An appellate court has thrown out an environmental impact report for a 17,000-acre-foot water project in El Dorado County because the EIR was predicated on an unadopted, draft general plan. In the same far-reaching opinion, the Third District Court of Appeal ruled that the purchase of three reservoirs by an irrigation district was not categorically exempt from the California Environmental Quality Act because the district planned to provide the water for consumption, which would have been a new use.
The court also ruled that the Federal Powers Act did not preempt state law requiring a study of the reservoir purchase. The court provided a broad reading to an exception, known as Section 27, which gives states authority over important rivers used for consumptive purposes. "It's the first such court ruling in the nation," said Stephan Volker, the environmental attorney who argued the case.
The court also ruled that the EIR did not adequately discuss baseline conditions, that purchase of the reservoirs was not categorically exempt from CEQA review, and that an irrigation district improperly filed its notice of exemption.
The El Dorado County Water Agency and the El Dorado Irrigation District have asked the State Supreme Court to review the case.
"There is no law on the books anywhere that says you have to have a general plan in place before you can apply for water rights," Irrigation District attorney Noble Sprunger said after filing a petition with the Supreme Court in mid December. "What the general plan exactly says is of no moment for water agencies," which are independent of the county government, he said.
The Third District decided the case in early November but did not publish the ruling. After both sides made strong arguments, the court published the opinion in early December. The decision to publish, which makes the case a statewide precedent, is one reason the Water Agency and Irrigation District have sought State Supreme Court review, Sprunger added.
The case stemmed from a plan of the Water Agency and the Irrigation District. They proposed using water from three high Sierra reservoirs to serve a growing population in the western part of the county. They also pursued purchase of the reservoirs from Pacific Gas & Electric.
In September 1992, the two water entities prepared a draft EIR that said the water program was intended to meet the needs of growth anticipated in the county general plan update, which was in draft form. The draft EIR concluded that the proposal to divert water for consumptive uses would not alter the way PG&E operated Caples Lake, Silver Lake and Lake Aloha, jointly known as Project 184.
The Department of Fish & Game and the League to Save Sierra Lakes (which included environmental groups, homeowners associations and Alpine County) commented that the draft EIR did not address PG&E's historical operation of the lakes, thus limiting the ability to measure impacts. The League also commented that the general plan process was incomplete and that the EIR did not adequately discuss the relationship between growth and water. But the water entities did not change the draft EIR before adopting it in March of 1993.
Later that same year, the State Water Resources Control Board rejected the water entities' water rights application for the 17,000 acre feet from the three reservoirs. The water entities submitted a new application, at the same time the Irrigation District began negotiations with PG&E to purchase Project 184.
The League to Save Sierra Lakes, DFG and Amador County all filed lawsuits, which were consolidated into one writ petition. (Amador County later settled its claims.) Retired Appellate Justice Winslow Christian heard the case and ruled against the Water Agency and Irrigation District, which then appealed.
The water entities argued that the CEQA claims were moot because El Dorado County had adopted a new general plan in 1996, and the Water Resources Control Board approved the water rights application with a number of reservoir operating conditions. However, the appellate court pointed out that a Sacramento County Superior Court later determined the general plan was inadequate in many respects and must be rewritten. (The Superior Court also struck down a revised general plan in 1999. See CP&DR Local Watch, March 1999.) Furthermore, the Water Resources Control Board had reconsidered the water rights application.
But the appellate court made clear that environmentalists would still have had a legitimate claim even if the county had adopted a valid general plan in 1996. "In this case, approving a water program before enacting a general plan places the proverbial cart before the horse," Justice Harry Hull wrote for the unanimous three-judge panel.
"By proceeding without the benefit of [having] the general plan in place, and by developing projects predicated on needs described in an unadopted plan, the CEQA process is stood on its head," Hull continued. "Instead of proceeding from a more general project to more specific ones, as is commonplace in tiering (see Guidelines §15152), the exact opposite occurs: a specific water project drives the general plan process. The issues become circular: water supply projects are adopted to meet growth plans outlined in a draft general plan, and the general plan is then adopted because an adequate water supply exists for the outlined development plans."
But Sprunger, the Irrigation District attorney, said the court's reasoning forces the Board of Supervisors to adopt a general plan that lacks an adequate water supply. Water agencies must take steps to procure water years in advance of its actual need because the water rights process is lengthy, he said. "What the court did was hamstring the planning process by hamstringing the water supply process," he said.
The court also ruled that the EIR's description of baseline environmental conditions was inadequate. The water entities and those protesting the water program differed on what information the EIR contained, but the court said the EIR should be easier to understand in any case.
"It may well be that by cobbling together information included in and appended to the EIR, a reader might be able to calculate historic flow releases and gain a better understanding of how PG&E had operated the lakes in the past and how defendants intended to operate them in the future," Hull wrote. "But such an effort should not be necessary. An adequate EIR requires more than raw data; it requires also an analysis that will provide decision makers with sufficient information to make intelligent decisions."
As for the Project 184 purchase, the Irrigation District argued that the Federal Powers Act preempted CEQA. But the court said §821 of the Federal Powers Act (commonly called Section 27) lets states control appropriation or distribution of water used for irrigation or municipal uses. The Project 184 purchase falls within this exception because the ownership change also entailed a "shift from a single-purpose hydroelectric project to multipurpose use that also permits consumptive use of water," the court ruled. The court also said CEQA review would not interfere with federal energy licensing procedures.
Environmental attorney Volker said this was a significant widening of Section 27, which courts "have given lip service to" in the past.
The court further rejected the Irrigation District's argument that the lawsuit over the CEQA exemption was filed too late. Normally such challenges must be submitted within 35 days of the filing of the notice of exemption. However the court ruled that the deadline to challenge the exemption was 180 days because the notice of exemption was defective.
The Irrigation District argued that it approved the project — the purchase of Project 184 — on December 12, 1994, when the Board of Directors authorized the district manager and counsel to begin negotiations with PG&E. The district filed the notice of exemption in April 1995.
However, the court ruled that the December 1994 resolution did not "constitute project approval as nothing in this resolution commits the district to purchasing Project 184." Instead, the court determined, project approval occurred in September of 1995 when the district entered into an asset sale agreement. The plaintiffs filed their lawsuit the following month, and amended it in December of 1995 to name PG&E, well within the 180-day deadline.
The irrigation district also argued that the reservoir acquisition could bypass CEQA based on the "existing facilities" exemption or the "ongoing project" exemption.
But the court ruled, "A project that shifts from nonconsumptive to consumptive use is not a negligible expansion of current use. It is a major change in focus, and thus does not fall within the ‘existing facilities' categorical exemption." For the same reasons, the court rejected the "ongoing project" argument.
County of Amador v. El Dorado County Water Agency, No. C027948, filed November 3, 1999, certified for publication December 3, 1999.
For El Dorado Irrigation District: Noble Sprunger, (530) 642-4155.
For El Dorado County Water Agency, James Moose, Remy, Thomas & Moose, (916) 443-2745.
For Department of Fish & Game, Charles Getz IV, assistant attorney general, (415) 356-6348.
For League to Save Sierra Lakes, Stephan Volker, Brecher & Volker, (510) 496-0600.
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