The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge
ORDER GRANTING MOTION TO INTERVENE
Bajagua, LLC ("Bajagua") has filed a motion to intervene in this action. For the reasons discussed below, Bajagua's motion to intervene is GRANTED for the limited purpose of requesting an extension of the compliance deadline.
In February 2001, the Regional Water Quality Control Board, San Diego Region ("Regional Board") commenced this suit, alleging that USIBWC was violating the Clean Water Act, 33 U.S.C. § 1365(a)(1)(A) and (B) and California's Porter-Cologne Water Quality Control Act, Water Code §§ 13385 and 13361, by discharging inadequately treated sewage effluent through the South Bay Ocean Outfall from the International Wastewater Treatment Plant ("IWTP").
On December 5, 2003, the Court granted the Regional Board's motion for summary judgment regarding liability of USIBWC under the Clean Water Act and the Porter-Cologne Water Quality Control Act. The Court found that USIBWC's ongoing discharges from the IWTP violate and will continue to violate effluent limitations based on secondary treatment requirements and limitations for acute and chronic toxicity contained in waste discharge requirements for the IWTP.
On December 6, 2004, the Court issued a final judgment setting a compliance schedule ("Compliance Schedule"). The Compliance Schedule requires that the USIBWC come into compliance with all effluent standards and limitations contained in Order No. 96-50 not later than September 30, 2008.
On February 14, 2006, USIBWC and Bajagua entered into a Development Agreement.
USIBWC granted to Bajagua the exclusive right to pursue the acquisition of permit approvals, financing and other prerequisites to the design, construction, ownership, operation and maintenance of all land, rights of way, facilities and services in Mexico to provide secondary treatment and effluent discharge for up to 25 MGD of advanced primary treated wastewater discharged by the IWTP and 34 MGD of untreated wastewater discharged by sources in the Tijuana, Mexico area.
The Development Agreement provides that the project facilities will be fully operational and in compliance with all applicable effluent standards and limitations by September 30, 2008. (Agreement, ¶ 3.1(i).) The Agreement requires that Bajagua, at its sole expense, complete a number of "development activities" on or before May 2, 2007, or in some instances on or before September 12, 2006, including obtaining all rights to obtain real estate and rights-of-way necessary for the facilities, obtaining all necessary permits to commence construction, obtaining necessary approvals from the Mexican Government, awarding the subcontract and other contracts necessary for the construction of the facilities, and securing the financing for construction. (Agreement, ¶ 3.1(a)-(g).)
The actual construction, operation, and maintenance of the proposed secondary treatment facilities are to be governed by a "Fee-for-Services Contract" that the parties will enter upon Bajagua's successful completion of its development obligations. (Agreement, ¶¶ 4.1, 4.5.) USIBWC may terminate the Agreement if, by May 2, 2007, USIBWC has not obtained reasonable assurance of appropriations for the Fee-for-Services Contract and for the administration and oversight of the design, construction, operation and maintenance of the Project Facilities. (Agreement, ¶ 5.3(b).)
On April 25, 2007, Bajagua notified USIBWC that it would be unable to meet the May 2, 2007 milestones and could not complete construction of the facilities by September 30, 2008. (Marin Decl., ¶ 21.) The USIBWC chose to suspend the Development Agreement pending Court approval of an extension of the compliance deadline. On July 10, 2007, USIBWC filed its motion to extend the compliance deadline to March 1, 2010.
In February 2007, the President submitted to Congress his FY 2008 budget. This budget included a request for $66 million to upgrade the IWTP to provide secondary treatment at the existing facility in the United States, in the event that certain milestones set forth in the Development Agreement were not met by May 2, 2007. In the event that the milestones were met, the budget requested $3.2 million to fund the first month of operations of the proposed Mexican facility.
On June 12, 2007, the House Appropriations Committee deleted from the budget both the $66 million for the IWTP expansion and the $3.2 million to fund the operation of the Mexican facility. On June 28, 2007, the Senate Appropriations Committee recommended "up to $66 million for the construction in the United States of secondary wastewater treatment capability, only after the IBWC ...