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San Diego Coastkeeper v. California State Lands Commission

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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ...


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