Elsinore Valley weighs a 500-mile dam buy while carrying a $586M local capital load
Elsinore Valley Municipal Water District serves roughly 159,000 customers across a 97-square-mile footprint in Western Riverside County. It confirmed June 15 that it is in the early stages of due diligence on PG&E's Potter Valley Project — Scott Dam and Cape Horn Dam on the Eel River, in the Lake and Mendocino county area — and has made no decision on acquiring, owning, operating, or financing it.
This isn't a proposed dam or new construction. The Potter Valley Project is a century-old hydropower complex PG&E already owns and wants out of: the utility filed to surrender its federal license in July 2025, and the standing plan is to remove both dams. EVMWD's interest is in buying the existing infrastructure and keeping it in place — taking on something its current owner has judged uneconomical to run.
The question for anyone tracking district finances isn't the dam-removal fight playing out up north. It's the balance sheet. EVMWD is already carrying one of the larger capital programs of any mid-size district in the region: by its own account, more than $586 million in capital improvement work. The single largest piece, a 4-million-gallon-per-day expansion of its Regional Water Reclamation Facility, runs to a $217 million construction contract the board approved in 2023, backed by roughly $130 million in state low-interest loans. Layered on top are well projects and PFAS treatment to bring contaminated local groundwater back online.
That load is landing on ratepayers now. The district ran a Prop 218 rate process last year, the formal mechanism for raising water and sewer charges — the signal that the capital program is being funded in part through the bill, not just through state loans and grants.
Against that backdrop, the Potter Valley interest is hard to square on the numbers. The Eel River system has no physical link to EVMWD's supply, which leans heavily on imported State Water Project water moving through the Central Valley. There is no pipe that would carry Northern California water to Lake Elsinore. Whatever the district sees in the project, it isn't a direct new supply for the customers funding the existing program — a point one of its own board members has acknowledged.
For operators and ratepayers inside the service area, the near-term read is narrow: a district mid-stream on a $586 million build, with rates already moving, is spending board and staff time on an out-of-region asset whose benefit to local customers it has not yet defined.