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HomeMy WebLinkAbout2009-01-27; City Council; 19704; Determination of Non-Compliance of Proposed CECPCITY OF CARLSBAD AND HOUSING & REDEVELOPMENT COMMISSION AGENDA BILL 8 AB# MTG. DEPT. 19.704 01/27/09 CM DETERMINATION THAT THE CARLSBAD ENERGY CENTER PROJECT IS NON-COMPLIANT WITH ALL APPLICABLE LAND USE LAWS, ORDINANCES, REGULATIONS, AND STANDARDS DEPT. HEAD CITY ATTY. CITY MGR. RECOMMENDED ACTION: Adopt Resolution No. 2009-020 making the determination that the proposed Carlsbad Energy Center project is inconsistent with all applicable land use laws, ordinances, regulations, and standards. ITEM EXPLANATION: On September 14, 2007, Carlsbad Energy Center, LLC, (the Applicant) submitted an Application for Certification (AFC) to the California Energy Commission for the Carlsbad Energy Center Project (CECP). Carlsbad Energy Center LLC (the Applicant) is an indirect wholly- owned subsidiary of NRG Energy, Inc. (NRG), which owns the existing Encina Power Station. The proposed project is to be located on the northeast area of the existing Encina Power Station property, east of the rail lines and west of Interstate 5. At the request of the California Energy Commission (CEC), on May 1, 2008, city staff provided an overview and analysis (Exhibit 1) of the proposed project and its conformance to city land use laws, ordinances, regulations and standards (LORS). The purpose of that analysis was to help educate the CEC staff on the numerous land use documents and LORS that pertain to the CECP. The City also wanted to inform the CEC as to how it would view the conformance of the CECP to those LORS. As highlighted on Page 2 of that letter, City staff clearly highlights for the CEC its position: "The proposed CECP is not consistent with the City's desired vision for the property. Also, as noted below, although NRG has not submitted all information necessary to determine compliance requirements, staff has been able to determine that the CECP is not consistent with many of the policies and/or land use requirements set forth in the various planning documents and/or City Council policies that apply to said property." Following the May 1st submittal to the CEC, on August 12, 2008 the City Council amended its position on the CECP in Council Resolution # 2008-235 (Exhibit 2). This resolution clearly reaffirms Council's longstanding requirement for a comprehensive plan to guide the redevelopment of the Encina Power Station site. DEPARTMENT CONTACT: Joe Garuba 760-434-2820, jgaru@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED DENIED CONTINUED WITHDRAWN AMENDED g D D D CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNKNOWN RETURNED TO STAFF OTHER -SEE MINUTES Da a Page 2 On August 22, 2008 the City submitted additional information (Exhibit 3) to the CEC which restated the City's belief that the proposed CECP was not consistent with land use LORS: "...reiterates its finding(s) that the proposed project is not consistent with several of the applicable land use ordinances and long-standing policies of the City, and again states that the proposed project is inconsistent with the desired development for the subject property." In December 2008, the CEC released their Preliminary Staff Assessment of the proposed power plant. In that document, CEC staff concluded that the proposed CECP, if approved, would comply with all land use LORS. The City contends that although the Energy Commission, as authorized through the Warren-Alquist Act, has the authority to override local land use LORS, the CEC and its staff do not have the authority to re-interpret City Council's interpretation to conclude consistency/inconsistency. In an effort to provide clarity for the CEC staff on the City Council's interpretation of land use LORS and the CECP's (non)compliance with those LORS, staff recommends that the City Council Adopt Resolution No. 2009-020 This resolution (Exhibit 4) will be provided to the CEC as part of the City's comments on the PSA. General information concerning the project may be viewed on the Energy Commission's Internet web page at: www.enerqy.ca.gov/sitingcases/carlsbad/ or on the City's web page at: www.carlsbadconnected.com. FISCAL IMPACT: Unknown at this time. ENVIRONMENTAL IMPACT: Unknown at this time. EXHIBITS: 1. Land Use Information Letter from City of Carlsbad to California Energy Commission, dated May 1,2008. 2. Council Resolution No. 2008-235 3. Carlsbad Energy Center Project Inconsistency with City of Carlsbad Land Use Ordinances and Policies letter from the City of Carlsbad to the California Energy Commission, dated August 22, 2008. 4. Resolution No. 2009-020 EXHIBIT 1 City of Carlsbad ^ m^^^^HM*^B*^^^09V^MWHHHHHBMOffice of the City Manager May 1, 2008 Mr. Mike Monasmith Siting Project Manager California Energy Commission 1516 Ninth Street Sacramento, CA 95814-5512 DOCKET DATE HAy ° l 200S RECD. Carlsbad Energy Center Project (07-AFC-6) - Land Use Information Dear Mr. Monasmith: Thank you for your Agency's letter dated March 26,2008, requesting the City of Carlsbad's position related to the Carlsbad Energy Center Project's (CECP) consistency with existing City and Redevelopment Agency documents that govern on-site land uses at the proposed CECP site and the surrounding area, which includes the existing Encina Power Station. Per your request, we are providing input on interpretation of our zoning ordinance and related land use plans which City and Redevelopment Agency staff believe would have applied to the project had it been under Carlsbad's jurisdiction for review and approval. We appreciate this opportunity to explain and clarify the relevant land use requirements and policies, as well as our policy position regarding the compatibility and desirability of the CECP at the identified location. Carlsbad's Overall Position on the CECP Before discussing land use requirements and policies, be advised that Carlsbad does not support the CECP. As host to numerous regional facilities, such as the Encina Water Pollution Control Facility, McClellan-Palomar Airport, and the existing power plant, Carlsbad is clearly accepting of these types of land uses within its jurisdictional boundaries. However, with the advancement of technology that removes the need for power generation facilities to have coastal access, the City believes that there are now more appropriate, compatible locations in Carlsbad and other communities for me CECP. The EPS property is predominantly surrounded by residences and open space. Its central location and proximity to the beach and lagoon, significant open space, and major transportation corridors make it a potential key gateway location and a connector between the ocean and existing and future visitor-serving and recreational uses. Accordingly, the City believes that a coordinated and appropriate planning effort for the entire property, as well as removal of the existing power plant and re-designation of the EPS for publicly-oriented, non-utility land uses, are necessary steps towards fulfilling this area's community benefit potential and the City's desired Vision for the CECP area. 1200 Carlsbad Village Drive • Carlsbad, CA 92008-1989 • (760) 434-2821 • FAX (760) 720-9461 Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 2 The proposed CECP is not consistent with the City's desired Vision for the property. Also, as noted below, although NRG has not submitted all information necessary to determine compliance requirements, staff has been able to determine that the CECP is not consistent with many of the policies and/or land use requirements set forth in the various planning documents and/or City Council policies that apply to said property. About this Letter As indicated in your Agency's letter, there are six (6) planning documents which are applicable to the subject property/project. Also germane is a 25-year-old City Council policy that applies to any development contemplated at the existing Encina Power Station and adjacent areas. In this correspondence, we have provided you with 1) a general description of each document, its intent and its applicability; 2) the action and/or permit(s) that would be required under each document; and 3) a description of the applicable policies and requirements set forth within each document. Similar information is provided for the Council policy as well. For additional information purposes, attached to this letter are the following exhibits: 1. A timeline of significant events in the life of the power plant and related property; 2. A map which outlines the boundaries for each document; 3. City Council Resolution No. 98-145; 4. July 24,1989 letter to SDG&E from Carlsbad Planning Director; 5. My 16,2007 letter to SDG&E from Carlsbad City Manager, and; These documents are helpful in providing more detail on various issues to be discussed below. The City submits this review of the CECP from a land use perspective only. It does not consider other equally important project-specific topics, including potential environmental impacts that would be evaluated under the California Environmental Quality Act (CEQA), such as traffic, noise, and aesthetics. Furthermore, this review does not represent the final nor complete land use comments the City may have on this project, considering there are many outstanding issues which need to be addressed that will affect land use. Finally, while this letter describes necessary permit and compliance requirements, it does so merely to clarify these items in detail; the discussion below should not be misconstrued as an indication of what it would take for the City to support the project. Carlsbad as Lead Agency Before proceeding with our effort to clarify the planning documents, it is important to note that if the City and Redevelopment Agency had the sole discretion to approve the subject project application from a land use perspective, staff would have determined the application to be incomplete. The CECP, as it is currently proposed, does not provide adequate information for a determination of compliance and/or consistency with all of the applicable planning documents. Additionally, the City would require all applicable land use permit applications to be submitted, which, in the Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 3 CECP's case, has not yet occurred. Therefore, under our typical review process, the City would not be able to continue processing the subject application due to its incomplete status. Staff would only be able to provide a list of applicable requirements and outline issues of concern that could be identified based on the information provided to date. Staff would have also informed NRG that the CECP could not be supported due to the reasons noted above. Normally, once an acceptable project description is developed and all appropriate permit applications are submitted, the City and Redevelopment Agency requires the applicant to prepare an environmental impact report (EIR). In order to provide decision-makers with complete information and aid in their land use analysis, the EIR would consider alternative locations to the CECP site and alternative means to obtain electricity other than by constructing a new power generating facility. Furthermore, analysis of greenhouse gas emissions would be considered in the EIR. However, as the lead agency, the EIR would not proceed until the City and Redevelopment Agency agreed on the appropriate land uses for the site through the comprehensive specific plan update process described in the following section. Land Use Analysis Below is an analysis of each land use document applicable to the CECP. The analysis highlights project inconsistencies where those occur. Since they are essential to the understanding of the relevant land use policies and requirements, the Encina Specific Plan and City Council Policy are discussed first. I. Encina Specific Plan (SP 144) Background/Intent The 680 acres of SP144 encompass the EPS site and the adjacent beach, all water areas of the Agua Hedionda Lagoon, and most properties on either side of Interstate 5 between Cannon Road and the lagoon. At the time of the specific plan's adoption in 1971, all of these properties were owned by SDG&E. Following its adoption, SP144 was amended several times to permit the development and expansion of the EPS essentially as it appears today. Amendments allowed the Unit 4 generator in 1973, the Unit 5 generator in 1975, and the addition of the 400-foot-tall emissions stack in 1976. Subsequent amendments after 1980 were either withdrawn or did not affect the power plant. In 2006, the City Council approved SP 144(H), which permitted the development of the Carlsbad Desalination Project. As stated in SP 144(H): • The purpose of this Specific Plan is to set forth the existing land uses and land use regulations applicable to the area of Carlsbad which includes the Agua Hedionda Lagoon and certain areas near the lagoon, including the Encina Power Station. Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 4 • The purpose of this amendment [SP 144(H)] is to incorporate the Encina Power Station Precise Development Plan 00-02 (PDF 00-02) into Specific Plan 144 while maintaining the conditions and regulations of previous Specific Plan Amendments A through G. As noted above, SP 144(H) did not change any land use designations, revise any conditions, or establish any development standards. As explained in detail in the City Council Policy discussion below, City Council Resolution 98- 145 establishes the requirement for a comprehensive update of SP 144 for any development proposal within its boundaries. This requirement was reiterated by the City Council in 2002. Although the City Council waived the requirement for a comprehensive update for the Carlsbad Desalination Project, the requirement continues to apply to any other proposal, including the CECP. This is evidenced by the continued application of the requirement as explained fully in the City Council Policy section. Comprehensive Update of SP 144 If Carlsbad had permit authority for the CECP, it would require NRG to first prepare a comprehensive update of the Encina Specific Plan 144, consistent with City Council Policy and as discussed below. NRG has submitted an amendment to SP 144 (SP 144 (I)); however, the proposal amends the document to include the CECP but does not address the comprehensive update required. The update of SP144 would be expected to set forth a vision for the noted and adjacent property, which should not include the CECP or existing power station. The comprehensive amendment of the Encina Specific Plan, SP 144, would involve all property owners and all 680 acres within the specific plan. The update would be applicant-initiated (as has been directed by the City Council) and prepared by a professional planning firm supported by experts in necessary disciplines (e.g., environmental, engineering, traffic, communications). An EIR for the comprehensive update would also be required; the consultant to prepare the EIR would be selected and administered by the City with all expenses paid by the applicant. It is not possible to identify all desired objectives or components of the comprehensive amendment; that will only occur as the amendment process is underway. However, the update would likely need to address the following items, all of which would be applicable to any development proposal in the SP 144, not just the CECP: 1. Ensure consistency with state law requirements regarding specific plans; 2. Establish an overall land use vision for SP 144, which would likely incorporate the findings of the Proposition D Committee for the South Shore of the Lagoon and produce the ultimate land use plan for the power plant property both east and west of the railroad tracks. It is anticipated that this land use vision will change existing land use designations and zonings, including but not limited to those applicable to the power plant, to incorporate the goals of the South Carlsbad Coastal Redevelopment Plan and the City's Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 PageS desire for land uses other than power generating facilities. Furthermore, this land use ' vision will ensure compatibility between SP 144 and all surrounding land uses; 3. Provide a land use study with alternatives for land surrounding the CECP site; 4. Ensure consistency between all affected land use documents (PDF 00-02, SP 144, Agua Hedionda Land Use Plan, South Carlsbad Coastal Redevelopment Plan, Habitat Management Plan, Airport Compatibility Land Use Plan, Zoning Ordinance, and General Plan); 5. Update the existing SP 144 to remove provisions that are outdated and/or no longer appropriate, and replace them with germane requirements that are appropriate and consistent with other documents as expressed in item 2; 6. Update the Agua Hedionda Land Use Plan to ensure all maps, policies, and standards regarding land use, public access, environmental protection, and buildings, among other items, are appropriate and consistent with other documents as expressed in item 3; 7. Review SP 144 and other affected land use documents to ensure consistency with all Coastal Act policies. This is important since SP 144 was adopted prior to Coastal Act approval; 8. Fix inconsistent land use and zoning designations (both City and Coastal) within SP 144; 9. Incorporate and recognize the goals of the South Carlsbad Coastal Redevelopment Plan; 10. Establish trails, public access, and public places, including connections with properties east of Interstate 5 and access to and use of lagoon water bodies and the beach; 11. Consider the design, location, and type of appropriate public amenities; 12. Establish public infrastructure requirements (e.g., street widening, sewer facilities, storm drains); 13. Develop appropriate development and use standards for all properties; 14. Engage all affected property owners, and; 15. Develop and implement a public outreach plan to ensure the public is involved in and aware of the update process. Compliance Requirements If Carlsbad had permit authority for the CECP, it would require NRG to first prepare a comprehensive update, including a land use visioning program, of the Encina Specific Plan 144 Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 6 as described above. Preparation of the update before proceeding with the CECP would be mandatory. II. City Council Policy Background/Intent In 1998, the Carlsbad City Council passed Resolution 98-145 (attached) declaring its intention to comprehensively update the Encina Specific Plan 144 (SP 144). This resolution was the result of 15 years of unsuccessful attempts by the City to achieve a comprehensive SP 144 update. As detailed above, the 680-acre SP 144 encompasses all of the existing Encina Power Station, the proposed CECP, and significant other lands. The City's policy to comprehensively update the specific plan is relevant to all land use permits and determinations of consistency the City would require of the CECP and any other development proposed within the specific plan. Moreover, knowing the history of this policy is also important to understanding the basis for many of the City's comments. As stated in Resolution 98-145, the Council declared its intention ".. .to study and consider amendment to the General Plan, zoning designations and the zoning ordinances pertaining to the Encina Power Plant and surrounding properties presently under the ownership of the San Diego Gas and Electric Company." At the time of the resolution's adoption, all properties within SP 144 were owned by SDG&E. The recitals of Resolution 98-145 list the reasons why the resolution was passed, why a comprehensive update is needed, and why it directed City staff, rather than the land owner, to prepare the update. Following are some of the recitals: • Whereas, SDG&E was informed that any future modifications, changes, amendments or additions to its plant would require a completed major amendment to the specific plan processed in accordance with Chapter 21.36 of the Carlsbad Municipal Code; (Note: This recital refers to a July 24,1989, letter to SDG&E from the City's Planning Director [attached]). • Whereas, the existing Specific Plan for the SDG&E properties does not address the regulations and restrictions of the LCP; • Whereas, despite numerous verbal agreements to do an updated [Specific] Plan, SDG&E has not come forward with a formal proposal, work program or timeline for initiating a process to update its Plan and address outstanding concerns and issues; • Whereas, these considerations [of amending existing zoning and General Plan designations of the SDG&E properties} should include whether the continued use of a portion of the property for a Power Plant is in the best interest of the citizens of Carlsbad and is the best, long-term use of the property given its superior coastal location and its Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 7 proximity to other existing, surrounding uses that can be adversely impacted by Power Plant use; Though passed in 1998, the need and reasons for the comprehensive update as indicated by the resolution remain. After approval of the resolution, initiation of the specific plan update by the City was subsequently put on hold when the EPS was sold by SDG&E to Cabrillo Power. It was the City's intent to work with the new owner to update the Specific Plan and develop a vision plan for that site which reflected the wishes of the community. The City attempted to negotiate a Memorandum of Understanding (M.O.U.) with the new owner which would include a process to study the existing and future land use and thus accomplish many of the SP 144 update objectives. Unfortunately, the M.O.U. was never finalized because the parties could not agree to the terms, and Cabrillo Power indicated no immediate need to move forward with the redevelopment of the site and/or construction of a new power plant. On June 11,2002, as part of questions related to the processing of the proposed Carlsbad Desalination Plant, the City Council reiterated its policy on requiring a comprehensive update of SP 144. By minute motion, the Council clarified the update requirement: (1) applies to any proposal; (2) is applicant, rather than city-initiated; and (3) requires the cooperation and resources of all affected property owners. On August 5,2003, the City Council passed Resolution 2003-208, allowing the proposed desalination plant to proceed without a comprehensive update of the entire specific plan. Rather than requiring the update, the Council directed the applicant to apply for a specific plan amendment to incorporate the proposed precise development plan into SP 144 and process the amendment along with all other necessary permits, The amendment would maintain the EPS as part of the specific plan. This would allow the City to continue to address all applicable land use matters such as public access and use of the lagoon and beach on the EPS and all other properties with SP 144. As part of the desalination project, the Council approved this amendment on June 13,2006. An important point to clarify is that the City Council decision to waive its policy to comprehensively update Specific Plan 144 applied only to the proposed desalination plant and not any other proposal. This waiver for the desalination plant was due to the plant's extraordinary public purpose benefit, including water reliability, price certainty, and significant public land donations. However, as stated above, the requirement to comprehensively update SP 144 continues to apply to any other project in the specific plan area. Most recently, this included a SDG&E proposal to perform minor improvements to its North Coast Operations Center (see attached July 16, 2007, letter to Sempra Energy from the Carlsbad City Manager). The City's initial comments on the CECP, contained in an October 24,2007, letter to the CEC's Dr. James Reede, described the requirement for the CECP to conduct a comprehensive update. Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 PageS Compliance Requirements Through its Policy on development in the Encina Specific Plan, the City Council established the comprehensive specific plan update as the vehicle to (1) achieve consistency in and between the many land use documents that affect development within the Encina Specific Plan and (2) develop a land use vision for the area, including the Encina Power Station and the CECP site. The longstanding disconnect between the policies and provisions of the General Plan, Redevelopment Plan, and Local Coastal Plan are due to the fact that the Encina Specific Plan has not yet been updated, even though the need is clearly demonstrated. If Carlsbad had permit authority for the CECP, it would require NRG to first prepare a comprehensive update of the Encina Specific Plan 144 to address the inconsistencies. The likely contents and processing of the update are listed above in the section on SP 144. The City/Agency would expect SP 144 to be updated through a visioning process that would result in alternate land uses at the CECP site. III. General Plan Background/Intent Carlsbad's General Plan establishes an overall multi-part vision for the entire City, including these relevant components: A City which provides a balanced variety of land uses for living, business, employment, recreation, and open space opportunities. A City which provides a diversified, comprehensive park system that offers a wide variety of recreational activities and park facilities. A City where travel is safe and easily accommodated whether it be by mass transit, in an automobile, on a bicycle or as a pedestrian. A City committed to the economic growth of progressive commercial and industrial businesses to serve the employment, shopping, recreation, and service needs of its residents. A City which recognizes the value of its unique ecological position as a coastal city of beaches, fragile lagoons, and unspoiled canyons; which has taken steps to conserve the quality and quantity of its air, water, land and biological resources. A City which recognizes its role as a participant in the solution of regional issues. Implementation of the City's overall vision is accomplished by the various General Plan elements and various policies, programs, and procedures. Carlsbad last comprehensively Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 9 amended its General Plan in 1994. Currently, the City is in the beginning stages of the next comprehensive update with community outreach expected to begin this summer. The General Plan Land Use Element designates the entire Encina Power Station (EPS), which includes the CECP site, for Public Utilities ("U"). The General Plan describes the Public Utilities designation as follows: This category of land use designates areas, both existing and proposed, either being used or which may be considered for use for public or quasi-public functions. Primary functions include such things as the generation of electrical energy, treatment of waste water, public agency maintenance storage and operating facilities, or other primary utility functions designed to serve all or a substantial portion of the community. Sites identified with a "U" designation indicate that the City is studying or may in the future evaluate the location of a utility facility which could be located within a one kilometer radius of the designations on a site for such a facility. Specific siting for such facilities shall be accomplished only by a change of zone, and an approved Precise Development Plan adopted by ordinance and approved only after fully noticed public hearings. Compliance Requirements The existing power plant is consistent with the General Plan Public Utility designation. Although the CECP is consistent with the "U" general plan designation, a determination of "general plan consistency" cannot be made by staff. As discussed in detail in the above City Council Policy section, the constant City policy for more than 25 years has been, with few exceptions, to comprehensively update the Encina Specific Plan 144 before any development occurs. This specific plan encompasses the EPS. Based on Redevelopment Agency goals as expressed in the South Carlsbad Coastal Redevelopment Plan, the comprehensive update would likely replace part or all of the Public Utility designation on the EPS with a designation(s) deemed more appropriate for community benefit purposes. The update may also result in requirements for open space, recreation, and public uses that would affect the current and proposed power plants. Therefore, until the comprehensive update to SP 144 is processed, a determination of General Plan consistency for the CECP cannot be made. The General Plan, in and of itself, would not require NRG to submit any land use permits. However, implementation of the General Plan's goals, objectives, and policies, would be accomplished by the permits required by the Zoning Ordinance, Local Coastal Program, and other implementing ordinances and policies. Through these permits, the City would need to demonstrate written compliance with the provisions of the General Plan through detailed findings and demonstrated by substantial evidence. Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 10 IV. Zoning Ordinance Background/Intent Adopted in 1971, the Public Utilities ("P-U") Zone, Chapter 21.36 of the Zoning Ordinance, has been applied to the EPS and other public utility properties in Carlsbad. It implements the Public Utility land use designation of the General Plan. In 1975, the City amended the P-U Zone to require a precise development plan for public utility uses. As stated in Section 21.36.030 of the Carlsbad Municipal Code, "No building permit or other entitlement for any use in the P-U zone shall be issued until a precise development plan has been approved for the property." In Section 21.36.010, the Zoning Ordinance states: The intent and purpose of the P-U zone is to provide for certain public utility and related uses subject to a precise development plan procedure to: (1) Insure compatibility of the development with the general plan and the surrounding developments; (2) Insure that due regard is given to environmental factors; (3) Provide for public improvements and other conditions of approval necessitated by the development. Among the uses permitted in the P-U Zone are: 1. Agriculture; 2. Energy transmission facilities; 3. Electrical energy generation and transmission; 4. Processing, using and storage of: (a) natural gas, (b) liquid natural gas, (c) domestic and agricultural water supplies; 5. Public utility district maintenance, storage and operating facilities; and 6. Wastewater treatment, disposal or reclamation facilities. Based on the above list, both the existing and proposed power plants and their appurtenant facilities are permitted uses in the P-U Zone. The P-U Zone includes only minimal development standards such as minimum lot area and coverage and parking locations. However, Section 21.36.050 states that it is through the precise development plan that requirements are established: The city council may impose such conditions on the applicant and the [precise development] plan as are determined necessary and consistent with the provisions of this chapter, the general plan and any specific plans that include provisions for, but are not limited to, the following: (1) Setbacks, yards and open space; (2) Special height and bulk of building regulations; (3) Fences and walls; (4) Regulation of signs; (5) Landscaping; (6) Special grading restrictions; Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 11 (7) Requiring street dedication and improvements (or posting of bonds); (8) Requiring public improvements either on or off the subject site that are needed to service the proposed development; (9) Time period -within which the project or any phases of the project shall be completed; (10) Regulation of points of ingress and egress; (11) Parking; (12) Regulation of the type, quality, distribution and use of reclaimed water, or reclaimed waste-water. In 2000, the first precise development plan for the EPS was submitted; the City approved the precise development plan, PDF 00-02, as part of the Carlsbad Desalination Plant project in 2006. PDF 00-02 serves both as an entitlement for the existing Encina Power Station and Carlsbad Desalination Plant and as a planning document with text and graphics for the entire power plant property. Compliance Requirements Because the CECP may affect or be affected by surrounding land uses, a determination of compliance with the Zoning Ordinance would require the comprehensive update of SP 144, as outlined above. Additionally, compliance with the Zoning Ordinance would be determined through the precise development plan, which is discussed in the following section. IV. Precise Development Plan Background/Intent The adopted precise development plan (PDF 00-02) for the EPS follows Section 21.36.050 of Carlsbad's Zoning Ordinance. It divides the EPS into planning areas with general development standards for each. It elaborates on parking requirements and provides basic aesthetic and landscaping requirements. PDF 00-02 also contains an inventory of existing uses and facilities at the power station and provides general review and approval criteria for any future improvements. Moreover, through the PDF 00-02, the City was able to condition a number of public improvements and public land or use dedications both in and adjacent to the EPS. As previously stated, a purpose and intent of the P-U Zone is to "insure compatibility of the development with the general plan and the surrounding developments." As stated in the approved PDF 00-02 document, it satisfies this purpose and intent by providing: • A baseline of existing conditions (as of January 2006) • Guidance for building permit and entitlement issuance for allowed uses • Establishment of planning areas, standards and provisions • Amendment and implementation procedures • Linkage to other related regulations, approvals, and documents The only development contemplated at the EPS upon the adoption of PDF 00-02 was the Carlsbad Desalination Plant. Therefore, the document recognized that future significant Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 12 improvements such as the CECP would require a City Council-approved major amendment to PDF 00-02. Through this major amendment, development standards and other requirements tailored to the proposal would be developed. Accordingly, NRG has submitted a major amendment to the approved precise development plan in the form of PDF 00-02(A). As noted in Zoning Ordinance Section 21.36.050 above, the City Council may impose a number of requirements to ensure consistency with the General Plan, including setback and height standards, landscaping, and public improvements. Until the comprehensive update of Specific Plan 144 is complete and, based on that update, use of the CECP site and surrounding properties is known, it is not possible to determine all requirements that should be set forth in PDF 00- 02(A) and thus the requirements that would be applied to the CECP. PDF 00-02(A) as submitted by NRG was not prepared in conjunction with the comprehensive specific plan update; therefore, it is not adequate. Compliance Requirements Based on the above requirements set forth in the Zoning Ordinance, if the City were reviewing the proposed application from NRG for compliance purposes, staff would recommend NRG first prepare a comprehensive update of the Encina Specific Plan 144. Once complete, it would then be possible to determine compliance of the proposed CECP from a land use perspective and, if appropriate, the contents of PDF 00-02(A). Subsequently, NRG would be required to submit an amendment to PDF 00-02 which is consistent with the updated SP 144. VI. Local Coastal Plan/Agua Hedionda Land Use Plan Background/Intent In May 1982, after several years of work, the City Council adopted the Agua Hedionda Land Use Plan (AHLUP), which is the segment of the City's Local Coastal Program that applies to the Agua Hedionda Lagoon area and all of Specific Plan 144. The California Coastal Commission certified the land use plan later that year. While the AHLUP is a certified segment of the City's Coastal Plan, Carlsbad does not have the authority to issue coastal development permits within the AHLUP area. As City Council Resolution 98-145 notes, when the City applied to the Coastal Commission to obtain effective certification (permit authority) in about 1983, it was requested by SDG&E to withdraw the application. The City agreed to SDG&E's request based upon a commitment by the company that it would update Specific Plan 144 and bring the Encina Power Station site into conformance with the requirements contained in Chapter 21.36 of the Carlsbad Municipal Code. However, SDG&E did not follow through on this commitment and coastal development permits remain the jurisdiction of the Coastal Commission in the AHLUP. While it does not issue coastal development permits for projects in the AHLUP, the City does review such projects for consistency with the requirements of the plan. Under a typical processing scenario, this consistency determination is made as part of the review of any City Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 13 permits required. Once Carlsbad's review process is complete, then the applicant would apply to the Coastal Commission to obtain a coastal development permit. The Agua Hedionda Land Use Plan contains eight different sections: land use, agriculture, environmental, geologic hazards, public works, recreation/visitor facilities, shoreline access, and visual resources. These sections contain policies affecting the EPS and other properties. As with the Encina Specific Plan 144, the AHLUP has yet to undergo a comprehensive update and has not had any substantial revisions since its adoption over 25 years ago. The City has intended that the comprehensive update of SP 144 would include the simultaneous, complete update of the AHLUP. In fact, the specific plan does not address the regulations and restrictions of the AHLUP; accordingly, the update of the AHLUP and review to ensure consistency between it, the SP 144, and all other land use documents are identified as items to complete in the specific plan update process. Compliance Requirements If the City were the lead agency on the CECP application, it would require NRG to demonstrate compliance with the provisions of the AHLUP. This would be accomplished first through the comprehensive update of SP 144, the method Carlsbad has consistently identified to develop and determine appropriate land uses and standards in the AHLUP area. Once the update was complete, a determination of compliance could then be made. Until this occurs, no such determination can be made, and the CECP cannot be found consistent with the AHLUP. Additionally, since a SP 144 update would require changes to the AHLUP, the City would require NRG to submit a Local Coastal Program Amendment (LCPA). The LCPA would be the application to amend the policies of the AHLUP and would be processed concurrently with the specific plan update. The LCPA would require City Council and Coastal Commission review and approval. For clarification, NRG has not submitted a LCPA. Furthermore, and under typical permitting procedures, once NRG had obtained all entitlements from the City, it would then need to apply for a coastal development permit from the Coastal Commission. This permit would be in addition to the need to obtain a LCPA. On a related, significant matter, the Executive Director of the California Coastal Commission (CCC), as stated in a October 16,2007, letter to the CEC, noted he will not produce the report required for the CECP's application for certification (07-AFC-6) pursuant to Coastal Act Section 30413(d). As stated in Public Resources Code 25523(b), however, the CEC cannot decide on the CECP without this report. It does not appear to the City that the Executive Director of the CCC has the authority to choose not to provide the report. In light of the fact that an LCPA and Coastal Development Permit would be required for said project, the CCC report seems significant. The City would appreciate a response from the Energy Commission on this matter. Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 14 VII. South Carlsbad Coastal Redevelopment Project Area Plan Background/Intent In September, 1997, the City of Carlsbad began to identify options for an action to eliminate or reduce the environmental impacts of the existing Encina Power Plant and to achieve more compatible land uses along its coastline. The existing power plant, which began operation in 1954, was obsolete due to its outdated, inefficient technology and more stringent Air Pollution Control District air emission standards, which were acknowledged by both the power plant owner/operator and the City, as well as other regulating agencies. In addition, the industrial land use represented by the power plant and related facilities was no longer considered the best use for this beautiful coastal property. As a result of research on the issues surrounding the existing power plant and related land uses and facilities, the City decided to form a redevelopment area known as the South Carlsbad Coastal Redevelopment Area, the boundaries for which include the power plant property. The underlying intent of the Redevelopment Plan was to convert the industrial land west of the railroad tracks (where the current plant is located) to another, more appropriate land use that would provide greater benefit to the community and would eliminate the possibility of an intensification of industrial applications at that site. At the time, the thought was that a replacement facility, located on the eastern portion of the site, would be more aesthetically and geographically desirable than any retrofit to the existing power plant facility. These were incentives for both the power plant property owner and the City to encourage redevelopment of the site and decommissioning of the existing plant. The existing and proposed new power plants adjoin residential neighborhoods, beaches, and the Agua Hedionda Lagoon that are all subjected to both the Plant's emissions as well as the aesthetic and other environmental impacts. The Plant's massive size is also out of scale with the much lower profile character of the surrounding properties. Compliance Requirements The South Carlsbad Coastal Redevelopment Plan (SCCRP) states the following: The land uses permitted by this Plan shall be those permitted by the General Plan and zoning ordinance, and all other state and local building codes, guidelines, or specific plans as they now exist or are hereafter amended, -with the exception that new development which provides for one or more of the following specific uses may be permitted in the Project Area only after all of the following are satisfied a) the Carlsbad Housing and Redevelopment Commission approves a finding that the land use serves an extraordinary public purpose, and b) a precise development plan or other appropriate planning permit or regulatory document is first approved by the Commission which sets forth the standards for development of the project, and c) the Commission has issued a Redevelopment Permit for the project: lit Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 15 (i) Desalination Plant and other facilities for the production, generation, storage, treatment or transmission of water; (ii) Generation and transmission of electrical energy; (Hi) Public Utility district maintenance and service facilities; (vi) Governmental maintenance, storage and operating facilities; (v) Processing, using and storage of natural gas, liquid natural gas, and domestic and agricultural water supplies; (vi) Energy transmission facilities, including rights-of-way and pressure control or booster stations for gasoline, electricity, natural gas, synthetic natural gas, oil or other forms of energy sources; and/or (vii) Wastewater treatment, disposal or reclamation facilities and other facilities for the production, generation, storage, treatment or transmission ofwastewater. Based on the above requirements set forth in the SCCRP, if the Redevelopment Agency were reviewing the proposed application from NRG for permit compliance purposes, we would have the following responses from a redevelopment perspective. First, a Precise Development Plan amendment would be required to set forth the development standards for the power plant. The standards would include agreed upon height, setbacks, architectural design, etc, as well as other appropriate revisions to the current Precise Development Plan. Second, a comprehensive amendment to the Encina Specific Plan (SP 144) would also be required, as discussed above. Third, the applicant would be required to submit an application for a major redevelopment permit and obtain approval of that permit, which would require a comprehensive review of the project details from both a land use perspective as well as a design standpoint. NRG has yet to submit an application to the City for this permit. Fourth, to approve the above noted permits and/or plans, the Housing and Redevelopment Commission, acting for the Redevelopment Agency, would need to approve a rinding that the proposed land use serves an extraordinary public purpose (emphasis added). Based on the application submitted by NRG, staff believes the Commission would not be able to make this finding for the proposed new power plant. The new power plant potentially serves a regional need for electricity. However, there are several reasons why this does not equate to extraordinary public purpose for Carlsbad, including but not limited to: 1. No assurances that the electricity generated would be used specifically for Carlsbad residents and/or businesses/services; 2. No guarantees that the generation of this power would eliminate the risk of "black outs" or require other energy conservation measures in Carlsbad; 3. No measures that would prevent substantial electrical rate increases within the City; 4. No assurances that the existing power plant will be decommissioned at a date certain, which is a key goal for the redevelopment plan; 17 Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 16 5. A general concern that the proposed land use (new power plant) would be an incompatible land use and potentially preclude other more desirable development such as visitor-serving commercial uses, hotels, and public amenities and/or services for local resident enjoyment; and 6. No other public benefit amenities were offered by NRG. Considering the scale of the CECP, not only in terms of its size and height but also its long term potential environmental impacts and potentially negative influence on adjacent land uses, the threshold for what constitutes an extraordinary public benefit is understandably very high. NRG would need to demonstrate extraordinary public purpose in a manner acceptable to the City and Redevelopment Agency for the CECP to be considered a potential land use in the Redevelopment area. Summary of City Position and Recommendation As indicated in this correspondence, the CECP does not conform to applicable land use regulations and is not supported by the City and Redevelopment Agency. As outlined above, the City and Redevelopment Agency staff do not believe that the proposed project is in compliance and/or consistent with any of the applicable planning documents. Until a comprehensive update of SP 144 is completed, which shall include a visioning process to determine appropriate and acceptable land uses, it is not possible to identify the best land use for the CECP site. The CECP's surroundings and location, combined with the fact that a coastal location is no longer mandatory for power generation, clearly reveal that the CECP site and the existing Encina Power Station are better suited for land uses other than large scale utility and industrial. For these reasons, the proposed CECP is not consistent with the City and Redevelopment Agency's desired Vision for the property. Furthermore, the City believes there are more appropriate locations in Carlsbad and perhaps elsewhere for the CECP and has offered to actively assist NRG in pursuing alternate sites. Therefore, Carlsbad does not support the CECP. As stated in the Public Resources Code 25525: The [California Energy Commission] may not certify a facility contained in the application when it finds, pursuant to subdivision (d) of Section 25523, that the facility does not conform with any applicable state, local, or regional standards, ordinances, or laws, unless the commission determines that the facility is required for public convenience and necessity and that there are not more prudent and feasible means of achieving public convenience and necessity. In making the determination, the commission shall consider the entire record of the proceeding, including, but not limited to, the impacts of the facility on the environment, consumer benefits, and electric system reliability, Therefore, the City/Agency does not believe the CECP can be approved unless the CEC can make the "public convenience and necessity..." determination. If, however, the California Energy Commission (CEC) chooses to move forward with its approval of the subject project Ift Carlsbad Energy Center Project (07-AFC-6) - Land Use Information May 1,2008 Page 17 regardless of the project's land use compliance/consistency status and over the objections of the City, staff respectfully requests sufficient opportunity to complete additional analysis and provide more information to the CEC before it makes a final decision on findings and conditions. The City of Carlsbad recognizes that the land use regulations and their application for the proposed CECP site are extremely convoluted. If you have any questions, please contact me at (760) 434-2893 or jgaru@ci.carlsbad.ca.us. Sincerely, JOE GARUBA Municipal Projects Manager Attachments: 1. Chronology - Encina Power Station and Specific Plan 144 2. Map showing boundaries of redevelopment area, specific plan, coastal zone, and Agua Hedionda land use plan. 3. City Council Resolution 98-145 4. July 24,1989, letter to SDG&E from Carlsbad Planning Director 5. July 16,2007, letter to SDG&E from Carlsbad City Manager See Proof of Service (Rev. 03/19/2008; electronic copy only) Carlsbad City Manager Carlsbad Community Development Director Carlsbad Planning Director BEFORE THE ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION OF THE STATE OF CALIFORNIA APPLICATION FOR CERTIFICATION FOR THE CARLSBAD ENERGYCENTER PROJECT Docket No. 07-AFC-6 PROOF OF SERVICE (Revised 3/19/2008) INSTRUCTIONS: All parties shall 1} send an original signed document plus 12 copies OR 2) mail one original signed copy AND e-mail the document to the web address below, AND 3} all parties shall also send a printed OR electronic copy of the documents that shall include a proof of service declaration to each of the individuals on the proof of service: CALIFORNIA ENERGY COMMISSION Attn: Docket No, 07-AFC-6 1516 Ninth Street, MS-14 Sacramento, CA 95814-5512 docket@energy.state.ca.us APPLICANT David Lloyd Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 David.Llovd@nrgenerqy.com Tim Hemig, Vice President Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 Tim.HemiQ@nrgenergv.com APPLICANT'S CONSULTANTS Robert Mason, Project Manager CH2M Hill, Inc. 3 Hutton Centre Drive, Ste. 200 Santa Ana, CA 92707 robert.Mason@ch2m.com Megan Sebra CH2M Hill, Inc. 2485 Natomas Park Drive, Ste. 600 Sacramento, CA 95833 Meqan.Sebra@ch2m.com COUNSEL FOR APPLICANT John A. McKinsey Stoel Rives LLP 980 Ninth Street, Ste. 1900 Sacramento, CA 95814 jamckinsev@stoel.com INTERESTED AGENCIES Larry Tobias Ca. Independent System Operator 151 Blue Ravine Road Folsom, CA 95630 LTobias@caiso.com Electricity Oversight Board 770 L Street, Suite 1250 Sacramento, CA 95814 esaltmarsh@eob.ca.gov City of Carlsbad Joseph Garuba, Municipals Project Manager Manager Ron Ball, Esq., City Attorney 1200 Carlsbad Village Drive Carlsbad, CA 92008 jgaru@ci.carlsbad.ca.us rball@ci.carisbad.ca. us 2.0 I Allan J Thompson Mike Monasmith Attorney for the City Siting Project Manager 21 "C" Orinda Way #314 mmonasrnj@energy,state.ca.us Orinda, CA 94563 Dick Ratliff INTERVENORS Staff Counsel dratliff@energy.state.ca.us California Unions for Reliable Energy ("CURE") Suma Peesapati Public Advisor's Office Marc D. Joseph pao@enerav.state,ca,us Adams Broadwell Joseph & Cardozo 601 Gateway Boulevard, Suite 1000 South San Francisco, CA 94080 speesapati@adamsbroadwell.com ENERGY COMMISSION JAMES D. BOYD Commissioner and Presiding Member jboyd@energy.state.ca.us KAREN DOUGLAS Commissioner and Associate Member kldouqla@energy.state.ca.us Paul Kramer Hearing Officer pkramer@energy.state.ca.us DECLARATION OF SERVICE declare that on 5-f-oS . I deposited copies of the attached , in the United States mail at fa^L^ fi>S+ OH'UL with first-class postage thereon fully prepaid and addressed to those identified on the Proof of Service list above, OR Transmission via electronic mail was consistent with the requirements of California Code of Regulations, title 20, sections 1209, 1209.5, and 1210. All electronic copies were sent to all those identified on the Proof of Service list above. I declare under penalty of perjury that the foregoing is true and correct. n \ ATTACHMENT 1 City of Carlsbad Chronology of Encina Power Plant Site and Specific Plan 144 1952 San Diego Gas and Electric Company (SDG&E) constructed the Encina Power Plant (EPS). 1971 The Public Utility (PU) Zone was established and applied to the EPS and surrounding properties owned by SDG&E. Augusts, 1971 Specific Plan 144 was adopted in City of Carlsbad Ordinance 9279. The purpose of the Specific Plan was to provide rules and regulations for the orderly development of 680 acres of land located East of the Pacific Ocean and South of the North Shore of the Agua Hedionda Lagoon, and North of what is now Cannon Road, and provide design and development guidelines for the expansion of the power plant, then owned by San Diego Gas & Electric Company. December 4,1973 The Carlsbad City Council passed Amendment A to Specific Plan 144 in Ordinance 9372 to allow for the construction of a 400-foot stack and removal of the four existing stacks at the EPS. This amendment became null and void one year later. The amended Specific Plan required notice and public hearings for any subsequent changes to the Plan. 1974 General Plan designation establishing a Public Utilities (U) land use classification was created and subsequently applied to the EPS. 1975 PU Zone was updated to require a Precise Development Plan (POP) rather than a Specific Plan for public utility uses. May 4,1976 Specific Plan 144 was amended again (Amendment B) by the City Council's passage of Ordinance 9456 to permit the construction of a single 400-foot stack at the Encina Power Station to replace the four existing stacks. Amendment B to Specific Plan 144 added condition 14, which created design, development, and other requirements for the constructions of the 400-foot stack, the removal of the existing stacks, and operation of the power station. Amendment B also provided an exemption to the 400-foot stack and duct work and screening to the 35-foot height limit established by Condition Number 5 of Ordinance 9279. May 3,1977 Amendment C of Specific Plan 144 was adopted by City Council Ordinance 9481 to allow for the construction of water treatment facilities and a maintenance building at the EPS. 1978 through 1993 Three additional amendments to Specific Plan 144 were applied for and withdrawn by SDG&E for changes to the EPS. Amendment D was proposed to allow connection of unit 5 to the stack, but it was determined that the connection was already allowed and so the amendment was not necessary. Amendment E proposed various improvements to the facility, and Amendment F proposed the addition of a green waste facility. Amendments D, E and F were ad withdrawn and were not incorporated into the Specific Plan 144. 1982 Agua Hedionda Local Coastal Plan (LCP) was adopted which includes the properties owned by SDG&E including the Encina Power Plant site. The City applied to the Coastal Commission to obtain effective certification for the Agua Hedionda LCP but was requested by SDG&E to withdraw the application. The City agreed to this request based upon a commitment by SDG&E that it would update its Specific Plan and bring the Power Plant site into conformance with the Site Development Plan ("Plan") requirements contained in Chapter 21.36 of the Carlsbad Municipal Code. SDG&E subsequently failed to honor this commitment. July 24,1989 City of Carlsbad letter to SDG&E reaffirming that any modifications, changes, amendments or additions to its plant would require a complete major amendment to the specific plan processed in accordance with Chapter 21.36 of the Carlsbad Municipal Code. Letter also requires that as part of the major amendment, the cumulative impact of all previous changes at the EPS site would be considered and an analysis would be made as to whether any conditions are necessary to address those cumulative impacts. January 16,1996 Carlsbad City Council adopted Ordinance NS-345 amending Specific Plan 144 (Amendment G) to remove 24.2 acres of land from the Specific Plan area. The map of the Specific Plan area was revised to reflect the removal of the acreage. May 12,1998 SDG&E letter to Carlsbad City Council acknowledging long-standing differences on the EPS. SDG&E requests that the City not adopt any policy or practice that would impact or delay the probable sale of the EPS. May 12,1998 Carlsbad City Council adopted Council Resolution of Intention No. 98-145. This resolution declared Council's intention to study the EPS and consider amendments to the General Plan, Zoning Designations and the EPS (up to and including area within the SP 144 boundary). This resolution which called for the City to undertake its own SP 144 update was due in large measure to the historically non-cooperative nature of the plant owner. 1999 SDG&E sold a significant portion of its holdings within Specific Plan 144 to Cabrillo Power I LLC. Property sold included the Encina Power Station and outer, middle, and inner basins of the Agua Hedionda Lagoon. SDG&E retained ownership of land east of Interstate 5 and along the lagoon's south and east shore, the SDG&E construction and operations center located south of the power station, and property along the lagoon's north shore west of Interstate 5. July 18, 2000 South Carlsbad Coastal Redevelopment Plan adopted. Spring/Summer, 2001 City of Carlsbad and Cabrillo Power attempt to draft Memorandum of Understanding (MOU). The purpose of this MOD was to rectify long-standing land use issues related to the EPS and to address future re-use possibilities of the EPS site. August, 2003 Carlsbad City Council adopts Resolution No. 2003-208 which allowed the proposed Carlsbad desalination plant to be processed without requiring a comprehensive update of the entire Specific Plan 144. June 20, 2006 Specific Plan 144 Amended. July 16, 2007 Carlsbad City Manager sends letter to Sempra Energy Utilities. This letter requires SDG&E to comprehensive SP144 update in order for the City to consider proposed modifications to SDG&E's Operations Center (located at the southwest corner of the EPS site). ATTACHMENT 2 Precise Development Plan & Desalination Plant Project Land Use Plan Relationships .March 12, 2008 v Legend Precise Development Plan Specific Plan 144 Boundary Agua Hedionda Land Use Plan/ Deferred Certification South Carlsbad Coastal Redevelopment Area Coastal Zone Desalination Plant .OMAR AIRPORT RD Feet 900 1,800 ATTACHMENT 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CITY COUNCIL RESOLUTION OF INTENTION NO. 98-145 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, DECLARING ITS INTENTION TO STUDY AND CONSIDER AMENDMENTS TO THE GENERAL PLAN, ZONING DESIGNATIONS AND THE ZONING ORDINANCES PERTAINING TO THE ENCINA POWER PLANT AND SURROUNDING PROPERTIES PRESENTLY UNDER THE OWNERSHIP OF THE SAN DIEGO GAS AND ELECTRIC COMPANY ___„ WHEREAS, the San Diego Gas and Electric Company (SDG&E) initially constructed the Encina Power Plant in approximately 1952; and WHEREAS, the Public Utility (PU) Zone was established in 1971 and applied to the Encina Power Plant and surrounding properties owned by SDG&E; and WHEREAS, in conformance with the PU Zone, a Specific Plan was adopted for the 680 acre SDG&E ownership including the Power Plant site; and WHEREAS, the General Plan designation establishing a Public Utilities (U) land use classification was created in 1974 and subsequently applied to the Encina Power Plant; and WHEREAS, in 1973 the City Council approved an amendment to the Specific Pian to permit enlargement of the Power Plant including the construction of a 400 foot high stack as a means of dispersing Power Plant air emissions and reducing adverse impacts on surrounding residential neighborhoods; and WHEREAS, the amended Specific Plan required notice and public hearings for any subsequent changes to the Plan; and WHEREAS, there have been a number of changes made at the Power Plant without notice and hearings including a fuel tank installation in 1975, a two-story 50'x16' control room in 1977, the relocation of a maintenance building, expansion of a 26 1 switching substation and driveway in 1980, the expansion of a distribution substation in 2 1982, the addition of a 6,168 square foot administration building in 1984, the 2 remodeling of the electric shop in 1985, addition of a storeroom and repair facility in 4 1986, the construction of a 24' x 40' pipe storage shed in 1986, the construction of a 5 30' x 30' metal paint shop in 1986, the addition of numerous microwave dishes and6 7 radio antenna attached to the stack, and the addition of temporary office trailers; and 8 WHEREAS, SDG&E was informed that any future modifications, changes, 9 amendments or additions to its plant would require a complete major amendment to the 10 specific plan processed in accordance with Chapter 21.36 of the Carlsbad Municipal Code, and at that time, the cumulative impact of ail previous changes would be 12 considered and an analysis would be made as to whether any conditions are necessary 13 to address those cumulative impacts; and14 15 WHEREAS, in 1975, the PU Zone was updated to require a Precise 16 Development Plan (POP) rather that a Specific Plan for public utility uses; and 17 WHEREAS, SDG&E has been informed that a Precise Development Plan 18 is needed for the Power Plant site; and 19 WHEREAS, the Agua Hedionda Local Coastal Plan (LCP) was adopted in 20 1982 which includes the properties owned by SDG&E including the Encina Power Plant21 22 site; and 23 WHEREAS, the LCP contains numerous regulations and restrictions 24 which impact the SDG&E properties and the Power Plant including public access, land use, recreation, agriculture, aquaculture, visual impacts and uses of the lagoon; and 26 27 28 ^-2- ' 1 WHEREAS, the existing Specific Plan for the SDG&E properties does not 2 address the regulations and restrictions of the LCP; and WHEREAS, the City applied to the Coastal Commission to obtain effective 4 certification for the Agua Hedionda LCP but was requested by SDG&E to withdraw the 5 application which the city subsequently did based upon a commitment by SDG&E that it6 - would update its Specific Plan and bring the Power Plant site into conformance with the 8 Site Development Plan ("Plan") requirements contained in Chapter 21. 36 of the 9 Carlsbad Municipal Code; and 10 WHEREAS, SDG&E did not follow through on its commitment regarding 11 the LCP; and 12 WHEREAS, the Zoning designations on the SDG&E properties are not in 13 strict conformance with the General Plan designations on the properties in that portions 15 of the properties are zoned Public Utility (PU) but are designated on the General Plan 16 for Open Space (OS) or Travel/Recreational Commercial (TR) use; and 17 WHEREAS, because of the aforementioned occurrences and unresolved 18 issues, the city has requested of SDG&E on numerous occasions that it prepare a 19 comprehensive, updated Plan for the existing and future use and development of its 20 property; and 22 WHEREAS, despite numerous verbal agreements to do an updated Plan, 23 SDG&E has not come forward with a formal proposal, work program or timeline for 24 initiating a process to update its Plan and address outstanding concerns and issues; 25 and 26 27 28 ^ -3- 1 WHEREAS, SDG&E has now informed the city that it is mandated by the 2 courts to divest itself from its electric generating operations and facilities and has 3 applied to the California Public Utilities Commission for permission to sell the Encina 4 Power Plant to a private operator without addressing or agreeing to address the 5 aforementioned issues regarding outdated plans, land use inconsistencies, coastal 6 - concerns and unfulfilled commitments; and 8 WHEREAS, the sale of the Power Plant site to a private operator raises 9 additional issues and public concerns including future restrictions on public access to 10 the Agua Hedionda Lagoon, future dredging of the lagoon, restrictions on the use of the site to only industrial or power generation notwithstanding consideration of the public 12 health, safety or general welfare, the disposition of Cannon Park, proposed future 13 changes of land use, the continuation of aquaculture and research at the lagoon, beach 15 area improvements, environmental clean-up and mitigation related to oil and fuel 16 storage and usage; and 17 WHEREAS, the city believes that it is necessary in order to protect the 18 interests of its citizens for the city staff to initiate a process to address the 19 aforementioned issues and concerns and to study and consider a comprehensive, 20 updated plan for the SDG&E properties including the Encina Power Plant site; and 22 WHEREAS, the city believes that it is necessary for this process to 23 include consideration of amendments to the existing Zoning and General Plan 24 designations of the SDG&E properties; and 25 WHEREAS, these considerations should include whether the continued 26 use of a portion of the property for a Power Plant is in the best interest of the citizens of 27 28 i ^0\ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Carlsbad and is the best, long-term use of the property given its superior coastal location and its proximity to other existing, surrounding uses that can be adversely impacted by Power Plant use; and WHEREAS, since SDG&E intends to sell the Encina Power Plant to a private operator, Section 21.48.100 of the Carlsbad Municipal Code which exempts Public Utilities from certain non-conforming use provisions of the Zoning Ordinance may no longer be appropriate or necessary and this code section should be considered for amendment or repeal. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 2. That pursuant to Section 21.52.020 of the Carlsbad Municipal Code and Section 65358 of the State Government Code, the City Council of the City of Carlsbad declares its intention to consider amendments to the General Plan and the Zoning Ordinance as it pertains to the Encina Power Plant and the surrounding properties now under the ownership of the San Diego Gas and Electric Company (SDG&E) as shown on the attached location map and labeled Exhibit "A". 3. City staff is hereby directed to study this matter, prepare recommendations and to set public hearings before the Planning Commission and City Council to determine whether the present General Plan and Zoning designations for the SDG&E property including the Power Plant site should be amended. 4. Part of the study may include preparing alternative land uses and a "conceptual Master Plan" for the properties including the Encina Power Plant site and, at this time, staff is authorized to solicit Requests for Qualifications (RFQs) from consulting firms that are interested in contracting with the city to assist staff in preparing said alternative uses for the Power Plant site. -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. Staff is also directed to consider the repeal or amendments to Section 21.48.100, as appropriate, of the Carlsbad Municipal Code regarding Public Utility exemptions from the non-conforming use provisions of the Zoning Ordinance. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12th day of May j <] gggt by the following vote, to wit: AYES: Council Members Lewis, Finnila, Nygaard NOES: None ABSENT: CounciXXember Hall CLAU ATTEST: ALETHA L RAUTENKRANZ, City Clerk / -6-yCr ATTACHMENT 4 City of Carlsbad Office of the City Manager July 16, 2007 David S. Siino, Manager/Facilities Sempra Energy Utilities 8335 Century Park Court San Diego CA 92123 N Re: San Diego Gas & Electric ("SDG&E") North Coast Operations Center Dear Mr. Siino: Thank you for your letter of June 6, 2007 and your prior meeting with me and members of my staff to discuss processing your proposed North Coast Operations Center improvements at its 16 acre operations center located behind Cannon Park on the-northeast corner of Cannon Road and Carlsbad Blvd. After consideration of your request and advice from our City Attorney, I have concluded that the best way to process changes to your operations center is to amend the Specific Plan and then proceed with the filing of a Precise Development Plan ("PDF"). As you have pointed out, the City Council determined to process a PDP for the proposed desalination plant without a comprehensive update to the Specific Plan. That determination by the City Council was based, in part, on the special benefits the City would receive over and above the normal benefits associated with processing and conditioning a proposed development Indeed, the City Council and Poseidon Resources, with the consent of Cabrillo Power, entered into a development agreement pursuant to Chapter 21.70 of the Carlsbad Municipal Code. That chapter required and the City Council found that that project would result in the provision of economic, environmental, recreational, cultural and social benefits which would not be obtainable without approval of the agreement. You have not indicated any extraordinary benefits and no where I have been shown any. It has been the piecemeal approach to improvements made by your client over the years that culminated in the adoption of City Council Resolution 98-145. At the time the City Council considered this resolution, the former President of your company acknowledged the need for a resolution to the long-standing jurisdictional dispute. (Letter from Edwin Guiles May 12,1998) In 2002 when the City Council was deciding whether or not to allow alternative processing for the proposed desalination facility, your Regional Public Affairs Manager recognized the need to address the long-term uses for other property within the Specific Plan. (Letter from Frank Urtasun, Regional Public Affair's Manager dated June 11, 2002) Ultimately, the City Council determined to permit an amendment of Specific Plan 144 for the proposed Carlsbad Desalination Facility, but did not repeal or otherwise change its position as stated in City Council Resolution 98-145 that a comprehensive amendment to the Specific Plan is necessary to determine the future 1200 Carlsbad Village-Drive • Carlsbad, CA 92008-1989 • (760) 434-2821 • FAX (760) 720-9461 vision for all properties located within the Specific Plan. If this issue is not addressed now, at what point in the future would trigger that review? The planning staff is prepared to process your application for a Specific Plan amendment and a Precise Development Plan as soon as you apply. If you still wish to apply for relief from this requirement, please contact Senior Planner, Scott Donnell to coordinate the processing of that request. Should you have any questions regarding the above, please do not hesitate to contact me. Very truly yours, RAYMOND PATCHETT City Manager c: City Attorney Community Development Director Planning Director Senior Planner, Scott DonneU ATTACHMENT 5 City of Carlsbad July 24, BT- »•fe-rn m S. San Diego Gas S Electric P.O Box 1831San Diego, California 92112 Attention: Dave Siino RE: AHEKDHBNT TO SPECIFIC PIAH H4/BHC1KX POWER Dear Kr. Siino: At the Planning Commission meeting of July 19, 1989, the Commission approved your request for a minor amendment to Specific Plan No. 144 to install six wastevater tanks. As was discussed at the meeting, this is to inform-you that any future request forimprovement to the Encinn Fewer Plant will require a complete maj or amendment to the Specific Plan processed in accordance with Chapter21.36 of the Carlsbad Municipal Code. At that time, the cumulative impact of all. previous minor amendments will be considered and an analysis will be aada as to whether any conditions are necessary to address the cumulative impacts. , Please feel free to contact me if you have any questions concerning this natter. Sincerely, CITY OF CARLSBAD , \ HICHAEIi J. HOLZHILtER Planning Director arb cc:Planning Comaission City AttorneySP-144- File 2075 LM* Patmaa Drtva • Carlsbad. California 920O8-48SB • (619)438-1161 EXHIBIT 2 1 RESOLUTION NO. 2008-235 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, WHICH OPPOSES THE 3 PROPOSED CARLSBAD ENERGY CENTER PROJECT 4 (CECP) AND PRECLUDES ALL NON-COASTAL DEPENDENT INDUSTRIAL APPLICATIONS, INCLUDING 5 ENERGY GENERATION FROM ANY FUTURE LAND USE AT THE ENCINA POWER STATION SITE. 6 7 WHEREAS, NRG Energy, Inc., has submitted an Application for Certification 8 (AFC) for the Carlsbad Energy Center Project (CECP) to the California Energy 9 Commission (CEC); and 10 WHEREAS, the CEC has jurisdiction in approving new power plants; and 11 WHEREAS, the City of Carlsbad recognizes the need to develop energy 12 resources that meet the growing demands of our region; and WHEREAS, as home to the existing Encina Power Station (EPS) since the 15 1950s and numerous other regional facilities, Carlsbad understands a community's 16 responsibility in hosting regional resources and the impacts associated with such; and 17 WHEREAS, due to recent advances in technology, a state-of-the-art power plant 18 is not a coastal dependent land use; and 19 WHEREAS, the proposed CECP would constitute a non-coastal dependent 20 industrial land use at the EPS site for an estimated additional 40 years; and 21 WHEREAS, the proposed CECP will negatively impact the future redevelopment 22 of the EPS site (defined as those parcels owned by NRG and San Diego Gas and £* -J Electric which are located west of Interstate 5, North of Cannon Road, South of Agua 25 Hedionda Lagoon, and East of Carlsbad Blvd); and 26 WHEREAS, the City of Carlsbad has reviewed the AFC and found it to be 27 inconsistent and detrimental to the best interests of the community; and 28 3 1 WHEREAS, the proposed CECP contains several objectionable concerns, 2 including land use compatibility; and 3 WHEREAS, the City of Carlsbad has required for over twenty-five years that a 4 comprehensive land use plan be conducted for Specific Plan 144 (which includes the 5 Encina Power Station site) to clearly identify acceptable future land uses and guide site 6 redevelopment; and 7 WHEREAS, any proposed non-coastal dependent industrial land use (including8 9 energy generation) should be located away from the Encina Power Station site to avoid 10 impacting significant coastal resources; and 11 WHEREAS, the proposed CECP has failed to demonstrate any extraordinary 12 public benefit as required by the South Carlsbad Coastal Redevelopment Plan. 13 14 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 16 1. That the above recitations are true and correct. 17 lg 2. Reaffirms its opposition to the proposed Carlsbad Energy Center Project, 19 as stated in Council Resolution No. 2008-138. 20 3. Supports the re-use of the existing Encina Power Station site to provide 21 greater public benefit. 22 4. Reaffirms its longstanding requirement for a comprehensive plan which 23 will guide the redevelopment of the Encina Power Station site. 24 5. Any non-coastal dependent industrial land use (including power generation) at the Encina Power Station site is inconsistent with the best 27 interests of the community and should be precluded. 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. City Staff is hereby directed to continue to work with NRG and San Diego Gas and Electric to help identify alternate solutions to regional energy demands. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12fo day of August 2008, by the following vote to wit: AYES: Council .Members Lewis, Kulcbin, Hall and Packard. NOES: None. ABSENT: Council Member Nygaard. ^UDE A. LEWIS, Mayor ATTEST: ORRXlNE M. WbdD, City Clerk U ^ EXHIBIT 3 City of Carlsbad Office of the City Manager DOCKET Q7-AFC-6 DATE 8 2 2008 August 22, 2008 Mike Monasmith Siting Project Manager California Energy Commission 1516 Ninth Street, MS-IS Sacramento, CA 95814 RE: CARLSBAD ENERGY CENTER PROJECT (07-AFC-6) PROJECT INCONSISTENCY WITH CITY OF CARLSBAD LAND USE ORDINANCES AND POLICIES Dear Mr. Monasmith: On June 3, 2008, a letter was forwarded to your office by John McKinsey, attorney for the Carlsbad Energy Center LLC. The correspondence provided a rebuttal on the conclusions and interpretations of the City of Carlsbad's land use ordinances and policies related to the property upon which the Carlsbad Energy Center Project (CECP) is proposed, and offers Mr. McKinsey's opinion that the proposed Carlsbad Energy Center is consistent with these policies. It will come as no surprise that the City disagrees with many of Mr. McKinsey's conclusions and reiterates its fmding(s) that the proposed project is not consistent with several of the applicable land use ordinances and long-standing policies of the City, and again states that the proposed project is inconsistent with the desired development for the subject property. The City Council approved at its August 12, 2008 meeting, a resolution reconfirming its opposition to the construction of the proposed CECP (see attached Resolution 2008-235). The resolution reaffirms the City's position that the future development of non-coastal dependent industrial uses is not and will not be supported. It is anticipated that there will be a zone change in the near future that will formalize this land use position. While the City acknowledges the need for hew in-basin energy generation and is supportive of serving as host to this type of facility, it no longer believes that the site selected for the subject project is the best and/or most appropriate. The City has provided information to the developer on alternate sites which are feasible and much more appropriate for this type of industrial land use. The City has also offered several times to work cooperatively with the developer of the Carlsbad Energy Center to build an energy-generating facility at an alternate site. This clearly demonstrates the City's sincere desire to accommodate a power plant within its jurisdictional boundaries. It also demonstrates the City's sincere desire to provide for development on the subject coastal property that offers much greater direct public benefit to the Carlsbad community and provides for a more appropriate land use. The City has been very consistent in its policy message that it is not opposed to the construction of a new power plant within Carlsbad. It is 1200 Carlsbad Village Drive « Carlsbad. CA 92008-1989 • (760) 434-2821 • FAX (760) 720-9461 August 22,2008 Mike Monasmith, Siting Project Manager Page Two simply opposed to construction of the new power plant on the coastal property identified within the application. Based on recent studies, the City believes the proposed site is seriously constrained and will ultimately result in a project which presents too many negative impacts for the Carlsbad community, including a negative visual impact and potential safety hazards from a power plant being located too close to Interstate 5 after its widening. In addition, the project no longer represents a coastal dependent land use. Therefore, it does not need to be constructed on key coastal property within Carlsbad. For all of these reasons, the City remains opposed to the proposed application. However, it will continue to work cooperatively with the applicant to site a power plant at an alternate (non-coastal) site, if the applicant desires to do so. If you have any questions regarding this correspondence and/or the City's review of the subject application, please contact my office at (760) 434-2820 or jgaru@ci.carlsbad.ca.us. Sincerely, Joe Garuba Municipal Projects Manager JG:ad Attachment cc: See Proof of Service (Rev. 7/31/2008; electronic service only) John A. McKinsey, Stoel Rives, LLC Lisa Hildabrand, City Manager Ron Ball, City Attorney Jim Elliott, Deputy City Manager Sandra Holder, Community Development Director Glenn Pruim, Public Works Director Debbie Fountain, Housing and Redevelopment Director Scott Donnell, Senior Planner 1 RESOLUTION NO. 2008-235 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, WHICH OPPOSES THE 3 PROPOSED CARLSBAD ENERGY CENTER PROJECT A (CECP) AND PRECLUDES ALL NON-COASTAL DEPENDENT INDUSTRIAL APPLICATIONS, INCLUDING 5 ENERGY GENERATION FROM ANY FUTURE LAND USE AT THE ENCINA POWER STATION SITE. 6 7 WHEREAS, NRG Energy, Inc., has submitted an Application for Certification 8 (AFC) for the Carlsbad Energy Center Project (CECP) to the California Energy 9 Commission-(CEC); and 10 WHEREAS, the CEC has jurisdiction in approving new power plants; and 11 WHEREAS, the City of Carlsbad recognizes the need to develop energy12 resources that meet the growing demands of our region; and 14 WHEREAS, as home to the existing Encina Power Station (EPS) since the 15 1950s and numerous other regional facilities, Carlsbad understands a community's 16 responsibility in hosting regional resources and the impacts associated with such; and 17 WHEREAS, due to recent advances in technology, a state-of-the-art power plant 18 is not a coastal dependent land use; and 19 WHEREAS, the proposed CECP would constitute a non-coastal dependent 20 industrial land use at the EPS site for an estimated additional 40 years; and 21 WHEREAS, the proposed CECP will negatively impact the future redevelopment 22 of the EPS site (defined as those parcels owned by NRG and San Diego Gas and 24 Electric which are located west of Interstate 5, North of Cannon Road, South of Agua 25 Hedionda Lagoon, and East of Carlsbad Blvd); and 26 WHEREAS, the City of Carlsbad has reviewed the AFC and found it to be 27 inconsistent and detrimental to the best interests of the community; and 28 1 WHEREAS, the proposed CECP contains several objectionable concerns, 2 including land use compatibility; and 3 WHEREAS, the City of Carlsbad has required for over twenty-five years that a comprehensive land use plan be conducted for Specific Plan 144 (which includes the Encina Power Station site) to clearly identify acceptable future land uses and guide site 6 redevelopment; and 7 WHEREAS, any proposed non-coastal dependent industrial land use (including8 g energy generation) should be located away from the Encina Power Station site to avoid 10 impacting significant coastal resources; and 11 WHEREAS, the proposed CECP has failed to demonstrate any extraordinary 12 public benefit as required by the South Carlsbad Coastal Redevelopment Plan. 13 14 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 16 1. That the above recitations are true and correct. 17 lg 2. Reaffirms its opposition to the proposed Carlsbad Energy Center Project, 19 as stated In Council Resolution No. 2008-138. 20 3. Supports the re-use of the existing Encina Power Station site to provide 21 greater public benefit. 22 4. Reaffirms its longstanding requirement for a comprehensive plan which 23 will guide the redevelopment of the Encina Power Station site. 24 5. Any non-coastal dependent industrial land use (including power 26 . generation) at the Encina Power Station site is inconsistent with the best 27 interests of the community and should be precluded. 28 •f 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. City Staff is hereby directed to continue to work with NRG and San Diego Gas* and Electric to help identify alternate solutions to regional energy demands. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the Wh day of August f 2008, by the following vote to wit: AYES: Council Jfecnbers Lewis, Kulcbin, Hall and Packard. NOES: None. ABSENT: Council Mamber Nygaard. VUDE A. LEWIS, Mayor ATTEST: ORRAlNE M. W/OdD, City Clerk U BEFORE THE ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION OF THE STATE OF CALIFORNIA ' 1516 NINTH STREET, SACRAMENTO, CA 95814 1-800-822-6228 -WWW.ENERGY.CA.GOV APPLICATION FOR CERTIFICATION FOR THE CARLSBAD ENERGY CENTER PROJECT Docket No. 07-AFC-6 PROOF OF SERVICE (Revised 7/31/2008) INSTRUCTIONS: All parties shall 1) send an original signed document plus 12 copies OR 2) mail one original signed copy AND e-mail the document to the web address below, AND 3) all parties shall also send a printed OR electronic copy of the documents that shall include a proof of service declaration to each of the individuals on the proof of service: CALIFORNIA ENERGY COMMISSION Attn: Docket No. 07-AFC-6 1516 Ninth Street. MS-15 Sacramento, CA 95814-5512 docket@enerQV.state.ca.us APPLICANT David Lloyd Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 David.Liovd@nraenerov.com Tim Hemig, Vice President Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 Tim.Hemia@nrQenergy.com APPLICANT'S CONSULTANTS Robert Mason, Project Manager CH2M Hill, Inc. 3 Mutton Centre Drive, Ste. 200 Santa Ana, CA 92707 robert.Mason@ch2m.com Megan Sebra CH2M Hill, inc. 2485 Natomas Park Drive, Ste,.600 Sacramento, CA 95833 Megan.Sebra@ch2m.com COUNSEL FOR APPLICANT John A. McKinsey Stoe! Rives LLP 980 Ninth Street, Ste. 1900 Sacramento, CA 95814 iamckinsey@stoel.com INTERESTED AGENCIES •California ISO P.O. Box 639014 Folsom, CA 95763-9014 e-recipient@caiso.com City of Carlsbad Joseph Garuba, Municipals Project Manager Manager Ron Ball, Esq., City Attorney 1200 Carlsbad Village Drive Carlsbad, CA 92008 |garu@ci.carlsbad,ca,us rball@ci.carlsbad.ca.us Allan J Thompson Attorney for the City 2rC'OrindaWay#314 Orinda, CA 94563 H3 INTERVENORS California Unions for Reliable'Energy ('CURE') Mike Monasmith Suma Peesapati . Siting Project Manager Marc D. Joseph rnmonasmi@enerav.state.ca.us Adams Broadwell Joseph & Cardozo 601 Gateway Boulevard, Suite 1000 Dick Ratliff South San Francisco, CA 94080 Staff Counsel soeesaDatkajadamsbroadwell.com dra(liff(5)enerav.s(ate.ca.us Public Advisor's Office , ENERGY COMMISSION pao@enerav.state.ca.us JAMES D. BOYD Commissioner and Presiding Member jboyd@energv.state.ca.us KAREN DOUGLAS Commissioner and Associate Member kldouQla@enerQv.state.ca.us Paul Kramer Hearing Officer pkramer@energy.state.ca.us DECLARATION OF SERVICE I, P*Ax«A.'b\j\Le.S . declare that on 8/3a./o8 | deposited copies of the attached g SItMtjr -firotn Jtg SOT ubal in the United States mail at OOLrLSba^Cxft with first-class postage thereon fully prepaid and addressed to those identified on the Proof of Service list above. OR Transmission via electronic mail was consistent with the requirements of California Code of Regulations, title 20, sections 1209,1209.5, and 1210. All electronic copies were sent to all those identified on the Proof of Service list above. I declare under penalty of perjury that the foregoing is true and correct. EXHIBIT 4 1 JOINT RESOLUTIONS NO. 2009-020 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD AND THE HOUSING & REDEVELOPMENT 3 COMMISSION OF THE CITY OF CARLSBAD, 4 CALIFORNIA, FINDING THAT THE PROPOSED CARLSBAD ENERGY CENTER PROJECT DOES NOT 5 COMPLY WITH ALL APPLICABLE LAND USE LAWS, REGULATIONS, ORDINANCES, AND STANDARDS 6 7 WHEREAS, NRG Energy, Inc. has submitted an Application for Certification 8 (AFC) for the Carlsbad Energy Center Project (CECP) to the California Energy 9 Commission (CEC); and 10 WHEREAS, the CEC has jurisdiction in approving new power plants over 49 11 mega watts; and 12 WHEREAS, the City of Carlsbad recognizes the need to develop energy resources that meet the growing demands of our region; and 15 WHEREAS, as home to the existing Encina Power Station (EPS) since the 1950s 16 and the numerous other regional facilities, Carlsbad understands a community's 17 responsibility in hosting regional resources and the impacts associated with such; and 18 WHEREAS, due to recent advances in technology, a state-of-the-art power plant 19 is not coastal dependent land use; and 20 WHEREAS, the proposed CECP would constitute a non-coastal dependent 21 industrial land use at the EPS site for an estimated additional 40 years; and 22 WHEREAS, the proposed CECP will negatively impact the future redevelopment 23 of the EPS site (defined as those parcels owned by NRG and San Diego Gas and 25 Electric which are located west of Interstate 5, North of Cannon Road, South of Agua 26 Hedionda Lagoon, and East of Carlsbad); and 27 28 lie: 1 WHEREAS, the City Council has reviewed the AFC and found it to be 2 inconsistent and detrimental to the best interests of the community; and 3 WHEREAS, the proposed CECP contains severe and possibly unavoidable 4 environmental impacts; and 5 WHEREAS, the City of Carlsbad has required for over twenty-five years that a 6 comprehensive land use plan be conducted for Specific Plan 144 (which includes the 7 Encina Power Station site) to clearly identify acceptable future land uses and guide site8 9 Redevelopment, which results in land use incompatibility without the desired update; 10 and 11 WHEREAS, any proposed non-coastal dependent industrial land use (including 12 energy generation) should be located away from the Encina Power Station site to avoid 13 impacting significant coastal resources; and 14 WHEREAS, the proposed CECP has failed to demonstrate any extraordinary 15 public benefit as required by the South Carlsbad Coastal Redevelopment Plan; 16 WHEREAS, the City of Carlsbad has provided on numerous occasions the City's 17 perspective of the applicable land use regulations in relation to the CECP; and 1 o WHEREAS, The California Energy Commission staff should recognize City 2Q Council's authority in determining local land use laws, ordinances, regulations, and 21 standards. 22 23 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, and the Housing & Redevelopment Commission of the City of Carlsbad, California, as follows: 26 1. That the above recitations are true and correct. 27 28 1 2. That the City Council and the Housing & Redevelopment Commission 2 have reviewed the record of information available to California Energy Commission. 4 3. The City Council and the Housing & Redevelopment Commission, based 5 on the above mentioned information, find that proposed CECP does not 6 comply with applicable land use regulations and the Redevelopment Plan of 8 the City of Carlsbad. 9 4. Recommends that the California Energy Commission staff recognize this 10 non-compliance and reflect City Council's position into the California Energy 11 Commission's CECP Staff Analysis. 12 /// 13 14 15 16 17 '" 18 19 /// 20 /// 21 /// 22 /// 23 /// 24 25 26 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Carlsbad City Council and Carlsbad Housing and Redevelopment Commission held on the 27th day of January, 2009 by the following vote to wit: AYES: Council Members Lewis, Kulchin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. CLAUDE A LEWIS, Chairman ATTEST: "LISA HILDABRAND, Secretary (SEAL) . •_- >/ ESTABLISHED'.* J/ * ''••: -••' ^ lk ATTEST: LORRAINE M. WOOD, (SEAD All Receive - Agenda Item # For Information of THE CITY COUNCIL CM_/_ CA__»1 CC_Jl_ 8 ,. From: <erin.thomas@roadrunner.com> To: <Council@[205. 142.1 09. 13]> Date: 01/26/2009 3:55 PM Subject: CITY OF CARLSBAD | CONTACT USJ A visitor to the City of Carlsbad Web site has completed and posted the "Contact Us" form to department, City Council. FOR SECURITY REASONS, DO NOT CHANGE THE SUBJECT LINE. Below, please find the information that was submitted: At your January 27 council meeting, I urge you to vote for the resolution finding that the second power plant proposed by NRG, called the Carlsbad Energy Center Project violates key city laws, regulations and plans. I add my voice in a chorus of opposition to the development of the Carlsbad Energy Center Project in the proposed location. Thank you for your consideration - Erin Thomas Erin Thomas 6495 Fairwater Place Carlsbad, CA 92011 USA erin.thomas@roadrunner.com Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; lnfoPath.1; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 76.176.174.212 x-l , ' j LUCE FORWARD ATTORNEYS AT LAW • FOUNDED 1873 San Diego, CA 92101 LUCE, FORWARD, HAMILTON & SCRIPPS LLP 619.236.1414 619.232!8311 fax www.luce.com RONALD W. ROUSE, PARTNER DIRECT DIAL NUMBER 619.699.2572 DIRECT FAX NUMBER 619.235.1338 EMAIL ADDRESS rrouse@luce.com 27740-00001 January 27, 2009 HAND-DELIVERED Mayor Lewis and Carlsbad City Council Members City of Carlsbad 1200 Carlsbad Village Drive Carlsbad CA 92008-1949 Re: Carlsbad Energy Center Project ("CECP") City Council Agenda Bill No. 19,704 Proposed Joint Resolution No. 2009-020 (Item #8) Dear Mayor and Council Members: We are special counsel for the CECP applicant and submitting this letter to both the City Council and the Housing and Redevelopment Commission in connection with the above-referenced Agenda Bill and proposed Joint Resolution. The purpose of this letter is threefold: first, request the City reconsider its opposition to the CECP and instead, constructively and cooperatively work with the Applicant and the California Energy Commission to improve the regionally important CECP and realize the multitude of regional and community benefits it delivers, a few of which are outlined below; second, to reiterate Applicant's disagreement with the City's advocacy position that the CECP is not consistent with applicable laws, ordinances, regulations and statutes; and third, as a procedural and legal matter, officially object to the proposed Joint Resolution insofar as it having any legal effect other than the City's expression of its advocacy position before the California Energy Commission. CECP Project Benefits to Carlsbad and Regional Community The City's Agenda Bill focuses entirely on the City's opposition to the CECP. However, it is well established that the CECP will provide numerous financial and community benefits to Carlsbad, as well as to the surrounding regional community, in terms of electrical energy reliability and associated environmental benefits including, but not limited to the following: • Retirement & decommissioning of existing units 1-3, reducing 320 MW • Install 2 low profile, high-efficient, units totaling 540 MW • Online as soon as 2012 ,IEI \/AiiEv/r>Ei Mno . I n<; Aur.Fi FI • SAN Dipcn • SAN FRANCISCO LUCE FORWARD ATTORNEYS AT LAW • FOUNDED 1873 LUCE, FORWARD, HAMILTON & SCRIPPS LLP Mayor Lewis Carlsbad City Council Members January 27, 2009 Page 2 Achieves goals of the South Carlsbad Coastal Redevelopment Plan New revenues to Carlsbad of about $5MM per year Provides new energy supplies that are critically needed in San Diego by 2010-2012 State policy places the highest priority in new power projects that: • Retire aging seawater cooled power plants • Are "peaking" plants that provide backup power to intermittent renewable resources • Are BROWNFIELD projects that reuse existing infrastructure • Improve GHG emission performance for the electric sector Highly efficient natural-gas fueled generating units burn 30% less fuel, resulting in 30% better greenhouse gas performance Replaces 225 million gallons per day of ocean water cooling system with air cooling to protect marine life Repowering Project delivers on City's goal to phase out existing power plant for community and commercial redevelopment Carlsbad Housing and Redevelopment Commission's adopted redevelopment work plan says: "The City's and Agency's top preference is to have the new Power Plant constructed within the area between the railroad tracks and Interstate 5, which is east of the existing Plant site." CECP is the most cost-effective, feasible way to bring Carlsbad's vision for the Encina property to fruition and without adversely affecting electrical system reliability and cost Construction workforce of 357 peak jobs and 237 jobs on average over a two-year construction period Construction payroll exceeding $55 million LUCE FORWARD ATTORNEYS AT LAW • FOUNDED 1873 LUCE, FORWARD, HAMILTON & SCRIPPS LLP Mayor Lewis Carlsbad City Council Members January 27, 2009 Page3 • Locally purchased materials estimated at $30 million • Sales tax to California of approximately $22 million • Induced and indirect employment estimated to be over 500 jobs and additional indirect local income of $21 million CECP is Fully Consistent with Existing Laws, Ordinances. Regulations and Statutes The Agenda Bill is a one-sided presentation of the City's argument that the CECP is inconsistent with its local laws, ordinances, regulations and statutes. To a great extent, the Agenda Bill relies on the City's May 1, 2008 letter to the California Energy Commission. The City's Agenda Bill does not, however, include the detailed, point-by-point response and rebuttal from the Applicant pursuant to its June 3, 2008 letter docketed with the California Energy Commission, a copy of which is attached hereto and incorporated into the City's administrative record as well. Clearly, the Agenda Bill completely ignores the contrary evidence and facts supporting the inescapable conclusion that the CECP is precisely what the City's long standing laws, ordinances, regulations and statutes intended, namely for the existing Encina Power Station to be decommissioned over time and a new generating facility be located at the Encina Power Station site in place of existing large fuel oil storage tanks between Interstate 5 and the NCTD rail tracks. While the CECP does not, in and of itself, decommission all five (5) existing steam generating units at Encina Power Station, the CECP is the first step to fully decommissioning, making the vast majority of the existing site west of the railroad tracks available for commercial and community redevelopment purposes. Clarification of the Effect of the Proposed Joint Resolution The Applicant recognizes the City's right to oppose the CECP and intervene in the California Energy Commission proceedings, as the City has done. Further, the Applicant recognizes that for the City Council and the Housing and Redevelopment Commission to publically and officially state its position, the use of a resolution may be an appropriate vehicle for communicating that advocacy position. However, the Applicant disagrees that the proposed Joint Resolution, as well as the City Council Resolutions previously adopted "declaring" the City's opposition to CECP have any legal force or effect other than as the expression of the City as to its advocacy position. The proposed Joint Resolution is not legislation, nor is it a quasi-judicial decision on a matter lawfully pending before the City, and therefore, should only be understood as the expression of an advocacy position by an intervening party in the California Energy Commission process. LUCE FORWARD ATTORNEYS AT LAW • FOUNDED 1873 LUCE, FORWARD, HAMILTON & SCRIPPS LLP Mayor Lewis Carlsbad City Council Members January 21, 2009 Page 4 Applicant raises this legal/procedural point only to set the record straight as to the legal effect and consequence of the proposed Joint Resolution, as well as the prior, unilateral resolutions previously adopted by the City Council. Neither the proposed Joint Resolution nor the prior resolutions have the force of law nor represent final "action" on a matter proceeding lawfully before the City. We note that the proposed Joint Resolution is on your agenda as part of the "Departmental and Executive Director Report." Applicant only learned of the Agenda Bill and the proposed Joint Resolution this past Friday, January 23, 2009 when the Agenda was first posted on the City's website. Applicant appreciates the opportunity to submit its comments and clarification on this important item. We have provided additional copies of this letter and the attachments for the City Clerk, City Manager and City Attorney, and respectively ask that the full submittal be incorporated into the administrative record. Thank you. W. Rouse of LUCE, FORWARD, HAMILTON & SCRIPPS LLP RWR/vvn Enclosure cc: City Clerk City Manager City Attorney Mr. Steve Hoffmann Mr. Tim Hemig Mr. David Lloyd John McKinsey, Esq. 101143301.1 STOEL 1907 /DRIVES 2007 980 Nlmh Sited. Suilf 1900 Sacramento. California 958M main JI6.H7.0700 fax 916 4-17.<I7S! June 3,2008 JOHN A. MCKIMSEY Direct (916) 319-4746 jamckinsey@sioel.com VIA EMAIL AND HAND DELIVERY Mr. Michael Monasmith Siting Project Manager California Energy Commission 1516 Ninth Street, MS-15 Sacramento, CA 95814 Re: Carlsbad Energy Center Project (07-AFC-6) Project Consistency with City of Carlsbad Land Use Ordinances Dear Mr. Monasmith: This letter identifies the factors by which the Carlsbad Energy Center LLC Project ("Applicant" or "CECP") is consistent with the City of Carlsbad's ("City") land use ordinances. The letter rebuts the interpretations and conclusions provided by City staff in its letter dated May 1, 2008. Applicant provides corrections to the City staffs conclusions and requests that CEC staff look beyond the City staffs position and focus on the land use ordinances in completing the CEC's Warren-Alquist Act siting process. I. Summary CECP is urgently needed to meet the San Diego regional electrical needs and goals for new in- basin generating, utilizing the most efficient and environmentally sound generating facilities. Since San Diego Gas & Electric's ("SDG&E") sale of the Encina Power Station in 1999, the City has continuously and repeatedly engaged the new site owner in discussions regarding the repowering and relocation of generation capacity to the easterly portion or the owner's property, so as to free up the westerly portion and adjacent lagoon for an undefined range of public and private uses. The uses include recreation, aqua farming/marine research, hotel/lodging, restaurant, retail and others, all to advantage the City and owner of the beach and lagoon proximity. Only now, when the energy needs and demands of the region have made the first move in that direction achievable, is the City asserting that such a project is inconsistent with the City's land use plans and ordinances. The City incorrectly concludes that the Carlsbad Energy Center Project ("CECP") is fatally inconsistent with the City's existing land use ordinances and Oregon Washington California Utah I el a h o Colorado M i n n e s o I a Mr. Michael Monasmith June 3,2008 Page 2 regulations. This conclusion is not supported by the City's zoning of the site or the City's planning documents. The City also raises, or has recently raised, other objections to CECP. For instance, the City has questioned whether the plant could be properly considered "coastal dependent" given its avoidance of the use of once though sea water cooling. Ultimately, all of these objections or concerns can be shown as being driven by a recent change in view of the City rather than being founded upon consistent policy, facts, or law. The focus of this letter, however, is upon correcting the record on the statements or characterization by City Staff of Carlsbad land use ordinances and regulations in the City's letter dated May 1, 2008. As the City letter warns: "...be advised that Carlsbad does not support CECP." It appears this articulated firm position has influenced the City's present interpretation of its existing land use regulations and policies. Such interpretation, however, does not change the fact that CECP is consistent with City land use plans and ordinances. Instead, the letter acts as a political signal that the CEC may be obliged to assert its superior jurisdiction over local ordinances and take full responsibility for determining compliance with local land use ordinances and approving all aspects of the project. The origin and incorporation of the city in 1952 was driven, in part, by a goal of the community of benefiting financially and economically from a new tax base represented by the construction of the Encina Power Station and capturing the economic and financial benefits of a key regional infrastructure, rather than see it included in the City of Oceanside or remain in the unincorporated portion of the County of San Diego. CECP is the initial stage of an overall "modernization and repowering" program at the Encina Power Station that is integral to the long-standing City goal to eventually retire the existing five steam generating units, large structural enclosure and 400 foot high exhaust stack that makes up the existing Encina Power Station and potential relocation of the SDG&E owned electrical transmission facilities. Dating back multiple decades, the ongoing discussions and land use polices announced by the City have consistently envisioned the modernization and relocation of the existing, older Encina Power Station generating facilities to more compact, modern, efficient and environmentally superior combined cycle generation, and specifically identified the repowering be located on the easterly portion of the existing power station site, between the railroad tracks and Interstate 5 ("1-5"). CECP precisely meets these expectations. As shown below, CECP is fully consistent with the Encina Specific Plan and the South Carlsbad Coastal Redevelopment Plan. As also shown below, a Precise Development Plan required by the Mr. Michael Monasmith June 3,2008 Page 3 City is a site design permit device the City uses as an equivalent of a building or site development permit. The City's process is fully supplanted and accomplished by the Warren- Alquist Act siting process and its replacement of local building permits. The City's continued disparagement of CECP is not only inconsistent with the law, it is also counter to the very purpose that the City and land use ordinances openly declare: to bring about the retirement of the older, existing generating facility. CECP represents the first and best opportunity the City will have in the foreseeable future to begin the retirement of the older existing infrastructure west of the railroad tracks: Applicant knows this and many citizens know this as well. By opposing CECP, the City is actually working counter to the interests and desires of its citizens and prolonging the life of the Encina Power Station that dominates the beach front. Applicant continues to hope the City will accept the reality that relocating the repowering units further inland is not feasible (for both timing reasons and ratepayer burdens of such a costly venture) and reverse its political position to be consistent with its own ordinances and consistent with the City and its citizens' desire to see the expedited retirement of the existing Encina Power Station facility. II. Factual Summary and History of Applicable Land Use Ordinances, Regulations and Policies In an effort to facilitate this response with the issues raised in the City letter, the organization of this response uses the same headings as contained in the City letter with page reference. A. About this Letter (page 2) Essentially, the City outlines a long history of dealing with the Encina Power Station and its prior owner, SDG&E, who has consistently owned considerable non-power generating property in the vicinity including the adjacent office/maintenance facility known as SDG&E's North Coast Operations Center and approximately 43 acres of high value tourist serving commercial/retail designated properties easterly of 1-5, both of which have nothing to do with CECP. Yet, as indicated by the listing of the various letters to SDG&E, the City has had long running and well known disagreements with SDG&E on a number of land use matters and issues. However, as evidenced by the Map/Legend, attached to the City's letter as Attachment 2, once the Encina Power Station was sold, the requirements for its operation as a power plant was further refined to reflect the separate ownership of the power plant itself. This is evidenced by the footprint for the Precise Development Plan ("PDP") boundaries being configured to eliminate SDG&E owned land and facilities, and include only the Encina Power Plant footprint of the westerly and easterly portions, all west of 1-5. Mr. Michael Monasmith June 3,2008 Page 4 B. Carlsbad as Lead Agency (page 2) It is difficult to determine the point being made by the City in this section, other than the City seems to disagree with the structure of California law and the exclusive jurisdiction of the CEC in evaluating and permitting, where appropriate, certain new thermal generating facilities throughout the state. Further, the environmental analysis and review mandated under the CEC regulatory regime is, by law, the California Environmental Quality Act ("CEQA") equivalent of the Environmental Impact Report process undertaken by other state and local agencies when the subject matter of the application makes such agencies the "lead agency." The state mandated CEC environmental review process will, in fact, inform decision makers as fully as the "standard" CEQA process. It is interesting that the City's letter suggests there are two distinct local agencies involved as though there were separate decision makers for the Redevelopment Agency and the City itself. While it is true, under California Redevelopment Law, the agency is a separate legal entity, it should be recognized that in Carlsbad, the City Council is the governing board, policy maker and both the executive and legislative branch of both the redevelopment agency and the City. Finally, it is factually interesting to note that the City bid on purchasing the Encina Power Station when it was for sale by SDG&E in 1998. The City was unsuccessful in its bid and immediately processed a new South Carlsbad Coastal Redevelopment Plan Area in an expedited timeframe so that it would become effective shortly before the ensuing fiscal tax year in which the power plant sale would be recognized for ad valorem tax purposes, thereby, securing an advantageous tax allocation for subsequent tax increment. C. General Plan (page 8) The City's letter leads off with the Specific Plan (SP 144). However, under California land use and planning law, the General Plan is the "constitution" of local land use regulation, policy and permitting, including the requirement that all specific plans, zoning ordinances and actions be fully consistent with the goals, policies and land use categories set forth in the General Plan. The City cites six separate General Plan (1994 revisions) policies as being relevant. We submit that CECP is fully consistent with each policy and, most particularly, the City recognizes the applicable General Plan Land Use designation for the entire Encina Power Station and CECP site (easterly portion between railroad tracks and 1-5) is designated "U" for Public Utilities. The City goes on to acknowledge that this designation includes "...both existing and proposed..." facilities. The General Plan designation further states: "Primary functions include such things as the generation of electrical energy, treatment of waste water.. .or other primary utility functions designed to serve all or a substantial portion of the community." Mr. Michael Monasmith June 3, 2008 PageS While the City letter acknowledges consistency with the use designation, it suggests it would not be able to make a "finding of consistency" because of a subordinate planning document, SP 144, and the "25 year policy" of the City requiring a comprehensive amendment to SP 144, which encompasses hundreds of acres outside the Encina Power Station boundaries and involves many other landowners, notably SDG&E. The City's logic is circular and misplaced. Clearly, CECP is fully consistent with the General Plan land use designation and policies. As will be demonstrated in the next section, it is also fully consistent with SP 144 and by express action taken by the City on August 5, 2003, it rescinded its prior policy requiring a comprehensive update of SP 144 a the ownership and land use landscape had changed dramatically by then, including the City's desire to approve the Poseidon Resource 50 million gallon per day desalination facility on the westerly portion of the Encina Power Station site. D. Encina Specific Plan (SP 144) (page 3) The City does not suggest that CECP is in any way inconsistent with the range of permitted uses, regulations or provisions of SP 144 itself. Indeed, as with General Plan consistency, the permitted land use designation for the Encina Power Station is stated as follows: "The Specific Plan 144(H) incorporates the Carlsbad General Plan land use designations for the area covered by the Specific Plan 144 (H).. .The Encina Power Station is designated U..." (SeeSP144(H)atp. 14.) SP 144(H) goes on to reiterate CECP consistency as follows: "The Specific Plan provides regulations for the development of the Encina Power Station which provides "generation of electrical energy," and incorporates PDP 00-02. The POP serves as a permit for the Carlsbad Seawater Desalination Project, which would provide "primary utility functions designed to serve all or a substantial portion of the community," by augmenting potable drinking water supplies for the City of Carlsbad. Thus, the power station and desalination plant are uses consistent with the provisions of the General Plan. Other than the desalination plant, Specific Plan 144(H) authorizes no additional development. Mr. Michael Monasmith June 3,2008 Page 6 (SP 144(H) at p. 14; emphasis added.) Two things are important to note here. First, SP 144(H) recognizes the role of POP as a permit, not as a zoning or other land use designation. Second, because SP 144(H) encompasses so much additional property outside the Encina Power Station, the City wanted to make clear that, while adopting the PDP for the Encina Power Station authorizing power generation and desalination uses, it was not extending those uses or in any way changing the range of permitted uses for any other properties within SP 144(H) (namely, any of the SDG&E owned properties west or east of 1-5). E. City Council Policy (page 6) The City letter asserts a "25 year policy" that no further development could occur in SP 144(H) area without concurrently adopting a comprehensive amendment of SP 144(H) for all affected properties. Clearly, an accurate reading of the history of this "comprehensive update policy" demonstrates, that whatever its intent had been when the Encina Power Station was owned by SDG&E, as part of the process for consideration and adoption of the PDP 00-02 for the Encina Power Station site itself and authorizing the desalination project within the PDP, the "policy" was rescinded as it relates to the Encina Power Station site. On August 3, 2003, Resolution 2003-208 was adopted unanimously by the City Council in order to specifically authorize and permit the Encina Power Station PDP 00-02 to be processed for the "Carlsbad Desalination Facility and Encina Power Plant." The resolution states, in part as follows, why the council was canceling its prior stated policy for power plant and desalination purposes on the Encina Power Station portion only, noting its rationale: ".. .discussions with property owners within Specific Plan 144 area relating to land use, public access and other similar matters have progressed to the point where the City Council believes it is not necessary to update the entire Specific Plan at this time." Resolution 2003-208 then specifically resolves as follows: "...an amendment of Specific Plan 144 shall be processed for the processing of the Carlsbad Desalination Facility and Encina Power Plant rather than a comprehensive update of the entire Specific Plan." (Emphasis added.) Mr. Michael Monasmith June 3,2008 Page 7 Clearly, since neither the desalination facility nor the power plant involved any change of land uses to properties outside the Encina Power Station site and SDG&E was no longer an owner of the Encina Power Station, there was no practical reason to continue to condition the power plant or desalination uses on Encina Power Station site with a requirement for a comprehensive land use update. Further, the City achieved is goals of exacting various property and public use/access provisions in the PDP process requiring future conveyance of power station bluff top property west of Carlsbad Blvd., expanded fishing access to the lagoon, additional beach parking and dedication of another portion for aquaculture and/or marine research. The City's statement in the letter that Resolution 2003-208 "...applied only to the desalination plant and not any other proposal" is contradicted by the precise language of the resolution quoted above, and by the scope of the facts and circumstances in which the City acknowledged that the discussions with the Encina Power Station owner were progressing satisfactorily with respect to "land use, public access and other related matters." Given the long standing and combative relationship between SDG&E and the City over SDG&E's land uses for its property, there is little doubt that the City did not intend to allow non-Encina Power Station land use approvals without comprehensively updating the SP 144. However, there was compelling justification for the Encina Power Station under new ownership and control to be carved out of the "comprehensive update policy." The new ownership, at the request of the City, identified a location for the Carlsbad Desalinization Facility on its property. Further, as a practical matter, it would have been logistically impossible for the Applicant to process a comprehensive SP 144(H) update as a condition of pursuing continuing power plant uses on its property, as it had no way of compelling SDG&E or any other owner to cooperate in the comprehensive update. As will be demonstrated under the discussion of the detailed conditions of PDP 00-02 below, the City exacted a wide range of concessions, commitments, future uses and restrictions on the Encina Power Station site so the "comprehensive update policy" was no longer needed. As a practical matter, it locked in the sole use of the Encina Power Station site as power generation, desalination and accessory uses. Clearly, if any other uses were to be proposed in the future, an amendment to both the General Plan and SP 144(H) range of authorized uses would be required, but no legislative amendments are required for continuing power generating uses such as CECP. F. Zoning Ordinance (page 10) Applicant fully concurs with the City's recognition that under the existing Public Utilities ("P- U") Zoning classification, "...both the existing and proposed power plants and their appurtenant facilities are permitted uses in the P-U Zone" originally adopted in 3 971 for this site. As recognized by the City as well, the specifics of conditions and exactions, design, setbacks, Mr. Michael Monasmith June 3, 2008 Page 8 parking and similar site design features are deferred to the PDP. As such, the PDP is a "site specific permit" addressing the details of site utilization and configuration only. The PDP cannot and does not authorize a different range of land uses in and of itself. G. Precise Development Plan (page 11) Importantly, the City letter acknowledges the PDP is a site design permit device, which the city uses to bridge the detail gap between the General Plan, Specific Plan and any unique Zoning Code requirements. In essence, the PDP is like a building or site development permit; that is, it cannot authorize uses inconsistent with the "senior" controlling land use documents. Applicant has filed for a PDP amendment, and as of this date, Applicant is unaware that the City has processed it. Given the City's announced unwavering opposition to CECP, Applicant is not hopeful the City will take any steps to process the local PDP amendment. The City has raised every conceivable obstacle in the way of CECP to date and seems unwilling and uncooperative in exploring solutions to any of the identified obstacles, short of capitulation on CECP at the Encina Power Site. It seems rather apparent that the City's commitment to addressing some of the "obstacles" only if Applicant abandons the existing CECP is a blatant statement that it does not intend to engage in a constructive process to achieve mitigations and/or solutions to the needed CECP with all its obvious benefits of continued utilization of the regional electrical grid infrastructure. The issue of "reclaimed water use" is a perfect example of the City's obstructive behavior. The City declares itself the sole provider in its territory; claims its supplies are over committed in the peak summer months; and refuses to address any other solution such as continuing purchase of reclaimed water from the Vallecitos Water District and/or expansion of the Encina Wastewater Treatment Facility water reclamation capabilities and distribution systems. The City's behavior is all the more problematic since the Encina Wastewater Treatment Facility is a multi-city, joint powers agency facility and its potential expansion or upgrade to increase available reclaimed water to take pressure off of potable water supplies may be in everyone's collective best interests. If, as the City states, the PDP approval was solely for the benefit of the desalination project and did not authorize the continued use of the Encina Power Station for power generating purposes, then the City misled the Applicant and there was no reason for the Applicant to cooperate such that "...the City was able to condition a number of public improvements and public land use dedications both in and adjacent to the EPS." In fact, the City demanded the owner pursue a PDP in the various negotiations for a Memorandum of Understanding previously mentioned by the City. Then the City came to the owner and said that the PDP process, initiated strictly for Mr. Michael Monasmith June 3,2008 Page 9 power plant purposes in 2000, should be used by the Carlsbad Desalination Facility to obtain its desalination approvals; in an effort to cooperate, the power plant owner agreed. Certainly, it could not imagine that the City would later disclaim any relevance whatsoever to the long standing dialogue between the City and the owner regarding the phased repowering to a more efficient and environmentally preferred combined cycle facility in the area designated between the tracks and 1-5 and a corresponding phased elimination of the older, steam generating units, large structure and 400 foot stack the City wishes to see retired. H. Local Coastal Program/Agua Hedionda Land Use Plan (page 12) Once again the City fails to identify any inconsistency between CECP and the Agua Hedionda Land Use Plan (AHLUP). The City correctly notes that it is not a certified Local Coastal Program, therefore the California Coastal Commission ("CCC") retains original jurisdiction, if any, on projects within the AHLUP boundaries for Coastal Development Permit issuance purposes. Here, the CCC has determined not to participate in CECP process as is it is allowed to do so, given the expansive exclusive jurisdiction and preemptive process authorized for the CEC in siting new power plants. One thing for certain is the AHLUP, since its inception in 1982, has consistently provided for the utilization of the Encina Power Station for "Utilities" purposes, a use designation fully consistent with existing uses and . (See AHLUP pp. 12-17, including the Land Use Map.) Further, it is interesting to note that in the AHLUP the City's "comprehensive amendment policy" requiring Specific Plan amendment of SP 144 before further development is restricted to the 45-acre SDG&E property east of 1-5 and requires a future specific plan before it could be utilized for Travel Services. This mention is another example of the intention to require the "comprehensive amendment policy" apply to non-power generation properties and purposes in order to compel SDG&E to address build-out of its properties east of 1-5. (See AHLUP at p. 17.) I. South Carlsbad Coastal Redevelopment Project Area (page 14) The historic context of the City adopting the South Carlsbad Coastal Redevelopment Plan ("SCCRPA") is discussed above in Section B. above. Further, the City and the Encina Power Station Owner discussed how the existence of the Redevelopment Area could financially participate or facilitate the construction of new, efficient combined cycle generation facilities into that portion of the Encina Power Station between the railroad tracks and 1-5. This occurred during the time of the on again/off again discussion regarding the phased retirement of the existing older facilities, the large structure, and the 400 foot stack. While no agreements were reached, it was clear the City was encouraging the owner to relocate and phase out the older units Mr. Michael Monasmith June 3,2008 Page 10 at the earliest opportunity. To that end, the SCCRPA work plan adopted February 19, 2002 by the Housing and Redevelopment Commission in Resolution No. 352, specifically includes the following goal: "The City's and Redevelopment Agency's objective is to work towards the complete demolition of the existing Power Plant at its current location on the existing site and provide for the construction of a new, physically smaller Plant towards the rear of the existing site. The City and Agency's top preference is to have the new Power Plant constructed within the area between the railroad tracks and Interstate 5, which is east of the existing Plant site. With demolition of the existing Power Plant and construction of a new Plant to the rear of the existing site, excess development property will be created which is located in a prime coastal location. It is staffs position that this excess property could be used for both private and public land uses." (Emphasis added.) As to the suggested further requirement of extraordinary benefit, we believe the City has misread its provisions. The extraordinary benefit requirement applies to the list of uses to the extent they are to be located elsewhere than where currently located. For example, at page 14 of the City letter, it points out the SCCRPA incorporates all "existing permitted uses," Clearly, the Encina Power Station area is authorized for electrical power generating purposes pursuant to the General Plan, Specific Plan 144(H), the AHLUP and POP 00-02. The reference to new uses requiring finding of extraordinary benefit must apply to those uses which are not otherwise permitted by the then existing underlying land use regulations, or are being introduced in SCCRPA areas where they had not previously been allowed. Under the interpretation advocated by the City, the sentence would make no sense and the "exception" would swallow the rule. Further, even if one were to assume, for argument purposes, that an extraordinary public benefit finding is required, here, that standard is clearly met for the following reasons: CECP (1) includes the decommissioning of older Units 1, 2 and 3; (2) replacement of those units with state of the art combined cycle facilities; (3) is an initial step to the eventual decommissioning of Units 4 and 5 and further; (4) meets current regional power generation needs; (5) results in lower requirements for once through ocean water cooling at the Encina Power Station realizing a tangible benefit to the marine environment consistent with statewide policies; (6) avoids the enormous cost of re-establishing the electrical distribution system elsewhere, a cost that rate Mr. Michael Monasmith June 3, 2008 Page 11 payers would ultimately shoulder; (7) improves the reliability of power generation capacity to meet the fluctuating demand needs in the region; (8) provides a reliable back up/supplemental source to augment the use of less reliable renewable resource generation sources; (9) is a step toward the elimination of the offshore oil delivery and onshore heavy oil storage facilities required for the old steam generating units to burn in the event natural gas supplies are curtailed; and, (10) results in progress toward the common goal of demolishing the final two steam generating units along with the large structure and 400 foot stack to make room for future private and/or public economic uses and benefits. Certainly, these amount to "extraordinary public purpose" under any objective application of the standard. Further, CECP is precisely the first step the City has consistently and repeatedly encouraged the owners of the Encina Power Station to pursue with vigor. III. Conclusion CECP fully meets each and every legitimate existing City land use regulation, ordinance or policy. Applicant believes the City has taken a position of opposition, without regard for the underlying merits of CECP and has taken a position that is political in nature, not legal. In taking such an unrelenting position, the City is avoiding any meaningful, joint effort to resolve identified issues and/or mitigate potential adverse consequences and is also working counter to the interests of the City's citizens to see the existing structure and facility eliminated. Having adopted such an adverse position, it appears to Applicant the City has embarked on an effort to block CECP and frustrate California's long-term energy planning and procurement process. The Applicant remains hopeful that the City will change its method of involvement and participate in a more constructive manner, to engage with the CEC Staff, Applicant and others involved in the process to reach the correct decision in the best interests of all the citizenry, to identify real issues and jointly fashion real solutions and enhancements to achieve the best possible outcome consistent with the California law and necessary energy policies. Certainly, Applicant does not presume the City must "like" CECP or endorse it (though Applicant believes CECP is fully consistent with long held goals of the City communicated to Applicant over the years in no uncertain terms). Instead, by engaging in constructive, problem solving endeavors, CECP can be improved, even if the City in its independent judgment still elects to oppose its approval. Applicant respectfully urges the CEC and staff to attempt to facilitate City cooperation even while moving CECP forward without it. Mr. Michael Monasmith June 3,2008 Page 12 Should you have any questions, please do not hesitate to contact me directly at (916) 447-0700. Respectfully submitted, Stoel Rives LLP rohn A. McKinsey Attorneys for Applicant Carlsbad Energy Center LLC JAM:kjh cc: See Proof of Service List Attached BEFORE THE ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION OF THE STATE OF CALIFORNIA Application for Certification for the CARLSBAD ENERGY CENTER PROJECT Docket No. 07-AFC-6 PROOF OF SERVICE (As of 03/19/2008) DECLARATION OF SERVICE I, Elizabeth Hecox, declare that on June 3, 2008,1 deposited in the United States mail at Sacramento, California with first-class postage thereon fully paid and addressed to those identified below OR transmitted via electronic mail consistent with the requirements of the California Code of Regulations, Title 20, sections 1209, 1209.5, and 1210 the following documents: CARLSBAD ENERGY CENTER PROJECT (07-AFC-6) PROJECT CONSISTENCY WITH CITY OF CARLSBAD LAND USE ORDINANCES CALIFORNIA ENERGY COMMISSION Attn: Docket No. 07-AFC-6 1516 Ninth Street, MS-14 Sacramento, CA 95814-5512 docket@energy.state.ca. us JAMES D. BOYD Commissioner and Presiding Member jbovd@energv,state.ca.us KAREN DOUGLAS Commissioner and Associate Member kldougla@energy. state, ca. us DICK RATLIFF Staff Counsel dratliff@energy.state.ca.us Public Advisor's Office pao@energy.state.ca. us PAUL KRAMER Hearing Officer pkramer@energv. state, ca. us MIKE MONASMITH Siting Project Manager mmonasmi@energy. state, ca.us INTERESTED AGENCIES Larry Tobias Ca. Independent System Operator 151 Blue Ravine Road Folsom, CA 95630 LTobias@,caiso.com Electricity Oversight Board 770 L Street, Suite 1250 Sacramento, CA 95814 esaltmarsh@eob.ca.Rov Portlndj-1622828.1 0035434-00009 INTERESTED AGENCIES CONT'D. City of Carlsbad Joseph Garuba. Municipals Project Manager Ron Ball, Esq., City Attorney 1200 Carlsbad Village Drive Carlsbad, CA 92008 jcaru@ci.carlsbad.ca.us rball@ci.carlsbad.ca.us Allan J. Thompson Attorney for City of Carlsbad 21 "C"OrindaWay#314 Orinda,CA 94563 allanori@comcast.net APPLICANT David Lloyd Carlsbad Energy Center. LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 David.Lloyd@nrgenergy.com Tim Hemig, Vice President Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 Tim.Hemig(fl),nrgenergv.com COUNSEL FOR APPLICANT John A. McKinsey Stoel Rives LLP ' 980 Ninth Street, Ste. 1900 Sacramento, CA 95814 iamckinsey@stoel .com APPLICANT'S CONSULTANTS Robert Mason, Project Manager CH2M Hill, Inc. 3 Hutton Centre Drive, Ste. 200 Santa Ana, CA 92707 Robert.Mason@ch2m.com Megan Sebra CH2M Hill, Inc. 2485 Natomas Park Drive, Ste. 600 Sacramento, CA 95833 Megan.Sebra@ch2m.com INTERVENORS California Unions For Reliable Energy (CURE) Suma Peesapati Marc D. Joseph Adams Broadwell Joeseph & Cardozo 601 Gateway Boulevard, Suite 1000 South San Francisco, CA 94080 speesapati@adamsbroad wel 1 .com 1 declare under penalty of perjury that the foregoing is true and correct. Elizabeth Hecox PorllncB-1622828.1 0035«<)-00009 Proposed Power Plant Project Agenda Project Description Updated Schedule Land Use Concerns Staff Recommendation Questions and comments PROJECT DESCRIPTION ROLES California Energy Commission City of Carlsbad NRG (power plant company) SDG&E California Coastal Commission Agua Hedionda Lagoon 14 stories tall 10 stories tall 6 stories tall Existing Power Plant I-5 (Widened) Strawberry Fields RR Agua Hedionda Lagoon Future Desal Plant Sewer Line & Rail Trail Lift Station Hearing/Workshop/Planned Event or Filing CEC Initial Schedule Carlsbad Anticipated Schedule Draft Preliminary Staff Assessment (PSA) April 2008 December 2008 PSA Workshop April 2008 January 2009 Amended PSA April, 2009 Amended PSA Workshop May, 2009 Final Staff Assessment (FSA) May 2008 July 2009 FSA Workshop August 2009 Evidentiary Hearings TBD 4th Qtr 2009 Preliminary Decision November 2008 1st Qtr 2010 CEC Decision 2nd Qtr 2010 Plant Construction 24 Months 30-36 Months Potential Online Date Nov 2010 Summer 2013 Revised Schedule In Carlsbad Other agency approvals We are here Land Use Review Encina Specific Plan 144 City Council Policy General Plan Zoning Ordinance Precise Development Plan Local Coastal Plan/Agua Hedionda Land Use Plan South Carlsbad Coastal Redevelopment Project Area Plan Area of Encina Specific Plan (SP 144) Staff Recommendation Determine proposed power plant is non-compliant with City/Redevelopment Agency LORS Adopt Resolution No. 2009-020 Questions ??? 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