KilarcCow Creek Hydroelectric Project Decommissioning FERC Project No

Kilarc-Cow Creek Hydroelectric Project Decommissioning FERC Project No. 606 Technical Meeting May 16, 2007, 1 -4 pm Red Lion Redding, CA

Agenda • Introductions/Review Agenda • Overview of Project and Decommissioning Agreement • Relicensing Studies • BREAK • Regulatory Permits • Next Steps 2

Meeting Process 3

PG&E is Committed to Decommissioning the Project • Including: – Complying with the Project Agreement on Decommissioning – Returning diverted flow to the streams and transferring PG&E water rights to a resource agency or other entity to protect, preserve and/or enhance aquatic resources – Timely preparation of a Decommissioning Plan and Surrender Application – Timely implementation of the Decommissioning Plan following FERC approval of the Surrender Application 4

Overview of Project and Decommissioning Agreement • Overview of Project • Project Agreement • Proposed Schedule for Decommissioning Process • Surrender Application Content and Process 5

Overview of Project Primary Project Features • Cow Creek Development 1. 8 MW – Located on South Cow Creek – Several Small Diversions – 2 Miles of Canal, Forebay, and Powerhouse • Kilarc Development 3. 2 MW – Located on Old Cow Creek – Several Small Diversions – 3. 5 Miles of Canal, Forebay, and Powerhouse 6

Overview of Project Kilarc-Cow Creek Hydroelectric Project • Began Operating in 1904 and 1907 • Operated by PG&E • Licensed by the Federal Energy Regulatory Commission (FERC) • Current FERC License Issued Feb. 1, 1980 • License Expired March 27, 2007 (operating on an annual license) • Project Relicensing Started 2001 7

Overview of Project • Project Relicensing Began in 2001 – An Application for New License was required to be filed by March 27, 2005 • Economic Issues – Small 5 MW Project in two developments, old facilities with high maintenance for power generated – Anticipated significant increase in instream flow requirements and construction of fish passage facilities – Decommissioning within the “Project Agreement” framework was more economic than continuing to operate the project – Less costly replacement power available • Environmental Laws and Compliance Issues – Threatened Species (Steelhead) – Species of Concern (Fall- and Late Fall-Run Chinook Salmon, Yellow legged frogs) 8

Overview of Project • In Early 2004 PG&E Decided To: – Interrupt relicensing the Project – Develop a Project Agreement to implement decommissioning, if no other entity relicensed the Project • Decision Based On: – Project economics – Anticipated new license conditions – Environmental benefits of decommissioning 9

Project Agreement • Signed March 2005 • Agreement with State and Federal resource agencies and other stakeholders – U. S. Fish and Wildlife Service – California Department of Fish and Game – National Park Service – California State Water Resources Control Board – NOAA Fisheries – Friends of the River – Trout Unlimited – PG&E 10

Project Agreement • PG&E agreed not to seek a new license • Identified “Subjects and Desired Conditions” that would be addressed if the Project was decommissioned • Upon decommissioning, transfer of PG&E water rights to other entity or agency to protect, preserve, and/or enhance aquatic resources • FERC has final approval authority over decommissioning 11

Project Agreement What Happened After the Agreement Was Signed • PG&E filed Agreement and informed FERC of the decision not to relicense the Project (3/30/05) • FERC “Public Notice” that the license was available (4/7/05) • Several entities evaluated acquiring the license and Project, but ultimately did not file license application • PG&E filed the required Surrender Schedule with FERC on 3/23/07 • Next, FERC is expected to order PG&E to develop a decommissioning plan and file a Surrender Application within 2 years 12

Proposed Schedule for Decommissioning Process • Filed Surrender Schedule with FERC– March 23, 2007 • Hold stakeholder meetings to identify issues and develop decommissioning plan– April 2007 through Oct 2007 • Conduct resource analysis in 2007 and 2008 • PG&E prepares Surrender Application- Jan 2008 – March 2009 • Surrender Application including Decommissioning Plan proposed to be filed with FERC by March 2009 • Upon approval of Decommissioning Plan by FERC, PG&E to implement plan 13

Surrender Application Content and Process • FERC Regulatory Requirements – FERC Regulations Addressing Decommissioning 18 CFR part 6, and 18 CFR s. 16. 25 – Surrender application • Must be filed in the same form and manner as the application for license • Must provide for disposition of any Project facility • Must comply with approved schedule • Must comply with the requirements of consultation 14

Resource Study Areas • Hydrology – Developed and verified estimated hydrology – Estimate average monthly flow at each diversion • Water Quality and Water Temperature – All water samples were within Basin Plan objectives except 4 coliform samples (2 background) – Old Cow Creek Water Temperature below 20°C – Water entering Project on South Cow routinely above 20°C during summer/fall 15

Resource Study Areas (cont. ) • Sediment and Channel Stability – Channel banks stable – Sediment moves through system – Spawning gravel not reduced below diversions • Aquatic Habitat – Passage Barriers • 14 barriers on Old Cow Creek • 9 barriers on South Cow Creek 16

Resource Study Areas (cont. ) • Fish Population – Old Cow - Rainbow Trout, Sculpin, Brown Trout, Sacramento Pikeminnow – South Cow- Steelhead, Chinook salmon (Wagoner Canyon) – Resident fish in canals and both forebays • Wildlife Resources – No CRLF or VELB – FYLF (South Cow) – Northwestern Pond Turtle (Hooten Gulch) – Osprey, Golden Eagle (Kilarc Forebay) 17

Resource Study Areas (cont. ) • Historic, Archaeological, Cultural, Recreational, Land Management & Aesthetics – Kilarc and Cow Powerhouse eligible – No cultural properties identified • Recreation – Limited opportunities – Kilarc Forebay - picnicing and fishing – 84% from Shasta County 18

BREAK 19

Regulatory Permits Anticipated Permits • FERC Surrender Application • Army Corps of Engineer 404 • CDFG 1603 (Stream Bed Alteration) • Stormwater runoff permit (depending on size of deconstruction area) • County grading permits (depending on construction of temporary roads) 20

Next Steps 21

Project Area 22

Project Schematic 23