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San Diego Coastkeeper v. California State Lands Commission

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA


December 10, 2010

SAN DIEGO COASTKEEPER, PETITIONER AND APPELLANT,
v.
CALIFORNIA STATE LANDS COMMISSION, RESPONDENT, POSEIDON RESOURCES (CHANNELSIDE) LLC, ET AL., REAL PARTIES IN INTEREST AND RESPONDENTS.

APPEAL from a judgment of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed. (Super. Ct. No. 37-2008-00092607- CU-WM-CTL)

The opinion of the court was delivered by: Benke, Acting P. J.

San Diego Coastkeeper v. California State Lands Commission

CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

The City of Carlsbad, acting as lead agency, certified an environmental impact report (EIR) for a seawater desalination facility operated by Poseidon Resources (Channelside) LLC in Carlsbad. As proposed by Poseidon, the desalination facility would be located next to the Encina Power Station (Encina) near the Agua Hedionda Lagoon and would use Encina's existing pipes and cooling water in its desalination processes. After Carlsbad certified the final EIR, Poseidon obtained necessary approvals for the desalination plant from Carlsbad and several state and regional agencies, including the California Coastal Commission, a California Regional Water Quality Control Board (Regional Water Board), and the California State Lands Commission (State Lands).

This appeal arises from San Diego Coastkeeper's unsuccessful writ of mandate petition filed in superior court challenging State Lands's approval of a lease amendment permitting Poseidon to operate the desalination facility. Coastkeeper contends the court erred in denying the petition because State Lands abused its discretion in refusing to prepare a supplemental environmental impact report (SEIR) for the proposed desalination project. Coastkeeper maintains that the California Environmental Quality Act (CEQA) required State Lands to prepare an SEIR because Carlsbad's final EIR did not sufficiently analyze the desalination plant's adverse environmental consequences to marine life if the Encina power plant's operations were discontinued. (See Pub. Resources Code, § 21000 et seq.; Cal. Code Regs., tit. 14, § 15000 et seq.)*fn1

This contention fails. After two hearings and review of extensive documentation, State Lands found the preparation of an SEIR was not permitted under CEQA because the environmental implications of a stand-alone desalination facility had already been analyzed in Carlsbad's final EIR. We determine this conclusion was supported by substantial evidence and is consistent with the CEQA statutory scheme. We also reject Coastkeeper's additional CEQA challenges to State Lands's approval of the lease amendment. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Background

In 2004, Poseidon reached an agreement with Carlsbad's water district, under which Poseidon would operate a desalination facility in Carlsbad next to an existing coastal power plant (Encina) and supply 100 percent of Carlsbad's potable water. To implement this agreement, Poseidon entered into a 60-year lease agreement with Encina's owner (Cabrillo Power I LLC) to use certain of its operations and facilities to produce the desalinated water.

The manner in which Poseidon would use the Encina facilities is relevant to the issues on appeal and requires a brief explanation of Encina's existing technology and Poseidon's desalination processes.

Since the 1950's, Encina's owners have used a technology known as a "once-through" system to cool Encina's steam generators. In this system, seawater is drawn through an intake pipe to cool Encina's generators and then discharged back to the ocean through an outfall structure. Specifically, the Encina power plant has five steam turbine generator units, each with its own boiler that generates heat up to 1005 degrees Fahrenheit. Purified water runs through the boilers, creating high pressure steam used to spin the turbines to generate electricity. The seawater cools and condenses the steam after the energy is expended. This water is pumped into the power plant from the ocean through an intake channel in the Agua Hedionda Lagoon. After the seawater performs the cooling function, the water is returned to the ocean though a discharge pipe located to the south of the lagoon's confluence with the ocean.

In its desalination processes, Poseidon planned to produce 50 million gallons of desalinated water per day. To accomplish this, Poseidon needed to divert 104 million gallons per day of ocean water into its plant, purify it using reverse osmosis technology, and then discharge the resulting byproduct (known as "brine") back into the ocean after diluting the brine with an additional 200 million gallons of water per day. Thus, Poseidon needed a total of 304 million gallons of seawater per day, and needed a way to bring the ocean water into its facility and to discharge the diluted brine back into the ocean. To accomplish this in the most efficient fashion, Poseidon sought to use Cabrillo Power's existing Encina power plant facilities.

Under the Poseidon-Cabrillo lease, Cabrillo Power agreed to permit Poseidon to use Encina's intake and outfall structures and Encina's cooling water to meet Poseidon's requirement of 304 million gallons of seawater per day. Under the lease provisions, the desalination plant's intake and discharge facilities would be directly connected to the discharge canal of the Encina power station, allowing 104 million gallons per day of cooling water discharge from the power plant to be diverted into the desalination plant, and also allowing Encina's cooling water discharge to be used as blending water to reduce the salinity of the brine. (See Appendix A attached to this opinion, depicting Poseidon's proposed shared use of Encina's structures.)

Carlsbad CEQA Certification

After Poseidon and Cabrillo Power entered into this lease agreement, Poseidon began processing the necessary environmental permits for the project. Carlsbad is the agency with the principal responsibility for carrying out and approving the desalination project. In this capacity, it was the "lead agency" under CEQA and thus had the responsibility for preparing an EIR or other appropriate CEQA document. (§ 21165; Guidelines, §§ 15050, 15051, 15367.)

In May 2005, Carlsbad circulated a draft EIR. Numerous parties, including Coastkeeper and the Coastal Commission staff, objected that the draft EIR assumed Encina would continue to operate at its historic operating capacity and did not adequately analyze Poseidon's stand-alone operation of the desalination facility for environmental effects to marine life and greenhouse gases. This "stand-alone" scenario referred to the situation when the Encina power plant was not operating and thus was not providing cooling water discharge, but Poseidon was using Encina's structures to obtain the necessary water. Under the stand-alone scenario, the essence of Poseidon's operations would not change -- it would continue to use Encina's intake and outflow structures to draw in and discharge the 304 million gallons of water per day -- but the water it used would not have been used first by Cabrillo Power to cool Encina's generators.

After responding to the objections and other comments, in December 2005, Carlsbad circulated a proposed final EIR, which found no significant adverse environmental impacts with mitigation measures being imposed. After objectors continued to assert that the EIR did not adequately study the likelihood of a stand-alone facility, Carlsbad's planning commission issued a May 2006 report and held a public hearing. In the report, the planning commission noted that Cabrillo Power had no current plans to reduce or terminate its Encina power plant operations or significantly reduce the use of seawater for cooling purposes, particularly because the California Independent System Operator has designated Encina as a " 'reliability-must-run' " facility and the baseline for determining environmental effects under CEQA is the current operating conditions. But the report stated the EIR analyzed the "No Power Plant scenario in order to determine the level of significance in the 'historical extreme,' " and that the EIR "contains substantial evidence that shows that the potential impacts from a No Power Plant scenario are the same as the With Power Plant scenario for all of the impact areas. . . ."

The Carlsbad planning commission also prepared "Additional Responses to Comments" (Additional Responses) and incorporated these responses into the final EIR (FEIR) to ensure "comprehensive disclosure and documentation of environmental issues" associated with the "No Power Plant" scenario. The Additional Responses noted that although Carlsbad found it "reasonably foreseeable" that the Encina power plant will continue to operate, some commentators continue to assert "that shut-down of the [power station] is relatively certain within the foreseeable future" and that the EIR analysis should take this potential termination into consideration when analyzing the environmental impacts. The Additional Responses stated that Carlsbad would therefore include additional clarifications in the FEIR which "demonstrate more clearly that even if the [Encina power plant] were to shut down permanently or for extended periods of time, the analysis and conclusions of the Final EIR are still accurate and valid."

Of particular relevance here, in the Additional Responses, the staff added a discussion on the marine biology entrainment effects of a stand-alone desalination facility. Entrainment occurs when smaller marine organisms are pulled into and through a water system, where most, if not all, of the organisms are destroyed by mechanical systems, temperature increases, or toxic stress. A related concept, impingement, occurs when marine organisms are trapped against components of the water system, such as screens, where they die. The Additional Responses reaffirmed that data presented in the Final EIR (based on a study by expert environmental consultant Tenera Environmental) supported a finding of no significant impact for entrainment or impingement.

The Additional Responses explained that when Poseidon is operating on a stand-alone basis, "the minimum larval fish entrainment loss for the desalination facility . . . and associated dilution water . . . would be 0.6% to 11.8% and the maximum would be 1.7% to 34.1%, depending on the design of the facility and species modeled." The report included a chart to explain this estimated entrainment loss. The Additional Responses stated that the study found these effects were not significant because the "most frequently entrained species are very abundant in the area of [the Encina power plant] intake, Agua Hedionda Lagoon, and the Southern California Bight so that the actual ecological effects due to any additional entrainment from the project at either level of plant operations are insignificant. Species of direct recreational and commercial value constitute a very small fraction (less than 1 percent) of the entrained organisms. Therefore, the operation of the desalination facility does not cause a significant ecological impact. . . . Additionally, entrainment mortality losses are not harvests in the common sense, because the larval fish are not removed from the ocean, but are returned to supply the ocean's food webs -- the natural fate of at least 99 percent of larvae whether entrained or not. Generally, less than one percent of all fish larvae become reproductive adults. [¶] Revisions to the Final EIR text have been made to provide additional clarification on entrainment effects under the No Power Plant Operation scenario. . . ." The FEIR concluded that the "small proportion of marine organisms lost to entrainment as a result of the desalination plant would not have a substantial effect on the species' ability to sustain their populations because of their widespread distribution and high reproductive potential."

On June 13, 2006, Carlsbad's city council unanimously certified the FEIR, as modified by the Additional Responses. In certifying the FEIR, Carlsbad found the Additional Responses merely clarified the discussion already contained in the prior version of the EIR, and therefore a recirculation of the FEIR was not required.

After certifying the FEIR, Carlsbad approved Poseidon's desalination project, and incorporated all of the conditions set forth in the planning commission's resolutions. One of those conditions was that a new EIR would be required if Encina "permanently cease[s]" its power plant operations and Poseidon (or its successor) "were to independently operate" Encina's intake and/or outfall structures for the benefit of the desalination project.

Several environmental groups (including a group to which Coastkeeper belongs) petitioned for a writ of mandate challenging Carlsbad's FEIR as inadequate. The petitioners' arguments included that the FEIR did not accurately describe or analyze the desalination project's likely stand-alone operations, and that Carlsbad was required to recirculate the FEIR because significant new information was added after the public comment period. However, these petitioners later dismissed the writ petition.

Regional Water Board Approves Permit for the Project

The next month, in August 2006, the Regional Water Board issued a National Pollutant Discharge Elimination System (NPDES) permit to Poseidon for the proposed desalination project. The Regional Water Board's action was exempt from CEQA. (Water Code, § 13389.) But to comply with state law (Water Code, § 13142.5, subd. (b)), the Regional Water Board required Poseidon to submit a "Flow, Entrainment and Impingement Minimization Plan." The Board directed Poseidon to assess the feasibility of procedures and/or mitigation measures to minimize the impacts to marine organisms when its intake requirements exceed the volume of water being discharged by the Encina power plant.

Application to State Lands Commission and Coastal Commission

During this same month (August 2006), Poseidon submitted an application to the Coastal Commission for a necessary coastal development permit to operate the plant.

Six months later, in February 2007, Poseidon applied to State Lands to amend the existing lease between State Lands and Cabrillo Power to allow Poseidon to use Encina's existing intake and discharge structures for desalination purposes. Encina's intake and discharge channels are located on tidelands under State Lands's jurisdiction. Cabrillo Power has a lease with State Lands to use these channels, but an amendment to the lease was necessary to permit Poseidon to use the facilities for desalination purposes.

Cabrillo Power's Application to Replace Encina Power Plant

While State Lands and the Coastal Commission were considering Poseidon's applications, in September 2007, Cabrillo Power submitted an application to the California Energy Commission for certification to start the review process needed to replace the existing Encina power plant, including to eliminate the once-through cooling technology. Under the plan, three of Encina's five generating units would no longer operate, and the two remaining units would operate only a few weeks each year during peak loads and would ultimately be phased out. At the time, several federal and state agencies were reviewing environmental impacts associated with once-through cooling technology used by coastal power plants, and were studying the feasibility of imposing requirements that these power plants adopt alternative technologies.

Coastal Commission Approval: November 2007 and August 6, 2008 Two months after Cabrillo Power submitted its application to the California Energy Commission, in November 2007, the Coastal Commission held a hearing on Poseidon's request for a coastal development permit needed to operate the desalination facility near coastal waters. After the hearing, the majority of the Coastal Commission voted to grant the permit, but concluded that Poseidon would be required to comply with marine life and greenhouse gas mitigation plans to avoid potential environmental impacts. Although the Coastal Commission staff had recommended a denial of Poseidon's permit application, the majority of the Coastal Commission disagreed with this recommendation and voted to grant the permit. One of the staff's primary objections was the lack of specificity of potential impacts to marine life caused by the desalination plant if Cabrillo Power terminates Encina's operations. This objection was also asserted by various environmental groups, including Coastkeeper. However, the Coastal Commission majority found mitigation plans could be developed to address these concerns.

Almost two years later, on August 6, 2008, the Coastal Commission held another hearing to clarify the grounds for its earlier action approving the permit. The final adopted written findings span 106 pages. As is relevant here, in these findings the Coastal Commission described the potential termination of Encina's operations, and stated its permit approval was based on the assumption that Poseidon would operate the desalination facility on a " 'stand-alone' " basis, defined to mean that Encina was no longer operating but Poseidon was continuing to use the existing power plant intake and discharge structures for its water supply. The Coastal Commission stated: "The [desalination] project was originally proposed to co-locate with the power plant in order to use some of the several hundred million gallons per day of water the power plant pumped from Agua Hedionda. However, the power plant owner announced in September 2007 it intends to shut down the existing plant and build a new one elsewhere on the site that would not use seawater for cooling. During the last few years, the power plant has operated at a substantially reduced level over its historical rate of use, and is expected to operate only sporadically for a few more years once the new facility is built. As a result, the desalination facility would now operate as a 'stand-alone' facility . . . ."

The Coastal Commission also noted that the Carlsbad FEIR had analyzed the stand-alone operations and found no significant impacts under this scenario. But the Coastal Commission found it was nonetheless appropriate to condition its approval of a coastal development permit on mitigation measures, including to mitigate for potential losses to marine life through entrainment, "to ensure conformity to Coastal Act Sections 30230 and 30231." (Italics added; see § 30000 et seq.)

Another environmental organization (Surfrider Foundation) petitioned for writ of mandamus challenging the Coastal Commission's approval of the coastal development permit, but the court denied the petition. Although an appeal was filed, it was later abandoned.

State Lands's Approval

Two weeks after the Coastal Commission issued its written findings approving the coastal development permit, on August 22, 2008, State Lands held its second and final hearing on Poseidon's application for lease amendment approval.

After the hearing, State Lands approved the lease amendment. In so doing, it specifically found that further CEQA review was not permitted and rejected arguments by Coastkeeper and others that the "stand-alone" scenario required an SEIR. State Lands explained: "Carlsbad, acting as Lead Agency . . . certified [the FEIR] . . . for the proposed project. [State Lands] will be acting as a Responsible Agency under CEQA and, as such, must generally use the EIR certified by the Lead Agency. Section 15162 of the CEQA Guidelines provides the only criteria under which a Responsible Agency may prepare a subsequent or supplemental EIR, and those relate essentially to major changes in the project or in the circumstances under which the project is built or to address new information of substantial importance. In this case, [the FEIR] did address impacts in the event that the power plant no longer needed cooling water and that the proposed desalination project is to draw directly all the seawater it needs. Preparation of a supplemental or subsequent EIR would therefore not appear to be permitted under Section 15162 of the CEQA Guidelines."

State Lands also reviewed the Coastal Commission's final approval and findings, and adopted essentially the same marine life and greenhouse gas mitigation measures as were adopted by the Coastal Commission. With respect to the marine life mitigation plan, State Lands required Poseidon to engage in a restoration project establishing "up to 55.4 acres of wetlands restoration to be implemented in two Phases, with the first Phase . . . comprising not less than 37 acres of wetlands restoration, and the second Phase . . . comprising up to an additional 18.4 acres." State Lands also required Poseidon "at its sole cost and expense" to "use the best available design, technology, and mitigation measures . . . to minimize the intake (impingement and entrainment) and mortality of all forms of marine life . . . as determined by the [Regional Water Board] or any other federal, state, or local entity having applicable jurisdiction." State Lands further reserved its authority to modify the mitigation requirements "to conform with equivalent or superior standards and requirements developed by . . . federal, state, or local entit[ies] having applicable jurisdiction." State Lands also required additional environmental review "[w]ithin ten years," or "upon notice by Cabrillo [Power] that it will no longer require the use of the Lease Premises for the purposes of generating electrical power . . . ." (Italics added.)

The final approved lease authorized Poseidon to use the desalination facility "in conjunction with Cabrillo [Power's] existing power plant cooling water system involving the intake of sea water and the commingling of brine water discharge from Poseidon's desalination facility."

Writ of Mandate Proceedings

Coastkeeper and another environmental organization petitioned for a writ of mandate challenging State Lands's approval of the Poseidon lease, and requested the court to issue a writ ordering State Lands to rescind the approval. The petitioners alleged State Lands violated CEQA because it failed to prepare an SEIR to evaluate changes to the project that could result in significant environmental impacts to marine life, greenhouse gas emissions, and global warming. The petitioners argued State Lands abused its discretion by failing to prepare an SEIR because the project substantially changed from a desalination project "co-located with the Encina Power Station" to a "stand-alone facility," and this change required major revisions to the FEIR. The petitioners also alleged State Lands violated the California Water Code, but later abandoned this claim.

The petition was opposed by State Lands and the real parties in interest, including Poseidon, Carlsbad, Cabrillo Power, and several local water districts.*fn2 After considering the 61-volume administrative record and the parties' briefs, and conducting a hearing, the superior court denied the petition. The court found an SEIR was not required because "the Project approved by State Lands did not change from the Project approved by Carlsbad." The court further rejected the petitioners' additional CEQA challenges.

Coastkeeper is the sole petitioner to appeal. On appeal, Coastkeeper challenges State Lands's approval only with respect to the desalination plant's impacts on marine life, and not with respect to greenhouse gas or global warming issues.

DISCUSSION

I. Governing Legal Standards

Under CEQA, Carlsbad was the lead agency for the proposed desalination facility, i.e., the agency that has principal responsibility for approving the project and preparing the appropriate CEQA review documents. (§§ 21067, 21165; Guidelines, §§ 15050, 15051, 15367.) State Lands, which had authority to approve the Poseidon-Cabrillo lease, was a " 'Responsible agency,' " which is an agency that has certain discretionary authority for carrying out or approving the project or a portion of the project. (§ 21069; Guidelines, § 15381.)

Responsible agencies are generally prohibited from preparing a separate EIR after the lead agency has certified an EIR for the project. Although "a responsible agency with permit authority . . . reach[es] its own conclusions as to whether and how to approve the project . . . ," it "must, as a general rule, use the EIR prepared by the lead agency, even if [the responsible agency] believe[s] it to be inadequate." (Central Delta Water Agency v. State Water Resources Control Bd. (2004) 124 Cal.App.4th 245, 274.) "After an initial EIR is certified, there is a statutory presumption against additional environmental review." (San Diego Navy Broadway Complex Coalition v. City of San Diego (2010) 185 Cal.App.4th 924, 934 (San Diego Navy); Moss v. County of Humboldt (2008) 162 Cal.App.4th 1041, 1049-1050.)

Section 21166 provides for certain narrow exceptions to this rule: "When an environmental impact report has been prepared for a project pursuant to this division, no subsequent or supplemental environmental impact report shall be required by the lead agency or by any responsible agency, unless one or more of the following events occurs: [¶] (a) Substantial changes are proposed in the project which will require major revisions of the environmental impact report. [¶] (b) Substantial changes occur with respect to the circumstances under which the project is being undertaken which will require major revisions in the environmental impact report. [¶] (c) New information, which was not known and could not have been known at the time the environmental impact report was certified as complete, becomes available."

These rules are further amplified in Guidelines section 15162 which provides in relevant part: "(a) When an EIR has been certified or a negative declaration adopted for a project, no subsequent EIR shall be prepared for that project unless the lead agency determines, on the basis of substantial evidence in the light of the whole record, one or more of the following: [¶] (1) Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; [¶] (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or [¶] (3) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR was certified as complete or the negative declaration was adopted . . . ."

In determining whether an SEIR is permitted under these rules, "it is important to understand the distinctions between the requirements for an EIR and those for an SEIR. 'An EIR is required in the first instance whenever a project "may have a significant effect on the environment." (§ 21151.) On the other hand, [an SEIR] is prepared under section 21166 only where it is necessary to explore the environmental ramifications of a substantial change not considered in the original EIR . . . .' " (River Valley Preservation Project v. Metropolitan Transit Development Bd. (1995) 37 Cal.App.4th 154, 167 (River Valley), italics added.) " ' "[S]section 21166 comes into play precisely because in-depth review has already occurred, the time for challenging the sufficiency of the original EIR has long since expired (§ 21167, subd. (c)), and the question is whether circumstances have changed enough to justify repeating a substantial portion of the process. Thus, while section 21151 is intended to create a 'low threshold requirement for preparation of an EIR' [citation], [section 21166] indicates a quite different intent, namely, to restrict the powers of agencies 'by prohibiting [them] from requiring a subsequent or supplemental environmental impact report' unless the stated conditions are met. [Citation.]". . . .' " (Ibid.)

Thus, as the California Supreme Court has stated, in "the case of a certified EIR, . . . the EIR [is] conclusively presumed valid unless a lawsuit has been timely brought to contest the validity of the EIR. This presumption acts to preclude reopening of the CEQA process even if the initial EIR is discovered to have been fundamentally inaccurate and misleading in the description of a significant effect or the severity of its consequences. After certification, the interests of finality are favored over the policy of encouraging public comment." (Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1130 (Laurel Heights II.) " ' "[S]section 21166 provides a balance against the burdens created by the environmental review process and accords a reasonable measure of finality and certainty to the results achieved." ' " (San Diego Navy, supra, 185 Cal.App.4th at p. 935.)

In reviewing a responsible agency's determination that an SEIR is unwarranted, an appellate court reviews the administrative record under the substantial evidence standard. (River Valley, supra, 37 Cal.App.4th at p. 168; Sierra Club v. County of Sonoma (1992) 6 Cal.App.4th 1307, 1318.) "Our task . . . is the same as that of the trial court. We must search the administrative record and determine, in light of the whole record, whether there is substantial evidence supporting the agency's determination and whether the agency abused its discretion by failing to proceed in the manner required by law." (River Valley, supra, at p. 168; see § 21168.) In conducting this review, we must resolve reasonable doubt in favor of the administrative finding and decision. "[I]f there are conflicts in the evidence, their resolution is for the agency." (Sierra Club v. County of Sonoma, supra, 6 Cal.App.4th at p. 1317.) The highly deferential standard reflects "the fact that in-depth review has already occurred." (Citizens for Responsible Equitable Environmental Development v. City of San Diego Redevelopment Agency (2005) 134 Cal.App.4th 598, 611.)

Further, we review the administrative record as it existed at the time of the challenged determination by State Lands. (See Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 573; Gonzales v. City of Santa Ana (1993) 12 Cal.App.4th 1335, 1342, fn. 7.) Thus, we do not consider the portions of the appellate briefs in which the parties discuss facts occurring after that time. For example, we disregard Coastkeeper's references to new government regulations and timelines applicable to repowering or terminations of coastal power plants and to new claimed mitigation requirements applicable to Poseidon. Moreover, there was no showing Coastkeeper sought to present these facts in the trial court. (See Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3.)

II. Analysis

A. State Lands Properly Found Major Revision to FEIR Unnecessary

At the heart of Coastkeeper's appeal is its contention that State Lands erred in refusing to prepare an SEIR because the undisputed record shows the project, or the circumstances underlying the project, changed after Carlsbad certified the FEIR. (See § 21166, subds. (a), (b); Guidelines, § 15162, subds. (a)(1), (a)(2).) Coastkeeper identifies the change as the fact that the Carlsbad FEIR defined the project as a "co-located" project (whereby Poseidon would use Encina's "once-through" cooling water in its desalination processes), but by the time of State Lands's lease approval, Cabrillo Power had applied to discontinue the once-through technology and thus it appeared more likely that Poseidon would eventually operate the facility on a stand-alone basis rather than in conjunction with the Encina power plant. Coastkeeper devotes large portions of its brief to its arguments that State Lands was aware of this potential change to Encina's operations, and that State Lands agreed with the other agencies that this change was likely to occur.

However, in declining to prepare an SEIR, State Lands did not deny that Cabrillo Power's proposal to alter Encina's operations constituted a potential change to the desalination project, or at least a substantial change in the circumstances under which the project would be potentially undertaken. State Lands instead made a determination that despite this change in circumstances an SEIR was not warranted because these changed circumstances had already been studied and analyzed by the lead agency. Specifically, State Lands found that Carlsbad's FEIR "did address [the environmental] impacts" in the event that Poseidon would operate the plant on a stand alone-basis, i.e., under circumstances when the Encina "power plant no longer needed cooling water and that the proposed desalination project [would] draw directly all the sea water it needs."

This finding was supported by the record of the FEIR certification. In the FEIR, Carlsbad evaluated the desalination facility operating with and without cooling water from Encina, including evidence regarding the marine life entrainment impacts from the facility. This study concluded that the project's maximum entrainment loss operating without cooling water from Encina would be between 1.7 and 34.1 percent, depending on various factors, including the species modeled. The study further concluded this was not a significant impact under CEQA because of the amount and nature of the marine life in the affected areas. Even assuming this conclusion was wrong, State Lands was required to presume the correctness of this conclusion in the FEIR when deciding whether it was appropriate to engage in another round of environmental impact documentation.

Based on State Lands's factual finding that the effects from the potential change of circumstances had already been analyzed in the FEIR, State Lands determined that an SEIR was unnecessary and impermissible under CEQA. This conclusion was proper under the governing law. Under section 21166, subdivisions (a) and (b), an SEIR is not required merely because there is a change in the project or a change in the circumstances relating to the project. Instead, an SEIR is permitted only when a responsible agency finds these changes "require major revisions of the previous EIR" because of the "involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects." (Guidelines, § 15162, subds. (a)(1), (a)(2), italics added; see § 21166, subds. (a), (b).) In this case, the potential changes to the project did not require "major revisions" to the FEIR because the alleged adverse environmental effects from this change had already been studied. State Lands made a specific finding (supported by evidence in the record) that major revisions of the FEIR were unnecessary because the environmental impacts associated with a stand-alone facility had already been addressed in the prior certified FEIR. This finding was fully consistent with the CEQA statutory scheme.

In challenging this conclusion, Coastkeeper contends State Lands "violate[d] CEQA as a matter of law" by "approv[ing] only a co-located Project and defer[ing] stand alone review to the future."

This argument is factually and legally unsupported. First, although the approved lease amendment appears to assume Encina's continued operation and requires further review in the event of a complete shutdown, State Lands did not defer environmental review of a stand-alone facility. Instead, State Lands properly relied on Carlsbad's FEIR review of this scenario before it approved the lease. The fact that State Lands (and Carlsbad) required additional environmental review in the future does not alter our conclusion. There is nothing in CEQA that bars an agency from providing additional environmental protections as a condition to its approval of a project.

In arguing to the contrary, Coastkeeper relies on authority relating to the initial EIR review of a project performed by a lead agency. (See, e.g., Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 396 [reasonably foreseeable future actions should be considered in an EIR]; No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 84 [relevant data should be considered by agency before making a decision]; Bozung v. Local Agency Formation Com. (1975) 13 Cal.3d 263, 282 [environmental impact should be assessed as early as possible in governmental planning].)

This authority is inapposite. State Lands was not a lead agency on the project. Its role was to approve a lease amendment authorizing a desalination operation that had already been studied and approved by the agency with the primary authority to analyze the environmental implications of the entire project. In this limited CEQA role, State Lands had no discretion to independently prepare an additional EIR, unless one of the three factors in section 21166 was established. As we have explained, substantial evidence supports State Lands's conclusion that none of these statutory factors were implicated in this case. The first two factors were inapplicable because the potential changed circumstances had already been studied in the lead FEIR, and the third factor was inapplicable because there was no showing of new information that could not have been produced earlier. Contrary to Coastkeeper's assertions, the fact that State Lands's staff was aware of the possibility of a change in Encina's technology does not show a new EIR was required. Moreover, we find unpersuasive Coastkeeper's reliance on various memoranda written by State Lands staff early in the process. We review the agency's final written findings and not the staff's prehearing internal discussions and correspondence.

We also reject Coastkeeper's reliance on Carlsbad's resolution requiring further environmental review if Encina's operations terminate. Coastkeeper argues the resolution reflects Carlsbad's conclusion that Poseidon's stand-alone facility would have significant environmental impacts and thus improperly conflicts with Carlsbad's FEIR. This argument is unavailing because it is an untimely collateral attack on the merits of the FEIR. (See Discussion, section II.C., post.) Moreover, Carlsbad's election to require additional environmental review upon Encina's termination bolsters State Lands's conclusion that a supplemental report was unnecessary at the time. Because the lead agency made a policy decision to require an additional EIR under the stand-alone scenario, it would be useless and a waste of resources for State Lands to prematurely conduct this same study. " ' " '[T]he purpose of CEQA is not to generate paper.' " ' " (A Local & Regional Monitor v. City of Los Angeles (1993) 16 Cal.App.4th 630, 639.)

Coastkeeper asserts numerous additional contentions in an attempt to establish a CEQA violation. Many of these arguments overlap and repeat similar assertions. We address the primary thrust of these arguments below.

B. Marine Life Mitigation Plan

Throughout its appellate briefs, Coastkeeper attempts to use State Lands's decision to require Poseidon to comply with the Coastal Commission's marine life mitigation plan as a basis to show a CEQA violation. These arguments are without merit.

Coastkeeper first contends State Lands abused its discretion by relying on the marine life mitigation program to "avoid" its CEQA responsibility to prepare an SEIR. However, State Lands did not rely on the mitigation program in making its decision on the SEIR. State Lands first decided that an SEIR was not warranted under CEQA and the implementing Guidelines because the environmental impacts had already been studied. As a separate and independent matter, State Lands decided it would impose the mitigation program that had been developed by the Coastal Commission, and incorporate these requirements into the approved lease. The record supports that State Lands did not impose the mitigation requirements under CEQA, but that it imposed the plan under its public trust authority as a way of ensuring the environment was fully protected, consistency in the regulations governing Poseidon, and that it would have the independent authority to enforce any violations of environmental standards.

To the extent Coastkeeper argues State Lands did not have the authority to impose the mitigation plan under its public trust authority, the argument is unavailing. State Lands has exclusive jurisdiction over the affected tidelands and holds this property " ' "as trustee of a public trust for the benefit of the people." ' " (National Audubon Society v. Superior Court (1983) 33 Cal.3d 419, 434.) Under the public trust doctrine, in exercising its right to sell or lease this land, State Lands had broad discretion to negotiate any terms it believed were in the public's best interest. (§ 6301; Western Oil & Gas Assn. v. State Lands Com. (1980) 105 Cal.App.3d 554, 563, 564, 566-567.) The record confirms that State Lands adopted the marine life mitigation plan to meet "the public trust resource impact mitigations that [State Lands is] concerned about," rather than to satisfy CEQA requirements.

Coastkeeper alternatively contends State Lands's marine life mitigation plan means that State Lands disagreed with the FEIR's conclusions that a stand-alone desalination operation would have no substantial adverse environmental consequences. However, the imposition of the mitigation plan did not necessarily reflect this disagreement. Because the other entities charged with protecting the environment had already imposed the mitigation plans, State Lands had a reasonable basis to conclude it would be appropriate to incorporate the plan as part of the lease agreement to maintain regulatory consistency and ensure it retained enforcement authority over actions being taken by Poseidon. Moreover, even assuming State Lands disagreed with Carlsbad's FEIR conclusion, a second EIR study is prohibited where, as here, the consequences of the project had already been studied. By enacting CEQA "the Legislature did not intend to promote endless rounds of revision and recirculation of EIR's." (Laurel Heights II, supra, 6 Cal.4th at p. 1132.)

In a related argument, Coastkeeper contends State Lands was required to prepare an SEIR because the Regional Water Board and the Coastal Commission determined a stand-alone project would have "significant entrainment impacts" and would thus require mitigation efforts. Coastkeeper argues that State Lands's adoption of the same marine life mitigation program showed that State Lands necessarily adopted the other agencies' findings of significant impacts. However, the record shows these agencies made their findings and imposed the conditions pursuant to their own regulatory programs, and not under CEQA.

The Regional Water Board imposed its mitigation plan pursuant to Water Code section 13142.5, which requires each new industrial installation using seawater to use the "best available site, design, technology, and mitigation measures feasible . . . to minimize the intake and mortality of all forms of marine life." (Water Code, § 13142.5, subd. (b).) The Coastal Commission imposed its mitigation plan to comply with the California Coastal Act. (§§ 30230, 30231.) The Coastal Commission specifically stated that "although the Final EIR found the project would cause no significant entrainment impacts pursuant to CEQA, the Commission finds that the project's entrainment impacts will require mitigation to ensure conformity to Coastal Act Sections 30230 and 30231." These Coastal Act provisions require the Coastal Commission to address all impacts on marine resources, not just those impacts that meet CEQA's level of significance. (See §§ 30230, 30231.)

In support of its arguments, Coastkeeper relies on Mira Monte Homeowners Assn. v. County of Ventura (1985) 165 Cal.App.3d 357 (Mira Monte), which held a lead agency erred by not preparing a supplemental EIR before it certified the EIR based on the agency's prior awareness of a significant change in the project description. (Id. at pp. 364-365.) The court found the lead agency's decision to provide mitigation measures for these new effects was not sufficient to substitute for a supplemental EIR. (Id. at p. 365.) Mira Monte is inapplicable here. In this case, the environmental effects of the desalination project (and possible future scenarios of the project) were analyzed in the amended FEIR before the FEIR was certified. This certification was never timely challenged, and therefore State Lands was bound by the findings in the FEIR. Moreover, after Mira Monte was decided, the California Supreme Court clarified that certification of an EIR is a prerequisite for application of section 21166. Therefore the Mira Monte court's ruling that the lead agency should have prepared a supplemental report pursuant to that section is no longer valid. (See Laurel Heights II, supra, 6 Cal.4th at pp. 1129-1130.)

Coastkeeper's reliance on this court's recent decision in San Diego Navy, supra, 185 Cal.App.4th 924 is also unhelpful. In San Diego Navy, we held an agency was not required to engage in additional EIR review because it lacked discretionary authority with respect to the challenged environmental impacts of a project. (Id. at pp. 928, 940-941.) Contrary to Coastkeeper's suggestions, this holding does not suggest that an agency with such discretionary authority has an affirmative duty to prepare an SEIR regardless of the circumstances.

C. Challenges to the Merits of the FEIR

Coastkeeper raises numerous arguments in an attempt to show the FEIR did not adequately address a stand-alone facility scenario. For example, it argues Carlsbad could not have "credibly considered" the stand-alone scenario because most of the original EIR language was retained after Carlsbad added the clarifications regarding the "No Power Plant Operation" scenario. Coastkeeper also asserts that the FEIR's identification of a possible 34.1 percent entrainment effect from a stand-alone facility should have resulted in a finding of a substantial environmental impact.

However, these challenges merely reflect Coastkeeper's disagreement with the conclusions contained in the FEIR. A previous EIR is conclusively presumed to be valid unless it has been set aside by a court. (See § 21167.2.) "One of the legislative policies animating CEQA is the prompt resolution of challenges to the decisions of public agencies regarding land use. [Citation.] 'Allegations that the public agency failed in its duty to make an adequate environmental assessment must be expeditiously resolved, and CEQA contains a number of procedural provisions evidencing legislative intent that the public interest is not served unless CEQA challenges are promptly filed and diligently prosecuted.' [Citation.]" (Citizens for Megaplex-Free Alameda v. City of Alameda (2007) 149 Cal.App.4th 91, 111 (Megaplex-Free Alameda).) Although a challenge was filed to Carlsbad's FEIR, it was later dismissed by the petitioners.

Coastkeeper argues that requiring parties to challenge an EIR with respect to a variation of an approved project would "have absurd results" because this rule would be "akin to requiring legal challenge to every alternative considered in an EIR, including those that weren't approved as the preferred alternative." However, Coastkeeper cites no authority supporting this argument, and the law is to the contrary. Because a discussion of the alternatives is relevant to the project adopted, all objections must be asserted or they will be waived.

In any event, Coastkeeper's arguments are inapplicable to the circumstances here. During the EIR process and immediately thereafter, Coastkeeper (along with other objectors) specifically asserted that the FEIR was deficient because Carlsbad's analysis of the stand-alone facility was incomplete and erroneous. The point of these arguments was that this variation of the project was not merely a speculative alternative project, it was in fact the future scenario for this project. Under these circumstances, it makes sense to require interested party objectors to immediately assert these objections and challenge the agency's findings, rather than to wait two years to request an independent review by an agency that has only limited authority over the project.

Coastkeeper additionally contends that a supplemental EIR was required because after the FEIR was certified, Poseidon performed a study that showed the project's impacts would result in an " 'area of habitat production foregone' " (AHPF) impact of about 37 acres of wetlands. The Coastal Commission and the Water Resources Board each relied on this study to formulate their marine life mitigation plans.

However, the results of an additional study conducted after an EIR certification is not a ground for an SEIR. Additional information may potentially trigger an SEIR only if the information could not have been presented before the EIR was certified. (See § 21166, subd. (c); Megaplex-Free Alameda, supra, 149 Cal.App.4th at p. 113.) There is no showing the AHPF study could not have been prepared before the certification of the FEIR. Moreover, the AHPF is a measurement of the amount of wetlands needed to replace all marine life that will be entrained (destroyed) under a project. This was critical information to the agencies that are governed by statutory schemes requiring this extent of mitigation. However, this standard does not necessarily apply to a CEQA analysis.

We also find unpersuasive Coastkeeper's reliance on several letters written by the Coastal Commission staff to show deficiencies in Carlsbad's FEIR. To the extent these letters suggest the FEIR did not adequately study the potential impacts of a stand-alone facility, the remedy for this argument was to timely challenge the FEIR, and not to collaterally attack the document during a responsible agency's discretionary review of a portion of the project.

Moreover, the letters do not support Coastkeeper's arguments. In two of the letters, a Coastal Commission staff member urged Carlsbad to obtain more information to analyze the stand-alone project before certifying the EIR. However, these letters were written at least six months before the additional clarifications were made to the EIR and the final certification of the FEIR in response to these objections. In the third letter, written by a Coastal Commission staff member in February 2007, the staff member opines that the proposed changes to the Encina power plant constitute "substantial changes" to the proposed project, and that Carlsbad's evaluation was not sufficient to describe these "changed circumstances." However, viewed in context, these statements reflect the staff member's opinion that the CEQA review was not sufficient to describe the changed circumstances for purposes of determining "Coastal Act conformity," which is a different issue from determining whether an SEIR is required. Moreover, State Lands was not bound by the opinions of the Coastal Commission staff member in deciding whether an SEIR was necessary, particularly because the Coastal Commission ultimately did not adopt its staff's recommendations that the project should not be approved.

D. Alleged Inconsistent Findings

Coastkeeper contends State Lands's findings were internally inconsistent because it adopted Carlsbad's CEQA findings that were based on a "co-located" facility and adopted the Coastal Commission's mitigation requirements that were based on a "stand-alone" facility. Even assuming Coastkeeper properly raised the issue below, the argument is unsupported because there was no inconsistency.

The CEQA analysis and the Coastal Commission's determinations were made for different purposes and under different statutory schemes. The fact that Carlsbad defined the project for CEQA purposes to include a desalination facility operating in conjunction with a power plant station and that the Coastal Commission defined the project to be a stand-alone facility for purposes of determining whether to issue a coastal development permit did not limit the scope of State Lands's authority to affirm both findings and approve the operations under either or both scenarios.

Coastkeeper argues State Lands's "approval of two conflicting findings leaves the public guessing which version of the Project is really authorized." The argument is without merit. The document entitled "Amendment of Lease" signed by representatives of Cabrillo Power, Poseidon, and State Lands makes clear what State Lands has authorized. Paragraph 8 states: "It is the intent of the parties to this lease that the improvements and activities authorized herein are for the exclusive use of . . . Cabrillo and Poseidon, in conjunction with Cabrillo's existing power plant cooling water system involving the intake of sea water and the commingling of brine water discharge from Poseidon's desalination facility. . . ." Paragraphs 10 and 11 require Poseidon to comply with the specified energy minimization and greenhouse gas reduction programs and the marine life mitigation plan. Paragraph 14 provides that State Lands will undertake an environmental review of the ongoing impacts under the specified circumstances.

Coastkeeper contends the fact that State Lands approved a "co-located" project is inconsistent with the fact that State Lands imposed mitigation measures applicable to a stand-alone project. This contention is unavailing. First, State Lands did not merely approve a co-located project, it broadly approved the desalination project in conjunction with Encina's cooling water system, but conditioned the approval on further environmental review if Cabrillo Power "no longer require[s] the use of the Lease Premises for the purposes of generating electrical power." Moreover, even if State Lands approved only a co-located project, there was no prohibition to imposing mitigation measures that were more protective of the environment than is required under CEQA.

E. Guidelines Sections 15065 and 15253

Relying on Guidelines section 15065, Coastkeeper contends State Lands had a legal obligation to prepare an SEIR once State Lands identified significant impacts based on a stand-alone project. This reliance is misplaced. By its terms, Guidelines section 15065 applies only to a lead agency's preparation of an EIR and not to the subsequent evaluation of a project by a responsible agency.

Coastkeeper also contends State Lands violated Guidelines section 15253, subdivision (c) because it adopted the Coastal Commission's findings "wholesale" as a substitute for preparing an SEIR. Guidelines section 15253 pertains to situations when an agency (such as the Coastal Commission) implements a regulatory program that has been "certified" by the Natural Resources Agency as meeting certain environmental standards that do not require the preparation of an EIR before it approves a project. (See Guidelines, § 15251, subds. (c), (f).) Under certain circumstances, a responsible agency may not use the substitute environmental documentation prepared by the certified agency in place of an EIR, and thus must follow the ordinary CEQA process in granting discretionary approvals. (1 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act (Cont.Ed.Bar 2010) § 3.33, pp. 135-136.)

This statutory scheme is inapplicable here because State Lands did not rely on the Coastal Commission's documentation as a substitute for preparing an EIR. Instead, it found that an SEIR was not warranted because the lead agency (Carlsbad) had prepared and certified an FEIR, and none of the statutory circumstances supporting a need for an SEIR were present.

DISPOSITION

Judgment affirmed. Appellant to bear respondents' costs on appeal.

HALLER, J.

WE CONCUR:

O'ROURKE, J.


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