Breach of Contract alleged as Placer County Water Agency files suit against PG&E

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Long-standing cooperative relations are strained

AUBURN, Calif. — The Placer County Water Agency (PCWA) has sued Pacific Gas & Electric (PG&E) in Sacramento County Superior Court for breach of contract.

The action follows disclosure of PG&E’s intent to transfer substantially all of its power generation assets, including the Drum-Spaulding Hydroelectric project in Placer County, to a subsidiary recently created by PG&E. Under a water supply agreement with PG&E, PCWA is entitled to approximately 125,000 acres of water supplied by this project, which is the primary source of water for Placer County residents and businesses.

the Water supply agreement between PCWA and PG&E in 2015 to require PG&E to give PCWA at least six months advance notice if it intends to sell some or all of the Drum-Spaulding hydroelectric project’s facilities. During this time, the PCWA has the right to discuss its interests and options for securing this water source for Placer County. PG&E failed to honor the six-month negotiation window.

“The PCWA is required to ensure an adequate water supply for the residents of Placer County,” said PCWA Chairman Robert Duggan.

“This lawsuit is being brought to protect those supplies and the interests of the residents of Placer County by compelling PG&E to comply with our water supply contract.”

PCWA Chairman Robert Duggan

PCWA has begun purchasing water from PG&E’s Drum-Spaulding Hydroelectric Project In 1968 as part of an agreement whereby PCWA purchased the distribution ducts and treated water systems for PG&E serving western Placer County. This water supply arrangement was expanded in 1982 when PCWA purchased the remainder of the PG&E retail water system in the Placer County foothills. In 2015, the parties agreed to extend the water supply agreement by 20 years, including a six-month notice clause and a window for negotiations.

On September 28, 2022, PG&E notified PCWA that, for the first time, it had submitted an application with the California Public Utilities Commission for approval to transfer the generation assets on the Drum-Spaulding Project to a wholly-owned subsidiary.

PCWA General Manager Andy Fico states, “For more than 50 years, PCWA and PG&E have worked collaboratively to ensure that residents of Placer County receive their contractually binding water from the Drum-Spaulding Hydroelectric Project. While we would prefer to continue this collaborative relationship, it has violated PG&E signed our agreement to discuss our mutual interests by engaging in discussions with another entity and publicly announcing its decision to transfer these assets.”

PCWA complaint

Not connected

The PCWA suit is not related to breach of contract The lawsuit was filed last month v. PG&E for Mosquito Fire Damages (“Mosquito Fire Update: Placer County Water Agency Files Claim v. Pacific Gas & Electric Company”).

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