"PG&E has very limited discretion to restrict PVID's contracted deliveries." The Potter Valley Irrigation District has put some version of that sentence on the record in past years. It repeated it in a March 18, 2026 filing, after a winter that had already sent 323,882 acre-feet of cumulative inflow into Lake Pillsbury by March 17.
That sentence matters to anyone looking at acreage in Potter Valley. For more than a century, summer irrigation here has run through a utility's diversion and a utility's contract. The utility is now asking to give the project back. The replacement on the table is designed to move water in the seasons when farms need it least. So in this valley, summer water is increasingly something a parcel holds for itself.
The Water Runs Through a Contract Between Two Other Parties
The Potter Valley Project has diverted Eel River water into the East Branch Russian River since 1908. In its September 2026 comments to FERC, the U.S. Department of the Interior described PVID as serving "on the order of 390 farms" and roughly 4,600 to 4,900 irrigated acres. PG&E's existing contract obligation to the district is up to 19,000 acre-feet.
PVID reads that contract as protecting a 50 cubic-feet-per-second delivery from April 15 to October 15. The one exception it names is a dry year in which cumulative inflow to Lake Pillsbury is under 25,000 acre-feet by April 1. In practice the arrangement has bent. In the same filing, the district said a late variance approval in 2025 led PG&E to cut East Branch flows to 5 cfs, and that the rest of the valley's summer and fall irrigation that year was curtailed.
Federal regulators have said where the contract stands with them. When FERC approved PG&E's 2026 flow variance on May 14, 2026, it allowed East Branch river releases to drop from the licensed 75 cfs to between 5 and 25 cfs as needed, a reduction the order described as separate from flows released to the irrigation district. In the same order, FERC said the dispute between PVID and PG&E falls outside its jurisdiction.
The price of that water has been rising, too. At its November 19, 2025 meeting, the PVID board approved a proposed PG&E contract rate of $21.31 per acre-foot for the 2026 irrigation season. Separately, the district raised its own general-delivery rate to customers from $22.50 to $35 per acre-foot in June 2025. It said the increase was needed to meet its contributions to the Mendocino County Inland Water and Power Commission.
The Replacement Diversion Runs in the Off-Season
PG&E filed to surrender and decommission the project on July 25, 2025, proposing to remove Scott Dam and Cape Horn Dam. The planned successor is the New Eel-Russian Facility, or NERF. It would be a pump station with fish screens near Cape Horn Dam, owned and operated by the Eel-Russian Project Authority. Sonoma County, Sonoma Water and the Inland Water and Power Commission created that authority in 2023, and its board includes representatives of the Round Valley Indian Tribes.
NERF would operate under the February 2025 Water Diversion Agreement. As the Press Democrat reported, that agreement transfers the Eel River water rights to the Round Valley Indian Tribes and sets seasonal, fish-protective rules for diversion. As Interior summarized them, those rules let the facility divert 30 percent of winter flow above a 250 cfs floor. In summer it can take only 20 percent of flow above a 35 cfs floor, and it stops whenever the allowable diversion falls under 5 cfs.
Sonoma Water's Don Seymour and John Mendoza showed what that means month by month in a July 9, 2026 modeling presentation to the Inland Water and Power Commission. Their model has NERF transfers dropping to zero by August, while actual transfers continued through the summer. Interior's comments to FERC list the figures for summer 2025:
| Month, 2025 | Actual transfers, acre-feet | Modeled NERF transfers, acre-feet |
|---|---|---|
| June | 7,135 | 1,070 |
| July | 7,603 | 243 |
| August | 3,017 | 0 |
The model does find water to divert in every type of year, including the drought years of 2020 and 2021. Annual totals for water years 2013 through 2025 range from about 18,000 acre-feet in 2021 to about 86,000 in 2017. So the water exists. It just arrives in the months when it is hardest for a farm to use directly. Interior's position is that the agreement does not carry forward PG&E's 19,000 acre-foot obligation to PVID as a duty of NERF. That is the department's argument in its comments, not a FERC finding.
The Plan Puts Storage and Wells on Individual Parcels
Bridging the gap between winter supply and summer demand was the job of the Potter Valley Water Supply Reliability Study. Jacobs Engineering Group prepared it for Sonoma Water in May 2025. It projects a late-spring and summer shortfall of about 9,000 acre-feet a year once diversions become run-of-river.
The study's recommendations include these four.
- Cut valley water demand by 20 to 30 percent through canal improvements and on-farm irrigation changes.
- Build at least 2,500 acre-feet of new in-valley pond storage, filled with canal water or pumped groundwater in early winter and spring. That works out to about 313 acres of new ponds, on top of the roughly 125 acres of ponds the valley has now.
- Develop at least 3,500 acre-feet a year of new groundwater from agricultural production wells, pumped June through September.
- Take a decentralized approach in which "each major landholding or group of landholdings would develop new ponds and wells for use on their lands," possibly encouraged through a Potter Valley water fund offering rebates.
That fourth point carries the most weight for anyone buying land here. Under this plan, summer reliability is built one property at a time. The study counts expanding pond storage as a "no-regret action" and notes that several landowners were already expanding ponds or thinking about it.
None of it is free. The study puts pond storage at $15 to $28 million, or $201 to $381 per acre-foot, and groundwater development at $19 to $22 million, or $210 to $370 per acre-foot. The full program could involve up to $60 million in capital projects and $2 million a year in operating costs. The Press Democrat reported in November 2025 that grants and federal money could help, but that much of the cost would likely fall on PVID ratepayers.
What This Changes When You Walk a Parcel
If a valley's summer supply is expected to come more and more from what each property can store and pump, then features that used to be extras start to look like infrastructure. An existing irrigation pond that can be filled during the wet months is one of them. So is a well. So is how a property's irrigation system uses water. Two otherwise similar parcels on the same canal could face future summers very differently depending on what is already built.
Groundwater is the least settled part of the plan. The Jacobs study points out that most existing wells in the valley, and the monitoring wells drilled for the study, are shallow and built for domestic use. It calls its own groundwater estimates uncertain. Its next step is a drilling and aquifer-testing program of up to 12 test wells to confirm yields, check water quality and gauge possible effects on existing domestic wells. Until those results are in, a well's past performance tells you more than the valley-wide estimate does.
Ponds take land, too. If the valley's pond area grows from about 125 acres to more than 400, some of that acreage will come out of fields and orchards. It is one more tradeoff to weigh when sizing up how much of a property is actually productive.
Water rights, district service and contract terms are legal questions with answers specific to each property. This post is general information, not legal or financial advice, so please confirm the details for any particular parcel with PVID and a qualified water or real estate attorney.
The Calendar Is Not Set Yet
PG&E says FERC has to approve its application before decommissioning can begin. The company has a target of filing management plans in 2027. FERC's scoping-comment deadline was extended to September 18, 2026. Interior's filing that day stated that no final order had been issued. An earlier Press Democrat report from August 2025 said decommissioning was not expected to start before 2028.
NERF's design is funded. Its construction, estimated at about $50 million as of March 2025, is not. According to Interior's summary of the published schedules, design runs through December 2028, and ERPA has described an operating window of "perhaps 2030 to 2035." Interior also argues that the agreement includes no protocol for delays. That is another point the department is pressing before FERC.
Local agencies are budgeting for the uncertainty. Mendocino County supervisors approved $500,000 for the Inland Water and Power Commission and ERPA to cover possible unanticipated decommissioning costs, the Mendocino Voice reported in February 2026. PVID's August 19, 2026 agenda included the district's share of legal and engineering costs for the surrender process, NERF and the Coyote Dam feasibility study, along with check dams on the East Branch. The Ukiah Daily Journal reported that ERPA Board Chair David Rabbitt said the partners had secured funding for NERF design. The paper also reported that PG&E CEO Patti Poppe met with Agriculture Secretary Brooke Rollins and Interior Secretary Doug Burgum on June 15, 2026.
A Few Quick Answers
Are the dams coming out this year? No removal date has been approved. PG&E's application was still under FERC review as of September 2026.
Who pays to run the new diversion? ERPA says Russian River water users would cover annual operations and maintenance. Interior estimates those costs at $7 million to $12 million a year, plus payments to the Round Valley Indian Tribes and a restoration fund.
Where can I read the source documents? The FERC project page, the ERPA FAQ and the Potter Valley Irrigation District website all post current filings and agendas.
If you're thinking about Potter Valley acreage, or about selling a place there with ponds or wells already in, I'm happy to go over what the property already has for summer water and which records are worth pulling before you decide. Diane Pennington works across Mendocino County's rural valleys. Let's Connect.
