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City officials in Fortuna and Rio Dell are raising concerns about PG&E’s inability to provide new electric hookups in the Eel River Valley, leaving major economic development plans in the lurch and putting future projects, including new housing, at risk.

Fortuna City Manager Meritt Perry said he is bringing the issue before the City Council at Monday’s meeting to discuss future steps, including whether to consider filing a complaint with the California Public Utilities Commission, which regulates PG&E, after being informed this week by utility representatives that it would take around $900 million and up to 10 years to make the needed upgrades.

“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 a statement, PG&E pointed to the cannabis industry as a reason for the capacity issues and said the utility is “investing billions of dollars in electric capacity upgrades over the next decade and beyond as we plan and engineer the electric grid to support growing electricity demand.”

“New and existing commercial customers in some areas with large cannabis business activity are experiencing delays and longer timelines for interconnection to the grid. We understand this could be frustrating,” the statement reads. “To address this load growth, PG&E is increasing our focus on capacity projects, while continuing to focus on wildfire mitigation and other safety-related work.”

PG&E states it also understands the “real-world impacts” of the situation and is “committed to making it right.”

“We have recently re-organized our operations into a Regional Service Model that enables us to best address local needs and provides a direct path for quickly escalating these issues,” the utility states. “PG&E is committed to working with local officials, project developers, and key project partners to discuss our challenges and provide our commitment to doing all we can to serve customers and support the economic growth within the community”

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 it took until now to get PG&E at the table with some answers, although many questions still remain, he said.

In addition to compromising Mill Site plans and other economic development projects the city has 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, he 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 the 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 they would “draw the line” or whether PG&E might discontinue new residential hookups.

Meanwhile, Rio Dell officials were scheduled to meet Thursday with PG&E and CPUC 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 for the entire county and region, not just communities around the Eel River Valley.

“At this point, Rio Dell has been trying to get clarity on the overall situation because [PG&E] has told us things in the past [about upgrades] and the timeline keeps getting extended to an unacceptable period of time,” Knopp 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 within the scope of the formal GRC proceeding, at the very least we intend for city of Rio Dell officials to have the latest information on projects affecting the city.”

Knopp said Rio Dell is currently in the “diplomatic phase” on the issue and looking to “get the facts” but said the situation has been “extremely concerning, especially the way it eked out.” He 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.

Back in Fortuna, Perry said his understanding is capacity became an issue for the company because there has been a huge demand for power in areas of Southern Humboldt tied to cannabis that PG&E had apparently not planned to service. But he said the real problem is that the utility did not “make the community aware it was running out of capacity” and now the Eel River Valley is “on the edge of a cliff.”

“My intention is to figure out how we got here,” Perry said.