, and upgrades at the Garberville substation, to increase capacity for serving the Garberville area," it reads.

"While some of this work is longer-term, in the short-term our capacity work planned through next year will support smaller energy load applications."

An earlier version of this statement specifically mentioned Jerold Phelps Community Hospital as a project that would be supported but the company then recalled it and issued an updated version that was nearly identical but omitted reference to the Southern Humboldt hospital.

The statement notes that building new transmission facilities requires the involvement of multiple parties, including customers, land owners, environmental regulators and the California Independent System Operator, a nonprofit that oversees the state's bulk electric system. The utility's statement acknowledges "past projects have experienced delays."

"We are committed to working creatively and collaboratively to develop standard and creative solutions to meet our customers' needs," PG&E states.

Meanwhile, officials in Fortuna and Rio Dell are trying to figure out next steps, while feeling blindsided by news of the capacity limitations.

Fortuna City Manager Merrit Perry said the first inkling of an issue came about six months ago when the city was installing a Tesla battery back-up at the wastewater pump station only to be informed by PG&E that it might not be able to provide service. But Perry said it took until now to get PG&E at the table with some answers, although many questions still remain.

"They basically told us the Eel River Valley is capacity-limited, both in distribution and transmission," Perry said, adding PG&E representatives relayed the utility won't be able to provide new electricity for larger projects, like the proposed Mill Site development, until upgrades are done.

In addition to compromising Mill Site plans and other economic development projects the city has already invested money into, Perry said he's concerned about potential impacts to incoming housing projects. Housing is a high priority for the state, which wants 3,390 new units built in Humboldt by 2027. Additionally, Perry said the county's Climate Action Plan, which includes transitioning new residential builds to electrical energy rather than natural gas, as well as putting more electric cars on the road, could be jeopardized.

Also at risk are the city's plans for improvements to the wastewater treatment facility and a new police station.

The lack of capacity, Perry said, could "slam the brakes" on the county's CAP, as well as derail Fortuna's efforts to promote economic development and make needed improvements to city services. He added that PG&E representatives made it sound like the utility could "try to fit in smaller projects" but it was unclear where it would "draw the line" or whether PG&E might discontinue new residential hookups.

Rio Dell officials also recently met with PG&E and California Public Utility Commission representatives to talk about the issue, which Mayor Debra Garnes first brought to the regulatory authority's attention in March after a $4.5 million development was stymied by a lack of available power.

City Manager Kyle Knopp called the state of PG&E's capacity levels an "issue of paramount importance" that should be of concern to the entire county and region, not just communities around the Eel River Valley.

"We did our best to communicate the urgency of the issue and we're going to be proactive in feeding them every bit of information on development prospects here," he said.

Knopp said the timeline PG&E laid out for upgrades in the past keeps getting extended to what he now deems an unacceptable period of time.

"PG&E is recognizing there are some issues with the distribution system in the region ... and that there are going to have to be some pretty significant investments in the distribution system in order to realize future growth," he said.

In a letter to the CPUC back in May, Garnes said PG&E representatives told the city in 2018 that certain upgrades would be completed in three years, but now "that timeline is completely up in the air and seemingly no progress has been made at all." She went on to describe the situation as "unacceptable" and "baffling," noting Rio Dell "is located just 1 mile away from one of California's largest green biomass power plants rated at 28 MW with distribution lines running through the community."

In a June response, CPUC Commissioner John Reynolds, who is overseeing a PG&E application that includes "investments in electric distribution infrastructure," writes that he shares the mayor's concerns about PG&E's lack of capacity in the area and the length of the upgrade timeline. He said the schedule for PG&E's application anticipates a CPUC decision by mid-2023.

"Electric distribution grid capital improvements take time to review and approve, but PG&E should be as transparent as possible about the timeline and next steps with local governments," he wrote. "While we cannot predetermine the outcome of any proposals ... at the very least we intend for city of Rio Dell officials to have the latest information on projects affecting the city."

The Rio Dell City Council was scheduled to discuss the capacity issue at its Tuesday meeting as the Journal went to press.

Knopp said the situation has been "extremely concerning, especially the way it eked out," and noted the capacity issue is "hugely problematic" for projects in the city and neighboring ones that community members have spent money developing.

"The timeline for these upgrades is unreal and begs the question, 'What else?'" he said, also raising concerns about future housing hookups.

He said he also brought up PG&E's previous statement to the Journal that pointed to large cannabis activity as a basis for the issue and the representatives were "apologetic for trying to affix a cause to a certain industry or customer type."

Bushnell said she had a similar conversation with PG&E representatives, noting it was "absolutely not the case" and she doesn't want to see the utility trying to put this issue on a certain industry or bait one community against another.

"We are all in this together. We have to figure this out," Bushnell said. "The bottom line is we are happy to help in any way we can but they've got to be straight up with us."

Back at the Fortuna City Council meeting, council members expressed concerns about economic impacts, as well as the city's ability to meet housing and climate mandates.

Council members also supported bringing the matter to the attention of the governor and the Legislature, expressing frustration that the city had to learn of the shortage on its own.

Perry, who previously described the situation as putting the Eel River Valley "on the edge of a cliff," said this was a time to hold the governor, the state's Public Utilities Commission and PG&E accountable. He said he wants answers on what services PG&E's is required to provide, noting: "It's a huge problem. A billion dollars is a huge number for this county."

"They have the privilege of being a public utility and having a captive audience, but then when they're not adequately planning for their facilities and they're going to leave all of their customers hanging with no ability to connect," Perry said. "How is that an acceptable position to be in as a company that's granted a public utility status? And what is the PUC's role in overseeing that and ensuring we have a reliable power supply that can be provided to new development in a timely manner."

Iridian Casarez (she/her) is a staff writer at the Journal. Reach her at (707) 442-1400, extension 317, or Follow her on Twitter @IridianCasarez.

Kimberly Wear (she/her) is the digital editor at the Journal. Reach her at (707) 442-1400, extension 323, or Follow her on Twitter @kimberly_wear.

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About The Authors

Iridian Casarez

Iridian Casarez was a staff writer at the North Coast Journal from 2019-2023.

Kimberly Wear

Kimberly Wear is the assistant editor of the North Coast Journal.

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