Power up!

Pacific Gas & Electric’s loss could be Butte County’s gain, if a changing of the guard at the Poe Power Dam actually comes off as planned. If not, the county may have spent $300,000 in consulting fees for naught.

If the gamble works, the county stands to gain a revenue stream of between $5 million and $7 million per year, in addition to providing more recreational access for boaters and fishermen and sewing up a reliable, renewable power supply in times of need.

“For Butte County it’s probably the best $300,000 the Board of Supervisors ever spent,” said consultant Ben Swann, whose Sacramento employer, Camp, Dresser and McKee, drew up the license application for the project. “I wouldn’t make any pretense that it’s going to be easy. But I think we have a good chance because I think we can put together a superior license [proposal].”

The Poe hydroelectric plant on the North Fork of the Feather River has been owned and operated by PG&E since it was built in 1953. The plant, located 28 miles northeast of Oroville, generates in excess of 500 gigawatts of electricity per year, translating into $20-$30 million for PG&E annually. PG&E, which is licensed by the Federal Energy Regulatory Commission (FERC) to operate the plant through 2003, submitted an application to FERC to renew its 50-year license back in September 2001. But because of a mailroom mix-up, that application arrived late, forcing FERC to open the licensing process to other entities.

That was all the window Butte County needed, said County Administrative Officer Paul McIntosh, who has championed the project to the supervisors. However, other entities took notice when PG&E dropped the ball. Initially, Butte County had to compete for the license with not only PG&E, but also the Bay Area city of Fremont as well as the Northern California Power Association (NCPA), a nonprofit consortium of California municipalities (including Biggs and Gridley) that operates a number of California power plants.

Realizing a rare opportunity, Butte County, NCPA and Fremont decided to band together and pursue the plant, divvying up the costs and potential profits at 50 percent for NCPA and 25 percent each for Fremont and Butte County.

The blunder was a monumental one for PG&E, which already had spent $5 million on studies related to relicensing the Poe plant. Those studies might now be used by the county and its partners to wrest control of the plant from PG&E. But company spokeswoman Lisa Randle said PG&E would not turn over the license without a fight.

“We are adamant about defending our license,” Randle said. “We have experienced competition in the past; in fact, NCPA has competed in the past. There has never been a license granted to anyone but the current owner [of the plant in question].”

FERC, which was forced by law to throw out PG&E’s late application, did throw the company a bone by granting it "incumbent status," meaning the company would have preference over other bidders. But that decision is currently being disputed in the federal 9th Circuit Court of Appeals. If the court sides with PG&E, McIntosh said, the county and its partners might decide to cut their losses and give up on the project. If the partnership is granted the license, the partners will have to buy the plant from PG&E and may issue bonds to come up with the estimated $12-$18 million the plant is said to be worth.