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

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

3. 3 Meeting Process

4. 4 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

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

6. 6 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

7. 7 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

8. 8 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)

9. 9 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

10. 10 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

11. 11 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

12. 12 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

13. 13 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

14. 14 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

15. 15 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

16. 16 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

17. 17 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)

18. 18 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

19. 19 BREAK

20. 20 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)

21. 21 Next Steps

22. 22 Project Area

23. 23 Project Schematic