Bay Area Air District Approves California’s First Regional Thresholds of Significance for Greenhouse Gas Emissions from Projects

The Bay Area Air Quality Management District (BAAQMD) last week announced the adoption of the first region-wide numeric thresholds for greenhouse gas emissions for residential and commercial projects in California. The new standards provide guidance for Bay Area public agencies to review the environmental risks posed by the approval of development projects under the California Environmental Quality Act (CEQA).

In 2006, the California Global Warming Solutions Act of 2006 (AB 32) was enacted to require a statewide reduction in greenhouse gas emissions to 1990 levels by the year 2020. This spring, the state revised the CEQA Guidelines to specifically address impacts caused by development projects related to greenhouse gas emissions. The BAAQMD’s new thresholds can be used for complying with these analytical requirements under CEQA for projects proposed in the Bay Area.

The BAAQMD’s thresholds, approved last Wednesday, allow Bay Area public agencies to consider either a fixed threshold of 1,100 metric tons per year of greenhouse gases emitted from a commercial, residential or mixed-use project, or a per capita threshold of 4.6 metric tons per year of carbon dioxide emitted per subdivision resident or business employee. These thresholds are intended to encourage smart-growth projects, while facilitating large projects that maintain a proportionally low level of emissions. Proposed developments that would exceed the thresholds are required to perform additional environmental review of ways to reduce or offset the emissions.

These thresholds were developed specifically for the Bay Area. However, since they are the first regional air district to adopt numeric thresholds for greenhouse gas emissions from residential and commercial projects, lead agencies throughout the state may receive public comments suggesting application of the BAAQMD thresholds to proposed development projects.

Court Finds Rejection of Alternative Was Not Supported and Water Supply Assessment Was Required for Composting Project

Center for Biological Diversity v. County of San Bernardino (Nursery Products LLC) No. D056652 (May 25, 2010) available at CourtWebsite.

This case deals with the support necessary for rejecting alternatives in a Final EIR ("FEIR") and the requirements for performing a water supply assessment (“WSA”). The court found that the FEIR’s rejection of the alternative to use an enclosed composting facility rather than an open-aired facility was not supported by substantial evidence because it did not show that it was technologically and economically infeasible. The court also found that the composting facility was a “project” under the Water Code and that the proponent had failed to comply with the requirement to perform a WSA.

In the case, Nursery Products LLC proposed to develop and operate an open-aired human waste composting facility in an unincorporated area of San Bernardino County in the Mojave Desert. Nursery Products contended that an alternative enclosed facility was economically and technologically infeasible. The court, however, found there was no meaningful comparative data pertaining to a range of costs in the FEIR because the FEIR only provided the cost of one other enclosed facility. The FEIR ignored other similar facilities despite evidence that there were facilities in Los Angeles and Riverside Counties, and it was known that such enclosed facilities were becoming more common in urban areas. The court also found that Nursery Products’ expert’s opinion related to the economic infeasibility of the alternative was not support by facts. Further, the FEIR contained no information on the technological infeasibility of the alternative. The FEIR showed electricity was not present at the site, but it did not discuss how it was infeasible to establish an electricity supply to the project site. Therefore, the court concluded that the rejection of the enclosed facility alternative as infeasible was not supported by substantial evidence.

Related to water supply, the FEIR did not include a WSA and did not indicate if a well had been drilled or other sources had been evaluated to determine the actual availability of water to the site. Nursery Products argued that a WSA was not necessary because the facility was not a “project” under the Water Code. The court found that the facility was a “project” because it was considered a “processing plant” that was conducted on more than 40 acres of land, pursuant to the definition in Water Code section 10912, subdivision (a)(5). The court found that the definition was not constrained by water usage and expanded the court’s holding in Gray v. County of Madera (2008) 167 Cal.App.4th 1099, 1131, that a WSA is required only if a public water system is impacted. Unlike Gray, here, the court analyzed several provisions in the Water Code and clarified that preparing a WSA was required even if the water source was not a public water system.

First Published Appellate Court Decision On GHG Emissions; Invalidates EIR That Deferred Development of GHG Mitigation Plan

Communities for a Better Environment v. City of Richmond, No. A125618, (Apr. 26, 2010) available at CourtWebsite.

In the first published decision to address greenhouse gas (GHG) emissions under CEQA, the Court of Appeal for the First Appellate District invalidated an environmental impact report (EIR) that deferred the formulation of mitigation for GHG emissions. Though the decision applied existing CEQA principles regarding deferred mitigation, the decision, as well as recent amendments to the State CEQA Guidelines, demonstrates a need for well-developed factual evidence to support a lead agency’s conclusion regarding a project’s climate change impacts.

In Communities for a Better Environment v. City of Richmond (April 26, 2010), the city certified an EIR for modifications to an existing refinery, which concluded the project’s GHG emissions would have a potentially significant effect on the environment. Accordingly, the EIR included mitigation measures that the city contended would result in no net increase in GHG emissions, including the development of a GHG mitigation plan within one year of project approval; an inventory of the project’s GHG emissions; and identification of potential emissions reduction opportunities. Following project approval, the EIR was challenged. The trial court struck down the EIR and an appeal was filed. Ultimately, the Appellate Court agreed with the trial court that the city violated CEQA by deferring the formulation of mitigation measures for GHG emissions.

The Appellate Court clarified that an EIR may only defer formulation of mitigation measures if the lead agency (1) first conducts a full analysis of the significance of the environmental impact, (2) proposes potential mitigation measures early in the planning process, and (3) articulates specific performance criteria to ensure that adequate mitigation is eventually implemented. The court also criticized the EIR’s failure to calculate the actual reduction in emissions that would likely result from each mitigation measure and questioned whether the city’s no net increase in GHG emissions could be achieved by the “handful of cursorily described mitigation measures for future consideration.”

Notably, although not addressed in the court's decision, the recently finalized State CEQA Guidelines addressing GHG emissions state that lead agencies must consider “feasible means, supported by substantial evidence and subject to monitoring or reporting, of mitigating the significant effects of GHG emissions.” To be “feasible” a mitigation measure must be capable of being accomplished in a successful manner within a reasonable period of time.

In sum, this case confirms that, while future mitigation plans for GHG emissions (or other impacts) are not prohibited by CEQA, the ideal time to analyze impacts and to formulate mitigation measures is during the environmental review process before project approval. If practical considerations do not allow for the formulation of mitigation measures prior to project approval, then the agency should, at a minimum, satisfy the three requirements set forth above, including establishing specific performance criteria for such measures.

Court Finds Proper Alternatives Analysis and Adequate Notice of Certification Provided by UC Regents

Jones v. Regents of University of California, No. A123948, (Apr. 7, 2010) available at CourtWebsite(decision); modified by No. A123948M (Apr. 8, 2010) available at CourtWebsite(order modifying).

A group of citizens opposed the certification of an EIR for the development of a laboratory facility operated by the University of California located on land owned by the UC Board of Regents ("Regents"). They alleged that the analysis of alternatives was inadequate in the EIR, and recirculation of the EIR was necessary after adding significant discussion related to impacts from the emission of greenhouse gases. The court found in favor of the Regents on each of these issues.

The court found that the Regents needed not consider every conceivable alternative to the project in the EIR, including the “so-called ‘true no-hillside growth’ alternative” asserted by the plaintiffs, which would have required all growth to occur on a satellite campus, rather than at the laboratory. On this issue, the court concluded that the range of alternatives was sufficient and that the EIR contained substantial evidence supporting the conclusion that the proposed off-site alternative would not meet the proposed project’s objectives.

The Draft EIR had not discussed the project’s potential for climate change as a result of greenhouse gas emissions. In response to public comments, the Final EIR added a discussion about the project’s potential for increasing such emissions and concluded that the cumulative impacts from the project’s contribution to emissions would be less than significant. In an unpublished part of the court's decision, the court noted that the plaintiffs had argued that the revisions constituted “significant new information,” and that the Regents had failed to provide adequate notice for providing further public comments related to the Final EIR. The court of appeal, however, found that the plaintiffs had not raised the issue of “recirculating the EIR” during the administrative proceedings, and that adequate notice had been provided for public comments in a letter that was issued by the laboratory. The letter indicated when the certification of the EIR would occur, where copies of the Final EIR could be reviewed, and the name and information for contacting the Regents. The court noted that the City of Berkeley and Sierra Club had provided comments related to the Final EIR, but that neither had suggested recirculation of the EIR in light of the greenhouse gas discussion. Therefore, the Regents had complied with CEQA’s notice requirements, and the plaintiffs had failed to exhaust their administrative remedies on the issue of whether the Regents were required to recirculate the EIR after adding the discussion about greenhouse gas emissions.

For more CEQA news visit www.ceqablog.com



.

California Supreme Court Finds Filing Notice of Exemption Triggers 35-Day Statute of Limitations to Any Project Challenge

Stockton Citizens for Sensible Planning v. City of Stockton, No. S159690 (Apr. 1, 2010) available at CourtWebsite

From the Supreme Court of California

The California Supreme Court has found that the 35-day statute of limitations for challenging projects determined to be exempt from environmental review under CEQA applies to any challenge against the underlying project, regardless of the alleged defects or flaws in the approval process. This decision reiterates the importance of complying with CEQA’s short notice-based limitations period intended to foster quick resolution of challenges to environmental review for a project.

In Stockton Citizens for Sensible Planning v. City of Stockton, the city found that its approval of the construction of a Wal-Mart Supercenter on parcels within a previously adopted master development plan for a large urban tract was a ministerial action exempt from CEQA review and filed a Notice of Exemption (NOE). Plaintiffs waited nearly six months to file suit against the project, arguing that the "approval" of the project by the city's Community Development Department director was invalid based on procedural and substantive reasons, and therefore the NOE was void and did not trigger the 35-day statute of limitations for exemptions. Plaintiffs also argued that the form and content of the NOE did not comply with CEQA because it failed to describe the project, omitted material information and included materially false information.

The Supreme Court, in reaching its decision last Thursday, reversed both the trial court and the Court of Appeal for the Third Appellate District, finding that the lawsuit was barred under the 35-day limitations period. The Court held that when a properly filed NOE complies in form and content with CEQA’s requirements and declares the agency has taken an action that would constitute final approval of a project under an exemption, the 35-day period for challenging the validity of this asserted approval begins to run. This conclusion is consistent with the language and the intent in Public Resources Code section 21167, subdivision (d), which specifies a 35-day limitations period for lawsuits claiming that a public agency "has improperly determined" a project is exempt from CEQA.

The Court also found that the form and content of the NOE minimally complied with CEQA and therefore triggered the 35-day statute of limitations. The NOE only had to provide a brief description of the approved project, state its location and set forth reasons for the agency’s finding of exemption under State CEQA Guidelines section 15062, subdivision (a). Compliance with these “basic requirements” was sufficient and the NOE did not have to disclose and explain all environmental implications of the project.

Thus, all CEQA challenges to an agency’s determination that a project is exempt, whether or not they have merit, must be brought within 35 days after the agency files a compliant NOE.

Court Holds that Supercenters Do Not Necessarily Trigger Examination of Urban Decay Effects in EIR

Melom v. City of Madera, No. F055024 (Mar, 24, 2010) available at CourtWebsite

In a decision clarifying when urban decay analysis must be conducted for a development project, the Court of Appeal recently held that building a retail store called a “supercenter” does not automatically require the project’s environmental impact report (EIR) to include an examination of possible urban decay effects.

In Patricia Melom v. City of Madera, Case No. MCV037268 (Ct.App. March, 24, 2010), Melom contended that the City violated CEQA by approving a retail shopping center project without preparing a subsequent or supplemental EIR after the largest retail space on the site plan grew significantly in square footage. In November of 2006, the City had certified an EIR for a project described as a “proposed retail center” with “approximately 795,000 square feet of gross floor area.” A conceptual site plan in the EIR showed approximately 30 retail spaces, the largest of which was 125,000 square feet. In March 2007, the developer submitted a “refined” site plan with the largest retail space described as approximately 198,500 square feet. The refined site plan identified the tenant of the largest retail space as a Super Target store. In June 2007, the City prepared an addendum to the EIR that concluded that there were no substantial changes proposed in the project requiring major revisions of the previous EIR.

The trial court held that the City did not violate CEQA and Melom subsequently appealed. Melom claimed that, based on Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184 (Bakersfield) and American Canyon Community United for Responsible Growth v. City of American Canyon (2006) 145 Cal.App.4th 1062 (American Canyon), whenever a governmental entity approves a project that includes a so-called “supercenter,” such an approval requires an EIR addressing “potential urban decay effects” that might result from the supercenter.

The Court of Appeal disagreed with Melom’s interpretation, stating that although the holdings in Bakersfield and American Canyon both repeatedly used the term “supercenter,” the term was not defined anywhere in those cases or in any statute or CEQA Guideline. The court went on to explain that for the purposes of CEQA, the important issue is whether an agency proposes or intends to carry out or approve a project that would have a significant effect on the environment. When there has been a subsequent change to such a project, the question then becomes whether those changes would require a major revision of a previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. The court clarified that it is the project or the change in the project that is the focus of the inquiry; not whether the project or change in the project is of a certain type (such as a supercenter). The court expressly declined to interpret Bakersfield or American Canyon as holding that urban decay effects must necessarily be examined whenever a project includes something called a supercenter.

Baseline for EIR Analysis Should Generally be Physical Conditions Existing at Time of Analysis

Communities For A Better Environment v. South Coast Air Quality Management District, No. S161190 (March 15, 2010) available at CourtWebsite

From the California Supreme Court

The Supreme Court of California held that when performing an environmental analysis, the analytical baseline against which project effects are measured should generally be the physical conditions existing at the time of the analysis, rather than the maximum capacity allowed under prior equipment permits. The Court added that for environmental conditions that vary from year to year, it may be appropriate to utilize a baseline that reflects these fluctuations. This decision impacts parties involved in environmental review pursuant to the CEQA.

In the case, ConocoPhillips developed plans for an ultra low sulfur diesel fuel project that, among other things, involved increasing the operations of existing cogeneration plants and four boilers. The plants and boilers were subject to prior permits that stated a maximum rate of heat production for each piece of equipment. ConocoPhillips applied to the South Coast Air Quality Management District (SCAQMD) for a permit to construct all the modifications necessary for the project. SCAQMD concluded that the project did not have the potential to adversely affect the environment and thus a negative declaration, rather than an EIR, was prepared. The plaintiff argued that the project would have significant adverse impacts on the environment because there would be an increase in nitrogen oxide (NOx), and therefore an EIR should have been prepared instead of a negative declaration. SCAQMD did note that the increased operation of existing equipment would cause additional NOx emissions, however, SCAQMD did not consider these increases to be part of the project because they did not exceed the maximum rate of heat production allowed under existing permits. SCAQMD treated any additional NOx emissions stemming from increased plant operations within previously permitted levels as part of the baseline measurement for environmental review, rather than as part of the project. The trial court entered judgment for SCAQMD and ConocoPhillips. On appeal, the Court of Appeal held that the increased use of existing equipment should have been evaluated as part of the project, not as part of the baseline.

The Supreme Court largely affirmed the Court of Appeal and concluded that prior operating permits did not themselves establish a baseline for CEQA review, but rather the physical conditions actually existing at the time of analysis established the baseline. SCAQMD and ConocoPhillips cited several Court of Appeal decisions as supporting the use of maximum operational levels allowed under a permit, rather than existing physical conditions, as a CEQA baseline. Rather than overrule that existing case law, the Court distinguished the cases from SCAQMD’s case. The Court stated that in each of the Court of Appeal decisions, the appellate court characterized the project at issue as merely a modification of a previously-analyzed project and thus requiring only a limited CEQA review, or as merely the continued operation of an existing facility without significant expansion of use and thus exempt from CEQA review. Here, the Court noted as important that SCAQMD had treated the ConocoPhillips project as a new project by requiring ConocoPhillips to apply for a new permit rather than finding that it was exempt as the continued operation of an existing facility. For this reason, the Court also refused to characterize the ConocoPhillips project as a modification of a previously-analyzed project.