HomeMy WebLinkAbout2014-04-22; City Council; Resolution 2014-075EXHIBIT 3
RESOLUTION NO. 2014-075
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
2 ACCEPTING THE TRANSFER OF ALL LAND USE PLANS AND
3 FUNCTIONS OF THE FORMER CARLSBAD REDEVELOPMENT
AGENCY, ASSUMING RESPONSIBILITY AND AUTHORITY FOR
4 ENFORCEMENT OF SAID LAND USE PLANS AND FUNCTIONS, AND
FINDING THE CECP AMENDMENT COMPUES WITH THE LAND USE
5 POLICIES OF THE SOUTH CARLSBAD COASTAL REDEVELOPMENT
AREA PLAN BECAUSE THE USE IS PERMITTED BY THE GENERAL
PLAN AND ZONING ORDINANCE AND WILL SERVE AN
7 EXTRAORDINARY PUBUC PURPOSE BASED ON THE FINDINGS OF
THE CITY COUNCIL
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^ WHEREAS, in May of 2012, the California Energy Commission (CEC) approved
10 NRG's application for certification of the Carlsbad Energy Center Project (CECP) over the
11 vigorous objections of the City of CaHsbad and the Carlsbad Redevelopment Agency; and
12 WHEREAS, during the CEC proceedings the City of CaHsbad and the CaHsbad
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Redevelopment Agency took certain legislative actions concerning the construction of the new
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CECP, including action by the former CaHsbad Redevelopment Agency indicating that the CECP
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was not consistent with the South Carlsbad Coastal Redevelopment Area (SCCRA) Plan because
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17 a finding (or findings) could not be made that the CECP provided for an extraordinary public
18 purpose in part due to the fact that there was not a demonstrated need for the power to be
1^ generated from the CECP and the fact that two power plants could potentially operate on the
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coastal (redevelopment) property for an indefinite period oftime, not eliminating this blight or
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blighting condition in the redevelopment area; and
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2^ WHEREAS, since October, 2012, the energy supply environment in Southern
24 California has dramatically changed due to the permanent closure of the San Onofre Nuclear
25 Generation Station (SONGS) and as a result the California Independent System Operator
(CAISO) and the California Public Utilities Commission (CPUC) have determined that additional
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power generation capacity is currently needed in the San Diego Region by 2018; and
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1 WHEREAS, most recently on March 13, 2014, the CPUC approved a decision
^ addressing San Diego Gas and Electric's (SDG&E) need to procure gas-fired power generation
up to 600 MWs in the San Diego region; and
WHEREAS, given the recent CAISO and CPUC determination of power needs in
the San Diego region, SDG&E recently indicated its interest in entering into a Power Purchase
7 Agreement (PPA) with NRG for electricity generated from the CECP, but only if NRG is willing to
8 change the proposed technology of the approved CECP from a "combined-cycle configuration"
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plant to a "peaker configuration" plant and submit a Petition to Amend (PTA) application to the
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CEC for the previously approved CECP; and
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WHEREAS, NRG is interested in submitting a PTA application, but only if the City
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J 3 and former Redevelopment Agency would be supportive of such an application; and
14 WHEREAS, per State Assembly Bill 1484 which went into effect June 27, 2011,
15 the Carlsbad Redevelopment Agency was dissolved as of February 1, 2012, and the City of
CaHsbad assumed the role of Successor Agency as permitted by Health and Safety Code Section
34173 and the City of Carlsbad also accepts the transfer of all land use related plans and
functions ofthe former Redevelopment Agency; and
WHEREAS, as home to the existing Encina Power Station (EPS) since the 1950s
21 and the numerous other regional facilities, Carlsbad understands a community's responsibility
22 in hosting regional resources; and
WHEREAS, on January 14, 2014, the City Council and CaHsbad Municipal Water
District approved the Settlement Agreement (Agreement) between and among the City of
Carlsbad, the Carlsbad Municipal Water District, Cabrillo Power I LLC and Carlsbad Energy
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27 Center LLC (collectively "NRG"), and SDG&E to support a change in the proposed technology of
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1 the approved CECP and the submittal of a PTA application to the CEC for approval of the
2 technology change, conditioned upon the decommissioning, demolition, removal and
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remediation of the current Encina Power Station (EPS) site by a date certain, as well as other
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changes in CECP plant design, energy infrastructure and property considerations beneficial to
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, the residents of Carlsbad; and
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7 WHEREAS, all land uses permitted in the SCCRA Plan are those permitted by the
8 General Plan and zoning ordinance, with the exception that uses for the generation and
^ transmission of electrical energy and similar utilities are permitted only if a finding is approved
that the land use serves an extraordinary public purpose; and
WHEREAS, there was no finding of extraordinary public purpose approved for
the original CECP and therefore neither the City nor the former Redevelopment Agency could
14 approve the proposed land use and support the application; and
15 WHEREAS, due to the proposed change in technology, demolition and removal
of the EPS by a date certain, and the other public benefits to be received as a result of the
Agreement approved by the City on January 14, 2014, the City has determined that it can now
make the required finding(s) of extraordinary public purpose and support the PTA application
for the CECP as set forth within this resolution; and
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21 WHEREAS, the City Council has determined the CECP, as proposed for
22 amendment and set forth in the Agreement, will provide extraordinary public benefit to the
community, including the South Carlsbad Coastal Redevelopment Area, if all parties comply
with the approved aforementioned Agreement; and
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1 WHEREAS, the City Council of the City of CaHsbad, on behalf of the former
2 Redevelopment Agency, has determined that the CECP proposal is now consistent with the
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SCCRA Plan with approval of the extraordinary public purpose findings as set forth within this
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Resolution.
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
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7 California, as follows
8 1. That the above recitations are true and correct
^ 2. That the City Council hereby accepts the transfer of all land use plans and
10 functions of the former Carlsbad Redevelopment Agency, and has assumed responsibility and
authority for enforcement of said land use plans and functions, including the active South
11 CaHsbad Coastal Redevelopment Area Plan, until such time as the plan effectiveness date
expires.
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3. That the City Council hereby determines that the PTA application
proposed by NRG to amend the CECP, as described in the Agreement dated January 14, 2014,
14 complies with the South CaHsbad Coastal Redevelopment Area Plan land use policies because it
is permitted by the General Plan and zoning ordinance and will include the following benefits
15 which the City Council finds represent an extraordinary public purpose as required by the South
CaHsbad Coastal Redevelopment Area Plan:
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17 a. NRG will amend its CECP project, proposing a plant that is more
environmentally friendly, lower profile, utilizing "peaker configuration" technology, with the
18 amount of power generation and hours of operation capped (6am to midnight, unless
otherwise directed by CAISO), consistent with the Agreement dated January 14, 2014; and
1^ b. NRG will immediately begin the process to completely shut down the
existing Encina Power Station (EPS) at no cost to taxpayers and will shut down the EPS the
eariier of midnight December 31, 2017 or the commercial operation date of CECP Amended or
21 face liquidated damages as set forth in the Agreement, and will commence demolition of the
EPS within one year of shutdown and complete demolition within two years of start of
22 demolition; and
c. SDG&E will pursue the relocation of its operations yard ("North Coast
Service Center") at NRG's expense and transfer ownership ofthe service center property (along
24 with the Cannon Park and the Agua Hedionda Lagoon North Shore Bluff Parcel) from SDG&E to
the City, freeing up the service center land for more appropriate uses. If it is ultimately not
25 possible to relocate the service center, NRG will pay the city $10 million; and
d. Immediate action to begin the process for a redevelopment plan for a
remediated Encina Power Station site; and
27 e. New design for CECP will address all Carlsbad Fire Department public
safety concerns; and
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1 f. Cooperation from NRG to determine a mutually acceptable alignment for
the Coastal Rail Trail; and
2 g. Uquidated damages (estimated at $3.6 million to $12 million annually) if
3 the EPS continues to operate after CECP becomes operational; and
h. NRG will grant Irrevocable Offers of Dedication (lODs) for fee title
4 ownership to the City, in addition to the easements already agreed to as a part of the Poseidon
Desalination Plant project, to include the Bluff Area Parcel, Fishing Beach Parcel, Hubbs Site
5 parcel, and South Power Plant parcel; and
i. Electrical generation reliability will be enhanced through development of
the amended CECP, which will benefit CaHsbad as well as the larger San Diego region.
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4. That based on the fact that the City Council now has authority and
8 responsibility for implementation of the South CaHsbad Coastal Redevelopment Area Plan from
a land use review and approval function perspective, the City Council finds that the proposed
^ amended application for the CECP is consistent with Section VI. (600) of the Plan and that the
Agreement approved on January 14, 2014 sets forth appropriate public benefits to justify a
finding of extraordinary public purpose as required by the South Carlsbad Coastal
11 Redevelopment Area Plan.
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12 5. That based on the facts set forth herein, the City Council finds that the
proposed PTA application for the CECP will result in construction of a replacement power plant
that serves an extraordinary public purpose, will have less environmental and visual impact on a
14 key coastal property than the original CECP, and will result in removal of the existing power
plant which has existed on the coastal site since the 1950s and has been identified within the
15 South CaHsbad Coastal Redevelopment Area Plan as representing blight or a blighting condition
which needs to be addressed to successfully redevelop the area.
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1 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City
2 of Carlsbad on the 22"'' day of April, 2014, by the following vote to wit:
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AYES: Council Members Packard, Wood, Schumacher and Blackburn.
NOES: None.
ABSENT: Council Member Hall.
MARK PACKARD, Mayor Pro Tem
ATTEST:
, City^i BARBARA ENGLESON, Cityelerk
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