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HomeMy WebLinkAbout2009-09-15; City Council; 19964 Part 3; Part 3 - Desalination Project Changes - EIR 03-05A |DA 05-01A|HMP 05-08A|PDP 00-02B|RP 05-12A|SP 144J|600 West Broadway, Su~te 1800 San D~ego, Callforn~a 92101-3375 I - ,Tel +I 6192361234 Fax +I 6196967419 jw IW com I. -HAM*WATKI NSLLP FIRM I AFFILIATE OFFICES Munch New Jersey New York Orange County Doha Pans September 14,2009 (2,-1 Y LL~i-fi ,: L , ,-,( E Rome Hon. Mayor Lewis Hon. Members of the City Council Carlsbad City Hall 1200 Carlsbad Village Drive Carlsbad, CA 92008 Frankfurt San Diego Hamburg San Francisco Hong Kong Shanghai London Sillcon Valley Los Angeles Singapore Madrid Tokyo Milan Washington. D.C. Moscow File No. 036182-0001 Re: City Council Agenda Item #12 - Response to Coast Law Group Letter Dear Hon. Mayor and Council Members: We represent Poseidon Resources in the development of the Carlsbad Desalination Plant ("CDP" or "Project"). We appreciate the opportunity to respond to the August 19,2009 letter from Coast Law Group ("CLG"). What is notable about the letter, and the continuous legal objections raised by Mr. Gonzalez and his ever-changing group of clients, is that these comments raise no credible environmental issues. CLG and its clients have stated that they are not opposed to desalination. Therefore, the obvious question that arises from this letter is what alternative are the opponents trying to achieve? Furthermore, the letter requests that the City study issues that have already been thoroughly analyzed and fully vetted by multiple regulatory jurisdictions and the Courts. It is obvious that the goal of the opponents at this stage is not to create a better Project or help the City to better analyze the Project; the goal is simply to kill the Project through delay. We believe that the City of Carlsbad ("City") has followed the correct course under the California Environmental Quality Act ("CEQA") in the drafting of an Addendum to the Final Environmental Impact Report ("FEIR) for your consideration, and believe that your staff and consultants have done an excellent and thorough job evaluating the minor and immaterial revisions to the Project. We request that the City approve the Addendum and minor permit amendments and allow this Project to move forward to serve the water needs of Carlsbad and the surrounding San Diego region. I. RESPONSE TO COMMENTS A. The City Has Provided the Public with Adequate Opportunity for Pro-iect Review CLG contends that there has been "little to no opportunity to review the City's Addendum and supporting documents." However, consistent with City policy, the staff report was posted via the City web site the Friday before the Planning Commission hearing. Specifically, the City provided the staff report on August 13,2009 and the Addendum was Hon. Mayor Lewis September 14,2009 Page 2 posted on August 14,2009. In addition, as noted in the Planning Commission hearing notice, additional documents were available from City staff by request. Contrary to CLG's contention that this has been a "truncated" process, the Project has been and continues to be reviewed using the same processes as other projects in the City of Carlsbad. CLG has had ample opportunity over the past several years since the first Project approvals in 2006 to work with the City to change its review processes, should it have desired. Having chosen instead to cry foul at the last minute, the City should not consider this improper argument. CLG also complains that "the Addendum cross references relevant sections of the FEIR, requiring additional review of the massive FEIR for comparison." This criticism is remarkable considering that CLG has had over three years to review the FEIR since its certification in 2006, and CLG has been the law firm of record challenging the Project on four separate occasions, including a lawsuit challenging certification of the FEIR. (See Exhibit A, 2006 Petition for Writ of Mandate.) CLG also unsuccessfully challenged the California State Lands Commission's reliance on the FEIR. (See Exhibit B, SLC Tentative Decision.) It therefore appears disingenuous that CLG would now contend that it is not familiar with the Project FEIR, and would need significant additional time to review it. The FEIR has also been continuously available to CLG at the Carlsbad City Clerk's office and on the Poseidon website at www.carlsbad-desal.com for over three years. If Project opponents have failed to avail themselves of the opportunity to review the document in the last three years, the applicant and the City should not be held accountable for their sloth. Nonetheless, the Addendum prepared by the City is hardly "voluminous." The Addendum is 47 pages long and the staff report is 2 1 pages. In addition, City staff have done an excellent job of presenting the amended permit documents in strikeout-underline text to allow the reader to quickly ascertain the changes that have been made in all documents. CLG contends City process is an "inappropriate and illegal evasion of public review and comment requirements of CEQA." But City staff have followed CEQA Guideline 5 15 164(c) which clearly states: "An addendum need not be circulated for public review but can be included in or attached to the final EIR or adopted negative declaration." CLG's statement simply ignores the applicable regulations governing CEQA. Further, CLG's statement that the City has followed a "predetermined approval process for the Carlsbad Desalination Project at every level of review," is insulting to the City Council, Planning Commission and City Staff. The City has spent over 10 years evaluating desalination and over 3 years reviewing this specific Project before it was approved in 2006. The City also required dozens of Project concessions and conditions during its 2006 approval process. The City staff has now made a thorough review of the minor reconfiguration of the Project, and the Planning Commission recommended approval of staffs findings. We hope that the City Council will agree that the amendments constitute minor and immaterial changes that should be approved without delay. Finally, many of the issues addressed in the CLG letter are neither new nor specific to this process. These same arguments were raised by the same environmental groups before the City Council in 2006, and subsequently in front of the San Diego Regional Water Quality Hon. Mayor Lewis September 14,2009 Page 3 Control Board ("Regional Board"), the California Coastal Commission ("CCC") and the California State Lands Commission ("SLC"). Therefore the contention that "it is unreasonable to expect the public to provide anything resembling meaningful comment within such a short time frame," is ridiculous at best. The Project has undergone 15 public hearings with over 73 hours of public testimony; produced four lawsuits; hundreds of pages of legal briefs; and thousands of pages of comments and responses by the opponents and proponents of the Project. To contend that this Project has not been amply reviewed by the public is insincere at best. B. The City is Not Required to Prepare a SEIR CLG argues that substantial changes to the Project and in the circumstances surrounding the Project require preparation of a supplemental or subsequent EIR ("SEIR). CLG provides no legal basis and no legal authority in support of this statement. CLG is either ignorant of the legal authority or is intentionally providing false and misleading statements to the City Council, making the substance of the entire letter suspect. To clarify, CEQA Guideline 5 15 164(a) states that, "the lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15 162 calling for the preparation of a subsequent EIR have occurred." Both CEQA 5 2 1 166 and its analog Guidelines 5 15 162 provide that a SEIR may not be prepared in the absence of the following: (I) substantial changes to the project, (2) substantial changes to the project circumstances, or (3) new information of substantial importance. (CEQA 5 2 1 166; Guidelines § 5 15 162(a), 15 163(a).)' Specifically, Guidelines 5 15 162(a) states: When an EIR has been certified or a negative declaration adopted for a project, no subsequent EIR shall be prepared for that project unless the lead agency determines, on the basis of substantial evidence in the light of the whole record, one or more of the following: (1) Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or 1 References to Pub. Res. Code fj 2 1000 et seq., are preceded by "CEQA" and followed by the section number, and references to 14 Cal. Code of Regs. 5 15000 et seq., are preceded by "CEQA Guidelines" and followed by the section number. Hon. Mayor Lewis September 14,2009 Page 4 (3) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR was certified as complete or the negative declaration was adopted, shows any of the following: (A) The project will have one or more significant effects not discussed in the previous EIR or negative declaration; (B) Significant effects previously examined will be substantially more severe than shown in the previous EIR; (C) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or (D) Mitigation measures or alternatives which are considerably different from those analyzed in the previous EIR would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative. (CEQA Guidelines $ 15 162(a); accord CEQA $ 2 1 166.) The Addendum prepared by the City exhaustively reviews eleven areas of environmental concern and finds that none of the conditions described in CEQA Guideline $ 15 162 have occurred. This analysis confirms that the Addendum is capturing the minor and immaterial changes to the Project which do not result in any new or increased significant effects analyzed in the FEIR. As such, the City's decision to prepare an Addendum to the FEIR instead of a SEIR is supported by substantial evidence. In addition, the CLG letter states that "several agencies have reviewed the Project and found the FEIR inadequate." Not so. CLG has been involved in each of these agency proceedings and either does not understand what occurred during those proceedings or is deliberately playing fast and loose with the truth. Each of the agencies who have reviewed the Project, including the CCC, Regional Board, and SLC, have all relied upon the Project FEIR in making their own findings of approval. (See Exhibit C, Final CCC Findings at 29; Exhibit D, Regional Board Order No. R9-2009-0038 at 7 22; Exhibit E, SLC Calendar Item 55, at 22.) None of the agencies found the FEIR inadequate. Judge Judith Hayes of the San Diego Superior Court recognized this fact in Surfrider Foundation et al. v. State Lands Commission, stating in the Tentative Decision that, "The Regional Board, Coastal Commission and State Lands approvals each recognized the FEIR's Hon. Mayor Lewis September 14,2009 Page 5 determination that the Project would not have significant marine life impacts under CEQA." (See Exhibit B, SLC Tentative Decision.) CLG also inaccurately contends that actions by these agencies have "supplement[ed] the document with new information" which "reveal the Project's significant negative impacts." The various agency processes have not revealed any new "negative impacts" under CEQA. Indeed, in Surfrider Foundation et al. v. State Lands Commission, the Court's Tentative Decision found: No agency determined that the Project would have significant marine life impacts pursuant to CEQA. Instead, the reviewing agencies imposed mitigation measures according to their respective responsibilities under separate statutory schemes which employ different standards of review than CEQA's "significant impact" threshold. [ ] The Regional Board, Coastal Commission and State Lands imposed additional conditions on the Project, outside of CEQA, to maximize environmental protection. (See Exhibit B, SLC Tentative Decision at 7; see also Exhibit C, Final CCC Findings at 46 ["Although the Final EIR found the project would cause no significant entrainment impacts pursuant to CEQA, the Commission finds that the project's entrainment impacts will require mitigation to ensure conformity to Coastal Act Sections 30230 and 3023 1 ."I; Exhibit D, Regional Water Quality Control Board Order No. R9-2009-0038 at 'l[ 52 ["Implementation of the March 27, 2009 Minimization Plan will ensure that the CDP is in compliance with Water Code section 13 142.5(b) under co-location operations to benefit the CDP."].) It is important to note that none of the agencies chose to prepare a SEIR, choosing instead to rely on the City's certified FEIR to make their respective approvals. (Exhibit E, SLC Calendar Item 55, at 22 ["Preparation of a supplemental or subsequent EIR would therefore not appear to be permitted under Section 15 162 of the CEQA Guidelines."].) Furthermore, contrary to CLG's letter, the State Water Resources Control Board's Proposed Water Quality Control Policy on the Use of Coastal and Estuarine Waters for Power Plant Cooling has no bearing on the Project. The State Water Resources Control Board's public hearing notice on the policy notes: "The proposed Policy establishes technology-based standards to implement federal Clean Water Act section 3 16(b)." (Exhibit W, State Water Resources Control Board Notice.) CLG made the same unsuccessful argument in Surfrider Foundation et al. v. California Coastal Commission and is fully aware of the Court's determination that Clean Water Act 5 3 16(b) does not apply to desalination facilities. The final decision in the case states: By its express terms, CWA section 3 16(b) applies only to "cooling water intake structures." [ ] In approving the Project's NPDES Permit, the Regional Board found that CWA section 3 16(b) regulations are inapplicable to the Project, and the State Board's Scoping Document for Power Plant Cooling states that desalination plants are outside the scope of CWA section 3 16(b) issues. [ 1 Hon. Mayor Lewis September 14,2009 Page 6 The Court holds that CWA section 3 16(b) does not apply to desalination plants such as the Project[.] (Exhibit F, Final CCC Statement of Decision at 3.) CLG's comment is simply a regurgitation of an argument that has been addressed and settled by the courts and is thus barred under the doctrine of res judicata. (Fed. of Hillside and Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1 180, 1202 [internal citations omitted].) Finally, it appears that CLG is once again trying to mischaracterize the record regarding the alleged shutdown of Encina Power Station (EPS). Notwithstanding CLG's continued assertions to the contrary, there is no "planned shutdown" of EPS. This issue was clearly addressed in the recent proceedings before the Regional Board. In approving Order No. R9- 2009-0038, the Regional Board properly found that although the shutdown of three out of five of the EPS power generation units has been proposed as part of the Carlsbad Energy Center project, such proposal has not been certified by the California Energy Commission and "it is speculative at this time to determine whether the project will be approved" by the CEC and constructed following any such approval. (Exhibit G, Regional Board RTC #50 at 5 1-52.) Even if that project were approved and constructed, and the three EPS units were shut down, two units with a total intake capacity of 633 MGD would remain online and could provide sufficient discharge to satisfy the Project's needs. (Id.) In addition, a Cabrillo representative testified to the State Lands Commission in October 2007 that two of the EPS units would continue to operate "indefinitely" and cannot be shut down unless Cal-IS0 determines they are no longer needed for grid stability. (Exhibit H, Excerpt from SLC Transcript at 153; Exhibit C, Final CCC Findings, at 14.) CLG's continued attempts to blur the record are without merit. C. The City Has Thoroughly Evaluated All Proiect Alternatives CLG claims that the additional regulatory agencies that reviewed the Project "imposed various mitigation measures to address the newly discovered and significant marine life impacts of the Project." Acknowledging the Addendum's finding that these conditions were imposed based on different statutory regimes such as the California Coastal Act and Water Code, CLG then nonsensically argues that these additional mitigation requirements "signal the need to prepare subsequent CEQA documentation evaluating the feasibility of alternative intakes in light of the significance of the Project's impacts." This argument ignores the thorough analysis of alternative intakes performed by the City during the original approvals in 2006 and included in the FEIR. A feasibility analysis of alternative intakes including beach wells, infiltration galleries, and seabed filtration systems is found at Appendix C of the FEIR. The City Council reviewed this analysis and found with respect to beach wells that the "siting, construction and operation of 100 wells would not be practical and could result in potentially significant impacts depending on the locations of the wells. Therefore, this design alternative is infeasible." (Exhibit X, 2006 City Council Findings of Fact at Section 5.3.) With respect to horizontal beach wells, the City Council found that the "[sliting of 25 beach wells along 4 miles of the Carlsbad beaches would likely result in significant unmitigable impacts to visual resources and recreation. In addition, temporary impacts to biological resources would also likely be significant. Therefore, this design Hon. Mayor Lewis September 14,2009 Page 7 alternative is not feasible." (Id. at 58.) In addition, infiltration galleries were found to be infeasible because "the estimated depth for each well would be approximately 30 feet, over an approximately 4-mile stretch of beach, requiring the removal and disposal of extensive quantities of earth material and resulting in potentially significant temporary impacts to biological resources." (Id. at 58.) Finally, the City Council found that, "because of the infeasibility and/or significant temporary and permanent impacts resulting from the design alternatives that are available, the co-located EPS intake is the best means of obtaining source water for the Project." (Id. at 59.) The CCC similarly reviewed and dismissed alternative intake options during its approval of the Coastal Development Permit for the Project. (See Exhibit C, Final CCC Findings at 47- 5 1 .) The Regional Board also echoed this alternative analysis when it approved Order NO. R9- 2009-0038: "The Discharger analyzed the following intake alternatives: (1) Subsurface intake (vertical and horizontal beach wells, slant wells, and infiltration galleries); (2) new open ocean intake; (3) Modifications to the existing power plant intake system; and (4) Installation of variable frequency drives (VFDs) on seawater intake pumps. The Discharger compared screening technologies to identify the best available technology feasible including: (1) Fish net, acoustic and air bubble barriers upstream of the existing intake inlet mouth; (2) New screening technologies to replace the existing inlet screens (bar racks); and (3) fine vertical traveling screens. Implementation of the alternatives associated with the modification of the existing power plant intake and screening facilities were infeasible because they would interfere with, or interrupt, power plant scheduled operations. Taking into account economic, environmental and technological factors, the power plant intake screening alternatives are not capable of being accomplished in a successful manner within a reasonable period of time. The Discharger identified intake technologies it will employ to reduce intake and mortality of marine organisms during temporary or permanent shutdown of the EPS. The CDP intake pump station design will incorporate variable frequency drives to reduce the total intake flow for the desalination facility to no more than that needed at any given time, thereby minimizing the entrainment of marine organisms. Under the conditions of co-location operations for CDP's benefit, the Discharger has little control over the intake structure and little flexibility in implementing different technologies. Under these circumstances, the Discharger has identified the best technologies feasible to minimize the intake and mortality of marine life at this time. The Regional Board finds that the proposed technology for the CDP is the best available technology feasible under co-location operation for the CDP benefit." (See Exhibit D, Regional Board Order No. R9-2009-0038 at 8.) Furthermore, the Regional Board found: With regard to alternative intakes, the CDP's hydro-geologic studies confirm that none of the alternative intakes evaluated are capable of delivering the 304 MGD of seawater needed for environmentally safe operation of the CDP. Furthermore, the quality of the Hon. Mayor Lewis September 14,2009 Page 8 water available from the subsurface intake would be untreatable due to an extremely high salinity level, excessive iron, and high suspended solids. The Coastal Commission found, and the Regional Board agrees, that alternative intakes that might avoid or minimize environmental impacts are infeasible or would cause greater environmental impacts. (See Exhibit G, Regional Board Responsiveness Document at 138.) Notably, over the course of four lawsuits challenging the Project, CLG has failed to provide one single alternative to the approved intake system that can feasibly bring water to the facility. D. The Proiect Does Not Result in Increased Growth Inducement Impacts CLG contends that the FEIR "did not discuss growth inducing impacts to any level of detail." This is simply incorrect. The FEIR provided an extensive analysis of the Project's potential for growth inducement at FEIR section 9.0 and the City Council ultimately found that, although the Project would not cause direct growth inducement, a possibility of indirect growth inducement was considered a potentially significant impact. The City further found that: Desalinated seawater is already considered in regional growth analyses conducted by SANDAG, as contained in its 2004 Regional Comprehensive Plan, and in demand projections by the CWA as contained in its 2003 RWFMP. The Project will not supply water in excess of what is already anticipated to meet future projected needs. The Project will not cause significant direct growth-inducing impacts. However, City recognizes that replacement of imported water supplies with locally produced desalinated water supplies could have the effect of making the imported water supplies that are displaced by the desalinated water supplies available for other use. Determination of the specific potential indirect growth inducing effects outside of the Project's service area would require speculation that is beyond the scope of the environmental analysis for the Project. Therefore, City considers the possibility of indirect regional growth inducement a potentially significant effect and finds that there is no feasible mitigation for this potential impact. (Exhibit X, FEIR Findings, Section 4.2.) It should be noted that since the certification of the FEIR, SANDAG has updated their demographic projections to show that growth projections in San Diego County remain almost unchanged and long-term growth projections for Carlsbad have actually decreased. (Exhibit I, SANDAG Regional Growth Forecast, June 2004 1 SANDAG 2030 Regional Growth Forecast Update, July 2008) CLG also states that the San Diego County Water Authority is "now planning" construction of a 150 MGD desalination plant which would add to the cumulative growth Hon. Mayor Lewis September 14,2009 Page 9 inducing impacts of the Project. As noted above, the City has already found the indirect growth inducing impacts of the Project potentially significant. In addition, the San Diego County Water Authority has only performed a feasibility study to determine the feasibility of building a desalination plant on the Camp Pendleton Marine Corps Base. The Water Authority has adopted no formal schedule for this project or its construction; therefore any attempt to determine the cumulative impacts of the project would be merely speculative and beyond the scope of the environmental analysis for the Project. (CEQA Guidelines $ 15 145; Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 11 12, 11 37.) E. Impacts to Geology and Soils Have Not Increased CLG alleges that the "potential for erosion will increase due to proposed undergrounding of additional Project components, as well as increase in the size of the delivery pipelines." CLG can provide no evidence to support this argument because it is, quite simply, a fact free statement. The Addendum specifically states: Erosion potential for the revised Project would be similar and slightly reduced compared to what was evaluated in the FEIR at both a direct and cumulative level. Reductions in erosion potential are due to the reduced length of pipeline and associated grading. In addition, the mitigation measures relating to erosion control identified in the FEIR are also applicable to the revised Project. (Addendum, at 26.) The Addendum also states, "[tlhe total pipeline length will be reduced from 17.4 miles to approximately 16.2 miles (a 7% reduction) and will reduce the amount of earthwork required by 333,001 cubic yards of cutlfill. This would result in a 56% reduction in grading." F. Project Noise Will Not Increase CLG additionally alleges that the installation of the new pipelines will result in increased noise impacts, stating that this is a special concern for those residential areas along Linda Vista and 9th Streets. Again, CLG provides no evidence for its statement and the thorough analysis of the Addendum proves its falsity. The Addendum states that, in regards to new pipelines in residential areas such as Linda Vista and 9th Street in the City of San Marcos: "As discussed in the FEIR, pipeline construction is anticipated to cause significant noise impact to surrounding residences and the same conditions to comply with all appropriate noise regulations will remain for the proposed Project." (Addendum, at 34.) As discussed in the FEIR, "the construction activities would comply with the local jurisdictions' noise ordinance for allowable hours," (FEIR at 4.9-8.) and therefore will not cause significant impacts. Because all proposed construction will comply with local noise ordinances, including construction in new residential areas, there will not be any new or greater impacts than what was already analyzed in the FEIR. Hon. Mayor Lewis September 14,2009 Page 10 In fact, given that the Project revisions will result in less overall pipeline length and thus, less total construction time, it is likely that the Project noise impacts will only decrease from those analyzed in the FEIR. Notably, Poseidon held a workshop in the City of San Marcos and sent over 1800 notices to effected residents in the area of the proposed pipeline. Clifton Williams, Land Use Analyst with Latharn & Watkins, attended the meeting and reported that no concerns about construction noise were raised at that meeting, and residents in the area were supportive of the Project. G. Traffic Impacts Will Not Increase In what rapidly appears to becoming a pattern, CLG again provides a statement with no fact basis by claiming that the new pipeline installation will result in increased traffic impacts. CLG also intimates that the City has been untruthful in compiling the Addendum by questioning the finding that the Project revisions will result in a reduction of cutlfill hauling. CLG, however, seems not to have read the Addendum. The Addendum acknowledges an increase in total earthwork at the plant but notes that less earth will be hauled from the site due to the site reconfiguration: While the total earthwork of the proposed Project is anticipated to increase from approximately 61,940 cubic yards to 68,500 cubic yards, due to the opportunity for increased on-site reuse of the cutlfill, the actual volume of earthwork to be removed from the site will decline from 55,746 CY to approximately 21,000 CY. Based upon an average haul truck capacity of 20 CY per trip, this approximate reduction of 34,746 CY of earth corresponds to a reduction of approximately 1,737 haul trucks leaving the site. (Addendum, at 34.) Under the quantitative analysis of the Addendum, it is clear that traffic impacts from dirt- hauling trucks will actually decrease under the minor Project revisions. H. Public Utilities Use Will Not Increase CLG argues that, "[bly operating at the FEIR's 'historical extreme' more frequently (and continuously upon EPS shutdown) the Project will require more energy to operate to draw 304 MG of water instead of 104 as anticipated." This statement is also incorrect. First, as noted in Section B, supra, there is no planned shutdown of EPS. Any attempts by CLG to argue the contrary are simply mischaracterizations of the record. Moreover, there is no indication that the Project will be operating at the FEIR's "historical extreme" more frequently. In fact, EPS would have provided 89% of the Project's intake requirements in 2008, an amount certainly sufficient to meet its regular needs. (Exhibit G, Regional Board Responsiveness Summary at 2.) Hon. Mayor Lewis September 14,2009 Page I I Second, even assuming the CDP will operate in standalone mode, the standalone energy use of the Project is within the scope of the energy use already analyzed in the FEIR and found not to be significant. As part of the CCC and SLC approval process, the Project was required to create an Energy Minimization and Greenhouse Gas Reduction Plan ("GHG Plan"). The GHG Plan required an evaluation of the average daily energy use of the Project, which included stand alone operation of the CDP with independent operation of the EPS intake pumps. (See Exhibit J, GHG Plan at Table-2.) Table-2 of the GHG Plan shows that average daily energy use for the Project in stand-alone conditions (with the operation of the EPS intake pumps) will be 3 1.32 MWh in the Project's baseline design, and 28.08 MWh in the high efficiency design (Ibid.) The FEIR described the Project's average annual energy use as 29.76 MWh for average daily operation of the desalination facility, and provided a maximum daily energy use for the CDP of 35.5 MWh. (FEIR, at 4.1 1-1 7.) Importantly, these energy use estimates did not include operation of the EPS intake pumps. In addition, the FEIR notes that an additional 0.55 MWh would be required for the operation of the Oceanside pump station. (Ibid.) Therefore the FEIR analyzed a total average daily energy use of 30.3 1 MWh and a maximum daily energy use of 36.05MWh for CDP operation.2 The FEIR analyzed the impact of the maximum daily energy use of 36.05 MWh and found: It is not anticipated that the increase in energy demand and consumption would require expansion of or improvements to existing facilities within the IS0 controlled electricity grid that could result in significant environmental effects. Therefore, impacts to energy resources and facilities are considered to be less than significant. (FEIR, at 4.1 1-2 1 .) Accordingly, the GHG Plan shows that average daily operation of the CDP in standalone operation will be only 1 MWh above the average daily energy use analyzed in the FEIR and far below the maximum daily energy use analyzed for the significance determination. Furthermore, in the high efficiency design, the CDP would actually use less energy while operating the EPS intake pumps in stand alone operation than was analyzed in the certified FEIR. Therefore the energy use of the CDP with the operation of the EPS intake pumps is within the scope of the Project already evaluated in the FEIR and will not cause a significant or increased impact to the environment. I. The Proiect is Properly Located at the EPS Site 2 Under the Project revisions, the Oceanside pump station has since been eliminated from the Project. Hon. Mayor Lewis September 14,2009 Page 12 CLG complains that the Project is no longer coastal dependent and should be relocated to an inland location because the "Project's intake of seawater, whether via the existing power plant intake or otherwise, does not require location of the physical desalination plant on the ~oast."~ As an initial matter, the CCC expressly found that the Project is "coastal dependent" in its approval of the Project's Coastal Development Permit, and that determination is now final and unchallengeable. (See Exhibit C, Final CCC Findings at 93.) In addition, CLG's statement suffers from a lack of logic. Despite 6-plus years of administrative and environmental review, 15 public hearings, over 73 hours of public testimony and countless pages of supporting data, all of which rely on the Project's co-locattion with the EPS, CLG is now demanding that the CDP be moved off of the EPS site to some unknown and unstudied inland location. Remarkably, CLG has not offered a proposed alternative site, nor explained how the seawater necessary for Project operations would be transported to the alternate inland location without incurring significant environmental impacts over and beyond those contemplated for the current Project. As such, CLG's demand must be taken for what it is: a simple attempt to overturn the hard work and dedication that no less than four public agencies have committed to this project over the last 6 years. Moreover, the argument that alternatives have not been thoroughly analyzed blatantly ignores the previous comprehensive analysis of alternative locations found in both the FEIR and subsequent Poseidon submittals to the CCC. (See FEIR, at 6-1 - 5; Exhibit K, Poseidon Resources November 30,2006 Response to CCC's September 28,2006 Request for Additional Information at 41-44.1~ Poseidon analyzed both the Encina Water Pollution Control Facility (EWPCF) and Maerkle Reservoir as potential Project alternative site locations; however, the analyses demonstrated that both alternate locations would not be feasible. The EWPCF would only accommodate a 10 MGD desalination plant due to outfall constraints; inadequate to satisfy even the City of Carlsbad's demand. The EWPCF would also have significant environmental and cost implications due to required construction of a water conveyance pipeline. (Exhibit K, Poseidon Resources November 30,2006 Response to CCC's September 28,2006 Request for Additional Information at 42.) Likewise, Maerkle Reservoir is located 10.6 miles east of the proposed site. Insufficient space exists in the public rights-of-way between this site and the ocean to accommodate the needed pipelines, and it would be extremely disruptive to construct pipelines outside exiting rights-of-way. Substantial construction and operating costs would also result from piping and pumping seawater to this location, increasing water costs by 20%. This option would also conflict with land use designations. (Exhibit K, Poseidon Resources November 30, 2006 Response to CCC's September 28, 2006 Request for Additional Information 3 It is unclear what CLG was referring to by titling this section of the comment letter, "Aesthetic and Coastal-Related Impacts Have Increased." CLG's comment does not state how or why "aesthetic and coastal-related impacts have increased" from the original to the revised Project. 4 CLG cannot claim ignorance of the existence of this document as it was a part of the administrative record and referenced throughout the briefing in the Surfrider Foundation et al, v. California Coastal Commission case. Hon. Mayor Lewis September 14,2009 Page I3 at 42-44.) It is clear that EPS is the only one of these locations that could feasibly meet Project objectives while also minimizing impacts. Disregarding this analysis, the CLG letter claims that the Project can be moved because the Project's connection to the SDCWA pipeline system enables movement of Project water throughout the County. While this is a true statement, water deliveries will also be made directly to the Carlsbad Municipal Water District, the Vallecitos Water District and the City of Oceanside at other connection points along the proposed pipeline route. These connections are marked as Flow Control Facilities ("FCF") on the pipeline maps included with the approval documents. These connection points are necessary to ensure efficient water delivery to the nine local water agencies that have entered into 30-year contracts with Poseidon to purchase 100% of Project capacity. (See Exhibit L, Water Agencies Comment Letter.) Additionally, the City of Carlsbad has the option to take 100% of its water supply from the CDP and has required connections that are separate from those for the SDCWA. As noted in the City Staff Report for the Project modifications: The City Council's strategic goal on water supply states: Ensure, in the most cost-effective manner, water quality and reliability to the maximum extent practical, to deliver high quality potable water and reclaimed water incorporating drought resistant community principals. (Staff Report, at 3.) To this end, the City of Carlsbad has sought a diversification of its water supply, separate and distinct from the SDCWA, to ensure the reliability of the City's water supply. Due to the direct connections to the municipal systems, the CDP will provide drinking water to the City of Carlsbad, City of Oceanside, and the Vallecitos Water District service area, even in the event of a catastrophic shut down of or reduction in supplies from the SDCWA aqueduct system due to earthquake or regulatory issues. The placement of the CDP in Carlsbad at the EPS site is vital to the City and surrounding jurisdictions. Locating the facility at the EPS site fulfills the major Project objectives stated in the FEIR, which include: 1. To provide a local source of potable water to supplement imported water supplies available to the City of Carlsbad and the San Diego region. 2. To improve water supply reliability for the City of Carlsbad and the San Diego region. 3. To improve water quality for the City of Carlsbad and the surrounding communities. (FEIR, Section 3.5 at 3-30.) In addition, the EPS property is zoned PU-Public Utility, which specifically allows for desalination plants, and therefore is an appropriate site for the CDP. Hon. Mayor Lewis September 14,2009 Page I4 The primary focus of the Project has always been to bring a safe, reliable, drought proof water source to the City of Carlsbad, which requires location of the facility on the coast of the City of Carlsbad. The Court acknowledged this fact in Surfrider Foundation et al. v. California Coastal Commission, holding: A Carlsbad locale is material to a project that will supply a significant percentage of its output to Carlsbad and satisfy 100% of Carlsbad's water needs. Substantial evidence supports the determination that siting the Project within its service area is central to Poseidon's ability to feasibly fulfill the Project's purpose of providing a local, drought-proof water source at or below the cost of imported water supplies. The record reflects that benefits of the Project site include its close proximity to the existing EPS intake and outfall and key delivery points of the distribution system of Carlsbad, the largest water user. [ ]The location allows the Project to optimize the cost of delivery of the produced water and the environmental impacts associated with the construction and operation of the Project. [ ] It also avoids the construction of new intake and discharge facilities, providing significant environmental and cost benefits. (Exhibit F, Final CCC Statement of Decision at 9.) CLG cannot now ignore this finding. J. Air Quality / Global Warming Impacts Have Not Increased CLG states that the Project will "contribute to increased regional GHG emissions." To the extent that CLG is alleging that further environmental review is required to analyze the Project's GHG emissions, CLG is re-asserting an argument that has long been reviewed and dismissed. Global warming is not a new phenomenon and governments have been aware of the effect of GHG emissions on global warming for over a decade. The Addendum provides a thorough review of the significant body of work available on global climate change prior to the approval of the Project, and to avoid repeating this analysis, we hereby incorporate pages 14 to 18 of the Addendum by reference. (See also Exhibit M, Assembly Bill 1493 (Pavley) (July 22, 2002); Exhibit N, Executive Order S-3-05 (June 1,2005); Exhibit 0, California Climate Action Team Report to Governor Schwarzenegger and the California Legislature, Executive Summary (March 2006); Exhibit P, IPCC Third Assessment Report (2001); Exhibit Q, California Consumer Power and Conservation Financing Authority, California Energy Resources Conservation and Development Commission, and California Public Utilities Commission, Energy Action Plan, May 2003; Exhibit R, Pacific Institute, Climate Change and California Water Resources: A Survey and Summary of the Literature, July 2003; Exhibit S, Natural Resources Defense Council v. Reclamation Board (Super. Ct., Sacramento County, issued Apr. 28, 2007, Case No. 06 CS 01228.); Exhibit T, American Canyon Cmty. Unitedfor Responsible Growth v. City ofAm. Canyon (Super. Ct. Napa County, issued May 22,2007, Case No. 26- 27462).) In addition, former Vice President A1 Gore's book Earth in the Balance, was published Hon. Mayor Lewis September 14,2009 Page 15 in January of 1993 and the subsequent movie An Inconvenient Truth was released on May 24, 2006 simultaneously with a book by the same title. (See Exhibit U, Copyright Page of Earth in the Balance.) The legislative actions and scientific studies outlined in the Addendum and incorporated here demonstrate that post-2006 legislative actions and scientific studies are not "new information" or a "changed circumstance" regarding climate change because they merely confirm information that was widely available before the June 2006 certification of the FEIR. (See No Oil, Inc. v. City of L.A. (1987) 196 Cal.App.3d 223,234 n.8 (study prepared before EIR was certified but submitted to City after certification of EIR was not "new information" under Pub. Res. Code § 2 1 166).) Furthermore, this issue has already been litigated in Surfrider Foundation et al. v. State Lands Commission. There, the Court's Tentative Decision found: [Ilnformation regarding greenhouse gas ("GHG") emissions is not "new information" under CEQA 5 2 1 166 because it was widely known and available long before certification of the FEIR in June 2006. (See, e.g., Massachusetts v. EPA (2007) 549 U.S. 497,507- 14 [discussing numerous legislative and executive actions prior to 2006 which addressed GHG emissions and global climate].) Petitioners' argument that the legislative enactment of Assembly Bill 32 ("AB32") in September 2006 and Senate Bill 97 ("SB97") constitute "changed circumstances", i.e., the California Legislature's acknowledgment of impacts of global warming upon the State, fails because California adopted GHG regulations several years before the adoption of AB32 and SB97, through enactment of AB 1493 in 2002 to regulate GHG emissions from cars and trucks, and the issuance of Executive Order No. S-3-05, in June 2005, which established the exact emissions targets that were later incorporated into AB32. The adoption of AB32 and SB97 does not constitute "changed circumstances" requiring preparation of an SEIR. Further, the threat of global warming is not "new information" that was not known or knowable when the FEIR was certified in 2006. [ ] Petitioners' claim that the SLC's "CEQA responsibilities" required preparation of an SEIR ignores the fact that this is not a new project involving whether or not CEQA review of climate change is required in the first instance; instead, this case only involves whether or not an SEIR is permitted under CEQA 5 21 166. Global warming does not constitute the requisite "new information" or "changed circumstances" triggering the need for an SEIR, as noted above. (Exhibit B, SLC Tentative Decision at 9-10.) Because no facts or conditions have changed since the Court's Tentative Decision in Surfrider Foundation et al. v. State Lands Commission, the doctrine of res judicata will bar any further attempt by the environmental groups to re-argue this Hon. Mayor Lewis September 14,2009 Page 16 issue. (Fed. of Hillside and Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1 180, 1202.) To the extent that CLG is alleging that the Project global warming impacts have increased since the FEIR was certified in 2006, this argument ignores the Project's commitment to become the first industrial facility in the state of California to have zero net indirect GHG emissions. As noted by the Addendum: The California Coastal Commission approved the Project subject to the condition, among others, that the CCC approve an Energy Minimization and Greenhouse Gas Reduction Plan (GHG Plan) at a subsequent hearing. Poseidon's plan for the assessment, reduction and mitigation of GHG emissions establishes a protocol for identifying, securing, monitoring and updating measures to eliminate the Project's net carbon footprint. (Addendum, at 1 5 .) The GHG Plan is attached here for the City's review. (See Exhibit J, GHG Plan.) Under the GHG Plan, the Project will not cause or contribute to any increase in GHG emissions because the GHG Plan includes numerous energy-minimization features and results in the reduction to zero of the Project's net indirect GHG emissions. To ensure the Project's emission reductions will be certain, verifiable and reduced to zero, the GHG Plan will require application of CCARICARB methodology to determine GHG emissions, purchase of offsetslrenewable energy credits to fully reduce Project indirect GHG emissions to zero, and submission of annual reports to the SLC to demonstrate compliance. (See Exhibit C, Final CCC Findings at 75-90.) Each public agency that has reviewed the GHG Plan has confirmed that the GHG Plan will result in net carbon neutrality and fully mitigate any effects of the Project's indirect GHG emissions on coastal resources. (See Exhibit V, CCC Findings on GHG Plan at 22.) We would note that the CCC's findings on this point were not challenged by Petitioners in the CCC case and Petitioners did not challenge the CCC's GHG Plan approval, thereby implicitly conceding the Plan will result in net carbon neutrality. K. Mandatory Significance Findings are Inapplicable Without explanation or evidentiary support, CLG alleges that global warming and marine life impacts result in a mandatory finding of significance pursuant to CEQA Guidelines 15065(a). This issue was directly addressed by the Court in Surfrider Foundation et al. v. State Lands Commission. The Court's Tentative Decision found: CEQA 5 15065 is inapplicable. Section 15065 establishes the circumstances [ ] where an EIR is required. Any claim that 5 15065 required an SEIR must fail because the requisite "substantial change" under CEQA 5 2 1 166 has not been established." Hon. Mayor Lewis September 14, 2009 Page 17 (Exhibit B, SLC Tentative Decision at 5.) Likewise, as noted above in Section B, supra, there have been no "substantial changes" or "new information" as a result of the minor Project modifications that are sufficient to require the preparation of a SEIR. CEQA Guideline 5 15065 is therefore equally inapplicable here. L. Cumulative Impacts are Fully Analyzed Cumulative impacts related to the 1-5 widening, Coastal Rail Trail, LOSSAN Rail Corridor, CECP, and Agua Heidionda Sewer Line and Lift Station, are fully analyzed by the Addendum. (Addendum, at 39-4 1 .) The CLG letter provides no information or evidence to support its assertion that the project's listed will "constitute substantially changed circumstances surrounding the Project which will involve new or increased significant environmental impacts." M. There is No Potential Increased Production Capacity CLG's contention that the CDP intends to increase production capacity is false. The Addendum provides specific information as to the reasons for the reconfiguration of the CDP, as well as the increase in the size of the product water storage tank and certain pipelines. (See Addendum, at 4-1 0.) The Planning Commission Staff Report also provides information regarding these modifications. (Staff Report, at 3-6, 10-14.) CLG is manufacturing a theory of supposed increased production capacity without any supporting evidence. With regard to the subsurface product water storage tank, the increase in size of the tank was done at the request of the Carlsbad Municipal Water District. As noted in the Staff Report, the increase in storage capacity will "allow for more time to modify water service deliveries to the City of Carlsbad in the event the Project is required to shut down. The new tank continues to be underground, but will provide an additional 30 minutes for the Carlsbad Municipal Water District to compensate for a change in water delivery if the plant were to shut down, therefore enhancing the health and safety of the system." (Staff Report, at 13.) CLG's assertion that the intake capacity is being increased is similarly false and has no basis in fact. The intake pipeline was originally proposed as a 72" pipeline and continues to be a 72" pipeline in the revised Project. (See Staff Report, Attachment 7a "Site Plan," and Attachment 7b "Site Plan".) No increase in intake is proposed. With regard to the discharge pipeline, the Addendum clearly states: "The discharge pipeline would increase from a 48 to 72 inch diameter. This increase in pipeline size is necessary to achieve full plant production capacity during initial start up and testing for the periods following service interruptions." (Addendum, at 7.) The Project approved in 2006 was a 50 MGD seawater desalination plant and the reconfigured Project remains a 50 MGD seawater desalination plant. As noted in the Addendum: "All components of the desalination plant, including all on-site and off-site Project elements, are proposed to be sized and built to accommodate and deliver 50 MGD of product water." (Addendum, at 4.) There is no change to the operational capacity of the CDP and no plans to change the capacity. Hon. Mayor Lewis September 14,2009 Page 18 N. The Proiect Does Not Exceed Development Standards 1 Lot Coverage CLG's comment is unclear but appears to state that the Project does not meet the PDP lot coverage standard. The area covered by the PDP is the approximately 95 acre EPS site. The CDP and appurtenant facilities has a lot coverage of 3% of the EPS. As shown in the PDP, the CDP plus EPS area does not exceed the 50% lot coverage standard. 0. An Amendment to the Proiect's Coastal Development Permit is Not Required The minor and immaterial revisions to the Project's configuration, including to the Project's intake and discharge pipes and storage tank capacity, are all within the environmental envelope analyzed by the CCC when it approved Poseidon's Coastal Development Permit on November 15,2007. None of those revisions will affect the CCC's determinations regarding the Project's consistency with the applicable policies of the Coastal Act. Further, Poseidon understands from its communications with Coastal Commission staff that staff has reviewed the Planning Commission's August 19, 2009 Resolutions recommending approval of the proposed Project, and that Commission staff has concluded that the revised Project presented in those Resolutions are consistent with the Project's Coastal Development Permit and will not require a Permit amendment. P. Cumulative Impacts CLG states that the "addendum fails to identify significant additional projects within the proposed revised pipeline routes." But the letter fails to identify even one of these supposed "significant additional projects." The question arises as to how CLG knows about "significant additional projects," but cannot list a single project in its letter. Q. The City is Not Relying on a "Claim of Benefits" in Preparing the Addendum Despite CLG's claims, the City is not relying on "net benefit to any future redevelopment of the EPS" as a reason to prepare the Addendum, instead of a SEIR. As noted in the Addendum, the City appropriately applied CEQA Guidelines $6 15 162, 15 163 and 15 164 to determine if an Addendum was the appropriate CEQA document for review of the revised Project. (Addendum, Section 2.0.) The Addendum further states that it "memorializes in detail the City's reasoned conclusion that their revised Project as described in Section 4.0 does not create the conditions requiring the preparation of a Subsequent or Supplemental EIR pursuant to State CEQA Guidelines, sections 15 162 and 15 163." (Addendum, Section 1 1.0.) CLG is simply misrepresenting the standard upon which the City has based its decision to prepare an Addendum. R. Wildlife Impacts In yet another unsupported challenge to the Project, CLG claims that "the alignment of the project buildings may provide new or enhanced perching opportunities for foraging raptors" because the Project site includes a stopover for migrating waterfowl. CLG cites no factual evidence that would support an argument that this could be seen as a potentially significant impact that should be analyzed in the Addendum or FEIR. Moreover, the existing condition is Hon. Mayor Lewis September 14,2009 Page 19 an oil storage tank at a height of approximately 42 feet. The CDP will not exceed 35 feet and therefore will diminish perching opportunities. S. Incomplete Staff Report Comment is noted. Poseidon has also requested that staff complete the sentence on page 3 of the report. T. The FEIR and Addendum Analyze All Proiect Impacts The FEIR and Addendum provide an analysis of all Project impacts regardless of political jurisdiction. The FEIR and Addendum clearly indicate that pipelines will cover several jurisdictions and analyzes impacts throughout the pipeline route. As noted in the Addendum, the length of the product water delivery pipeline is being reduced from 17.4 miles to 16.16 miles which will reduce overall construction impacts. In addition, the Project is required to follow all construction rules of each jurisdiction, and to prepare construction plans for each phase of pipeline construction. Therefore all impacts from the construction of pipelines, regardless of political jurisdiction, have been addressed. 11. CONCLUSION Thank you for the opportunity to respond to these comments. As noted at the Planning Commission meeting, these comments appear to be devoid of real environmental issues and are intended to delay the approval process. CLG's comments are neither new or novel and have been raised multiple times at every level of review. Importantly, the courts have consistently found in favor of the approving agencies. We therefore ask that the City approve the Addendum and minor revisions to the Project, so that construction may commence on this important source of water to the San Diego area. Sincerely, @-- A , kL\c- C &istopher W. Garrett of LATHAM & WATKINS LLP cc: City Manager City Attorney City Planning Director COAST LAW GROUP,LLP MARCO A.GONZALEZ (SBN 190832) CHRISTIAN C.POLYCHRON (SBN 230103) 169 Saxony Road,Suite 204 Encinitas,CA 92024 Ph:(760)942-8505 Fx:(760)942-8515 email:rnarco~coast1awgroUp .com SAN DIEGO COASTKIEEPER ENVIRONMENTAL LAW &POLICY CLINIC GABRIEL G.SOLMER (SBN 228449) 2825 Dewey Road,Suite 200 San Diego,CA 92106 Ph:(619)758-7743 Fx:(619)224-4638 email:gsolrner~coastlawgroUp.Com Attorneys for Petitioners, SURFRIDER FOUNDATION and SAN DIEGO COASTKEEPER 13 14 SURFRIDER FOUNDATION,a California non-) profit public benefit corporation;SAN DIEGO ) COASTKEEPER,a California non-profit public ) benefit corporation,) Petitioners. v. . ) CALIFORNIA STATE LANDS COMMISSION, a California public agency,) ) Respondent.) Ffl ~ 1 2 3 .4 6 •1 8 9 10 11 12 SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO CASE NO.37-2008-00092607-CU-WM-CYL )PETITION FOR WRIT OF MANDAMUS )California Environmental Quality ActJ 15 16 17 18 19 20 21 22 23 24 25 26 27 ) ) POSEIDON RESOURCES,(CHANNELSIDE) LLC.,a Delaware limited liability company; ) ) ) 28 I POSEIDON RESOURCES CORPORATION,a ) 2 Delaware corporation;POSEIDON WATER,) LLC,a Delaware limited liability company;) 3 CITY OF CARLSBAD,a California municipal ) corporation;CABRILLO POWER I,LLC,a ) 4 Delaware limited liability company;) CARLSBAD MUNICIPAL WATER DISTRICT,) a municipal water district;VALLEY CENTER ) 6 MUNICIPAL WATER DISTRICT,a municipal ) water district;RINCON DEL DIABLO ) 7 MUNICIPAL WATER DISTRICT,a municipal ) water district;SWEETWATER AUTHORITY,a ) 8 municipal water district;RAINBOW ) 9 MUNICIPAL WATER DISTRICT,a municipal ) water district;VALLECITOS WATER ) 10 DISTRICT,a municipal water district;SANTA ) FE IRRIGATION DISTRICT,a municipal water ) ~district;OLIVENHAIN MUNICIPAL WATER ) 12 DISTRICT,a municipal water district,) ) 13 RealParties-in-Interest ) 14 15 I. 16 INTRODUCTION 17 1.The SURFRIDER FOUNDATION,by and through its San Diego County Chapter, 18 (hereinafter “SURFRIDER FOUNDATION”),and SAN DIEGO COASTKEEPER (hereinafter 19 “COASTKEEPER”)bring this action in the public interest to challenge the CALIFORNIA STATE 20 LANDS COMMISSION’s (hereinafter “COMMISSION”)approval of POSEIDON RESOURCES 21 (CHANNELSIDE)LLC’s (hereinafter “POSEIDON”)proposed amendment to Lease No.PRC 8727.1,a 22 General Lease-Industrial Use (hereinafter “Lease Amendment”)that provides for the use of certain 23 public trust lands. 24 2.The Lease Amendment permits use of an existing once-through cooling upland electricity 25 generating power plant’s seawater intake and outfall structures for the purposes of a new desalination 26 plant (hereinafter “Facility”).This action claims approval of the Lease Amendment by COMMISSION 27 was inconsistent with the California Environmental Quality Act (hereinafter “CEQA”)and the California 28 Water Code.Therefore,COMMISSION’s approval of the Lease Amendment was both procedurally and 2 PETITION FOR WRIT OF MANDAMUS -CEQA 1 substantively illegal,and must be overturned. 2 II. 3 JURISDICTION 4 3.Jurisdiction is proper under.Code of Civil Procedure sections 1085,1094.5,1 87,and 526 5 and Public Resources Code sections 21168 and 21168.5.Venue is proper pursuantto California Code of 6 Civil Procedure section 393.The COMMISSION conducts business and oversees public trust land in 7 Carlsbad,California,and the proposed project is located in Carlsbad,California. 8 4.Petitioners have complied with the requirements of Public Resources Code section 9 21167.5 by mailing a written notice of the commencement of this action to the COMMISSION prior to 10 the filing of this Petition.A copy of the prior written notice provided to the COMMISSION,w:ith proof ~of service thereof is attached hereto as Exhibit A. 12 III. 13 PARTIES 14 5.Petitioner SURFRIDER FOUNDATION is,and at all times herein mentioned has been,a 15 non-profit public benefit corporation,organized and existing under the laws of the State of California, 16 with its principal place of business in San Clemente,California.SURFRIDER FOUNDATION meets 17 all standing requirements for prosecuting this petition.SURFRIDER FOUNDATION is beneficially 18 interested in the subject matter of this petition for writ of mandamus and will be adversely affected by 19 the environmental impacts of this project. 20 6.SURFRIDER FOUNDATION is an environmental organization dedicated to the 21 protection and enjoyment of the world’s oceans,waves,and beaches,including the coastline and lagoons 22 in and around Carlsbad.SURFRIDER FOUNDATION engages in community activism,participates in 23 governmental hearings,and educates children and adults about the past,present,and future environmental impacts on the oceans and beaches.The interests that SURFRIDER FOUNDATION 25 seeks to protect in this petition are germane to its fundamental purpose.Members of SURFRIJDER FOUNDATION regularly use the beach and the lagoon areas adjacent to the Facility location for recreation including surfing,fishing,hiking,sunbathing,water sports,and passively enjoying nature. 27 Thus,SURFRIDER FOUNDATION has a geographical nexus with the affected environment and its 28 ,members are within the class of persons beneficially interested in the subject matter of this petition. 3 PETITION FOR WRIT OF MANDAMUS CEQA 1 7.The injuries of SURFRIDER FOUNDATION,its members and their families and 2 children are actual,concrete injuries and would be redressed by the relief sought herein.SURFRIDER 3 FOUNDATION brings this petition on its own behalf,on behalf of its San Diego Chapter,and on behalf A of more than 25,000 members who live in California.The claims asserted and the relief requested in this 5 petition do not require that SURFRIIDER FOUNDATION’s individual members directly participate as 6 parties to this lawsuit. 7 8.Petitioner COASTKEEPER is,and at all times herein mentioned has been,a noi.~-profit 8 public benefit corporation,organized and existing under the laws of the State of California,with its :9 principal place of business in San Diego,California.COASTKEEPER meets all standing requirements io for prosecuting this petition for writ of mandamus,is beneficially interested in the subject matter of this II petition,and will be adversely affected by the environmental impacts of this project.Much of 12 COASTKEEPER’s work is focused on protection of water resources,including the coast and lagoons in 13 and around Carlsbad.COASTKEEPER engages in community activism,participates in governmental 14 hearings,and educates the public about environmental impacts on oceans and beaches.The interests that 15 COASTKEEPER seeks to protect with this writ are germane its fundamental purpose.Members of 16 COASTKEEPER regularly use the beach and the lagoon areas adjacent to the Facility location for 17 recreation including surfing,fishing,hiking,sunbathing,water sports,and passively enjoying nature. 18 9.The injuries of COASTKEEPER,its members and their families and children are actual, 19 concrete injuries and would be redressed by the relief sought herein.COASTKEEPER brings 1;his 20 petition on its own behalf,and on behalf of more than 6,000 members who live in San Diego County. 21 The claims asserted and the relief requested in this petition do not require that COASTKEEPER’s 22 individual members directly participate as parties to this lawsuit 23 10.Petitioners are informed,believe and thereon allege that respondent CALIFORNIA 24 STATE LANDS COMMISSION is a state agency,organized and existing under the laws of the State of 25 California,with its principal place of business in Sacramento,California.Respondent is a Responsible Agency under the California Environmental Quality Act (CEQA)Guidelines section 15381.The 26 COMMISSION has discretionary approval power over POSIEDON’s use of public trust tidelands for 27 seawater intake and discharge. 28 4 PETITION FOR WRIT OF MANDAMUS -CEQA 1 11.Petitioners are informed,believe,and thereon allege real party-in-interest POSEIDON 2 RESOURCES,(CHANNELSIDE)LLC,the project applicant,is a Delaware.limited liability company 3 headquartered in Stamford Connecticut,and registered and operating in the State of California. .4 Petitioners are informed,believe,and thereon allege real party-in-interest POSEIDON RESOU1.~CES 5 CORPORATION is a Delaware corporation headquartered in Stamford Connecticut,and registered and 6 operating in the State of California.Petitioners are informed,believe,and thereon allege real party-in 7 interest POSEIDON WATER,LLC is a Delaware limited liability company headquartered in Stamford 8 Connecticut,and registered and operating in the State of California.(Collectively,real parties-in-interest 9 referenced in this paragraph shall hereinafter be referred to as “POSEIDON”or “POSEIDON RPIs”) io Petitioners are informed,believe,and thereon allege POSEIDON RPI’s are affiliates,subsidiaries,or II parents of each other and share the same business address per filings with the California Secretary of 12 State,and that POSEIDON RPIs have a beneficial interest in the Lease. 13 12.Petitioners are informed,believe and thereon allege that real party-in-interest,.TY OF 14 CARLSBAD (hereinafter “CITY”)is a municipal corporation.Petitioners are informed,believe and 15 thereon allege CITY has the option to purchase the Facility from POSEIDON after the 30 year term of 16 its water supply agreement with POSEIDON expires,and maintains the right of first refusal to buy 17 Facility if POSEIDON sells Facility.Petitioners are informed,believe and thereon allege that CITY 18 retains land use control over the Facility site,will gain approximately 2 million dollars in new property 19 tax revenue,and will gain three key parcels of land adjacent to Agua Hedionda Lagoon as a result of this 20 project.Therefore,CITY has a beneficial interest in the proposed project. 21 13.Petitioners are informed and believe and thereon allege that real-party-in-interest 22 CABRILLO POWER I LLC (hereinafter “CABRILLO”)is a Delaware limited liability company 23 headquartered in Houston,Texas,registered and operating in the State of California.CABRILLO owns 24 and operates the Encina Power Plant,including infrastructure for seawater intake from the Agua 25 Hedionda Lagoon,and is the master lessee of the intake and discharge infrastructure required by 26 POSEIDON to operate the Facility.CABRILLO therefore has a beneficial interest in the valid:ity of the Lease Amendment. 27 28 5 PETITION FOR WRIT OF MANDAMUS -CEQA 1 14.Petitioners are informed,believe and thereon allege real party-in-interest CARLSBAD 2 MUNICIPAL WATER DISTRICT is a subsidiary municipal water district of the City of Carlsbad;and 3 VALLEY CENTER MUNICIPAL WATER DISTRICT,RINCON DEL DIABLO MUNICIPAL 4 WATER DISTRICT,SWEETWATER AUTHORITY,RAINBOW MUNICIPAL WATER DISTRICT, 5 VALLECITOS WATER DISTRICT,SANTA FE IRRIGATION DISTRICT,and OLIVENHAJN 6 MUNICIPAL WATER DISTRICT (hereinafter referred to collectively as WATER DISTRICTS)are 7 municipal water districts formed pursuant to the Municipal Water District Law of 1911,California 8 Water Code section 71000 et seq.According to POSEIDON,WATER DISTRICTS have entered into 9 public-private partnerships with POSEIDON and signed long-term purchase agreements to receive 10 10 percent of the desalinated water from the Facility.WATER DISTRICTS therefore have a beneficial 11 interest in the Lease. 12 13 PRELIMINARY FACTS 14 15.At issue is the COMMISSION’s amendment of Lease No.PRC 8727.1 to allow Facility’s 15 use of intake and outfall structures constructed for and currently servicing the Encina Power Station 16 (hereinafter “Encina”or “power plant”).Encina is located adjacent to the Agua Hedionda Lagoon and to 17 the Pacific Ocean in Carlsbad,San Diego County. 18 16.POSEIDON and CABRILLO have entered into a Ground Lease and Easement allowing 19 construction of the Facility and use of the land and infrastructure for approximately 33 years from the 20 anniversary of the commercial operation date of the Facility,with an option to extend the term for up to 21 two consecutive additional periods of ten years. 22 17.The COMMISSION and CABRILLO entered into an agreement designated as Lease PRC 23 8727.1,authorized on May 10,2007 and executed August 14,2007,whereby COMMISSION granted a 24 lease of public tidelands to CABRILLO for its seawater intake and discharge outfall. 25 18.Encina uses a technology,known as once-through cooling,by which seawater is drawn 26 from the ocean,circulated through the power plant to cool its generators,and discharged back into the 27 ocean at an increased temperature.Encina uses an open-ocean intake to draw its cooling water from the 28 Agua Hedionda Lagoon.The Facility will utilize the Encina cooling water intake infrastructure to draw 6 PETITION FOR WRIT OF MANDAMUS -CEQA • I in source water for the Facility’s desalination process and for dilution of the Facility’s discharge. 2 19.The proposed Facility would be “co-located”with the power plant,meaning it would be 3 constructed adjacent to the power plant and share the intake and discharge outfall channel with Encina. 4 The Facility would intake and discharge ocean water into and from state tidelands held by the .5 COMMISSION in trust for the public. 6 20.On September 14,2007,CABRILLO submitted an application to the California Energy 7 Commission to replace the existing power station with a new plant,which CABRILLO expects will be 8 operating by 2010.This new power plant would use a closed-cycle cooling system instead of 9 once-through cooling.CABRILLO proposes to keep two of the five units in the existing station online 10 beyond 2010 to provide additional grid reliability if needed. 11 21.The Facility will require 304 million gallons per day (“MUD”)of lagoon source water in 12 order to produce 50 MUD of potable water.Approximately 100 MUD will be used for the desalination 13 process,with the remainder required to provide dilution of the desalination by-product,also called 14 “brine”,to be discharged to the Pacific Ocean. 15 22.Currently,Encina’s intake volume is insufficient to meet the Facility’s source water needs, 16 and Encina’s intake volume will decrease further when the new power plant is built.CABRILLO 17 anticipates upon construction of its new power plant the two remaining units will operate only a few 18 weeks per year.At times when the current power plant is shut down or draws less than 304 MGD,the 19 Facility would run the intake pumps to satisfy Facility intake needs. 20 23.By co-locating with Encina,the Facility will perpetuate the use of the open-ocean intake 21 infrastructure currently used for once-through cooling. 22 24.Once-through cooling technology has been recognized as harmful to the marine 23 environment because it causes significant impingement and entrainment of marine organisms. 24 Cumulatively,use of once-through cooling technology at power plants throughout the State of California 25 has been found to have caused significant,if not devastating,harm to the marine environment•. 26 25.The Facility would kill marine organisms through entrainment,which occurs when 27 organisms found in the source water are drawn into the plant through the seawater intake,and by 28 impingement,which is the pinning of marine organisms against intake screens.The Facility would kill at 7 •PETITION FOR WRIT OF MANDAMUS -CEQA 1 least 2.11 pounds or 96,000 individual marine organisms per day.Over the expected 30-year life of the 2 Facility this correlates to over 23,000 pounds or over 1 billion organisms. 3 26.The California State Water Resources Control Board (hereinafter,“SWRCB”)is in the 4 process of finalizing a policy for power plants that use once-through cooling technology.The goal of the 5 SWRCB effort is to adopt a statewide policy to implement federal Clean Water Act section 316(b),the 6 statute which seeks to control the harmful effects of power plant once-through cooling water intake 7 structures on marine and estuarine life. 8 27.The Facility will require approximately 274,400 megawatt-hours of electricity per year to 9 desalinate water.This equates to approximately 97,165 metric tons of carbon dioxide emission per year. 10 The Facility will be the most energy-intensive means of producing drinking water in the State of ii California. 12 V. 13 PROCEDURAL HISTORY 14 28.As Lead Agency pursuant to the California Environmental Quality Act,on or about June 15 14,2006 CITY certified a Final Environmental Impact Report (FEW)to support various CITY approvals 16 required for construction and operation of the Facility.The FEIR concluded impacts to the marine 17 environment would be less than significant.The FEW did not include an analysis of greenhouse gas 18 emissions resulting from Facility operations and electricity consumption. 19 29.In 2006,the California legislature passed,and the Governor signed,the Global Warming 20 Solutions Act of 2006 (AB 32).In 2007,Senate Bill 97 was passed,explicitly recognizing that 21 greenhouse gas emissions are an important environmental issue requiring analysis under CEQA. 22 30~On October 30,2007,the COMMISSION held a public hearing to consider approval of 23 the Lease Amendment.After taking testimony from POSEIDON,Petitioners,and numerous members of 24 the public both in support of and in opposition to the proposed Facility,the COMMISSION continued 25 the hearing and requested additional information from POSEIDON. 26 31.On November 15,2007,the California Coastal Commission (hereinafter !ICoastal 27 Commission”)conditionally approved a Coastal Development Permit for the Facility.In doing so,the 28 Coastal Commission refused to accept the CITY’s FEW conclusion that the Facility would have no 8 PETITION FOR WRIT OF MANDAMUS -CEQA 1 significant impacts upon marine life or the marine environment,and required POSEIDON to propose a 2 comprehensive Marine Life Mitigation Plan (hereinafter “MLMP”)to address the impacts. ‘3 32.As part of its November 15,2007 conditional approval,the Coastal Commission also 4 required POSEIDON to prepare an Energy Minimization and Greenhouse Gas Reduction Plan 5 (hereinafter “GHG Reduction Plan”). 6 33.On August 6,2008,the Coastal Commission issued a final project approval requiring 7 POSEIDON to offset its GHG emissions to become “net carbon neutral”and submit annual GI-IG 8 monitoring reports. 9 34.On August 6,2008,the Coastal Commission also adopted a modified version of the 10 MLMP proposed by POSEIDON.The Coastal Commission determined the Facility would negatively. 11 impact marine life through impingement and entrainment,resulting in 37 acres of Agua Hedionda 12 Lagoon habitat production foregone.The Coastal Commission required the creation of up to 55.4 acres 13 of wetland habitat as a condition of approval of POSEiDON’s coastal development permit,but failed to 14 identify a location for such habitat restoration,and did not establish performance criteria by which 15 successful mitigation would be established. 16 35.At its August 22,2008 meeting,the COMMISSION granted POSEIDON a Lease 17 Amendment requiring compliance with the mitigation measures recently adopted by the Coastal 18 Commission.The COMMISSION’s Lease Amendment required up to 55.4 acres of wetlands restoration 19 to be implemented in two Phases,with the first Phase (Phase I)comprising not less than 37 acres of 20 wetlands restoration,and the second Phase (Phase II)comprising up to an additional 18.4 acres.The 2,1 COMMISSION’s Lease Amendment approval failed to identify a location for such habitat restoration, 22 and did not establish performance criteria by which successful mitigation would be established. 23 36.The COMMISSION also imposed a requirement in the Lease Amendment that 24 POSEIDON comply with the provisions of the GHG Reduction Plan as adopted by the Coastal 25 Commission.The COMMISSION required that POSEIDON offset an additional 25,000 metric tons of ~6 greenhouse gas emissions from construction and Facility operations. 27 37.Neither the significant marine life impacts nor the greenhouse gas emissions,fbr which 28 mitigation requirements were adopted by COMMISSION as conditions of the Lease Amendment,were 9 PETITION FOR WRIT OF MANDAMUS -CEQA I considered or addressed in the CITY’s FEIR or any other CEQA-compliant document. •2 38.On August 29,2008,COMMISSION filed a Notice of Determination (hereinafter 3 “NOD”)pursuant to 14 Cal.Code Regs.section 15075,stating that the COMMISSION had considered 4 and adopted the FEIR as prepared by the CITY.The COMMISSION’s NOD also stated that findings had ~5 been made pursuant to CEQA. 6 VI. .7 PRELIMINARY ALLEGATIONS 8 39.Petitioners exhausted all administrative remedies prior to filing this action.The 9 COMMISSION’s determination is final and no further administrative appeal procedures are provided by 10 State or local law. ii 40.Petitioners and their members timely raised each and every significant substantive and 12 procedural issue known to them in compliance with Public Resources Code section 21177 duri!ng the 13 review process for this project.Petitioners objected to approval of the Lease Amendment in writing on 14 or about October 16,2007,August 20,2008 and August 21,2008.Petitioners objected to approval of ~the Lease Amendment orally at the COMMISSION’s October 30,2007 and August 22,2008 public 16 hearings on approval of the Lease Amendment application.Each issue raised in this petition was 17 presented to respondent either orally or in writing by Petitioners,members of the public,or both,prior to 18 the close of the COMMISSION’s public hearing. 19 41.Petitioners do not have a plain,speedy,and adequate remedy in the ordinary course of 20 law. . 21 42.If the COMMISSION’s order is allowed to be implemented,Petitioners and their 22 members’recreational,aesthetic,scientific,educational,conservation and economic interests will be 23 adversely affected by construction and operation of the Facility,leading to irreparable injury.Imposition 24 of a stay is not against the public interest because environmental review has not been completed,and 25 negative adverse impacts to the environment will result if the project moves forward as.planned.A stay 26 is in the public interest because implementing the project will violate the public trust and result in 27 significant adverse environmental impacts. 28 43.There is a probability that Petitioners will prevail on the merits.The Court should issue a 10 PETITION FOR WRIT OF MANDAMUS -CEQA 1 temporary restraining order,preliminary injunction and permanent injunction ordering respondent to 2 suspend all activities implementing the project until the Court,by way of return writ,adjudicates that the .3 COMMISSION has fully complied with all requirements of the California Environmental Quality Act. 4 44.Petitioners are entitled to attorneys’fees pursuant to Code of Civil Procedure section 5 1021.5inthat: 6 a.The successful disposition of this lawsuit will result in the enforcement of 7 important rights affecting the public interest and will confer significant benefits upon the public or a 8 large class of persons.Petitioners seek to enforce provisions of important state environmental laws for 9 the benefit of the public; 10 b.The necessity and financial burden of private enforcement are such as to make the ii award appropriate;and 12 c.Such fees will not be paid out of any recovery. 13 14 . VII. 15 FIRST CAUSE OF ACTION (WRIT OF MANDATE/CEQA~MARINE LIFE IMPACTS) 16 17 45.Petitioners incorporate all previous paragraphs as if fully set forth herein. 18 46.The COMMISSION prejudicially abused its discretion and failed to fulfill its duties under 19 CEQA in approving POSEIDON’s application for the amendment of Lease No.PRC 8727.1.The Lease Amendment approval is invalid under Code of Civil Procedure section 1094.5 because the 20 COMMISSION failed to proceed in the manner required by law and its findings,determinations,or 21 decision are not supported by substantial evidence in light of the whole record. 22 47.The CEQA Guidelines,section 15 162(a)require production of a Subsequent BIR when: 23 a.Substantial changes occur with respect to the project that will result in new or 24 increased significant environmental impacts; 25 b.Substantial changes occur with respect to the circumstances under which the 26 project is undertaken that involve new or increased significant environmental impacts;or, c.Important new information is obtained that shows the project will have one or 28 more significant effectnot previously discussed,mitigation measures previously found infeasible would 11 PETITION FOR WRIT OF MANDAMUS -CEQA 1 in fact be feasible,or new feasible mitigation measures not previously considered are declined by the 2 applicant. 3 48.The COMMISSION inappropriately relied upon the CITY’s FEW,and inappropriately re 4 certified the FEW,despite the CITY’s inaccurate finding of no significant environmental impact to 5 marine life from impingement and entrainment caused by the Facility. 6 49.The Coastal Commission’s identification of significant marine life environmental impacts 7 and the imposition of a MLMP,neither of which occurred via the previously certified FEW,constitute 8 substantial changes with respect to the project,substantial changes with respect to the circumstances 9 under which theproject is undertaken,and important new information showing the project will have one 10 or more significant effects not previously discussed.Pursuant to CEQA Guidelines section 15162(a),the 11 COMMISSION was required to produce a Subsequent or Supplemental EIR to address these changes. 12 50.The Coastal Commission’s MLMP approved at its August 6,2008 hearing,and 13 subsequently adopted or incorporated by reference by the COMMISSION,is insufficient to meet the 14 ~CEQA requirements. 15 51.The COMMISSION committed an arbitrary and capricious abuse of discretion ‘when it 16 approved the Lease Amendment without requiring preparation of a Supplemental or Subsequent EJR and 17 adopting an appropriate marine life mitigation plan as required by CEQA Guideline Section 15162. 18 52.The COMMISSION committed an arbitrary and capricious abuse of discretion in 19 approving the Lease Amendment without adopting its own findings as required under CEQA Guidelines 20 Sections 15096 and 15091. 53.The COMMISSION did not determine whether the Lease Amendment is in the best 22 interest of the State pursuant to pursuant to Public Resources Code Section 6702(b)(3).The 23 COMMISSION did not adequately consider whether the use,project or activity permitted by the lease is consistent with environmental protection. 24 VII. 25 SECOND CAUSE OF ACTION 26 (WRIT OF MANDATE/CEQA:GREENHOUSE GAS EMISSIONS) 27 54.Petitioners incorporate all previous paragraphs as if fully set forth herein. 28 55.The COMMISSION prejudicially abused its discretion and failed to fulfill its duties under 12 PETITION FOR WRIT OF MANDAMUS -CEQA 1 CEQA in approving POSEIDONs application for the amendment of Lease No.PRC 8727.1.The Lease 2 Amendment approval is invalid under Code of Civil Procedure section 1094.5 because the 3 COMMISSION failed to proceed in the manner required by law and its findings,determinations,or 4 decision are not supported by substantial evjdence in light of the whole record. 5 56.The COMMISSION inappropriately relied upon the CITY’s FEIR,and inappropriately re 6 certified the FEIR,despite the CITY’s failure to consider,assess,or mitigate the impacts from 7 greenhouse gas emissions in the FEIR. 8 57.The emissions of greenhouse gasses from the Facility will be extensive,will cause a 9 significant environmental impact,and will contribute to the impacts of global warming. 10 58.The passage of the Global Warming Solutions Act of 2006 (AB 32)and the requirements j~of SB 97 (2007)constitute a change in circumstances under which the project is being undertaken that 12 resulted in the identification of increased significant environmental impacts. 13 59.Through the Coastal Commission and COMMISSION reviews,important new 14 information regarding greenhouse gas emissions from the facility and their impact was disclosed that 15 show the Facility will have one or more significant effect not previously discussed. 16 60.COMMISSION’s adoption of any greenhouse gas mitigation measures required by the 17 Coastal Commission or incorporation of any such requirements as conditions of Lease Amendment 18 approval do not substitute for nor constitute CEQA compliance. 19 61.The COMMISSION failed to prepare a Supplemental or Subsequent Environmental 20 Impact Report to address Facility greenhouse gas emissions and their impacts as required by CEQA 21 Guideline Section 15162. Ix. 22 THIRD CAUSE OF ACTION 23 (PETITION FOR WRIT OF MANDAMUS:CALIFORNIA WATER CODE) 24 62.Petitioners incorporate all previous paragraphs as if fully set forth herein. 63.The COMMISSION prejudicially abused its discretion and failed to fulfill its duties under •26 California Water Code section 13142.5(b)when it adopted the Lease Amendment.The Lease 27 Amendment is invalid under Code of Civil Procedure section 1094.5 because the COMMISSION failed 28 to proceed in the manner required by law and its findings,determinations,or decision are not supported 13 PETITION FOR WRIT OF MANDAMUS -CEQA 1 by substantial evidence in light of the whole record. 2 64.The federal Clean Water Act section 316 (b)requires that location,design,construction, 3 and capacity of cooling water intake structures reflect the best technology available for minimizing 4 adverse environmental impact.Encina is subject to regulation under Clean Water Act 316 (b)and any 5 policy adopted by the SWRCB.The Facility,while not directly subject to regulation under Clean Water 6 Act 316 (b),must comply with a related state law,California Water Code section 13142.5. 7 65.California Water Code section 13142.5 (b)requires the Facility to utilize the best 8 available site,design,technology,and mitigation measures feasible to minimize the intake and mortality 9 of all forms of marine life.The best available site,design,technology and mitigation are determined by 10 analyzing each element (site,design,technology,and mitigation)individually,and in combination. 11 66.The COMMISSION failed to analyze Facility compliance with California Water Code 12 section 13142.5(b).The COMMISSION therefore failed to require that the Facility use best available 13 site,best available design,best available technology and best available mitigation. 14 67.The COMMISSION analyzed Facility environmental impacts only for operations at the 15 proposed site.No alternative sites were assessed during the COMMISSIONs review of the Facility. 16 68.The COMMISSION committed an arbitrary and capricious abuse of discretion by failing 17 to analyze the best available site,and thereby failing to assess and require best available technology for 18 minimizing intake of marine life by the Facility. 19 X. 20 PRAYER FOR RELIEF 21 WHEREFORE,Petitioners pray: 22 1.For an immediate stay of all construction activities,approvals,permit processing or any 23 other activities related to,or dependent on the COMMISSION’s approval of the project described above. 24 2.For the Court to issue a peremptory writ of mandamus directed to the COMMISSION 25 setting aside its approval of POSEIDON’s Lease Amendment application. 26 3.For a temporary restraining order,preliminary injunction and permanent injunction, 27 ordering POSEIDON to suspend all activities implementing the project until the Court,by way of return 28 writ,adjudicates that the COMMISSION has fully complied with all requirements of the California 14 PETITION FOR WRIT OF MANDAMUS -CEQA 5 Water Code and CEQA. 4.For reasonable attorneys fees. 5.For costs incurred herein. 6.For any other relief that the court deems necessary and proper. VERIFICATION 15 1 2 3 4 DATED:September 26,2008 COAST LAW GROUP Marco A.Gonzalez Gabriel G.Solmer Attorneys for Petitioners, SURFIUDER FOUNDATION and SAN EGO COASTKEEPER 6 7 8 9 1,0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 PETITION FOR WRIT OF MANDAMUS -CEQA I I,JOE GEEVER,declare: I am a representative of Surfrider Foundation,a California public benefit corporation organized 3 and existing under the laws of California.Surfrider Foundation is a petitioner in the above-entitled 4 action,and I have been authorized to make this verification on its behalf. 5 I have read the foregoing Petition for Writ of Mandamus and know the contents thereof The 6 same is true of my own knowledge except as to those matters which are alleged on information and ‘~belief,and as to those matters I believe them to be true. 8 I declare under penalty of perjury,under the laws of the State of California,that the foregoing is 9 true and correct and that this verification was signed on the 26th day of September,2008 in Encinitas, 10 California. 13 Joe,~eever Aut~horized Representative 1.4 Surfrider Foundation 15 16 17 18 19 20 21 24 25 26 27 28 VERIFICATION 16 PETITION FOR WRIT OF MANDAMUS -CEQA 1 2 I,BRUCE REZNIK,declare: 3 I am the Executive Director of San Diego Coastkeeper,a California public benefit corporation ~organized and existing under the laws of California.San Diego Coastkeeper is a petitioner in the above- entitled action,and I have been authorized to make this verification on its behalf. 6 I have read the foregoing Petition for Writ of Mandamus and know the contents thereof The same is true of my own knowledge except as to those matters which are alleged on information and 8 belief,and as to those matters I believe them to be true. 9 I declare under penalty of perjury,under the laws of the State of California,that the foregoing is 10 true and correct and that this verification was signed on the 1 6t~~day of September,2008 in Encinitas, california. 12 13 Bruce Reznik Executive Director 14 San Diego Coastkeeper 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 PETITION FOR WRIT OF MANDAMUS -CEQA 1 COAST LAW GROUP,LLP MARCO A.GONZALEZ (SBN 190832)2 CHRISTIAN C.POLYCHRON (SBN 230103) ~169 SaxonyRoad,Suite2O4 Encinitas,CA 92024 4 Ph:(760)942-8505 Fx:(760)942-8515 email:marco~coastlawgroup.com .6 SAN DIEGO COASTKEEPER 7 ENVIRONMENTAL LAW &POLICY CLINIC GABRIEL G.SOLMER (SBN 228449) 8 2825 Dewey Road,Suite 200 San Diego,CA 92106 Ph:(619)758-7743 10 Fx:(619)224-4638 email:gso1mer~coastlawgroup.com 12 Attorneys for Petitioners, SURFRIDER FOUNDATION and SAN DIEGO COASTKEEPER 13 14 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 15 COUNTY OF SAN DIEGO 16 17 18 SURFRIDER FOUNDATION,a California non-)Case No. profit public benefit corporation;SAN DIEGO ) 19 COASTKEEPER,a California non-profit public ) benefit corporation ) 20 ) Petitioners,)NOTICE OF COMMENCEMENT OF )ACTION PURSUANT TO THE 22 v.)CALIFORNIA ENVIRONMENTAL )QUALITY ACT 23 CALIFORNIA STATE LANDS COMMISSION,) a California public agency.)Pub Res.Code §21167.5] 24 ) 25 Respondent.) ______________________________________________________________________________________ ) 26 ) POSEIDON RESOURCES,(CHANNELSIDE)) 27 LLC.,a Delaware limited liability company;) 28 EXHIBIT A 1 POSEIDON RESOURCES CORPORATION,a ) 2 Delaware corporation;POSEIDON WATER,) LLC,a Delaware limited liability company;) ~CITY OF CARLSBAD,a California municipal ) corporation;CABRILLO POWER I,LLC,a ) 4 Delaware limited liability company;) CARLSBAD MUNICIPAL WATER DISTRICT,) a municipal water district;VALLEY CENTER ) 6 MUNICIPAL WATER DISTRICT,a municipal ) water district;RII’JCON DEL DIABLO ) 7 MUNICIPAL WATER DISTRICT,a municipal ) water district;SWEETWATER AUTHORITY,a ) 8 municipal .water district;RAiNBOW ) 9 MUNICIPAL WATER DISTRICT,a municipal ) water district;VALLECITOS WATER ) 10 DISTRICT,a municipal water district;SANTA ) FE IRRIGATION DISTRICT,a municipal water ) 11 district;OLIVENHAIN MUNICIPAL WATER ) 12 DISTRICT,a municipal water district.) 13 Real Parties-in-Interest ) 14 15 TO RESPONDENT STATE LANDS COMMISSION AND REAL PARTIES IN iNTEREST: 16 Please take notice,pursuant to California Public Resources Code section 21167.5,on or before 17 .September 18,2008,Surfrider Foundation and San Diego Coastkeeper intend to commence an action 18 seeking a writ of mandamus to review,overturn,set aside,void,and annul the State Lands Commission 19 decisions approving the lease amendment for Poseidon Resources Carlsbad Desalination Project 20 21 (“Project”)and accepting the Environmental Impact Report (“EIR”)for the Project (SCH # 22 2004041081)prepared by lead agency City of Carlsbad. 23 This action will be based upon State Lands Commission’s failure to comply with the California 24 Environmental Quality Act (Public Resources Code §2100 et seq.,)when it approved the Project,relying 25 on the EIR prepared by City of Carlsbad,and failing to require preparation of a subsequent or 26 27 supplemental EIR as required under CEQA Guideline Sections 15162 and 15163. 28 2 NOTICE OF COMMENCEMENT OF ACTION -CEQA EXHIBIT A Marco A.Gonzalez Gabriel G.Solmer Attorneys for Petitioners, SURFRIDER FOUNDATION and PLANNING AND CONSERVATION LEAGUE 3 NOTICE OF COMMENCEMENT OF ACTION -CEQA This action will further be based upon State Lands Commission’s failure to require Project to comply with the California Water Code and State Lands Commission’s violation of the public trust responsibility to protect the public’s rights with respect to state tidelands. DATED:September 16,2008 COAST LAW GROUP 1 2 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 EXHIBIT A 1 COAST LAW GROUP,LLP MARCO A.GONZALEZ (SBN 190832)2 CHRISTIAN C.POLYCHRON (SBN 230103) ~169 Saxony Road,Suite 204 Encinitas,CA 92024 4 Ph:(760)942-8505 Fx:(760)942-8515 email:marco@coastlawgroup.com 6 SAN DIEGO COASTKEEPER 7 ENVIRONMENTAL LAW &POLICY CLINIC GABRIEL G.SOLMER (SBN 228449) 8 2825 Dewey Road,Suite 200 9 SanDiego,CA92106 Ph:(619)758-7743 10 Fx:(619)224-4638 email:gsolmer@coastlawgroup.com 12 Attorneys for Petitioners, SURFRIDER FOUNDATION and SAN DIEGO COASTKEEPER 13 14 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 15•COUNTY OF SAN DIEGO 16 17 18 SURFRJDER FOUNDATION,a California non-)Case No. profit public benefit corporation;SAN DIEGO ) 19 COASTKEEPER,a California non-profit public ) benefit corporation ) 20 ) Petitioners,)PROOF OF SERVICE 21 ) 22 v.)Pub Res.Code~21167.5] ) 23 CALII~ORNIA STATE LANDS COMMISSION,) a California public agency.) 24 ) 25 Respondent.) _______________________________________________________________________________ ) 26 ) POSEIDON RESOURCES,(CHANNELSIDE).) 27 LLC.,a Delaware limited liability company;) 28 EXHIBIT A 1 POSEIDON RESOURCES CORPORATION,a ) 2 Delaware corporation;POSEIDON WATER,) LLC,a Delaware limited liability company;) ~CITY OF CARLSBAD,a California municipal ) corporation;CABRILLO POWER I,LLC,a ) 4 Delaware limited liability company;) CARLSBAD MUNICIPAL WATER DISTRICT,) a municipal water district;VALLEY CENTER ) 6 MUNICIPAL WATER DISTRICT,a municipal ) water district;RINCON DEL DIABLO ) 7 MUNICIPAL WATER DISTRICT,a municipal ) water district;SWEETWATER AUTHORITY,a ). 8 municipal water district;RAINBOW ) 9 MUNICIPAL WATER DISTRICT,a municipal ) water district;VALLECITOS WATER ) 10 DISTRICT,a municipal water district;SANTA ) FE IRRIGATION DISTRICT,a municipal water ) ~district;OLWENHAIN MUNICIPAL WATER ) 12 DISTRICT,a municipal water district.) ) 13 Real Parties-in-Interest ) 14 15 PROOF OF SERVICE 16 17 ~Sara Honadle,declare; 18 1.I am,and was at the time of service of the papers herein referred to,a citizen fo 19 the United States,a resident of the State of California,over the age of eighteen years,and not 20 a party to this action.I am employed in the County of San Diego,California,in which County the within mentioned service occurred.My business address is Coast Law Group LLP,169 21 Saxony Road,Suite 204,Encinitas,CA 92024. 22 2.On September 16,2008 I served the following document(s): Notice of Commencement of Action 24 On the parties in this action as follows: 25 26 27 28 2 PROOF OF SERVICE EXHIBIT A 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 Hayley E.Peterson Attorneys for State of California Deputy Attorney General OFFICE OF ATTORNEY GENERAL . 110 West A Street,Suite 1100 (92101) P0 Box 65266 San Diego,CA 92186-5266 Email:HayIey.Peterson~doj.ca.gov Dana .i.Dunwoody Attorneys for Cabrillo Power I LLC J.Barrett Marurn SHEPPARD MULLIN RICHTER &HAMPTON LLP 5001 West Broadway,19th Floor SanDiego,CA 92101 -3598 Email:ddunwoody©sheppardmullin.com bmarum~sheppardmullin.com Christopher Garrett Attorneys for Real Parties in Interest Poseidon Jeffrey P.Carlin Resources (Channelside)LLC;Poseidon LATHAM &WATKINS LLP Resources Corporation;Poseidon Water LLC 600 West Broadway Suite 1800 San Diego,CA 92101 -3375 Email:christopher.garrett~lw.com jeff.carlin@lw.com C.Michael Cowett Attorneys for Sweetwater Authority;Valley Center Melissa Woo Municipal Water District;Santa Fe Irrigation BEST BEST &KRIEGER District;Olivenhain Municipal Water District; 655 West Broadway,15th Floor Rincon Del Diablo Municipal Water District; San Diego,CA 92101 Rainbow Municipal Water District Email:cmcowett@bbklaw.com melissa.woo@bbklaw.com Attorneys for City of CarlsbadRonaldR.Ball City Attorney,City of Carlsbad CITY OF CARLSBAD 1200 Carlsbad Village Dr. Carlsbad,CA 92008-1949 Email:rball@ci.carlsbad.ca.us Jan DriscolI Attorneys for City of Carlsbad,Carlsbad Munic~ipaI Heather S.Riley Water District,Vallecitos Water District ALLEN MATKINS LECK GAMBLE MALLORY &. NATSIS LLP 501 West Broadway,15th Floor San Diego,CA 92101-3541 Email:jdriscoll@allenmatkins.com . hriley~aIIenmatkins.com Paul Thayer Executive Officer,State Lands Commission Executive Officer State Lands Commission 100 Howe Ave.,Suite 100 S Sacramento,CA 95825 Email:thayerp@slc.ca.gov 3 PROOF OF SERVICE EXHIBIT A I (x)(BY MAIL)By placing envelopes containing the above documents for collection and mailing following our ordinary business practices.I am readily familiar with Coast Law 2 Group,LLP’s practice for collection and processing correspondence,said practice being that in the ordinary course of business,correspondence is deposited with the US 3 Postal Service is a sealed envelope with postage fully prepaid thereon. 4 (x)(BY ELECTRONIC MAIL)By use of electronic mail I served a copy of the document(s) on the parties to this action at the email address(es)listed above. 5 6 I declare under penalty of perjury under the laws of the State of California that the 7 foregoing is true and correct,and that this declaration was executed on September 16,2008 8 at Encinitas,California. 10 Executive Legal Assistant 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PROOF OF SERVICE EXHIBIT A SUPERIOR COURT OF THE STATE OF CALIFORNIA 37-2008-00092607-CD-WM-CTL Petitioners,TENTATIVE DECISION The Honorable Judith F.Hayes 68 LED AUG 4 -2009 Clerk of the S!;~er:or Court F By:C.WALKER,Deputy Judge Dept: COUNTY OF SAN DIEGO CENTRAL DIVISION v. RECEIVED AUG 06 lOO9 LATHAM &WATKINS LLP SAN DIEGO SURFRIDER FOUNDATION et aI., 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 CALIFORNIA STATE LANDS COMMISSION, 17 18 19 20 21 22 23 24 25 Respondent. POSEIDON RESOURCES (CHANNELSIDE)LLC,a Delaware limited liability company;POSEIDON RESOURCES CORPORATION,a Delaware corporation;POSEIDON WATER LLC,a Delaware limited liability company et ai. Real Parties In Interest. On May 28,2009,the Court held a hearing on Petitioners Surfrider Foundation and San Diego Coastkeeper's writ petition in Department 68 ofthe Superior Court of the State of 26 California,in and for the County ofSan Diego,the Honorable Judith F.Hayes presiding. 27 28 1 Petitioners Surfrider Foundation and San Diego Coastkeeper were represented by Marco 2 Gonzalez,Christian Polychron,Gabriel Solmer and Livia Borak.Respondent California State 3 Lands Commission was represented by Jamee Jordan Patterson and Haylee Peterson.Real Parties 4 in Interest Poseidon Resources (Channelside)LLC,Poseidon Resources Corporation,Poseidon 5 Water LLC were represented by Christopher Garrett,Jeffrey Carlin and Lauren Ross. Real Parties 6 in Interest City ofCarlsbad,Vallecitos Water District and Carlsbad Municipal Water District 7 were represented by Jan Driscoll and Heather Riley.Real Parties in Interest Sweetwater Water 8 Authority,Valley Center Municipal District,Santa Fe Irrigation District,Olievenhain Municipal 9 Water District,Rincon Del Diablo Municipal Water District,Rainbow Municipal Water District 10 were represented by Michael Cowett and Melissa Woo.Real Party in Interest Cabrillo Power I 11 LLC was represented by Dana Dunwoody.Petitioners and Respondents/Real Parties submitted 12 their respective proposed statements of decision. 13 The Court issues the following Statement of Decision pursuant to CCP section 632 and 14 California Rule of Court,Rule No.3.1590.The Court received into evidence the Administrative 15 Record for the Carlsbad Desalination Project ("Project"),which was certified by State Lands and 16 lodged with the Court.After reviewing the evidence in the Administrative Record and the briefs 17 and supporting papers filed by the parties,and hearing the arguments ofcounsel on May 28, 18 2009,the Court rules as follows. 19 I.STANDARD OF REVIEW 20 State Lands'decision not to prepare a subsequent or supplemental environmental impact 21 report ("SEIR")is reviewed under "the traditional,deferential substantial evidence test,"and 22 "[t]he Court decides only whether the administrative record as a whole demonstrates substantial 23 evidence to support the determination that [any]changes in the project or its circumstances were 24 not so substantial as to require major modifications to the EIR."(A Local &Regional Monitor v. 25 City ofLos Angeles ("ALARM")(1993)12 Cal.AppAth 1773,1793.)State Lands'decision must 26 therefore be upheld if the record contains relevant evidence that a reasonable mind might accept 27 as adequate to support its conclusion that an SEIR was not required.(Bowman v.City of 28 Petaluma (1986)185 Cal.App.3d 1065,1072,1075.)Under the substantial evidence standard of 2 1 review,the Court will not independently review the evidence or substitute its findings or 2 inferences for those ofState Lands.(Kirkorowicz v.California Coastal Com.(2000)83 3 Ca1.AppAth 980,986.)"Rather,it is for the Commission to weigh the preponderance of 4 conflicting evidence,as [the Court]may reverse its decision only if,based on the evidence before 5 it,a reasonable person could not have the reached the conclusion reached by it."(Ibid.)State 6 Lands'decision is presumed correct,and Petitioners bear the burden of showing that no 7 substantial evidence exists to support State Lands'decision.(AI Larson Boat Shop v.Board of 8 Harbor Commissioners (1993)18 Ca1.AppAth 729,740.) 9 II.PREPARATION OF SEIRTo ANALYZE STAND-ALONE OPERATION OF THE DESALINATION PLANT 10 11 A.Substantial Evidence Supports State Lands'Determination That An SEIR Was Not Required To Re-Evaluate Stand-Alone Impacts On Marine Life. 12 State Lands proceeded in the manner required by law when it approved a lease amendment 13 for the Carlsbad Desalination Project ("Project")without requiring the preparation ofan SEIR to 14 re-analyze operation of the desalination plant without concurrent Encina Power Station ("EPS") 15 operation (i.e.,"stand-alone"operations).Because the intake and outfall structures used by EPS 16 are located on state tidelands,their use requires a lease from State Lands.State Lands'review of 17 this Project was limited to its consideration ofan amendment to the existing lease between the 18 owner ofEPS,Real Party in Interest Cabrillo Power I LLC ("Cabrillo")and State Lands,so that 19 the intake and outfall structures could also be used by Poseidon for desalination purposes.(AR 20 17128,17890.)Primarily,the lease amendment added Poseidon as a co-lessee to the existing 21 lease.In the existing lease and in the amendment,EPS is permitted to discharge up to 22 approximately 860 million gallons per day ("MGD"),with an average discharge from 1980-2000 23 of 576 MGD.(AR 17820-21.)The desalination plant is authorized to use up to 304 MGD for 24 desalination purposes. 25 It is undisputed that the City ofCarlsbad ("Carlsbad")was the "lead agency"for the Project 26 under the California Environmental Quality Act ("CEQA"),Public Resources Code section 27 21000,et seq.(AR 171.)The lead agency is the agency with principal responsibility for carrying 28 out or approving a project,and it must prepare an Environmental Impact Report ("EIR")or other 3 1 appropriate CEQA review document.(CEQA §21067,CEQA Guidelines §§15050,15367.) 2 Acting as lead agency,Carlsbad certified a Final EIR for the Project on June 13,2006 ("FEIR"). 3 State Lands was a "responsible agency"regarding the Project.A responsible agency is an agency 4 other than a lead agency that has responsibility for carrying out or approving a project. 5 Responsible agencies have limited availability to conduct their own environmental review outside 6 the processes initiated and managed by the lead agency.(CEQA §21069.) 7 Pursuant to CEQA §21166 and CEQA Guidelines §15096,a responsible agency need not 8 prepare an SEIR unless (a)substantial changes are proposed in the project which will require 9 major revisions in the EIR,(b)substantial changes occur with respect to the circumstances under 10 which the project is undertaken which will require major revisions to the EIR,or (c)new 11 information,which was not known and could not have been known at the time the EIR was 12 certified,becomes available.CEQA Guidelines §15162 requires that any "substantial changes" 13 or "new information"must result in a new significant impact or a substantial increase in the 14 severity ofa previously identified significant effect.In the absence of these factors,a responsible 15 agency is bound by the lead agency's EIR unless it takes the issue to court within 30 days after 16 the lead agency files a notice of determination;otherwise,the responsible agency is deemed to 17 have waived any objection to the adequacy ofthe EIR.(CEQA Guidelines §15096(e).) 18 Petitioner contends that an SEIR was required because "the Project substantially changed 19 from a co-located to a stand-alone facility"and this required "major revisions to the FEIR's 20 discussion of marine life impacts."(Opening Brief,7:14-16.)However,the Project approved by 21 State Lands did not change from the Project approved by Carlsbad.The Carlsbad approval 22 anticipated continued operation ofthe Encina Power Station (EPS)and required Poseidon to 23 obtain new permits and undergo additional CEQA compliance only ifEPS permanently ceased 24 operations.(See AR 17811-12.)Similarly,the Lease Amendment approved by State Lands 25 authorizes Poseidon to operate the desalination plant "in conjunction"with the existing EPS 26 intake and outfall structures,and requires State Lands to conduct subsequent environmental 27 review of desalination operations in the event that the EPS permanently shuts down,in order to 28 ensure that the Project is using the best available and feasible measures to minimize intake and 4 1 marine life mortality.(AR 17991-92.)IfEPS shuts down,co-lessee Cabrillo also will need to 2 apply to State Lands for approval of an assignment of its rights under the Lease to Poseidon,so 3 Poseidon can operate on a stand-alone basis.(AR 17995.)The record before State Lands reflects 4 that Cabrillo will continue to operate the EPS "indefinitely"and has no timetable for shutting 5 down EPS,and Cabrillo may not cease EPS operations without permission from the California 6 Independent System Operator.(AR 15316,11855.) 7 The Court declines to address the issue ofwhether the FEIR's analysis of stand alone 8 impacts was adequate,and that even ifthe stand-alone operations constituted a substantial change 9 requiring major revisions to the FEIR,whether substantial evidence supports the SLC's decision 10 not to require a SEIR because the Project's Marine Life Mitigation Plan ("MLMP")would fully 11 mitigate any ofthe Project's unavoidable losses to marine life.(AR 17926)Because the project 12 has not changed to a stand alone operation,such discussion is not required. 13 Further,under the exhaustion ofadministrative remedies doctrine the Court does not 14 consider Petitioners'claim that adoption ofthe MLMP implicates mandatory findings of 15 significance under CEQA Guidelines §15065.Petitioners concede that this claim was not 16 presented to State Lands in the administrative proceedings below.(CEQA §21177(a);Sierra 17 Club v.City ofOrange (2008)163 Cal.AppAth 523,536.)Petitioners'"generalized 18 environmental comments"regarding the alleged need for an SEIR are insufficient.(Banker's 19 Hill,Hillcrest,Park W Cmty.Pres.Group v.City ofSan Diego (2006)139 Cal.AppAth 249, 20 282.)Regardless,CEQA §15065 is inapplicable.Section 15065 establishes the circumstances,as 21 in this case,where an EIR is required.Any claim that §15065 required an SEIR must fail 22 because the requisite "substantial change"under CEQA §21166 has not been established. 23 Petitioners'reliance on Mira Monte Homeowners Assn v.County ofVentura (1985)165 24 Cal.App.3d 357 is misplaced.Mira Monte involved mandatory findings of significance 25 implicated prior to final certification ofan original EIR,not post-certification determination of 26 whether to prepare an SEIR.(Id.at 363.) 27 II 28 5 B.The FEIR's Conclusion That The Project Will Not Have Significant Marine Life Impacts Is Conclusively Presumed To Comply With CEQA 2 3 The FEIR's conclusion that the Project will not cause significant marine life impacts under 4 CEQA,operating with or without the EPS,is "conclusively presumed to comply"with CEQA for 5 purposes ofits use by State Lands.(CEQA §21167.2.)This conclusive presumption applies 6 unless preparation of an SEIR is triggered under the limited criteria set forth in CEQA §21166, 7 which,as noted above,it is not."This presumption acts to preclude reopening the CEQA process 8 even ifthe initial EIR is discovered to have been fundamentally inaccurate and misleading in the 9 description ofa significant effect or the severity ofits consequences.After certification,the 10 interests offinality are favored over the policy of encouraging public comment."(Laurel Heights 11 Improvement Ass 'n,supra,6 Ca1.4th at 1130;RVPP,supra,37 Cal.App.4th at 178.)The Court 12 declines to rule on whether or not preparation of a CEQA document may be required should 13 Cabrillo discontinue operation ofEPS in its entirety. 14 Petitioners do not dispute that the FEIR evaluated stand-alone operations.Nor do 15 Petitioners point to any evidence demonstrating that the Project will cause additional effects to 16 fish and larva or entrain more organisms than described in the FEIR.Rather,Petitioners disagree 17 with the FEIR's characterization of entrainment impacts as insignificant under CEQA,and 18 contend that State Lands was required to prepare an SEIR because the FEIR's conclusion was 19 "clearly erroneous or inaccurate."(Opening Brief,16:28.)But the adequacy ofthe conclusions 20 in Carlsbad's FEIR may not be reviewed by the Court in this lawsuit,(CEQA §21167.2; 21 Temecula Band ofLuiseno Mission Indians v.Rancho Cal.Water Dist.(1996)43 Cal.AppAth 22 425,437),and courts have rejected similar "disguised challenge[s]"to an original EIR made 23 under the guise ofarguing that an SEIR is required.(ALARM,supra,12 Cal.AppAth at 1794.) 24 The dispositive threshold issue for State Lands'consideration ofwhether to prepare an SEIR,and 25 for this Court's review of that decision,was whether stand-alone operations constituted a 26 "substantial change"that was "not considered"in the FEIR.(RVPP,supra,37 Cal.AppAth at 67.) 27 Because the operations have not shifted to a stand alone platform there was no substantial change 28 to the project that required State Lands to prepare an FEIR.Further,because the FEIR analyzed a 6 1 stand-alone project,State Lands was bound by the FEIR's determinations under the conclusive 2 presumption.The Court might or might not have found that the FEIR contained substantial 3 evidence supporting Carlsbad's conclusions regarding marine life impacts ifit was charged with 4 reviewing a challenge to Carlsbad's approval ofthe Project and certification of the FEIR in the 5 first instance,but the Court is simply not permitted to pass judgment on the FEIR in the present 6 lawsuit.(Laurel Heights Improvement Ass 'n,supra,6 Ca1.4th at 1130.) 7 Petitioners failed to establish that review of the Project by the Regional Board,Coastal 8 Commission and State Lands identified new significant marine life impacts under CEQA that 9 would occur during stand-alone operations.Stand-alone operations do not constitute a substantial 10 "change"that was not evaluated in the FEIR.No agency determined that the Project would have 11 significant marine life impacts pursuant to CEQA.Instead,the reviewing agencies imposed 12 mitigation measures according to their respective responsibilities under separate statutory 13 schemes which employ different standards ofreview than CEQA's "significant impact" 14 threshold.(AR 18077,18139, 11902,17656-57,9965.)The Regional Board,Coastal 15 Commission and State Lands imposed additional conditions on the Project,outside of CEQA,to 16 maximize environmental protection.In imposing these additional conditions,State Lands acted, 17 not pursuant to CEQA, but in its capacity as trustee and lessor under the Public Trust Doctrine. 18 (Pub.Resources Code §6301;AR 17656.)As requirements in a lease to protect the value and 19 use ofthe leased property,State Lands imposed additional requirements not mandated under 20 CEQA.Requiring each subsequent agency to prepare a separate EIR would frustrate the 21 streamlining process set forth in CEQA through the creation of lead and responsible agencies,and 22 would disrupt the presumption ofvalidity and finality embodied in CEQA §21167.2.The 23 Regional Board,Coastal Commission and StateLands approvals each recognized the FEIR's 24 determination that the Project would not have significant marine life impacts under CEQA. 25 (AR 18139,11877,17142-44,15393-94.) 26 II 27 II 28 7 1 C.Carlsbad's Reopener Provision Can Be Reconciled With The FEIR's Conclusion That The Project Will Not Cause Significant Marine Life 2 Impacts? 3 The record reflects that EPS will continue to operate indefinitely. State Lands'approval,as 4 with Carlsbad's,requires subsequent review in the event that the EPS permanently shuts down. 5 The Carlsbad and State Lands approvals are distinguishable in this respect from the approval 6 issued by the Coastal Commission,which does not require further review if EPS ceases 7 operations.Despite the reopener provision,it is undisputed that both Carlsbad and State Lands 8 reviewed the environmental impacts from operation ofthe desalination plant without concurrent 9 EPS operation,and that Carlsbad did not rely on the reopener provision in its decision to forgo 10 analysis ofstand-alone operations in the FEIR.Notwithstanding Carlsbad's inclusion ofthe 11 reopener provision,members of the public including Surfrider and Coastal Commission staff 12 submitted comments asserting that stand-alone analysis still needed to be included in the FEIR. 13 Although the environmental effects ofstand-alone operations were assessed and subjected 14 to public comment,Carlsbad's reopener facilitates further public participation and review in the 15 event EPS permanently shuts down and Poseidon is required to independently operate the 16 seawater intake and outfall for the desalination plant.Should this circumstance occur,according 17 to the reopener provision,additional permits will need to be obtained,new CEQA compliance 18 undertaken by the City ofCarlsbad,(AR 17812),and State Lands will also be required to conduct 19 additional environmental review to ensure the Project is using the best available design, 20 technology and mitigation to minimize intake and mortality ofmarine life.(AR 17991-92.)If 21 Petitioners are dissatisfied with any subsequent approvals authorizing stand-alone operations 22 made by Carlsbad and/or State Lands,they may then file suit to challenge such approvals. 23 Under CEQA,the reopener provision does not in any way affect the validity ofthe FEIR's 24 analysis of stand-alone operations or trigger preparation ofan SEIR.Pursuant to CEQA section 25 21166,there are only three circumstances which require preparation ofan SEIR:(a)substantial 26 changes are proposed in the project which will require major revisions in the EIR,(b)substantial 27 changes occur with respect to the circumstances under which the project is undertaken which will 28 require major revisions to the EIR,or (c)new information,which was not known and could not 8 1 have been known at the time the EIR was certified,becomes available.Carlsbad's reopener does 2 not meet the criteria for preparation ofan SEIR under CEQA section 21166. 3 D.State Lands and Carlsbad Approved the Same Project. 4 The record demonstrates that State Lands and Carlsbad approved the same Project.As 5 detailed above,Carlsbad and State Lands each authorized the desalination plant to operate in 6 conjunction with the EPS,and required subsequent environmental review in the event that EPS 7 permanently ceases operations,a circumstance that is not expected to occur in the near term since 8 the record reflects that EPS operations will continue indefinitely.Further,each approval 9 authorizes the desalination plant to draw in approximately 304 million gallons per day (MGD)of 10 seawater through the existing EPS intake system,with 104 MGD to be used as source water to 11 produce about 50 MGD ofdesalinated water,and the other 200 MGD used only for purposes of 12 diluting the approximately 54 MGD ofcombined filter backwash and brine discharge before it 13 returns to the ocean via the existing EPS outfall. 14 III.PREPARATION OF SUPPLEMENTAL EIRTo ANALYZE GLOBAL CLIMATE CHANGE 15 16 A.Substantial Evidence Supports State Lands'Determination That An SEIR Was Not Required To Analyze The Project's Potential Impacts On Global Warming 17 State Lands properly concluded an SEIR was not required to analyze the Project's potential 18 impacts on global climate change for three reasons.First,information regarding greenhouse gas 19 ("GHG")emissions is not "new information"under CEQA §21166 because it was widely known 20 and available long before certification ofthe FEIR in June 2006.(See,e.g.,Massachusetts v. 21 EPA (2007)549 U.S.497,507-14 [discussing numerous legislative and executive actions prior to 22 2006 which addressed GHG emissions and global climate].)Petitioners'argument that the 23 legislative enactment ofAssembly Bill 32 ("AB32")in September 2006 and Senate Bill 97 24 ("SB97")constitute "changed circumstances",i.e.,the California Legislature's acknowledgment 25 ofimpacts ofglobal warming upon the State,fails because California adopted GHG regulations 26 several years before the adoption ofAB32 and SB97,through enactment ofAB1493 in 2002 to 27 regulate GHG emissions from cars and trucks,and the issuance ofExecutive Order No.S-3-05,in 28 June 2005,which established the exact emissions targets that were later incorporated into AB32. 9 1 (AR 16926,16932-39,16941-42.)The adoption ofAB32 and SB97 does not constitute "changed 2 circumstances"requiring preparation ofan SEIR. 3 Further,the threat ofglobal warming is not "new information"that was not known or 4 knowable when the FEIR was certified in 2006.Surfrider (as part ofthe Southern California 5 Watershed Alliance)filed a petition for writ ofmandate in 2006 (prior to adoption ofAB32 and 6 SB97)challenging the Carlsbad FEIR on the grounds that it failed to evaluate how the Project 7 would "contribute to global climate change."(AR 3512,3521.) 8 Petitioners'claim that the SLC's "CEQA responsibilities"required preparation ofan SEIR 9 ignores the fact that this is not a new project involving whether or not CEQA review ofclimate 10 change is required in the first instance;instead,this case only involves whether or not an SEIR is 11 permitted under CEQA §21166.Global warming does not constitute the requisite "new 12 information"or "changed circumstances"triggering the need for an SEIR,as noted above. 13 IV.STATE LANDS'ApPROVAL OF THE MLMP DID NOT IMPROPERLY "DEFER" MITIGATION 14 15 State Lands did not improperly defer mitigation through its approval ofthe Marine Life 16 Mitigation Plan ("MLMP"),the same plan that was adopted by the Coastal Commission as part of 17 its approval of the Project's Coastal Development Permit.First,the concept of deferred 18 mitigation under CEQA is inapplicable because State Lands did not impose the MLMP as a 19 CEQA mitigation measure,but rather pursuant to State Lands'responsibilities under the public 20 trust doctrine and as a lessor.(Pub.Resources Code,§6301;AR 17656.)Since the MLMP is 21 not a CEQA mitigation measure,there is no basis for evaluating State Lands'approval ofthe 22 MLMP under CEQA's deferred mitigation principles.For the same reasons,this Court held that 23 the Coastal Commission's approval ofthe MLMP was not subject to CEQA's deferred mitigation 24 principles in the related case captioned Surfrider Foundation v.California Coastal Commission, 25 et al.,Case No.37-2008-00075727.(See Statement ofDecision,Case No.37-2008-00075727,at 26 5:8-11 (filed May 7,2009).) 27 The potential environmental impacts from implementation ofthe MLMP need not be 28 reviewed in an SEIR The MLMP will require its own coastal development permit,including 10 1 CEQA documentation,ensuring that review and adoption ofthe MLMP will be subject to public 2 comment,and that its potential impacts will be disclosed,assessed and mitigated if necessary. 3 (AR 11833.) 4 V.REQUESTS FOR JUDICIAL NOTICE 5 A.Trial Court Opinions 6 Petitioners'Request for Judicial Notice ofthe trial court opinion of Centerfor Biological 7 Diversity,et al.v.City ofDesert Hot Springs,et al.is denied in its entirety.Trial court opinions 8 have no precedential value and thus are not appropriate "court records"that are the proper subject 9 ofjudicial notice.(Santa Ana Hosp.Med.Ctr.v.Belshe (1997)56 Cal.AppAth 819,830-31; 10 Laurel Heights Improvement Assn.,supra,6 Cal.4th at 1123 n.5;Henley v.Philip Morris Inc. 11 (2001)93 Cal.AppAth 824,836 n.5.) 12 Similarly,Real Parties'Conditional Request for Judicial Notice ofthe trial court opinions 13 of(1)Unite-Here Local 30 v.San Diego Unified Port District,(2)Highland Springs Conference 14 and Training Center v.City ofBanning,(3)Westfield,LLC v.City ofArcadia,(4)Center for 15 Biological Diversity v.City ofPerris is denied in its entirety. 16 B.Governor's Senate Bill 97 Signing Message 17 Real Parties'Request for Judicial Notice ofthe Governor's Senate Bill 97 Signing Message 18 is granted in its entirety.The Signing Message is an appropriate subject for judicial notice 19 pursuant to Evidence Code section 452(c),which authorizes judicial notice of the "official acts" 20 ofstate agencies.The Signing Message is relevant to the Court's evaluation ofPetitioners'claim 21 that State Lands should have prepared an SEIR to evaluate the Project's potential impacts to 22 global climate change because the Signing Message establishes that SB97 was not intended to 23 support a litigation claim that an EIR or SEIR should be prepared to address global climate 24 change prior to the promulgation ofstandards under SB97.(Doe v.Saenz (2006)140 25 Cal.AppAth 960,986.)Instead,SB97 was intended to "advance a coordinated policy for 26 reducing greenhouse gas emissions"through development ofCEQA Guidelines by the Office of 27 Planning and Research and the Resources Agency to guide state and local agencies on the 28 assessment,and possible mitigation,ofGHG emissions. 11 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 For the foregoing reasons,Petitioners'Petition for Writ ofMandamus is denied. This is a Tentative Statement ofDecision which shall become a Final Decision by operation oflaw unless further proceedings or objections are brought pursuant to California Rule ofCourt,Rule No.3.1590. IT IS SO ORDERED. August L,2009 12 STATE OFCALIFORNIA THE RBSOURCES AGENCY CALIFORNIA COASTAL COMMISSION 45 FR!!MONT.SUIT!!2000 SAN FRANCISCO.CA 94105-2219 VOICE AND TDD (415)904·5200 FAX (415)904-HOD FINAL ADOPTED FINDINGS ARNOLD SCHWARZBNEGGER.GOYERIIOR W4a APPLICATION FILE NO.: PERMITTEE: PROJECT LOCATION: PROJECT DESCRIPTION: ADOPTED: SUBSTANTIVE FlLE DOCUlVIENTS: EXHIBIT 1: EXHIBIT 2: EXHIBIT 3: EXHIBIT 4: ATTACHMENT 1: ATTACHMENT 2: ATTACHMENT 3: ATTACHMENT 4: ATTACHMENT 5: ATTACHMENT 6: E-06-013 Poseidon Resources (Channelside)LLC /Cabrillo Power II LLC On the Encina Power Plant site,adjacent to Agua Hedionda .. Lagoon,in the City ofCarlsbad,San Diego County. Construction and operation ofa 50 million gallon per day seawater des~lination facility. August 6,2008 See Appendix A Location Map Site Layout Aerial View ofSite Diagram ofSubsurface Intakes November 15,2007 Hearing Transcript.Note:attached transcript includes Commission deliberations only. StaffProposed Conditions ofNovember 14,2007 and Poseidon Proposed Conditions ofNovember 15,2007. Ex Parte Forms. June 25,2008 letter from Latham &Watkins with requested revisions to ReVIsed Findings.. June 11,2008 e-mail from Latham &Watkins with requested revisions to Revised Findings. May 22,2008 Applicant's Requested Revisions to Revised Findings. 014041 Final Adopted Findings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 2 of106 EXECUTIVE SUMMARY Project Description:The proposed project is a seawater desalination facility to be constructed and operated at the site ofthe Encina Power Plant in Carlsbad,San Diego County.The facility would be owned and operated byPoseidon Resources (Channelside)LLC.It would withdraw about 304 million gallons per day (MOD)ofwater from Agua Hedionda Lagoon (the Lagoon),a coastal estuary,to produce about 50 MOD ofpotable water for sale and distribution. The project was originally proposed to co-locate with the power plant in order to use some ofthe several hundred million gallons per day ofwater the power plant pumped from Agua Hedionda. However,the power plant owner announced in September 2007 that it intends to shut down the existing plant and build a new one elsewhere on the site that wouldnot use seawater for cooling. During the last few years,the power plant has operated at a substantially reduced level over its historical rate ofuse,and it is expected to operate only sporadically for a few more years once the new facility is built.As a result,the desalination facility would now operate as a "stand- alone"facility,and the analyses in these Findings are based onthese "stand-alone"operations. Key Coastal ActIssues: •Protection ofMarine Life and Water Quality:The project as proposed and conditioned herein will be consistent with policies ofCoastal ACt Sections 30230 arid 30231 meant to protect marine life and water quality.Results ofPoseidon's entrainment study show the entrainment caused bythe project's use ofan open-water intake within Agua Hedionda would result in a loss ofproductivity in the Lagoon equal to that produced inno less than 37 acres ofwetland and open water habitat.. The Commission finds that the certified project EIR determined that the project's. discharge into coastal waters ofits waste stream would result in levels ofsalinity higher than the natural variability oftQese waters in an area ranging from about eight to over 40 acres ofbenthic habitat,but would not cause significant adverse impacts to marine life, and.that the San Diego Regional Water QualityBoard (Regional Board)studied the project's expected.discharge before issuing the project's NPDES permit,and that the Regional Board adequately conditioned all potential discharge-related impacts to ensure compliancewith applicable Clean Water Act criteria and the California Ocean Phm.As documented in the certified EIR prepared for the project by the CityofCarlsbad,the desalination facility would not cause significant impingement or entrainment impacts when it operates while the power plant is using at least 304million gallons per day (MOD)ofcooling water (i.e.,"co-located"operations).Operating stand-alone -that is, when the power plant is using little or no cooling water -the EIR found that the desalination facility would not cause significant impacts.Poseidon's entrainment study results showthat the desalination facility's entrainment impacts would result in a loss of productivity in the Lagoon equal to that produced in approximately 37 acres ofwetland and open water habitat. 014042 Final Adopted Findings -Coastal Development Pennit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 3 of106 To address these impacts,Poseidon submitted a conceptual plan to restore 37 acres oflost wetland and upland habitat productivity.1 The Commission is requiring through Special Condition 8 that Poseidon submit its full entrainment study and develop a Marine Life' Mitigation Plan for further Commission review and approval that fully documents the facility's anticipated entrainment and impingement impacts,mitigates those impacts to the maximum extent feasible through creation,enhancement,or restoration ofaquatic and wetland habitat,and ensures long-term performance,monitoring,and protection ofthe approved mitigation measures in a manner consistent with the policies ofCoastal Act Sections 30230 and 30231.The Commission is also requiring through Special Condition 9 that Poseidon obtain an amendment to its coastal developmentpermit ifit proposes or is required to withdraw more than the currently anticipated 304 million gallons per day ofestuarine water from AguaHedionda Lagoon.Further,the project is subject to continuing review by the Regional Board to ensure conformity to federal Clean Water Act and state Porter-Cologne Actrequirements related to protection ofwater- quality impacts.Special Condition 4 requires Poseidon to submit,prior to construction, documentation that it has received final approvals from the Regional Board and other agencies for project construction and operations.For the reasons set forth more fully below in these Findings and in Poseidon's submissions,the Commission finds that . alternative intakes that would avoid or reduce entrainment and impingement impacts are infeasible or would cause greater adverse impacts. With implementation ofthese Special Conditions,the Commission finds the project will <;onf'orm to applicable provisions ofCoastal Act Sections 30230 and 30231 by ensuring that marine resources are maintained,enhanced,and restored. •Energy Use and Greenhouse Gas Emissions:Yhe project's electrical use would cause emissions ofcarbon dioxide ofabout an estimated,130 million to 200 million pounds (approximately 61,000 to 90,000 metric tonnes)per year,which would result in adverse impacts to a wide range ofcoastal resources,as described in Section 4.5.5 ofthese Findings~Poseidon has agreed to "go carbon-neutral"-i.e.,to reduce its emissions through various measures so that its facility would contribute net zero greenhouse gas emissions,but it has not yet demonstrated how it would implement this mitigation proposal.To ensure the project conforms to Coastal Act Section 30253(4)and other applicable policies,and avoids or minimizes its effects on coastal resources,the Commission is requiring throughSpecial Condition 10 thatPoseidon develop an Energy Minimization and Greenhouse Gas Reduction Plan for further Commission review and approval. J Poseidon has also submitted the plan to the SanDiego Regional Water Quality Control Board (Regional Board)as required by its conditional NPDES permit.The Regional Board reviews various water quality issues and will ensure compliance with its'regulations and policies via its review and approval ofthe plan. 2 As described more fully inSection 4.5.5 herein,Commission staffestimates that the project will emit 90,000 metric tonnes (200,000,000 pounds)ofcarbon dioxide per year,while Poseidon,relying onthe California Climate Action Registry's certified protocol,estimates 61,000 metric tonnes (134,500,000 pounds)ofcarbon emissions. 014043 FinalAdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 4 of106 •Dredging and Protection ofCoastal Waters and Wetlands:The project may require future dredging to ensure its continued use ofthe existing intake structure,and the Commission,through imposition ofSpecial Condition 12 requiring Poseidon to obtain separate coastal development permits for any future proposed dredging activities,has ensured that any needed dredging will conform to applicable Coastal Act policies.. However,the project represents a use and alteration ofAgua Hedionda Lagoon that is not permitted under Coastal Act Section 30233(c).That Coastal Act policy identifies Agua Hedionda.as one of19 coastal estuaries in which alterations are allowed for just a limited set ofuses,including "...very minor incidental public facilities,restorative measures, [and]nature study...",and the project's removal and use ofwater from Agua Hedionda does not fall within the set ofallowable uses or alteration.The Commission therefore fmds the project is not consistent with the use prohibitions ofCoastal Act Section 30233(c).Even so,because the project is a coastal-dependent industrial facility,the Commission can approve the project,notwithstanding its nonconformity to Coastal Act Section 30233(c),ifthe Commission finds that it meets the requirements ofSection 30260,as described below. •Application ofCoastal Act Section 30260:Because the proposed project is a coastal- dependent industrialfacility,its inconsistencies with Coastal Act Section 30233(c)may be "overridden"pursuant to Coastal Act Section 30260.That policy allows the Commissionto approve coastal-dependent industrial facilities that are not consistent with other Coastal Act policies contained in Chapter 3 ifthe proposal meets three tests.Those tests require:(1)that there be no feasible and less environmentallydamaging location for the proposed project;(2)that the project's adverse environmental impacts be mitigated to the maximum extent feasible;and,(3)that not permitting the proposed project would adversely affect the public welfare.In applying these tests to the proposed project,the Commission fmds,as discussed in detail in Section 4.5.7 ofthese Findings,the .following: •There are no feasible and less environmentally damaging alternative locations to draw in the needed seawater (e.g.,subsurface or offshore,as further described in Section 4.2.1 ofthese Findings)that would avoid nonconformity to the use prohibitions of Section 30233(c).Forreasons set forth more fully below inthese findings,the Commission fmds that slant wells are infeasible because the water qualityavailable from such intakes would make it difficult,ifnot impossible,to treat for desalination purposes,and that the construction impacts associated with this alternative render it environmentally inferior to the proposed project.The Commission·also finds that an infiltration gallery is environmentally inferior to the proposed project because this alternative would disrupt public access to marine resources,require frequent dredging,and would require the destruction of150 acres ofcoastal habitat,and that the alternative is economically infeasible.The Commission further finds that an offshore intake system would result in greater environmental impacts and that construction ofan offshore intake would render the project economically infeasible. 014044 Final AdoptedFindings -CoastalDevelopment Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust6,2008-Page 5 of106 •Special Conditions 4,8,9,10,11,12, 15,16,and 17,ensure the project's adverse effects to Agua Hedionda Lagoon are mitigated to the maximum extent feasible.The Conunission finds that the required development ofthe necessary mitigation plans, the limitation on water withdrawals,prohibition ofdredging without further Conunission review and approval,and imposition ofwater quality best management practices,will ensure that the project is mitigated to the maximum extent feasible. •Denial ofthe proposed projectwould adversely affect the public welfare for a number ofreasons.As set forth inthe project's EIR and described herein and elsewhere in the·Commission's record,the project would provide public benefits in the form of a local water supply in all areawhere current and anticipated water imports are expected to decline.Although it is a privately funded project,the water produced by the project will be put to public use by eight public water districts.The sale ofwater .to public water districts isexpected to both alleviate expected water supply shortfalls and augment other supply options such as recycled water and conservation.It also provides public benefits to those districts and their ratepayers because they will not be expected to pay directly for more than $300 million ofthe project's start-up and constmction costs.The project also includes public benefits in the fonn ofincreased public access opportunities to both Agua Hedionda Lagoon and to the Pacific Ocean. Commission Action:On August 6,2008,the Commission approved,as conditioned,proposed project E-06-013 as described herein.· 014045 Final Adopted Findings -CoastalDevelopment Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 6 of106 . GLOSSARY Terms Used: •Acre-foot:An acre-foot is equal to about 326,000 gallOns,whlch is enough to supply from one to four households for a year. •Kilowatt-hour (kWh):As used in these findings,it refers to the amount ofelectricity needed to produce one kilowatt for one hour. •Megawatt-hour (mWh):As used inthese findings,it refers to the amount ofelectricity needed to produce one megawatt for one hour.A megawatt is 1,000 kilowatts. •Million gallons per day (MGD):A million gallons is equal to about three acre-feet. TABLE OF CONTENTS 1.0 Motion and Resolution ;·7 2.0 Standard Conditions ;8 3.0 Special Conditions ~8 4.0 Findings and Declarations 14 4.1 Project Purpose and Description ;14 4.2 Background 18 4.3 Coastal Commission Jurisdiction and Standard ofReview ;29 4.4 Other Pennits and Approvals ~29, 4.5 Confonnity to Applicable Coastal Act Policies 33 4.5.1 Protection ofMarine Life (Coastal Act Sections 30230 &30231)33 4.5.2 Use ofWetlands and Coastal Waters (Coastal Act Section 30233)65 4.5.3 Public Access 71 4.5.4 Scenic and Visual Resources 73 4.5.5 Energy Use and Greenhouse Gas Emissions (Coastal Act Section 30253(4»75 4.5.6 Development and Public Services (Coastal Act Sections 30250 &30254)91 4.5.7 Coastal-Dependent "Override"(Coastal Act Section 30260)93 5.0 California Environmental QualityAct ;100 014046 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 7 of106 1.0 MOTION AND RESOLUTION Motion Staffrecommends the Commission adopt the following findings in support ofits actions on November 15,2007 to approve Coastal Development Permit E-06-013. I move that the Commission adopt the Revised Findings in support ofthe Commission's actions on November 15,2007 concerning the Commission's Coastal Development Permit E-06-013. Resolution The Commission hereby adopts the Findings setforth below regarding Coastal Development Permit E-06w 013. 014047 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 8 of106 2.0 STANDARD CONDITIONS 1)Notice ofReceipt and Acknowledgment:This pennit is not valid until a copy ofthe pennit is signed by the Pelmittee or authorized agent,acknowledging receipt ofthe permit and the acceptance 9fthe tenns and conditions,and is returned to the Commission office. 2)Expiration:Construction activities for the proposed project must be initiated within two years ofissuanceofthis pennit.This permit will expire two years from the date on which the Commission approved the proposed project ifdevelopment has notbegun.Construction of the development shall be pursued in a diligent manner and completed in a reasonable period oftime.Application for extension ofthe permit must be made at least six months prior to the expiration date. 3)Interpretation:Any questions ofintent or interpretation ofany condition will be resolved by the Executive Director ofthe O:nnmission (hereinafter,"Executive Director")orthe Cominission. 4)Assignment:The permit may be assigned to any qualified person,provided the assignee files with the Commission an affidavit accepting all terms and conditions ofthe penni!.. 5)Terms and Conditions Run with the Land:These terms.and conditions shall be perpetual, and it is the intention ofthe Commission and the Permittee to bind all future owners and . possessors ofthe subject property to the tenns and conditions. 3.0 SPECIAL CONDITIONS 1)Liability for Costs and Attorneys Fees:The Permittee shall reimburse the Coastal Commission in full for all Coastal Commission costs and attorneys fees -including (1)those charged by the Office ofthe Attorney General,and (2)any court costs and attorneys fees that the Coastal Commission may be required by a court to pay-that the Coastal Commission incurs in connection with the defense ofany action brought against the Coastal Commission, its officers,employees,agents,successors and assigns challenging the approval orissuance ofthis permit.The Coastal Commission retains complete authority to conduct and direct the defense ofany such action against the Coastal Commission. 2)ProofofLegal Interest:PRIOR TO ISSUANCE OF THE PERMIT,the Permittee shall provide for Executive Director review and approval documentation ofthe Pennittee's legal interest in all property within the coastalzoneneeded to construct and operate the project, including: •Lease(s)from the California State Lands Commission for structures on state tidelands. Any conflictsbetween conditions ofthe lease(s)and those adopted bythe Coastal Commission shall be presented to the Coastal CommissIon for resolution. •Lease(s)or other forms ofapproval from the power plant owner allowing the Permittee to use portionsofthe power plant site and Agua Hedionda Lagoon. •Lease(s)or other fonns ofapproval from the City ofCarlsbad and other local governments for the project's water delivery pipelines. 014048 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 9 of106 3)Lease and Deed Restriction:PRIOR TO ISSUANCE OF THE PERMIT,the applicant shall provide to the Executive Director for review and approvaldocumentation demonstrating that the applicant has executed and recorded against its leasehold interest(s)in the property governed by this permit a lease restriction (in which any private owner ofthe fee interest in such property shall join or to which it shall agree to be bound),in a form and content acceptable to the Executive Director (a)indicating that,pursuantto this permit,theCalifornia Coastal Commission has authorized development on theProperty,subject to terms and conditions that restrict the use and enjoyment ofthe Property;and (b)imposing all ofthe Special Conditions ofthis pennit as covenants,conditions and restrictions onthe use and enjoyment ofthe Property.The restriction shall include a legal description ofthe Property.It shall also indicate that,in the event ofan extinguishment or tennination ofthe deed restriction for any reason,the Standard and SpecialConditions ofthis pennit shall continue to restrict the use and enjoyment ofthe Property so long as either this permit or the development it authorizes -or anypart,modification,or amendment thereof-remains in existence on or with respect to the Property. 4)Other Approvals:PRIOR TO COMMENCEMENT OF CONSTRUCTION,the Permittee shall submitto the Executive Director for review and approval documentation showing that the project has obtained final approvals for project construction and operation from the City . ofCarlsbad,theRegional Water Quality Control Board,the California Department ofHealth Services,the National Marine Fisheries Service,and the U.S.Fish and Wildlife Service,or .documentation showing that these approvals are not needed.. 5)Assumption ofRisk and Waiver ofLiability:The Permittee acknowledges and agrees,on behalfofitselfand all successors and assigns:(i)that the project site may be subject to hazards from seismic events,liquefaction,storms,waves,floods and erosion;(ii)to assume .the risks to the Permittee and the propertythat is the subject ofthis permit ofinjury and damage from such hazards in connection with this permitted development;(iii)to unconditionally waive any claim of damage or liability against the Commission,its .officers, agents,and employees for injury or damage from such hazards;and (iv)that any adverse effects to property caused bythe permitted project shall be fully the responsibility ofthe landowner.. 6)Limits ofDevelopment:This permit authorizes the construction and operation ofthe Poseidon Carlsbad Desalination Project and associated infrastructure as described in the project description ofthis staffreport,as clarified and modified bythese conditions. 7)Final Plans:PRIOR TO COMMENCEMENT OF CONSTRUCTION,the Permittee shall submit to the Executive Directc,r for review and approval final plans for the project components located in the coastal zone.The Pennittee shall undertake development in accordance with the approved plans and any changes shall be reported to the Executive Director.No material changes within the coastal zone shall occur without a Commission- approved amendment to this coastal developmentpermit unless the Executive Director determines that no amendment is necessary.Changes to the project requiring review for amendment would include changes in the physical,operational,or delivery capacity . increases,or extension ofwater supply distribution pipelines beyond those shown on the final plans. 014049 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6.2008-Page 10 of106 8)Marine Life Mitigation Plan:PRIOR TO ISSUANCE OF THE PERMIT,the Ptmnittee shall submit to and obtain from the Commission approval ofa Marine Life Mitigation Plan (the Plan)that complies with the following: a)Documentation ofthe project's expected impacts to marine life due to entrainment and impingement caused by the facility's intake ofwater from AguaHedionda Lagoon.This .requirement can be satisfied by submitting a full copy ofthe Pennittee's Entrainment Study conducted in 2004-2005 for this project. b)To the maximum extent feasible,the mitigation shall take the fonn ofcreation, enhancement,or restoration ofaquatic and wetland habitat. c)Goals,objectives and perfonnance criteria for each ofthe proposed mitigation sites.It shall identify specific creation,restoration,or enhancement measures that will be used at each site,including grading and planting plans,the timing ofthe mitigation measures, monitoring that will be implemented to establish baseline conditions and to detennine" whether the sites are meeting performance criteria.The Plan shall also identify . contingency measures that will be implemented should any ofthe mitigation sites not meet performance criteria. d)Requires submittals of"as-built"plans for each site and annual monitoring reports for no less than five years or until the sites meet performance criteria. e)Defines legal mechanism(s)proposed to ensure pennanent protection ofeach site -e.g., conservation easements,deed restriction,or other methods. The Pennittee shall comply with the approved Plan.Prior to implementingthe Plan,the Perinittee shall submit a proposed wetlands restoration project that complies with the Plan in the fonn ofa separate coastal development permit application for the planned wetlands restoration project. 9)Change in Seawater Withdrawal:Ifat any time during the life ofthe project Poseidon proposes or is required to withdraw more than an average flow of304 MGD ofseawater,it must obtain first an amendment to this pennit. 10)Energy Minimization and Greenhouse Gas Reduction Plan:PRIOR TOISSUANCE OF THEPERMIT,the Pennittee shall submit to the Commission a Revised Energy Minimization and Greenhouse Gas Reduction Plan that addresses comments submitted by the staffs ofthe Coastal Commission,State Lands Commission and the California AirResources Board.The permit shall not be issued until the Commission has approved a Revised Energy Minimization and Greenhouse Gas Reduction Plan after a public hearing. 11)Public Access Enhancements:PRIOR TO COMMENCEMENT OF OPERATIONS, .Poseidon shall cause to be dedicated,in accordance with the City ofCarlsbad's Precise .Development Plan PDP 00-02,the below-described parcels ofland.The dedications shall be in the form ofeasements,title transfers,and/or deed restrictions,whose purpose is to further Coastal Act goals ofmaximizing public access and recreational opportunities along the coast in the South Carlsbad Coastal Resource Redevelopment Area and maintaining,restoring and enhancing marine resources.The four sites are: •Fishing Beach:public access and parking easement in favor ofthe CitY ofCarlshad covering approximately 2.4 acres ofland along the west shore ofAgua Hedionda Lagoon. 014050 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 11 of106 •BluffArea:approximately 10.2 acres ofland on the west side ofCarlsbad Boulevard opposite the power plant,which shall be dedicated in fee title to the City ofCarlsbad for .recreational and coastal access uses, •Hubbs Site:approximately 2 acres ofland along the north shore ofAgua Hedionda Lagoon to be used for a fish hatchery,aquatic research,and public access,which shall be deed restricted to uses such as fish hatchery,aquatic research,and trails. •South Power Plant Parking Area:an access easement over approximately 0.3 acres of land on the east side ofCarlsbad Boulevard near the south entrance ofthepower plant that shall be dedicated to the City ofCarlsbad for public parking. 12)Dredging:This permit does not authorize dredging that may be needed to maintain flows to the desalination facility's intake structure.The Permittee shall submit separate coastal development pennit applications for proposed dredging operations. 13)Visual Resources:PRlOR TO COMMENCEMENT OF CbNSTRUCTION,the Permittee shall submit to the Executive Director for review and approval a Screening Plan. Desalinationplant exterior mechanical equipment and facilities,including tanks,heating,air conditioning,refrigeration equipment,plumbing lines,duct work and transformers,shall be screened from view on all sides visible to the public.The design and material used for screening shall be architecturally compatible with the building. 14)Lighting Plan:PRlOR TO COMl.1ENCEMENTOF CONSTRUCTION,the Permittee shall submit a Lighting Plan to the Executive Director for review and approval.Exterior lighting for the desalination facilities shall serve the purpose ofoperations,security and safety only. The Lighting Plan shall demonstrate that project lighting is shielded from surrounding areas, and that onlythe minimum amount oflighting required for safetypurposes is provided to avoid adverse effects on surroullding areas.In general,lighting fixtures shall be shielded downward and away from the ocean,Lagoon and adjacent properties.Construction ofthe desalination plant and related facilities and improvements shall be in conformance with the approved plan. 15)Construction Plan:PRlOR TO COMMENCEMENT OF CONSTRUCTION,the Permittee shall submit to the Executive Director for review and approval a Construction Plan.The Construction Plan shall identify the specific location ofall construction areas,all staging areas,and all construction access corridors in site plan view inthe coastal zone.The Plan shall identify any expected disruptions to public access to the shoreline and shall include measures to avoid,minimize,or mitigate for those disruptions. The Plan shall also identify the type and location oferosion control/water quality best management practices that will be implemented during construction to protect coastal water quality,including the following: •Silt fences,or equivalent apparatus,shall be installed at the perimeter ofthe construction areas to prevent construction-related runoffand/or sediment from entering the dunes and/or the Pacific Ocean. •Grading and land alteration outside ofthe approved construction zone is prohibited. 014051 Final Adopted Findings -Coastal DevelopmentPermit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 12 of106 •Equipment washing,refueling,and/or servicing shall not take place on the beach or sandy dune area.All construction equipment shall be inspected and maintained at an off-site location to prevent leaks and spills ofhazardous materials at the project site. •The construction site shall maintain good construction housekeeping controls and procedures (e.g.,clean up all leaks,drips,and other spills immediately;keep materials covered and out ofthe rain (including covering exposed piles ofsoil and wastes);dispose ofall wastes properly,place trash receptacles on site for that purpose,and cover open trash receptacles during wet weather;remove all constructiondebris from the beach). •All erosion and sediment controls shall be in place prior to the commencement of construction as well as at the end ofeach workday.A copy ofthe approved Construction Plan shall be kept at the cor.structionjob site at all times and all persons involved with the construction shall be briefed onits content and meaning prior to commencement of construction.The Permittee shall notify the Executive Director at least three working days in advance ofcommencement ofconstruction,and immediately upon completion of construction.The Permittee shall undertake construction in accordance with the approved ConstructionPlan.Any proposed changes to the approved Construction Plan shall be reported to the Executive Director.No material changes to the approved Construction Plan shall occur without a Commission amendment to this coastal development permit unless the Executive Director detennines that no amendment is necessary. 16)Storm Water Pollution Prevention Plan:PRIOR TO COMMENCEMENT OF CONSTRUCTION,the Permittee shall submit for Executive Director review and approval a Storm Water Pollution Prevention Plan (SWPPP)..At minimum the SWPPP shall include the .following Best Management Practices (BMPs): •Gravel bags,silt fences,etc.shall be placed along the edge ofall work areas·as determined appropriate by the City's construction inspector in order to contain particulates prior to contact with receiving waters. •All concrete washing and spoils dumping will occur in a designated location. •Construction stockpiles will be covered in ord~r to prevent blow-off or runoffduring weather events.. • A pollution control education plan developed.by the General Contractor and implemented .throughout all phases ofdevelopment and construction. •Severe weather event erosion control materials and devices shall be stored onsite for use as needed. 17)Water Quality Technical Report:PRIOR TO COMMENCEMENT OF CONSTRUCTION,the Pennittee shall submit for ·Executive Director review and approval a Water Quality Technical Report as specified in the City ofCarlsbad Standard Urban Stormwater Mitigation Plan (April 2003)(Carlsbad SUSMP)for the post construction desalination facility,prepared by a licensed Civil Engineer,which shall include plans, descriptions and supporting calculations.The Storm Water Management Plan shall incorporate all feasible Best Management Practices (BMPs)designed to reduce,to the. maximum extent practicable,the volume,velocity and pollutant load ofstormwater leaving the developed areas ofthe site.The plan shall include the following criteria: •Post-Development peak runoffrates and average volumes shall notexceed pre- development conditions. 014052 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 13 of106 •Runofffrom all parking areas,tUrnouts,driveways and otherimpenneable surfaces (e.g., roofs)shall be collected and directed through·asystem ofstructural BMPs including vegetated and/or gravel filter strips or other media filter devices or other equivalent· means.The filter elements shall be designed to 1)trap sediment,particulates and other solids and 2)remove ormitigate contaminants through infiltration andlorbiological uptake.The drainage system shall also be designed to convey runoffin excess ofthis standard from the developed site in a non-erosive manner. •Provisions for maintaining the drainage and filtration systems so that they are functional throughout the life ofthe approved development.Such maintenance shall include the following:.1)the drainage and filtration system shall be inspected,cleaned and repaired prior to the onset ofthe stonn season,but not later than September 30theach year and 2) should any ofthe project's surface or subsurface drainage/filtration structures fail or result in increased erosion,the applicant/landowner or successor-in-interest shall be responsible for any necessary repairs to the drainage/filtration system and restoration of the eroded area. • A drainage system approved bythe City Engineer to ensure that runoffresulting from 10- year frequency stonns of6 hours and 24 hours duration under developed conditions,.are equal to or less than the runofffrom a storm ofthe same frequency and duration under existing developed conditions.Both 6-hour and 24-hour storm durations shall be analyzed to determine the detention basin capacities necessary to accomplish the desired results. The Permittee shall implement and maintain the Plan for the life ofthe project. 014053 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 14 of106 4.0 FINDINGS AND DECLARATIONS 4.1 PROJECT PURPOSE AND DESCRIPTION The proposed project is a seawater desalination facility proposed by Poseidon Resources (Channelside)LLC (referred to herein as Poseidon).Poseidon's proposed facility would use about 304 million gallons per day (MGD)ofwater drawn from Agua Hedionda Lagoon (the Lagoon)in Carlsbad,San Diego County (see Exhibit 1),to produce 50 MGD ofpotable water for local and regional use.3 At 50 MGD,Poseidon's proposed project would be the largest seawater desalination facility in the United States and in the Western Hemisphere.The proposed development also includes pipelines and pump stations necessary to deliver the produced water to a water reservoir in Carlsbad.The project's objectives include providing a local and reliable source ofwater,reducing local dependence on imported water,and providi,ng water at orbelow the cost ofimported water supplies.Poseidon has announced agreements to sell various amounts ofits desalinated water to water districts in San Diego County for up to about 90 years. Project Setting:The project would be located at the Encina power plant in Carlsbad on a site leased from the powerplant owner,Cabrillo Power II,LLC (Cabrillo)(see Exhibit 2).During the past half-century,the power plant used water from Agua Hedionda Lagoon to cool its generating units.Poseidon's project as initially proposed in 1999 would have used some ofthe hundreds ofmillions ofgallons ofestuary water the power plant drew in from Agua Hedionda Lagoon to cool its generating units;however,.Cabrillo recently proposed replacing the existing power plant with a new plant to be located elsewhere on the site,and which Cabrillo expects will be operating by 2010.4 This new power plant would use dry cooling instead ofusing water from Agua Hedionda.Cabrillo proposes to keep two ofthe five units in the existing plant available for a few years beyond 2010 to provide additional grid reliability ifneeded.Although they represent about two-thirds ofthe plant's generating capacity,s Cabrillo anticipates that these two units would operate only a few weeks per year.The power plant's generating capacity is subject to "Reliability Must Run"status,as contracted by the California Independent System Operator (Cal-ISO),which is meant to provide electrical grid reliability.At the October 2007 State Lands Commission meeting,a Cabrillo representative testified that the units would remain in service indefinitely and that Cal-ISO would determine when they are no longer needed for grid stability. Cabrillo's announced change in the power plant's operations represents a change in how Poseidon's facility was originally proposed.Poseidon's project would no longer function as a co-located desalination facility -that is,it would not re-use the estuarine water already used by the power plant -but instead would be a new "stand-alone"facility,drawing in waterjust for desalination.The project's EIR prepared by the City ofCarlsbad analyzed the project's impacts 3 Th~project would use about 100MGD in the desalination process to create about 50 MGD ofpotable water and about 50 MGD ofa high salinity discharge.The total amount would vary based onproject operations -e.g.,during maintenance,periods ofstart-up,etc.-and could be as high as 129 MGD.To reduce the salinity concentrations of itsdischarge,Poseidon would pump an additional ioo MGD into its intake and discharge system for dilution.This is discussed in more detail in Section2.5.1 ofthese Findings. 4 On September 14,2007,Cabrillo submitted to the California Energy Commission its Application ForCertification to start the review process needed to replace the existingpower plant (Application #07-AFC-06). 5 Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.B,atp.2. 014054 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC .ApprovedAugust 6,2008-Page 1501106 as both a co-located and a stand-alone facility.The EIR determined that as a stand-alone facility, the project would cause less entrainment and impingement losses than the existing power plant's operations and would have no significant impacts.6 Poseidon's lease with the power plant owner would allow it to operate the power plant's pumps when the power plant is shut down and would allow the proposed desalination facility to operate for up to 90 years.These Findings evaluate Poseidon's proposal as a "stand-alone"facility and the analyses herein are based on the coastal resource impacts that would result from the "stand-alone"project. A key environmental feature ofthe proposed project site is Agua Hedionda Lagoon.Several sections ofthese Findings address project-related impacts to the Lagoon's water quality and habitat values and the measures imposed to mitigate those impacts and ensure conformity to the Coastal Act.The description below provides a briefintroduction to the Lagoon and subsequent sections provide additional relevant details. Agua Hedionda Lagoon is a coastal estuary that extends about 1.7 miles inland and is up to about one-half mile wide.It is at the downstream end ofAgua Hedionda Creek,which has a watershed ofabout 29 square miles.The Lagoon has been altered ·substantially overthe past century or so. lt has been bridged several times -in the late 1800s for a railroad,in 1919 for the Pacific Coast Highway,and in 1967 for Interstate 5.It now consists ofthree main "lobes"-an Outer Basin of . about 66 acres,a Middle Basin ofabout 23 acres,and an Inner Basin ofabout 167 acres.The Lagoon's mouth is about 3,000 feet north ofthe power plant,and is maintained by two jetties extending a few hundred feet into the ocean.Thejetties are on State tidelands and are leased by the State Lands Commission to Cabrillo.The power plant also has a State Lands lease for use of its discharge structure,which crosses a state beach and state tidelands to the south ofthe Lagoon mouth (see Exhibit 3). Before the mid:..1950s,Agua Hedionda Lagoon was a shallow coastal wetland that was periodically shut off from tidal flows (the name is Spanish for "stinky water").In the mid-1950s, Southern California Edison purchased much ofthe Lagoon and dredged about four million cubic yards ofmaterial to create an intake channel for the power plant's cooling water system.7 Edison sold thepower plant in 1999.The power plant has operated since the mid 19508 using up to about 850 million gallons per day ofwater from the estuary,although its water use has declined significantly in recent years.It has required regular dredging during that time to maintain the power plant's intake channel,with at least 25 separate dredging events occurring during the powerplant's history.The estuary is also used for other purposes,including aquaculture (sea bass net pens,and a mussel farm),recreation (primarily boating and beach use),and ocean research (Hubbs-Seaworld Research Institute).Cabrillo,the currentowner,also allows use of the Lagoon for various scientific research and monitoring activities.A study submitted by Dr. Scott Jenkins on September 28,2007 on behalfofPoseidon indicates that ifthe Lagoon is not regularly dredged,it would close in about five to seven years and slowlyrevert to its pre- dredging condition,which consisted largely ofshallow marshy channels with hyper-saline water. Inthat condition,many ofthe Lagoon's current uses,such as recreation,fishing,and aquaculture 6 See also Poseidon Resources Corporation,Response to StafJReport,November 9,2007,Exh.A at pp.9-11;see Project EIR Section 4.3. 7 In 1999,Southern California Edison sold most ofthe power plantproperty and Agua Hedionda Lagoon to Cabrillo, although it continues to own land along the lagoon's shoreline. 014055 Final AdoptedFindings -Coastal Development Permit Application E-06-013 .Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 16of106 would be eliminated or reduced.8 Pastdredging ofthe Lagoon has also provided sand to maintain Carlsbad State Beach,grunion spawning habitat,and a popular surfing break:. The state's water quality standards identify Agua Hedionda Lagoon's listed beneficial uses as the powerplant's industrial use,recreational uses,aquaculture,and habitat The estUary is also listed as impaired,pursuant to Section 303(d)ofthe federal Clean Water Act,due to excess sedimentation and coliform bacteria.Additionally,the Carlsbad Watershed Management Plan? identifies the Lagoon as being further impaired due to habitat fragmentation and the presence of invasive species.During the past several years,the Lagoon experienced an outbreak:ofthe highly invasive Caulerpa taxifolia,but in 2006 local and state efforts to eradicate Caulerpa from .the Lagoon were deemed successful.Monitoring for Caulerpa continues,however. Despite these impacts and the degraded water quality,AguaHedionda continues to provide significant habitat values.The California Department ofFish and Game (DFG)includes it in a .list of19 "high..:priority"coastal wetlands and pFG manages a Marine Ecological Reserve wi~ the Lagoon that provides habitat for a number oflisted sensitive species.These features are.. described in more detail in Section 4.5.1 ofthese Findings. Need for the Project:The projectwould provide an important and much-needed source of potable water for Southern California.SincePoseidon filed its Coastal Development Permit ("CDP")application,the water supply situation inthe State of California -already bad-has substantially deteriorated.Poseidon has previously provided the Commission with newspaper reports that recognize a looming water crisis and clearly identify the need for California,and more specifically San Diego County,to lessen its demand on the State Water Project and Colorado River watersheds,which were critically dry in 2007,10 There is a convergence ofwarnings that California's water supply will continue to shrink. Climate change brought on by global warming could disrupt weather patterns,leaving the state vulnerable to punishing drought.There is a possibility that 2007 will be the beginning ofa multi-year drought.If2008 offers hydrologic conditions similar to those this year,some significant sources ofwater for Southern California maynot be available.The most recent example ofthe deteriorating supply situation occurred in May 2007,when state water officials temporarily turned offthe pumps that send water to Southern California from the Sacramento- San Joaquin Delta to protect the endangered smelt and salmon.ll 8 Comparative Analysis ofIntake Flow Rate on Sand Influx Rates at Agua Hedionda Lagoon.~Low Flow vs.No-Flow Alternatives,Dr.Scott Jenkins,September28,2007. 9 The Carlsbad Watershed Plan was published in 2002 pursuant to an NPDES permitissued in 2001 by the State Water Resources Control Boardto the cities ofSan Diego County.The permit requires participating cities to develop a cooperative and coordinatedwatershed approach to address water quality issues.The Plan's goals include the following:"Protectcoastal and wetland resources:Extra credit should be given to "Action Items"that serve to protect the wetland resources,sensitive species and fragile ecosystems associated with coastal lagoons and riverine resources.These resources are not only sensitive and highly valued,but they support a great diversity ofspecies and tend to be "sink holes"where water quality problems become much greater." 10 SeePoseidon Resources Corporation,R~sponseto StaffReport,November 9,2007,Exh.A at p.5. II See id. 014056 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 17of106 In the summer of2007,the Metropolitan Water Districtput San Diego County Agriculture on notice that it will cut agricultural water deliveries by 30 percent beginning January 1,2008. With $1.4 billion in annual revenue,San Diego County is the twelfth largest agricultural economy among all counties in the nation,and it could be severely hanned by this reduction in water supply.The Metropolitan Water District also has warned municipal and industrial water users to anticipate water rationing if2008 -like preceding years -is a dry year.Rationing of municipal and industrial supplies would be highly disruptive to San Diego's $150 billion annual economy.12 . Moreover,State,regional,'and local water plans all have confirmed that the immediate and pressing water needs are so great,t.~at they cannot be.met by conservation and recycled water alone and that a substantial investment in seawater desalination,including the project,is required.The project's capaCity of56,000 AFY ofnew water supply for the San Diego region is aboutten percent of500,000 MY ofdesalinated water identified by the California Department ofWater Resources as needed by 2030,as stated in its 2006 Water Plan Update.This Update lists the project as a potential source ofdesalinated water.The Metropolitan Water District of Southern California's Integrated Water Resources Plan identified a need for 150,000 AFY of seawater desalination (including 56,000 AFY from the Carlsbad project)to ensure regional water ,supply reliability.hi addition,the SanDiego County Water Authority updated its 2005 Urban Water ManagementPlan in April 2007 specifically to reaffirm the need for 56,000 AFY of seawater desalination from the project by 2011.Theproject is a central component ofstate, regional and local water supply planning to meet already-identified demand.13 Recognizing the importance ofthe project,eight water agencies -Carlsbad Municipal Water District,Valley Center Municipal Water District,Rincon del Diablo Municipal Water District,SweetWater Authority,Rainbow Municipal Water District,Santa Fe Irrigation District,Vallecitos Water District,and Olivenhain Municipal Water District -have already contracted to purchase 100%of .the project's capacity,and have identified the project's water supply as a component oftheir water plans.14 12 See id.. 13 See id.at p.6. 14 See id.at p.6-7. 014057 Final AdoptedFindings -Coastal DevelopmentPermit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 18 of106 4.2 BACKGROUND Seawater Desalination's Rolein California's WaterPortfolio Both California and the Coastal Commission have recognized that environmentally and economically appropriate seawater desalination is an acceptable method for providing part ofthe state's water supply.There are currently about a dozen facilities operating along the California coast,mostly providing relatively small amounts ofwater to local users or to certain industrial facilities.During the past few years there has been increased interest in seawater desalination, due largely to recent advances in desalination technology,concerns about increasing the reliability over local water supplies,and interest in reducing dependence on imported supplies. There are now about twenty proposals for new facilities to be built along the coast to serve both local and regional water needs. The 2005 Update ofCalifornia's State Water Plan expects seawater desalination to provide about 200,000 acre-feet ofwater by2030.Boththe Metropolitan Water District ofSouthern California. (MWD)and the San Diego County Water Authority (SDCWA,or Authority)have included seawater desalination as part oftheir long-tenn water supplyportfolio.The Authority has established a goal that seawater desalination provide 89,600 acre-feet ofits water supply by 2030.Even the Southern Nevada Water Authorityhas identified seawater desalination as part of its long-termwater supply,with its idea being that water from the Colorado River would be used in Nevada in exchange for the Nevada water users paying for desalinated water to be,produced along the California coast. Several recent initiatives in California illustrate this increased interest: •State Desalination Task Force:In 2003,pursuant to AB 2717,the California Department of Water Resources convened an interagency task forcers to report to the Legislature on potential opportunities and impediments for using seawater and brackish water desalination, and to examine what role,ifany,the state should play in furthering the use ofdesalination technology.Based on information provided during a series ofworkshops around the state, the task force developed recommendations and guIdelines for desalination projects proposed in California.Some key task force findings applicable to this proposed project include: •Desalination can provide a reliable supply during California'8periodic droughts. •Many communities and water districts are interested in developing desalination facilities as a local,reliable source ofwater to reduce their dependence on imported water and/or 15 Task Force members included representatives from:State agencies -California Department ofWater Resources, Coastal Commission,State WaterResources Control Board,Central Coastal Regional Water Quality Control Board, Energy Commission,Department ofHealth Services,Resources Agency,California Environmental Protection Agency,Department ofFood and Agriculture,CALFED,Bay Conservation and Development Commission, Department ofFish and Game,University ofCalifornia;federal agencies-Bureau ofReclarnation,Monterey National Marine Sanctuary;local governments and water agencies -Monterey County HealthDepartment,City of Long Beach Water Department,League ofCities,County Supervisor Association ofCalifornia,Central Basin and West Basin Municipal Water Districts,Marin Municipal WaterDistrict,Inland EmpireUtilities Agency;and interest groups-California Building Industry Association,Surfrider,American Membrane Technology Association, National Water Research Institute,Clean WaterAction and Clean WaterFund. 014058 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 19 of106 to meet existing orprojected demand.Some communities see desalination as a way to reduce their diversionsfrom rivers andstreams,thus contributing to ecosystem restoration. •Technologically,desalination is a proven,effective mechanism for providing a new source ofwater.A variety ofdesalination technologies have been applied in many locations throughout the world. •Economically and environmentally acceptable desalination should be considered as part ofa balanced water portfolio to help meet California's existing andfuture water supply and environmental needs. •While theyvary on a site-specific level,potential impediments to seawater desalination include the environmental impacts associated with thefeedwater intake and brine/concentrate disposal.As is the case with many other water management strategies,. otherpotential issues include cost,sitin8 and growth-inducement. •With proper design and location ofoutfalls,brinelconcentrate disposal may not be a major impediment to desalination.. •Seawater desalination is more energy intensive,per acre-foot,than brackish water desalination or water recycling.For energy comparison purposes,current desalination systems using reverse osmosis technology require about 30percent more energy than existing interbasin supply systems currently delivering water to parts ofSouthern California;Efforts including those supported by the Bureau ofReclamation,U.S· Desalination Coalition,.and the National Water Research Institute are underway to increase the energy efficiency ofdesalination through improved membranes,dual pass processes,and additional energy recovery systems. •Advantages to co-locating desalinationfacilities with coastalpowerplants usingonce- through cooling may include:compatible land use,use ofthe existing infrastructurefor feedwater intake and brine discharge,location security,use ofthe warmedpowerplant cooling water as thefeedwater for the desalination facility,reduction ofthepowerplant discharge thermalplume and the potentialto purchasepowerfrom the hostpowerplant at prices below retail rates. •Co-locating a desalination facility with a coastal powerplant mayprovide ajustification for the continued use ofonce-through cooling technology.Once through cooling technology has well-documented environmental impacts,including impacts on marine organisms. •The appropriate State regulatory agencies have indicated that the siting ofa new desalination faCility,which utilizes any new orexisting open waterfeedwater intakes,will require a current assessment ofentra{nment and ir1'Jpingement impacts aspart ofthe environmental revieW andpermittingprocess. •Various technologies exist that may avoid,reduce or minimize the impacts offeedwater intake. o Drawingfeedwaterfrom beach wells is one way to avoid the ecological impacts of entrainment and impingement associated with open water intakes;however,the capacity ofeach well is limited and is subject to local hydrogeologic conditions. o Low velocity intake systems,marine fish screens,sub-jloor intakes and appropriate intakepipe design and location are methods that may reduce orminimize impacts of entrainment and impingement associated with open water intakes. •Water,including ocean and estuarine water,is a public resource,subject to the public trust doctrine,andshould beprotected and managedfor thept,tblic good. 014059 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 20 of106 •The extent to which private companies are involved in the ownership and operation of proposed desalination plants varies widely,from completely privateprojects that may be regulated by the State Public Utilities Commission,to public-privatepartnerships,to projects that would be wholly owned,operated and controlled bypublic entities.The involvement ofprivate companies in the ownership and/or operation ofa desalination plant raises unique issues. •There are implications associated.with the range ofpublic-privatepossibilitiesfor ownership and operation ofdesalination facilities.Local government has the responsibility to make the details ofthese arrangements available to the public. •Recently adopted international trade agreements and international trade agreements currentlybeing negotiated may affect howfederal,State and local agencies adopt or apply regulations concerning activities ofpublic agencies orprivate entities with· multinational ties. fl Desalination proposals are subject to existing regulatory andpermittingprocesses to ensure environmentalprotection andpublic health. •Environmentaljustice considerations include the siting ofdesalination facilities. determining who accrues the costs and benefits ofdesalination and who has the opportunity to use higher quality (desalinated)water,and the possible impacts of replacing low-cost with high-cost water. ~Growth inducing impacts ofany new water supply project,including desalination,must be evaluated on a case-by-case basis through existing environmental review and regulatoryprocesses. liJ .E'ach desalination project involves different environmental characteristics,other water supply alternatives,proposedplant ownership/operation arrangements,demographics, economics,community values andplanningguidelines. .,Coastal Commission Report -Seawater Desalination and the California Coastal Act:In 2004,Commission staffpublished a report describing many ofthe issues associated with s·eawater desalination along the California coast and discussing how proposed desalination facilities could conform to Coastal Act provisions.The report provides generalinformation about desalination;describes the status ofdesalination in California,identifies key Coastal Act policies most likely to apply to proposed desalination facilities,and identifies much of theinformation likely to be requIred during review ofa coastal development permit application for those facilities. Its key conclusions recognize that each facility will require case-by-case review due to the unique operating characteristics and environmental settings,that Coastal Act policies do not suggest overall support of,or opposition to,desalination,that there may be differences in applying those policies to public or private proposals,that the most significant potential· impacts to address are likely entrainment ofmarine organisms and growth-inducement,and that proposed co-located facilities raise unique issues regarding Coastal Act conformity. •Proposition 50 Grants:As part ofProposition 50,which Californians approved in 2002 to provide funding for a number ofwater-related projects around the state,the state Department ofWater Resources distributed about $50 million to public agencies for various types of desalination research projects.·Several ofthe Conimission's past decisions have been in support ofthese projects -for example,the Commission has approved projects conducted by 014060 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 21 of106 the City ofLong Beach Water Department to conduct pilot tests and subsurface intake methods and projects by the Metropolitan Water District ofOrange County for its innovative ·and successful research on using slant-drilled wells for subsurface desalination intakes. There are also a number ofinitiatives at local or regional levels to support orresearch the potential for seawater desalination to provide part of an area's water supply.For example, Southern California's Metropolitan Water District (MWD),which represents most water agencies in coastal Southern California,established a program offering to its member agencies subsidies ofup to $250 for each acre-foot ofdesalinated seawater produced.The agencies eligible for this subsidy include the San Diego County Water Authority,Long Beach Water Department,Los Angeles Department ofWater and Power,West BasinMunicipal Water District,and the Municipal Water District ofOrange County.The MWD has also provided about $250,000 to its member agencies for desalination research Association with a powerplant once-through cooling waterintake system Poseid·on proposes to use the existing Encina power plant intake and discharge.Originally, Poseidon planned to reuse some ofthe estuary water the power plant drew in from Agua Hedionda Lagoon to cool its generating units.However,as discussed in Section 4.1 above, Cabrillo has applied to cease operations ofits existing facility and to build a new power plant.In September 2007,Cabrillo applied to the California Energy Commission·to build by2010 a new, smaller,dry-cooled power plant on site that would not use water from Agua Hedionda. Cabrillo'sproposal includes removing three ofthe existing plant's five generating units and operating the remaining two units only part time (expected to be up to a few weeks per year)for several more years until replacement power becomes available.The two remaining units would represent up to about 528 MGD ofpumping capacity.As noted previously,the power plant is subject to "Reliability Must Run"contracts with Cal-ISO.At,the October 2007 State Lands Commission hearing,a Cabrillo representative stated that the generating units will beavailable for service indefinitely and that Cal-ISO would ultimately determine when they are no longer needed for grid reliability.Once the power plant's operations cease,Poseidon would continue to use the existing power plant intake and discharge structure for its water supply.The proposed project was the subject ofCEQA review conducted bythe City ofCarlsbad.The Final EIR, certified by the City on June 14,2006,addressed the potential stand-alone operation ofthe facility and concluded that such a facility would not result in any significant adverse environmental impacts.16 In March 2007,Poseidon provided Commission staffwith results ofits entrainment study showing impacts roughly equal to the loss ofproductivity from 37 acres of wetlands and open water in Agua Hedionda Lagoon.'7 Poseidon also provided in December 2006 and May 2007 technical papers showing the amount ofLagoon sedimentation caused by use ofthe intake.ls 16 See Project EIR Section 4.3,Appendix E. 17 See Carlsbad Seawater Desalination Project RevisedFlow,Entrainment,andImpingement Minimization Plan, June 1,2007,Attachment 4,Tenera Enviromnental,Inc.,Assessment ofPotential ImpingementandEntrainment Attributed to Desalination Plant Operations andAssociatedArea ofProduction Forgone,May 2007,at p.4. IS See Carlsbad Seawater Desalination Project RevisedFlow,Entrainment,and Impingement Minimization Plan, June 1,2007:Attachment 6,ScottA.Jenkins and Joseph Wasyl,Coastal Process Effects ofReduce£}intakeFlows at Agua Hedionda Lagoon,December 13,2006,Attachment 8,Steve Le Page,PotentialAdverse Changes in Agua Hedionda Lagoon Resulting From Abandonmentofthe Lagoon Intake,May 18,2007. 014061 Final Adopted Findings -Coastal Development Permit Application E-06-013 .Poseidon Resources (Channelside)LLC .ApprovedAugust 6,2008-Page 22 ofl06 As a stand-alone facility,Poseidon would operate the power plant's pumps to take in approximately 304 MGD ofestuarine water.The project would use about 100 MGD ofthat water in the desalination process to create about 50 MGD ofpotable water and about 50 MGD of a high salinity discharge.The facility's NPDES permit issued to Poseidon bythe Regional Board requires that Poseidon's discharge not exceed a maximum salinity level of40.1 parts per thousand.Poseidon would use the additional 200 MGD ofestuarine water it pumps in to reduce its discharge's salinity concentration to levels established in the NPDES pennit. Some other reverse osmosis desalination facilities can produce a particular amount ofpotable .waterbyusing about twice that amount ofseawater (i.e.,a 2:1 ratio),but because ofthe approach used in this project to dilute Poseidon's discharge and due to the Regional Board's requirements, this project would require a 6:1 ratio.This is discussed in more detail in Section 4.5.1 ofthese Findings. Poseidon's preferred operating scenario,which is the basis ofthe analyses herein,is to use the power plant's Unit4 pumps to provide the necessary 304 MGD.19 A number ofregulatory,policy,and legal challenges have been raised with respect to once- through cooling.Their relevance to the project is not yet certain,in part because while the project will use the existing once-through cooJingsystem,it will not be using that system for once-through cooling.Issues that maybe relevant include: ..Entrainment/impingement studies along California's coast:California's coastal power plants have been studied over the past few years to determine what effects their use ofseawater for cooling has on the marine environment.20 These power plants can use from several hundred ..million gallons per day to over two billion gallons per day ofwater from the nearshore ocean, open embayments,and enclosed estuaries.Each ofthe studies showed these cooling water intakes cause significant adverse effects to the marine environment that in some cases extended up to dozens ofmiles along the coast or covered up to hundreds ofacres of nearshore waters. •California Ocean Protection Council's Once-Through Cooling Policy:In response to these studies and in recognition ofthe degraded quality ofCalifornia's ocean environment,the California Ocean Protection Council last year adopted a policy to reduce the adverse effects 19 The power plant has five separate generating units,each with two cooling water pumps and one or two service pumps.Each unit's pwnpshave a different capacity,from about 73 MGD to 326MGD.Poseidon's preferred scenario would be to operate the Unit 4 pumps,which would provide the required 304 MGD rate.The Regional Board determined that304 MGD would be necessary to adequately dilute Poseidon's 50 MGDhigh salinity discharge.OnJune 1,2007,Poseidon submitted to the Boarda RevisedFlow,Entrainment andImpingement Minimization Plan that the Board is currentlyreviewing.The draftPlan states that operating the Gnit 4 pumps wouldresult ina discharge of304 MGD with a salinity level of40.1 parts per thousand,which is the limit established in the facility's conditional NPDES permit.This operating scenario serves as thebasis ofthe various analyses inthese Findings related to entrainment,impingement,greenhouse gas emissions,and others. .20 Since 1998,power plant entrainment/impingement studies done in California include South Bay(in SanDiego), HuntingtonBeach (Orange County),Diablo Canyon and Morro Bay (SanLuis Obispo County),andMoss Landing (Monterey County).. 014062 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 23 of106 ofonce-through cooling systems.2\The resolution recognizes that such systems cause significant adverse impacts to the marine ecosystem.The Council further directed its staffto complete by December 2007 a study ofalternative cooling methods that would reduce impacts,urged the State WaterResources Control Board to implement the most protective controls to reduce entrainment and impingement impacts by 90-95%,and established an interagency coordinating effort-to address once-through cooling issues.22 •Changes in regulatory /legalstatus ofseawater intake systems:In January 2007,the 2nd Circuit Court ofAppeals determined that U.S.EPA rules for regulating existing power plant cooling water intakes did not conformto Clean Water Act requirements (Riverkeeper,Inc.,v. United States EPA,475 F.3d 83,97 (2d Cir.2007».In response,the U.S.EPA rescinded its proposed requirements and directed state water quality agencies to use Best Professional Judgment indetermining applicable NPDES requirements for once-through cooling systems. In conjunction with that ruling,the State Water Resources Control Board is developing a Statewide Polleyfor Once-Thruugh Cooling!3 that will incorporate the RiverkeeperII decision,which Was a decision involving the federal Clean Water Act,but will also be based primarily on a state requirement that regulates more thanjust cooling water structures.· Porter-Cologne Act Section 13142.5(bY4 states: "For each new or expandedcoastalpowerplantor other industrial installation using seawaterfor cooling,heating,or industrialprocessing,the best available site,design, technology,and mitigation measuresfeasible shall be usedto minimize the intake and mortality ofallforms ofmarine life." Although Poseidon's use ofthe power plant intake structure would not be for coolin.g purposes,it would be subject to this Porter-Cologne Act provision and would cause the same type ofentrainment and impingement impacts both the Clean Water Act and the Porter- Cologne-Act require be avoided and minimized.At this time,the Regional Water Quality Control Board is processing a plan to regulate Poseidon's use ofthe power plant intake structure for desalination purposes.This plan is described in more detail in Section 4.5.1 of these Findings.In addition,the Commission retains full authority to ensure the project's consistency with the Coastal Act's marine resources protection policies through the imposition ofSpecial Condition 8,which provides that Poseidon shall submit a Marine Life Mitigation Plan for Commission review and approval. 2\See Resolution ofthe CalifOrnia Ocean Protection Council Regarding the Use ofOnce-through Cooling Technologies in Coastal Waters,April 20,2006. 22 Coastal Commissionstaff is active in the interagency coordinating group. 23 In July 2006,the Boardinitiated CEQA ~eviewfor the proposed policyand is expected to issue a draft policy sometime in early2008,with a fmal policylater in 2008. 24 Pursuantto Coastal Act Section 30412(a),the Commission shares responsibilities with the State Boardin implementing this section ofthe Porter-Cologne Act.. 014063 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources.(Channelside)LLC .ApprovedAugust 6,2008-Page 24 of106 Without the mitigation measures in the Special Conditions contained herein,the proposed use of the existing intake and discharge facilities would be inconsistent with applicable Coastal Act policies.As mitigated and conditioned,the Commission finds the project will be consistent with the Coastal Act because all feasible mitigation measures will be adopted to reduce impacts to marine resources ~d Special Condition 8 and Poseidon's mitigation package will ensure that marine resources are maintained and enhanced to the maxmmm extent feasible. Public use afwater Poseidon has announced purchase agreements totaling 57,900 acre-feet ofwater per year with the following water agencies: •Carlsbad Mu~cipal Water Department:22,000 acre-feet per year,or about 20 MGD •.Olivenhain Municipal Water District:5,000 acre-feet per year,or about 4.5 MGD •Rainbow Municipal WaterDistrict:7500 acre-feet per year,or about 6.5 MGD •Rincon Del Diablo Municipal Water District:4,000 acre-feet per year,or about 3.5 MGD •Sante Fe Irrigation District:2000 acre-feet per year,or about 1.8 MGD .,Sweetwater Authority:2400 acre-feet per year,or about 2 MGD •Vallecitos Water District:7500 acre-feet per year,or about 6.5 MGD •Valley Center Municipal Water District:7,500 acre-feet peryear,or about 6.5 ~GD Poseidon's stated objective is to provide water to purchasers at or belowthe price they would pay for imported water,and its purchase agreements with these agencies are based on that objective.These agencies,all ofwhich are members ofthe San Diego CoUnty Water Authority, currently purchase imported water from the Authority at rates ranging from about $250 to $700 per acre-foot,which are below the costs anticipated for water from the Poseidonproject.Cost considerations are described in more detail later inthis section. Ofthe purchasers above,several would not be able to receive water directly from Poseidon's facility,as theyare some distance from Carlsbad -for example,the Sweetwater Authority is about twenty miles away at the southern end ofSan Diego Bay and both Rincon'and Valley Center are several miles inland.Instead,Poseidon's intent is to allow some ofthe agencie$to trade water it has purchased from Poseidon to agencies closer to the facility in exchange for those nearby agencies'rights to imported water. The project as currently proposed would allow for only limited exchanges,since it does not include several elements ofpublic infrastructure needed to distribute the water beyond adjacent communities.Poseidon's proposal includes pipelines and pumps necessary to transport its produced water to Carlsbad's Maerkle Reservoir,which serves parts ofCarlsbad,and its other pipelines would serve parts ofsome other neighboring communities.Poseidon'sproposal includes several pipeline route altematives,for the most part outside the coastal zone,that would allow it to provide water to portions ofthe cities ofCarlsbad,Oceanside,Vista,San Marcos, Escondido,Encinitas,and Solana Beach.The project EIR examined facilities to connect with these local water delivery systems.Getting water from this reservoir to the regional distribution system where it would be usable or tradable byother wateragencies would require an additional pump station and pipeline between the reservoir and elements ofthe regional system located further inland and several hundred feet higher in elevation.Poseidon does not currently plan to 014064 Final Adopted Findings -Coastal Development Permit Application E-06-0J3 Poseidon Resources (ChanneIside)LLC ApprovedAugust 6,2008-Page 25 of106 . connect the desalination facility to the regional water distribution system.This new pump station and pipeline are included in the SDCWA's 2007 DraftIntegrated Water Resource Management Plan,which describes the project as conveying desalinated water from Carlsbad to the regional water distribution system. Further,Maerkle Reservoir is currently designated by Carlsbad as its required emergency storage reservoir -that is,water stored there is meant to provide the City with a lO-day emergency water supply during a shutdown ofthe regional delivery system -and,as noted in the Water Purchase Agreement between Poseidon and the Carlsbad WaterDepartment,the City's need for water from the regional system is likely to be significantly reduced after Poseidon is able to provide water to the City at or below the cost ofimported water,thereby freeing up capacityin the reservoir for operational storage ofdesalinated water. ExpectedProjectCosts The Commission does not directly regulate costs;however,the Coastal Act includes consideration ofproject costs in an indirect but important way.Some Coastal Act provisions require the Commission to determine whether certain adverse impacts ofthe proposed project are mitigated to the extent feasible or whether there are feasible and less environmentally damaging alternatives to aspects ofa proposed project (see,for example,Coastal Act Sections 30212.5, 30230,30231,30233(a),and 30260).Coastal Act Section 30108 defmes "feasible"as "capable ofbeing accomplished in a successful manner within a reasonable period oftime,taking into account economic,environmental,social,and technological factors!'Therefore,information about proposed project costs may sometimes be necessary to fully evaluate what project changes ormitigation measures may be economically feasible.The Commission includes the following discussion ofthe project's estimated costs to assist in determining feasible mitigation measures and alternatives for the project. One ofPoseidon's objectives and the basis ofits purchase agreements is to provide water to water districts at orbelow the costs ofimported water.25 Those costs now range from about $250 to $700 peracre-foot for water districts in the San Diego area.26 Poseidon provided the Commission with a description ofits expected costs,27 which are currently higher than what local 25 More precisely,Poseidon's Water Purchase Agreements describe the price as:"The lower of(i)the sum of(A) $86l/acre-foot [$0.70/m3](the "Base Price"in 2004 dollars)and (B)a delivery charge for transportation ofthe desalinated waterto the Exchange Partner;and (ii)the sum (the "Avoided Cost")of(A)Buyer's costofwater supplied bythe SDCWAand (B)anysubsidy.received byBuyer from MWD or any other third party for the purchase ofwater from the Project To the extent the Base Priceplus the delivery charge is less than the Avoided Cost,the savings shall be shared equally between the Parties." The"AvoidedCost"method is equal to the sum ofcosts charged-by the SanDiego County Water Authority. The"Base Price"method is tied to the ConsumerPrice Index and is based on the following formula: Current Base Price =(Base Priceinitia000%(CPJi /CPJinitia0 +(30%(EC;/ECinitial)))014065 26 The MWD,from whom SDCWA purchases most ofits imported water,expects its imported waterpnce to go up from 4-6%peryear for the next ten years.Inthe shorter term,SDCWA expects its costs to increase next yearby about 10%. 27 Poseidon has provided the CO:mnUssion with the following docUIDl:nts supporting its projections ofexpected costs: Poseidon Resources Corporation,Response to California Coastal Commission's September 28Requestfor AdditionalInformation,November 30,2006 pp.46-51;Poseidon Resources Corporation,Response to California Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Chminelside)UC ApprovedAugust 6,2008-Page 26 of106 water districts are paying for imported water.However,Poseidon stated at the Commission's November 15,2007 hearing that it intends to operate at a loss for some unknown number of years until the costs ofimported water increase to match Poseidon's costs for constructing and operating the desalination facility. In July 2007,Poseidon provided the following figures for its expected projeCt costs: Total capital costs: Annua)gross revenues: (based on 56,000 acre-feet per year X ~$950 per acre-foot) Annual operations and maintenance costs: Debt service and taxes: Anticipated net annual revenues: Total:. $300 million $53 million $30 million $21 million $2 million $535 per acre-foot $375 per acre-foot" $36 per acre-foot $946 per acre-foot Commission staffbelieve,based on the analysis below,however,that the overall cost would likely be somewhat higher and,in fact,for some components ofthe proposed project could only verify higher costs.These higher costs,which would make Poseidon's water cost more than the expected $950 per acre-foot,include those listed below.Poseidon states,however,that it has taken all these potential costs into consideration in assessing the feasibility ofits project.28 •Overall trend ofdesalination.costs:Over thepast couple ofdecades,desalination costs have declined significantly,due largely to advances in technology such as increased energy efficiency,extended membrane and filter operating life,and other improvements.More recently,however,the trend appears to have reversed,due in part to increased cost for energy and materials.Of all significant sources ofwater,seawater desalination is the most energy intensive and the most cost-sensitive to energyprices.In 2004,Poseidon estimated its water would cost $800 per "acre-foot;its most recent estimate is $950 per acre-foot.Its overall capital costs have increased from $270 million to about $300 million during the same period. •Additional mitigation costs:Ai;noted later in these Findihgs,several mitigation measures are needed forthe proposed projeCt to confonn to various Coastal Act provisions.For example, Poseidon stated it is considering purchasing "carbon offset"credits for its greenhouse gas Coastal Commission's July 3 RequestforAdditional Information,July 162007,at pp.11-13;Poseidon Resources Corporation,Transmittal ofIntake Cost Estimates,October 17,2007. 28 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Ex.B,at p.7;Poseidon Resources Corporation,Response to California Coastal Commission's July 3,2007Requestfor Additional Information,July 16,2007;and Poseidon Resources Corporation,Response to California Coastal Commission's September 28,2006RequestforAdditionalInfOrmation,November 30 2006:(Attachment 3)Water Purchase Agreementbyand betweenThe Carlsbad Municipal Water District and Poseidon Resources (Channelside)LLC, September 28,2004,at §3.1.2;(Attachment 4)Water Purchase Agreement byand between Rincon del Diablo Municipal Water District and Poseidon Resources (Channelside)LLC,March 14,2006,at §3.1.2;(Attachment 5) Water Purchase Agreementby and betweenValleyCenter Municipal Water District and PoseidonResources (Channelside)LLC,December 20,2005,at§3.1.2.". 014066 Final AdoptedFindings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 27 of106 emissions.At a current average cost'of$20 per megawatt-hour,these credits would cost Poseidon over $5 million per year to fully offset its emissions,which would add about $95 to the cost ofeach acre-foot produced.Poseidon indicated that it has taken all ofthese costs into consideration in assessing the feasibility ofthe project and addressed these costs in its Climate Action Plan. •Poseidon's reliance on a MWD subsidy:Poseidon's anticipated costs are also based in part on it being eligible to benefit from the $250 per acre-foot subsidy available from the MWD described previously in theseFindings.Without this subsidy,Poseidon's stated costs would be $250 per acre-foot higher. •Present andfUture costsfor electricity:Poseidon estimates its average cost for electricity will be $0.0749 per kWh.It bases this estimate on the rates available from the San Diego Gas & Electric Company (SDG&E)for large industrial customers (SDG&E TariffSheet#AL- TOU),which provides a range ofenergy prices based on the time-of-use (e.g.,higher costs at peak afternoon hours,lower costs at night;generally higher costs in summer than in winter) and its eligibility for a discount due to its participation in SDG&E's emergency response program. However,to Commission staff,it appears that applying the rates from that TariffSheet would result in an actualannual average rate ofno less than $0.10 per kWh which,ifapplicable, would increase Poseidon's expected costs per acre:-foot by abouf$125.29 Poseidon responds that the applicable SDG&E tariff is subject to a discount due to the project's ability to reduce demand during peak periods and to shed up to 95 percent ofthe project's energy load during local utility emergencies.30 Additionally,to Commission staff,it appears that Poseidon's anticipated costs do not recognize likely future rate increases for electricity,which'it expects . would add about $25 per acre-foot ifapplied nextyear to Poseidon's costs.3l •Additional costs to pump water into SDCWA distribution system:As noted above,Poseidon's current proposal includes installing the pipelines and pumps needed to deliver water only to Carlsbad's Maerkle Reservoir and parts ofVista and Oceanside.Transporting water to other entities would require an additionalpipeline from the reservoir tothe regional distribution system along with an additional pumping station and additional electricity costs.SDG&E's \ most recent cost estimates for these components are $80 million in capital costs and $2.5 million per year in operations and maintenance costs.. 29 Poseidon stated that it could take advantage oflower off-peak electricity rates by reducing its production dwing peak hours and increasing it dwing non-peak hours -it proposed,for example,that it could operate at 80%capacity (40 MGD)during the highestrate periods and at 108%capacity(54MGD)during lower rate periods.However,it appears this scenario would have little effect on average electricalcosts,since Poseidon would use even more electricity during the longer low~rate periods and less during the muchshorterhigh-rate periods.Further,this "start/stop"operating scenario would likely increase Poseidon's operations andmaintenance costs due to shortening the operating life ofthe various membranes,filters,and other facility components. 30See Poseidon Resources Corporation.Updated Response to Coastal Commission's September 28,2006 Request for Additional Information,Section 13,CDP Energy Use,GHG Production &Mitigation,October 21,2007,at p.3. 31 For 2008,SDG&E has already proposed an increase ofabout 5%increase for its industrial users,which would add about $25 per acre-foot to Poseidon's current estimated costs. 014067 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 28 of106 •Additional costsfor dredging Aqua Hedionda Lagoon:The power plant owner is currently responsible for dredging the Lagoon and is expected to maintain that responsibility as long as the power plant plans to use its once-through cooling system.When the powerplant ends its use ofthat system,it might allow Poseidon to take on responsibilities for dredging the Lagoon,which based on the power plant's current costs,could add about $1 million per year to Poseidon's costs. In sum,Commission staffestimates that the additional costs described above could add up to about $450 to Poseidon's stated $950 per acre-foot costs,which is more in line with cost estimates available from other seawaterdesalination facilities operating or being developed in California. Regardless ofwhich cost estimates are more accurate -those provided by Poseidon or those of Commission staff-the Commission has found that the project,as conditioned herein,will incorporate all feasible mitigation measures needed for the project to confonn to applicable Coastal Act provisions,and Poseidon has stated it has taken all these costs into consideration in assessing the project's feasibility.There are no feasible and less environmentally damaging alternative locations to draw in the needed seawater (e.g.,subsurface or offshore).The Commission finds that slant wells are infeasible because thewater quality available from such intakes would make it difficult,ifnot impossible,to treat for desalination purposes,and that the .construction impacts associated with this alternativerender itenvironmentally inferior to the proposed project,3z The Commission also finds that an infiltration gallery is environmentally inferior to the proposed project because this alternative would disrupt public access to marine resources,require frequent dredging and require the destruction of 150 acres ofcoastal habitat, and that the alternative is economically infeasible.33 The Commission further finds that an offshore intake system would result in greater environmental impacts than the proposed project's use ofthe existing power plant intake,and that construction ofan offshore intake would render the project infeasible.34 Moreover,should Poseidon's costs orother concerns make the project unsuccessful,measures existto protect coastal resources.First,under the waterpurchase agreements between Poseidon and the Carlsbad Municipal Water District,the WaterDistrict at its option can assume operation or ownership ofthe facility.Second,ifthe Water District chooses not to assume either ofthose options,or ifoperations ceased for some reason,Poseidon is required to remediate the site and remove the facility.To accomplish this,and as described in the Water Purchase Agreement n See PoseidonResources Corporation Responseto California Coastal Commission's Letter ofSeptember 28,2006, November 3D,2006,atpp.24-51;Poseidon Resources Corporation,Response to StaffReport,November 9,2007, Exh.A at pp.16-17. 33 See Poseidon Resources Corporation,AdditionalAnalysis ofSubmergedSeabedIntake Gallery,October 8,2007; .Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.17-18. 34 See PoseidonResources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.19-20;Issues Related to the Use ofthe Ag).la Hedionda Inlet Jetty ExtensionEIR to Recommend An Alternative Seawater Intake for the Carlsbad Desalination Project,Graham,Le Page and Mayer,October 8,2007. 014068 Final AdoptedFindings-Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 29 of106 between the Water District and Poseidon,Poseidon is required to post a security in the fonn of either a letter ofcredit or an irrevocable bond with the propertyowner.3S 4.3 COASTAL COMMISSION JURISDICTION AND STANDARD OFREVIEW Theproposed desalination facility and portions ofits associated pipelines would be located in the coastal zone within the City ofCarlsbad.Carlsbad has a certified Local Coastal Program (LCP), and the Agua Hedionda area is one ofsix segments ofthat LCP.Although most ofthe city's coastal zone is fully certified,the Agua Hedionda segment has only a certified Land Use Program (LUP),not a certified implementation program.Therefore,review and pennitting authority within this segment remain with the Commission,with the standard ofreview being Chapter 3 ofthe Coastal Act.The Commission may also use provisions ofthe certified LUP as guidance.. 4.4 OTHER PERMITS AND ApPROVALS City of Carlsbad: •Precise Development Plan:As part ofits project review and approval,the City ofCarlsbad approved a Precise Development Plan for the project site,which modified the allowable uses on the site to include the proposed desalination facility. •Environmental Impact Report:On June 14,2006,the CityofCarlsbad certified a Final .EIR for the project.At the request ofthe Coastal CommissionstafI,the City added a discussion to the Final EIR to address stand-alone operations ofthe project.In addition,the potential for stand-alone operations was evaluated in the City's staffreports to the City Planning Department and City Council.The City concluded that the project,operating as either a co-located or a stand-alone facility,would not result in any significant adverse impacts.36 . State: •Lease ofstate tidelands from the StateLands Commission:The proposed project would require a lease from the State Lands Commission due to its use oftwo sets ofstructures built on state tidelands -the jetties at the mouth ofAgua Hedionda and the discharge structure built across a state beach about 3000 feet south ofthe Lagoon mouth. 35 See Water Purchase Agreementby and between The Carlsbad Municipal Water District and Poseidon Resources (Channelside)LLC,September 28,2004,at §14.2.. 36Note:The EIRfound that allbut one ofthe project-related impacts wouldbe nonsignificant or through mitigation wouldbe less than significant.TheEIRfound that the project wouldindirectly contribute to a significant cumulative impact to air quality because it is likely that atleast partofthemixofelectricitythat the desalination plant uses will come from pollutant-emitting sources in the SanDiegoair basin.However,the EIR also found that there were no feasible mitigation measures to reduce this impact.(See ProjectErR,Chapter 5,p.5-9.) 014069 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6.2008-Page 30 of106 The powerplant currently has a lease from the State Lands Commission allowing it to use those structures until 2026;however,that lease allows use ofthose structures only for power plant cooling operations and for minor use by Poseidon's test desalination facility (up to 200 gallons per minute)only when the power plant is operating.The power plant's lease also states that the "Commissionhas expressed concerns regarding Once-Through Cooling (OTe) ofpower plants and the environmental impacts to the waters ofCalifornia that may be caused by OTC systems",and further states that the lease iricludes provisions that authorize the State Lands Commission to amend the lease ifthe State or Regional Water Boards modify Cabrillo'sNPDES permit.This lease requires additional written approval from the State Lands Commission for use ofthe intake or discharge by a future desalination project. Poseidon submitted its lease application in February 2007.As CommissionerThayer explained at the hearing,the State Lands Commission held a hearing on Poseidon's lease application on October 30,2007.Staffrecommended approval ofthe lease but the Commission took no action"and continued the hearing at the request ofthe public because the . hearing was held just days after the San Diego region fires and at least one individual who wanted to participate in that hearing had been evacuated.Commissioner Thayer said a second hearing would be scheduled in December 2007 or at a later date. Coastal Act Section 30601.537 requires in part that an applicant demonstrate its ability to comply with all conditions ofa coastal development permit prior to issuance ofthat permit. This demonstration includes landowner approval,which in this case would take the form of Poseidon obtaining the necessary State Lands Commission leases.To ensure Poseidon complies with this requirement,Special Condition 2 requires Poseidon,prior to the Commission's issuance ofthe coastal development permit,to submit for ExecutiveDirector review and approval all necess~leases from the State Lands Commission,local governments,and the power plant owner showing that it has the necessary legal interest in all property within the coastal zone necessary to construct and operate the project.Special Condition 3 further requires Poseidon to execute and record against its leasehold interests restrictions that bind both Poseidon and any future holders ofthose interests to the terms and conditions ofthe Commission's approval.This,too,requires review and approval by the Executive Director before issuance ofthe coastal development permit.. • ,National PollutantDischarge Elimination System (NPDES)permit from the Regional Water Quality Control Board:Poseidon's proposed project is subject to a NPDES permit issued by the San Diego Regional Water Quality Control Board in August 2006 pursuant to the Clean Water Act (33 U.S.C.§1251 et seq.)and the Porter-Cologne Water Quality Control Act (Cal.Water Code §13000 etseq.).The NPDES permit,issued after the Regional Board reviewed several studies and analyses ofthe project,covers discharges from the project to the Pacific Ocean.The NPDES permit addresses marine impacts ofthe project by requiring compliance with applicable water quality control plans,water quality objectiv~s, 37 Coastal Act Section 30601.5 states:"Where the applicant for a coastal development permit is not the owner ofa fee interest in the property onwhich a proposed development is to be located,but can demonstrate a legal right, interest,or other entitlement to use the property for the proposed development,the commissionshall notrequire the holder or owner ofany superior interest in the property to join the applicant as coapplicant.Allholders or owners of any other interests ofrecord in the affected property shall be notified in writing ofthe permit application and invited tojoin as coapplicant. In addition,prior to the issuance ofa coastal development permit,the applicant shall demonstrate the authority tocomply with all conditions ofapproval." 014070 FinalAdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC . ApprovedAugust 6,2008-Page 31 of106 performance goals,effluent limitations,and other receiving waterand discharge limitations. In September 2006,Surfrider Foundation and Orange COlmty CoastKeeper filed a petition with the State Board challenging the pennit on several grounds.In June 2007,the State Board dismissed the petition because it failed ''to raise substantial issues that are appropriate for review"by the State Board.38 The permit requires Poseidon to submit additional documentation for Board approval before starting operations and is based on Poseidon operating with or without concurrent power plant operations,as long as either entity ensures a discharge ofat least 304 MGD to provide adequate dilution ofthe desalination facility's high salinity discharge. One ofthe required documents is a Flow,Entrainment andImpingement Minimization Plan, which Poseidon submitted in February 2007 and revised in June 2007 and which the Board is . still reviewing.This plan is described in more detail in Section 4.5.1 ofthese Findings.The NPDES Permit states that the Board will detennine through its review ofthis Plan whether. the proposed project conforms to Porter-Cologne Act Section 13142.5. Additionally,Poseidon's operations would cause sedimentation in Agua Hedionda,which is listed by the State and Regional Boards as an impaired water body due in part to high rates of sedimentation.Poseidon states,citing documentation by the Regional Board,that the 303(d) listing ofAgua Hedionda Lagoon as an impaired body is based on fine-grained sedimentation discharged by urban run-off into the Lagoon from the neighboring watersheds (predominantly Agua Hedionda Creek),impacting 6.8 acres primarily located in the east basin ofthe Lagoon.39 As noted in the Carlsbad Watershed Plan,developed pursuant to an NPDES Permit issued in 2001 to a number oflocaljurisdictions bythe State Water Quality Control Board,continued use ofthe power plant intake by either Poseidon or Cabrillo would contribute to the high sedimentation rate in the Lagoon.As described later in these Findings, Poseidon's studies show that sedimentation at the mouth ofthe Lagoon caused by use ofthe intake results in increased sedimentation within the area ofthe Inner Basin identified as impaired.For example,in describing sedimentation caused by the intake,Poseidon states that the build-up ofsediment near the Lagoon mouth restricts the tidal prismso that outf1ow~ from the Inner Basin are both reduced and slowed,resulting in the Lagoon having insufficient transport capacity to reduce the sediment load in the Inner Basin..Poseidon .contends that the intake is only partially responsible for this sedimentation,and that the fine- grained sedimentation in the InnerBasin is primarily the result ofurban run":offdischarge. This issue wi11like1y require further consideration by the Regional Board as part ofits ongoing review ofPoseidon's provisional NPDESperrrtit,which was issued in June 2006 before these studies were prOVided.The Commission expects that action by the Regional Board will result in conformity to these applicable NPDES requirements. .38 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,at Exh.B p.6;see also SWRCB/OCC File A-I773,June 5,2007. 39 2006 Clean Water Act 303(d)List ofWater Quality Limited Segments Requiring TMDLs,San Diego Regional Water Quality Control Board,June 28,2007. 014071 Final AdoptedFindings -Coastal Development Permit Application E~06-013 Poseidon Resources (Channelside)LLC Approved AugUst 6,2008-Page 32 of106 Federal: •Federal "incidental take"permits:Poseidon's proposed project may result in the "take"of species protected under the Marine Mammal Protection Act through entrapment of seals or other marine mammals in the power plant intake.In a June 4,2007 letter to Commission staff,Poseidon indicated it would apply for an independent "Incidental Harassment Authorization"("incidental take"permit)under the Marine Mammal Protection Act for any impacts to sea lions,seals,or any other protected marine mammals resulting from construction oroperation ofthe project.During review ofPoseidon's application~the .National Marine Fisheries Service would engage in consultation under Section 7 ofthe federal Endangered Species Act to ensure that the project will not jeopardize the continued existence ofany species listed as threatened or endangered under the Act.Past power plant operations have caused documented entrapment ofspecies protected under the federal Endangered Species Act,incluciing two endangered East Pacific green turtles (Chelonia mydas)over the past several decades.Poseidon's operations ofthe intake system at velocities ofless than 0.5 feet per second are expected to decrease the likelihood offuture sea turtle impingement... Agua Hedionda historically provided habitat for the tidewater goby (Eucyclogobius newberryi)a species listed as endangered by the U.S.Fish and Wildlife Service in 1999.The goby is also listed as a Special Status Species by the California Department ofFish and Game.The Service was developing a critical habitatdesignation for the species about the same time as publication ofCommission staffs recommended Findings to the Commission.40 In November 2006,the USFWS issued a proposed designation that did not include Agua Hedionda as critical habitat,stating that the goby has not been detected in the Lagoon for many years;the last goby specimen from AguaHediondawas collected in 1940.4\ To ensure Poseidon confonns to these other coastal resource protection requirements,Special.. Condition 4 requires Poseidon,prior to starting construction,to submit documentation ofother permits and approvals needed for project construction and operation,including those from the City ofCarlsbad,theRegional Water Quality Control Board,the California Department of Health Services,the National Marine Fisheries Service,and the U.S.Fish and Wildlife Service, or documentation showing that these approvals are not needed. 40 In 1994,the U.S.Fish and Wildlife Service listed the goby as endangered.In 1999,the Service published inthe Federal Register a proposed rule to retain the goby as a listed endangered species in Orange and SanDiego County coastal waters and to establish Agua Hedionda as part ofthe critical habitat for the goby.The goby had been listed as endangered in February 1994.InNovember 2000,the Service published its final rule,which designated Agua Hedionda as critical habitat for the goby.InAugust 2001,Cabrillo Power L.L.c.,owner ofthe Encina power plant, filed a lawsuit challenging that designation.The Service later filed a consent decree withU.S.District Court in which it agreed to vacate that designation and reconsider the entire criticalhabitat designation in the rule.That consent decree also established that the Service would publish a revised proposal for critical habitat byNovember 15,2006 and a new final rule byNovember 1,2007.The USFWS had not issued its fmal habitat designation as of the date ofthe Commission's decision. 4\See PoseidonResources,Response to StaffReport,November 9,2007,Exh.B,at p.9. 014072 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust6,2008-Page 33 of106 4.5 CONFORMITY TO APPLICABLE COASTAL ACT POLICIES 4.5.1 Protection ofMarine Life (Coastal Act Sections 30230 &30231) Coastal Act Section 30230 states: Marine resources shall be maintained,enhanced,and,wherefeasible,restored.Special protection shall be given to areas and species ofspecial biological or economic significance.Uses ofthe marine environment shall be carried out in a manner that will sustain the biologicalproductivity ofcoastal waters and that will maintain healthy populations ofall species ofmarine organisms adequatefor long-term commercial, recreational,scientific,and educationalpurposes. Coastal Act Section 30231 states: The biologicalproductivity and the quality ofcoastal waters,streams,wetlands, estuaries,and lakes appropriate to maintain optimum populations ofmarine organisms andfor the protection ofhuman health shallbe maintained and,.where feasible,restored through,among othermeans,minimizing adverse effects ofwaste water discharges and entrainment,controlling runoff,preventing depletion ofground water supplies and substantial interference with surface waterflow,encouraging waste water reclamation, maintaining natural vegetation buffer areas that protect riparian habitats,and minimizing alteration ofnatural streams. These Coastal Act provisions require generallythat marine resources be maintained,enhanced, and where feasible,restored.They also require that the marine environment be used in a manner that sustains biological productivity and maintains healthy populations ofall marine species. Coastal Act Section 30231 requires that biological productivity be maintained,and where feasible,restored,including byminimizing the adverse effects ofentrainment.42 OtherpoUcies asguidance In applying the above-quoted Chapter 3 policies,the Commission maybe guided by Porter- Cologne Act Section 13142.5,pursuant to Coastal Act Section 30412(a).43 Subsection (b)of Section 13142.5 states: For each new or expanded coastalpowerplant or other industrial installation using seawaterfor cooling,heating,or industrialprocessing,the best available site,design, technology,andmitigation measuresfeasible shall be used to minimize the intake and mortalityofallforms ofmarine life. 42 "Minimize",as used in these Findings,means "to reduce to the smallest possible amount,extent,size,or degree" as defmed in the American Heritage@ Dictionary ofthe English Language:FourthEdition (2000).. 43 Coastal Act Section 30412(a)states:"In addition to Section 13142.5 ofthe WaterCode,this section shall apply to the commission and the State WaterResources Control Board and the California regional water quality control ··'boards." 014073 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 34 of106 State,regional and local water plans all have confmned that waterneeds in the San Diego region will rely in part on seawater desalination.44 To that end:(1)the proposed project will provide 56,000 AFY ofnew water supply fur the San Diego region;(2)the California Department of Water Resources'2006 Water Plan Update identifies the need for 500,000 AF ofdesalinated water by 2030;(3)the Metropolitan Water District ofSouthern California's Integrated Water Resources Plan identified a need for 250,000 AFY ofseawater desalination (including 56,000 AFY from the Carlsbad project)to ensure regional water supply reliability;(4)the San Diego County Water Authority (SDCWA)updated its 2005 Urban Water Management Plan in April 2007 specifically to reaffirm the need for 56,000 AFY ofseawater desalination from the Carlsbad project by 2011;and (5)Carlsbad Municipal Water District,Valley Center Municipal Water District,Rincon del Diablo Municipal Water Pistrict,SWeetwater Authority,Rainbow Mwricipal Water District,Santa Fe Irrigation District,Vallecitos Water District,and Olivenhain Municipal Water District have entered into long-term waterpurchase agreements with the Carlsbad Desalination Project.4S Collectively,these water districts will use 100%ofPoseidon's capacity.45 These agencies that have or are planning to acquire water from the Carlsbad Desalination Project have organized the "San Diego Desai Partners"and meet on a regular basis to coordinate efforts to advance the project..In a communication to Commission Chairman Kruer,the San Diego Desal Partners described the Carlsbad Desalination Project as "one ofthe most important water infrastructure projects currentlybeing planned for the State of California."47 The SDCWA's April 18 Update of2007 Metropolitan Water District supply assessment projected 2007 to be a critically dry year in both the State Water Project and Colorado River watersheds.48 In light ofthis concern,the public support for the project contiimes to grow.For example,among key findings ofthe SDCWA 2006 Public Opinion Survey,the top response by respondents when asked what the most critical things the SDCWA could do to ensure a safe and reliable water supply was to develop seawater desalination.49 Certified Agua HediondaLand Use Plan:Because the proposed project is within the Commission's retained jurisdiction,the standard ofreview is Chapter3 ofthe Coastal Act. .However,in such instances,the Commission may use as guidance adjacent certified Local Coastal.Programs (LCPs).The proposed project would be in the coastal zone within the City of Carlsbad.Although the City has a certified LCP,the Commission has not yet certified the LCP for the portion ofthe City,known as the Agua Hedionda segment,where the project would be. 44 See Poseidon Resources Corporation,Response to California Coastal Commission 's February 20 Requestfor AdditionalInformation,June 1,2007,at pp.7-9. 45 See id. 46 See id. 47 See id. 48 See id. 49 See id. 014074 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 35 of106 The Commission,however,has certified the Land Use Plan (LUP)for the Agua Hedionda segment.The certified Land Use Plan recognizes the Lagoon's unique environmental status and designates the entire Lagoon as a "special treatment area".The Plan's goals for the Lagoon include the following: •Protect andconserve natural resources,fragile ecological areas,unique natural assets, and historically significantfeatures ofthe community. •Preserve natural resources byprotectingfish,wildlife,and vegetation habitats;retain the natural character ofwaterways,shorelinefeatures,hillsides,andscenic areas;safeguard areas for scientific and educational research;respect the limitations ofour air and water resources to absorb pollution;and encourage legislation that will assist in preserving these resources. Agua Hedionda is also one of19 coastal wetlands identified in the California Department ofFish and Game report,Acquisition Prioritiesfor the Coastal Wetlands ofCalifornia.This report identifies high priority wetlands for acquisition,based primarily on their values for fish and wildlife habitat and threats to their continued existence as a natural resource.5D Coastal wetlands identified in this report are subject to the additional protections ofCoastal Act Section 30233(c), which are 4escribed in Section 4.5.2 ofthese Findings. Otherpolicies andrequirements applicable to theproposedproject Marine Reserve Designation:Additionally,part ofAgua Hedionda has been designated by the California Department ofFish and Game as the Agua Hedionda Lagoon State Marine Reserve. Pursuant to Section 1580 ofthe state Fish and Game Code,the Reserve is to be managed to: "...protect threatened or endangered native plants,wildlife,oraquatic organisms or specialized habitat types,both terrestrial and nonmarine aquatic,orlarge heterogeneous natural gene poolsfor thefuture use ofmankind through the establishment ofecological reserves." NPDES permit:Activities within the City ofCarlsbad affecting Agua Hedionda Lagoon are in part subject to an NPDES permit issued in 2001 by the State Water Resources Control :Board to several San Diego County cities to address significant water quality impacts in several coastal watersheds.The permit in part requires the cities to develop a comprehensive plan to manage the region's watersheds and to avoid and·solve surface water quality problems.The Carlsbad Watershed Management Plan,published in 2002 pursuant to these NPDES requirements, includes a munber ofgoals and objectives to implement the NPDESpermit requirements.Its goals include,fOT example: Protect Beneficial Water Uses:To be considered supportable by this plan,all "Action Items II mustprotect,restore,.or enhance beneficial water uses within the watershed.The action shouldfocus on theprotection ofhuman public healthfirst andthen on the health ofwildlife and natural ecosystems.The action item should recognize that public health 5D See also the California Coastal Plan,December 1975. 014075 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 36.of106 includesflood protection andshould strive to balance natural restoration with water quality improvements andflood control. Protect Coastal and Wetland Resources:Extra credit shouldbe given to "Action Items" that serve to protect the wetland resources,sensitive species andfragile ecosystems associated with coastal lagoons and riverine resources.These resources are not only sensitive and highly valued,but they support a great diversity ofspecies and tend to be "sink holes"where water qualityproblems become much greater. Multiple Habitat ConsenJation Program:The Multiple Habitat Conservation Program (MHCP) is a comprehensive habitat conserv:ltion planning process that addresses multiple species needs and the preservation ofnative vegetation communities for the.Cities ofCarlsbad,Encinitas, Escondido,Oceanside,San Marcos,Solana Beach,and Vista,California.The MHCP is established in part to develop coordinated habitat preserve system.In Carlsbad,the MHCP is focused on preserving eight vegetation types,including marsh and estuarine wetlands.The covered species for this plan include invertebrates,birds,and plants found in and near Agua Hedionda and use the Lagoon as habitat. Marine LifeManagement Act:The California Marine Life Management Act (MLMA)was established to ensure the conservation,sustainable use,and restoration ofCalifornia's marine life. This includes the conservation ofhealthy and diverse marine ecosystems and marine living resources.To achieve this goal,the MLMA calls for allowing and encouraging only those activities and uses that are sustainable.Although most ofthe MLMA is devoted to fisheries management,it also recognizes that non-consumptive values such as aesthetic,educational,and recreational are equally important.Unlike previous law,which focused on individual species,the MLMA recognizes that maintaining the health ofmarine ecosystems is important in and ofitself .The MLMA also holds that maintaining the health ofmarine ecosystems is key to productive fisheries and non-consumptive uses ofmarine living resources. One ofthe MLMA's primary goals is to provide for sustainable fisheries.A sustainable fishery is defined in the MLMA as one in which fish populations are able to replace themselves.The MLMA recognizes that populations ofmarine wildlife may fluctuate from year to year in response to external environmental factors,such as climate and oceanic conditions.Unlike traditional definitions ofsustainability in fisheries,a key feature ofthe MLMA.definition calls. for maintaining biological diversity. "Essential Fish Habitat":Agua Hedionda Lagoon is also considered "Essential Fish Habitat" (EFH),pursuant to provisions ofthe federal Magnuson-Stevens Fishery Conservation and Management Act.The Act defined EFH as "those waters and substrate necessary to fish for spawning,breeding,feeding,or growth to maturity",and establishes that activities that would affect this habitat require consultation with the National Marine Fisheries Service pursuant to Section 305(b)ofthe Act. 014076 Final Adopted Findings -Coastal Development PefmitApplication £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 37 of106 Proposed ProjectLocation andSite Conditions Poseidon's proposed facility would be located on the site ofthe Encina power plant adjacent to Agua Hedionda.The facility would pump approximately 304 million gallons per day (MOD)of estuarine water from the Lagoon.51 Although Poseidon's proposal is to use 100 MGD of seawater to produce 50 MOD ofpotable water,the Regional Water Quality Control Board has required through its issuance ofan NPDES permit that Poseidon discharge no less than 254 MOD to dilute its high salinity discharge.52 These proposed project characteristics and issues associated with this discharge are discussed later in these Findings. .Characteristics ofAgua Hedionda Lagoon:Agua Hedionda Lagoon is located within the City of Carlsbad and is used for a wide variety ofactivities.It is used recreationally,it includes extensive aquaculture operations,and it has served as the location for the p~wer plant's cooling water intake structure since the mid-1950s. The vast majority ofthe water in the estuary is from tidal sources.Each semi-diurnal tide brings in or discharges about 500 million gallons ofseawater;so Poseidon's water withdrawals would represent ahout 30%ofthe estuary's daily water influx.53 The Lagoon receives a relatively small amount offreshwater from Agua Hedionda Creek,from twenty-three stonn drains,and from urban and agricultural runoff.The Lagoon's three basins have very different habitat characteristics,based largely on the hydrodynamics ofthe tidal flow and the resulting different substrates -finer materials in the hIDer Basin grading to coarser materials in the Outer Basin. Agua Hedionda Lagoon is listed by the Regional Board·as having impaired water quality due to the presence ofindicator bacteria and because ofsiltation and sedimentation.54 As noted in the Carlsbad Watershed Plan,the impairment is due largely to fine-grained sediments being discharged into the Lagoon from urban runoffcoming from the neighboring watersheds (predominantly Agua Hedionda CreekY5,although part ofthe excess sedimentation within the estuary has been due to the power plant's water intake causing an imbalance between sediment 51 Toprovide a sense ofscale,the 304 million gallons ofestuarine water Poseidon would use eachday equals about 932 acre-feet,or the amount ofwater that would cover 932 acres (about 1.5 square miles)with a foot ofwater.Over the course ofa year,Poseidon would use more than 100 billion gallons ofwater fromthe estuary,or about 340,000 acre-feet,which would cover over 500 square miles up to a foot deep. 52 304 MGD is an average volume.Poseidon's NPDES Permit limits the facility's salinity discharge to no more than about 40 parts per thousand,whichrequires Poseidonto pump from up to about 320 MGD at various times. 53 Poseidon's FlowPlan states that the tidal cycle brings in about 475 million gallons.The San Diego County Water Authority estimated in its recent DraftEIRfor a similar proposed desalination facility that tidal inputs were about 528 million gallons.The average ofthese two estimates would result in a twice-per-<lay influx ofabout 1003 MGD, so Poseidon's 304 MGDwithdrawal would represent about 30%ofthe average tidal inputs. 54 As noted in Section 4.4 ofthese Findings,pursuant to prQvisions ofthe federal Clean Water Act,states are required to identifypolluted surface water bodies that do not meet water quality standards.States are tothen prioritize those waterbodies for cleanup activities through developing a "Total Maximum Daily Load"(TMDL)for those waterbodies that identifies the cleanup steps needed to allow the waterbodies tomeet the standards.California has not yet developed a TMDL for Agua Hedionda Lagoon. 552006 Clean Water Act 303(d)List ofWater Quality Limited Segments Requiring TDMLs,San Diego Regional Water Quality Control Board,June 28,2007. 014077 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 38of106 inflow and outflow,and Poseidon's proposed project would cause similarsedimentation problems. Poseidon has also submitted a study indicating that due to sedimentation and in the absence ofthe power plant,ifthe Lagoon is not regularly dredged,it would close in from about five to seven years and slowly revert toits natural state ofmarshy channels with hyper-saline waters. Despite these water quality concerns,Agua Hedionda provides extensive habitat values for a wide variety ofmarine biological resources and other wildlife.Surveys from 1994-95 found that the Lagoon and nearby wetlands supported 29 fish species and 143 species ofbenthic invertebrates.56 AgUa Hedionda provides habitat for important commercial and recreational fish species,special listed species,and forage fish used by these other species.Fish in the Lagoon include California halibut,which use the Lagoon as an important nursery area,garibaldi,. Northemanchovy,and various gobies,blennies,and others.The Lagoon formerly provided habitat for the endangered tidewater goby (Eucyclogobius newbe"rryi).The u.s.Fish and Wildlife Service determined in 2006 that the goby's absence from the Lagoon is due to habitat loss and other anthropogenic factors.51 The Lagoon is also identified as Essential Fish Habitat (EFH),pursuant to the Magnuson-Stevens Act described above. The surveys also identified 81 different bird species in these areas,including 12 listed as sensitive:Belding's Savanna sparrow,California leasttern,Western snowy plover,Brown pelican,White-faced ibis,California gull,Osprey,Cooper's hawk,Long-billed curlew, Loggerhead shrike,Northern harrier,and Black skimmer.In the coastal scrub sage habitat adjacent to many ofits wetlands,the surveys found additional sensitive bird species,including the California<gnatcatcher,the leastBel1's vireo,and the light-footed Clapper rail.Many ofthese speciesrelyon marine life within the Lagoon and adjoining wetlands. AnticipatedProjectImpacts and CoastalAct Conformity -Intake-Related Findings in this section evaluate the proposed project's impacts on marine biological resources associated with its intake of estuarine water.Findings insubsequent sections describe discharge- related impacts caused by the proposed facility's discharge ofhighly saline wastewater into nearshore ocean waters and its cumulative impacts.All analyses are based on Poseidon's .proposed use and discharge ofan average of304 MOD ofestuarine water,and on Poseidon's use ofthe existing power plant pumps as a stand-alone desalination facility. Adverse Impacts Caused by Poseidon's Intake:The project's proposed withdrawal of304 MGD ofestuarine waterthrough the powerplant intake structure would cause several types of impacts to marine biological resources,including impingement,entrainment,and potential "take"ofprotected species.However,with implementation ofthe mitigation measures and Special Conditions described in these Findings,these impacts can be mitigated to an insignificant level such that the project conforms to Coastal Act Sections 30230 and 30231. 56 From CaliforniaWetlands InformationSystem database at: http://ceres.ca.gov/wetlands/geo_info/so_cal/agua_hedionda.html. 57 From Federal Register,November 28,2006,proposed rule pursuant to 50 CFR 17 (see: http://www.epa.gov/fedrgstr/EPA-SPECIES/2006INovemberlDay-28/e9291.htrn).Additionally,as noted in Section 4.4 ofthese findings,Agua Hedionda Lagoon is notlisted as critical habitat for the species. 014078 Final AdoptedFindings -Coastal Development Permit Application E-06-0l3 Poseidon Resources(Channelside)LLC ApprovedAugust 6,2008-Page39 of106 •Impingement:Impingement occurs when fish or other organisms are caught on an intake's screening system and are either killed or injured.The impingement rate for an intake is primarily a function ofwater velocity.The current Clean Water Act regulations (at 40 CFR 125)applicable to cooling water systems establish a maximum velocity of 0:5 feet per second as the required Best Available Technology.When velocities are below that level,fish are usually able to swim away from the pull ofthe intake.Impingement rates may also vary seasonally or when schools offish get close to the intake. Regarding Poseidon's expected impingement impacts,the project EIR at Section 4.3 and Poseidon's 2004-05 study described below showed that it would not cause impingement at levels beyond those caused by the power plant and that its use ofthe powerplant intake would impinge about 20,000 fish per year (or about 55 per day)weighing a total of about 4500 pounds (or about 12 pOimds per day).During the study period,however,most ofthis impingement-about 80%-was caused by power plant heat treatments,which Poseidon would not have to do as a stand-alone desalination facility.Therefore,Poseidon's impingement rate would be much less,averaging less than 2.5 pounds per day.The City of Carlsbad'sEIR determined that under the stand-alone "No Power Plant Operation"scenario, the project would have an intake flow velocity that would not exceed 0.5 feet per second, .which is consistent with the U.S.EPA guidance for "bestavailable technology"for cooling water intakes,and that under these operating conditions the project "would not result in significant impingementeffects."See project EIR Section 4.3.Poseidon has prepared a Flow,Entrainment andImpingement Minimization Plan in accordance with its Regional Board issued NPDES Permit (Regional Board Order No.2006-0065).The Flow, Entrainment and Impingement Minimization Plan provides that the project,when operating stand-alone,is expected to impinge approximately 2.12 pounds offish per day,which Poseidon provides is less than the average daily consumption ofan adult pelican (more than 2.5 pounds per day),which for this project the Commission considers de minimis and insignificant.58 Moreover,Special Condition 8 requires Poseidon to submit a Marine Life Mitigation Plan for Commission approval,and implementation ofthat Plan will mitigate any expected impingement impacts.Past impingement at the power plant has included entrapment and ''take''ofthe endangered Eastern Pacific green turtle a protected species.During the past several decades,one green sea turtle has been entrained and released unharmed and a second one was found dead at the intake structure.Sea turtles are rarely seen in the Lagoon area,or in the intake oroutflow bays ofthe power plant.The flow rate ofthe water in the intake bays is expected to be at or below 0.5 fps;therefore,death ofhealthy sea turtles after entering these areas is highly unlikely.Because there will be either no change to the existing conditions,orin the case oftheproject operating by itselfa substantial reduction.in the seawater pumping rate,it is not anticipated that continued operation ofthe power plant or the needs ofthe project will have.significant adverse impacts on sea turtle species.Thecurrent design ofthe power plant miniffiizes the possibility ofentrainment ofsea turtles in the power plant structures.The intake structure is outfitted with metal guard rails (trash racks)that prevent animals from entering the forebay area on the plant side.The slow moving water in .the Lagoon and through the intake trash racks allow the sea turtles to get out ofthe area if 58 See also Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.9-10. 014079 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 40 of106 theyenter.59 Because the turtles do not breed in this area,only adults would be susceptible to potential "take",and adult turtles are too large to fit through the bar racks at the intake entrance.Poseidon has documented that stand-alone operation ofthe facility would result in intake water velocities at or below 0.5 feet per second,which is consistent with the U.S.EPA guidance for "best available technology"for cooling water intakes.As noted above, Poseidon will also apply for an incidental take permit from NMFS to mitigate any such impacts.Based on the above,and with Special Condition 8,the Commission fmds the impingement impacts and the potential for an incidental take associated with stand-alone operations will be consistent with the Coastal Act and fully mitigated. •Entrainment:Entrainment occurs when small organisms,sucb as plankton,fish eggs, larvae,etc.,are pulled into an open-water intake.Once-through cooling systems like the one at the Encina power plant are considered"to cause essentially 100%mortality due to the organisms being subjected to high temperatures or high pressures within the system. Entrainment causes direct impacts bykilling the small organisms that are pulled through the cooling system and causes indirect impacts to the larger marine community by altering the food web and removing part ofthe community's productivity.Seawater is notjust water,but is habitat,and along the California coast an acre-foot ofseawater (about 326,000 gallons)can contain an average ofabout 500 different species offish,invertebrates,plankton,and other marine life.Large intake systems such as the one Poseidon proposes to use can kill millions oforganisms each day and cause a loss Of change in ecosystem resources and alterations in community structure.While impingement rates are largely a function ofwater velocity and can be reduced when velocities are reduced,the amount ofentrainment is primarily associated with the amount ofwater used,so the main way to reduce entrainment impacts is to reduce water volumes pulled into an intake system. Background-How to Determine Entrainment Effects:Detennining the scale arid the extent ofentrainment impacts generally requires a study that includes obtaining at least one year's worth ofregular sampling data and application ofany ofseveral modeling approaches.The samplcs arc taken from waters near the intake and from nearby source waters.Organisms captured are identified to the lowest possible taxon.In most cases,all organisms cannot be identified,so the known taxa serve as indicators or surrogates for the full set ofaffected species.Ofthe various models available,the most acceptable is known as the Empirical Transport Model (ETM).It is used to provide an estimate ofthe proportion oforganisms lost due to entrainment compared to the overall number oforganisms in a source water body.. The ETM approach allows estimates ofloss for each identified species,in part by .recognizing that each species is subject to entrainment during particular life stages.Once the species subject to entrainment are identified,the ETM approach then determines what period oftime each ofthe species are subject to entrainment -that is,based on local currents,it determines how many days an egg stage or larval stage ofa particular species is subject to being pulled into the cooling system rather than be able to move away and escape from it. This period varies by species,ranging from just a few days to several weeks.It will also vary bywhether it is calculated using the maximum or mean duration of larvae in the source water.As a very simple example,ifindividuals ofa species are "entrainable"for the first five days oftheir lives and the average currents in the area move past the cooling system intake at haIfa mile per hour,that species has a source water area ofsixtymiles (5 days x 24 59 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.B atp.14. 014080 Final Adopted Findings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC . .ApprovedAugust 6,2008-Page 41 of106 hours x 0.5 mph =60 miles).Determining source water areas may be complicated by seasonal changes in current speed or direction and whether the species are from nearshore or offshore areas,and for intakes proposed in enclosed estuaries,the calculations must· incorporate the hydrologic pattern ofthe estuary. The proportion oflarvae lost to larvae in the source water (known as "proportional mortality")is then multiplied by the source water area to provide an estimate ofhowmuch overall production ofthe species in this area is lost due to entrainment.This result ofthis calculation,known as "habitat production foregone"(HPF)can be expressed in acres or in miles of shoreline.Even a low "proportional mortality"figure can result in a large impact if the loss occurs over a large stretch ofshoreline.Using the example above,if5%ofthe larval stage ofthat species is lost due to entrainment,that represents that species'production along about three miles ofshoreline (0.05 x 60 miles =3 miles).The HPF for the various species can be kept separate or can be combined as an overall average figure. Results ofentrainment studies such as this do not reflect all the variables that may affect populations within a given area -for example,populations may decrease or increase due to seasonal or long-term changes,the habitat within the source water areas is likelyto include characteristics that affect particular species and may be ofvariable quality within the same soUrce water area,etc.These methods do,however,provide a good sense ofscale ofthe overall impacts ofa given intake system during the period sampled. Poseidon's anticipated entrainm.ent effects:The project is expected to cause adverse effects to marine life due to its use of304 MOD ofestuarine water.The City ofCarlsbad determined,in Section 4.3 ofthe project ElR,that under standalone operations,the facility would have no significant effects "on the source water populations [ability]to sustain themselves".60 However,in 2004-05,Poseidon conducted a study as part ofthe documentation for its Flow,Entrainment,and Impingement Minimization Plan to determine the entrainment impacts that would be caused by continuous 304 MOD water use.InMay 2007,Poseidon provided a technical memorandum to Commission staff summarizing the results ofthat study and its Flow,Entrainment,and Impingement Minimization Plan and stated that the study used Regicnal Board approved protocols for sampling and analysis. Poseidon stated its study showed that the desalination facility's water withdrawals would entrain an average ofabout 12%of three types offish larvae inAgua Hedionda subject to entrainment -gobies,blennies,and garibaldi -in addition to smaller percentages ofother species,including white croaker,Northern anchovy,California halibut,and queenfish,none ofwhich are listed as endangered or threatened.Poseidon identified these species as coming from about 302 acres ofAgua Hedionda's open water habitat (253 acres)and its mudflat/tidal channel habitat (49 acres).Applying the ETM and HPF methods described above suggests that Poseidon's entrainment would cause a loss ofproductivity about equal to that created by 36 acres ofAgua Hedionda's openwater and mudflat/tidal channel habitat (Le.,12%of302 acres =~36 acres). To ensure Poseidon's study accurately assesses the project's entrainment impacts,Special Condition 8 requires that Poseidon provide a full copy ofits study for further Commission review and approval. 60 See Project EIR,Section 4.3. 014081 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 42 of106 - Poseidon has argued,for a number ofreasons,that this expected entrainment impact does not constitute a significant adverse impact,and that several features ofits project will reduce entrainment impacts: o Ongoing use ofthe intake by the powerplant:Poseidon states that its entrainment impacts will be reduced as long as the power plant continues to use its cooling water intake; Poseidon states that the power plant expects to continue its use ofthe once-through cooling system indefinitely.The magnitude ofthe entrainment losses identified in Chapter 3 ofPoseidon's Revised Flow,Entrainment and Impingement Minimization Plan, dated June 1,2007,is estimated for continuous operation ofthedesalination plant on a stand-alone basis notwithstanding the fact that the power plant generating units will be available for service indefinitely.The power plant owner has proposed removingthree of the existing plant's five generating units and operating the remaining two units only part time for several more years until replacement power becomes available.The two remaining generating units represent 528 MGD ofpumping capacity.Cal-ISO would ultimately determine when 'i:he remaining units are no longer needed for grid reliability. Poseidon states that in the meantime,seawater.pumping by the power plant would likely meet a substantial portion ofthe desalination facility's flow requirements,resulting in a comparable reduction ofentrainment and impingement impacts attributable to the facility.61 o Modifications to the intake systemfor desalinationfacility use:Poseidon states that entrainment mortality that occurs within the existing power plant screens,pumps,and condensers upstream ofthe desalination facility intake would be substantiallyreduced during the desalination facility's standalone operations due to lower water temperatures, volumes,velocities,and turbulence resulting from desalination operations compared to .those ofthe power plant.62 o Use ofwaterfor dilution:OfPoseidon's 304 MGD use ofestuarine water,about two- thirds,or 200 MGD,would be pulled in to the intake system and used,without further processing,to dilute the high salinity discharge from the desalination facility.'Poseidon .states that only 104 MGD would be subjected to additional processing that would cause entrainment mortality,as 200 MGD bypasses the desalination facility and is discharged to the ocean.63 o "Cropping"andpopulation size:Poseidon states,for example,that because there are large numbers ofplanktonic organisms in estuarine water and because they experience a very high natural mortality rate,the effects ofentrainment are generally similar to what these organisms already experience~Poseidon further states that the "cropping"ofthese 61 See PoseidonResources Corporation Response to California Coastal Commission's Letter ofFebruary 20,2007, June 1,2007,at Attachment 25. 62 See Carlsbad SeawaterDesalination Project Revised Flow,Entrainment,andImpingement Minimization Plan, June 1,2007,at p.26. 63 See Carlsbad SeawaterDesalination Project Revised Flow,Entrainment,andImpingement Minimization Plan, June 1,2007,atpp.1-19. 014082 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 43 of106 - organisms via entrainment is beneficial in that it allows remaining individuals to have less competition.It states that entrainment samples collected during the study were consistently dominated by larvae ofthree lagoon-dwelling species and contained relatively few numbers ofocean-dwelling species.It states that study samples were dominated by gobies,a mud-dwelling group offish ubiquitous to all California lagoons and bays,blennies,fish that are crevice dwellers;and garibaldi,a typical rocky reef dweller in open ocean habitat,but in this case occupying the rocky reef ofrock rip-rap armoring the Lagoon side ofthe Carlsbad Boulevard jetty.None ofthe species entrained is listed as threatened orendangered.In addition,Poseidon states its samples showed entrainment would affect about 0.2%ofother species,including white croaker,Northeni anchovy,California halibut,and queenfish.Poseidon further states that because the affected species are primarily gobies,which are ubiquitous in California lagoons and -bays,blennies,which are also common,and garibaldi,which are more often found in rocky habitats in the open ocean,the 12%average loss is not significant.PoseIdon states that most ofthe organisms that would be entrained are species that are not commercially orrecreationally fished,and since they are not harvested,the entrainment mortality is being imposed on populations that are at a level close to the natural carrying capacity of the coastal environment.Therefore,Poseidon contends,mortality due to entrainment would not affect such populations,and any impingement or entrainment impacts ofthe project,ifit should operate stand-alone in the future,would have no significant adverse effects on marine biology.Poseidon also applies measures from the California DepartmentofFish and Game's Nearshore Fisheries Management Plan to conclude that because the 12%loss is below the levels identified in that Plan (i.e.,30%or 60%loss ofa fish stock's biomass)that require a fisheries management response,the entrainment loss is not significant.Poseidon states that because the fish are not harvested,the mortality levels caused by entrainment would not affect the populations. However,Commission staffs analysis shows that Poseidon's arguments are not supported by available science or the findings from the past several years ofentrainment studies conducted at power piants along the California coast and elsewhere in the U.S. RegardIDg ongoing use by the power plantofits once-through cooling system,Commission staffconcur that in that situation,the entrainment caused would be shared by both Poseidon and Cabrillo;however,it is not able to determine what proportion ofthe adverse effects_ could be assigned to either entity.Staffs analysis was based on Poseidon's stand-alone operations pulling in about 304 MGD.Cabrillo hasstated that while it would continue to make available two ofits generating units as needed,that it expects them to operate for no more than a few weeks per year once its new dry-cooled facility is operating,and it is not possible to predict how often or for how long these units might run in the future.Therefore, the Commission is unable to determine whether continued,part-time co-located operations would affect Poseidon's entrainment impacts.Ifthe power plant operates at times when Poseidon is operating and draws in additional water,Poseidon's impacts may be a "share"of the overall total;however,as noted previously,the adverse effects to marine biology evaluated in these Findings and the necessary mitigation are based on Poseidon operating as a stand-alone facility and drawing in about 304 MGD. 014083 Final AdoptedFindings -Coastal Development PennitApplication £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 44 of106 Regarding the modifications and different processes Poseidon states may occurwithin the intake and discharge system,including use ofestmmne water for dilution,staffnotes that the standard protocols used for conducting entrainment studies and determining the levels of adverse effects do not allow a lower mortality rate to be applied to the different processes organisms may experience in the various typeS ofthese systems.There are no peer-reviewed scientific studies that support a lower mortality level-therefore,the protocols'assumption. of 100%mortality applies to each study regardless ofthe variable temperatures,water volumes,velocity,and turbulence caused by any particular intake system.Further,the project EIR stated that it did not evaluate how larvae may be affected differently by different levels ofturbulence and temperature,and also noted that entrained organisms would be subjectto the same level ofturbulence from the desalination facility whether the power plant is operating or not. In all entrainment studies done at California's coastal power plants,and per guidance and findings from the U.S.EPA,the California Regional Water Quality Control Boards,the California Energy Commission,and previous Coastal Commission decisions,entrainment mortality is assumed to be 100%regardless ofthe various processes and stressors the· entrained organisms may experience in different intake systems.Even ifsome organisms may survive the initial heat,turbulence,or pressure-induc.ed stresses experienced when passing through these systems,they are expected to be injured and suffer mortality shortly after being discharged due to injury,increased rates ofpredation,orother related causes.A stand-alone desalination facility using the same type ofwater intake structure is assumed to cause the same level ofmortality,due to its use offilters and high pressures to remove most particles from seawater and due to its high salinity discharge.Those organisms drawn into the intake in water used just to tiilute the desalination discharge may experience somewhat less than 100%immediate mortality;however,there are insufficient data or peer-reviewed scientific studies to conclude that the overall mortality from desalination processes and discharges would be anything less than the 100%mortality the protocols apply to organisms going through the power plant processes and discharges.Further,for this particular intake and discharge system,organisms that may survive being pulled from the estuary and through the desalination processes would be discharged into the very different habitat conditions of the nearshore ocean shoreline,which in itself is likely to cause substantial mortality. Regarding "cropping"and population size,staffnotes that Poseidon's proposed use ofthe CDFG's fisheries management definitions do not apply to the species Poseidon states are most subject to its entrainment impacts -that is,gobies,blennies,and garibaldi,none of which are managed as part ofa fishery.Further,Poseidon's contentions regarding the ubiquity and population sizes ofthese species do not incorporate standard ecological concepts that recognize the importance offorage fish,such as gobies and blennies in supporting other species and ecosystem functions.. Each ofthe entrainment studies done in California since 1998 concluded that the power plant .intakes caused significant adverse impacts to local orregional marine biota.64 Additionally, 64 Since 1998,entrainment s.tudies completed at California coastal powerplants include those done atMoss Landing, Morro Bay,Diablo Canyon,Huntington Beach,and SouthBay(e.g.,Morro Bay PowerPlant 316(b)Resource Assessment,2001;AESHuntington Beach Generating Station Entrainment andImpingement Study,2005 and California Energy Commission Entrainment andImpingement Final StaffAnalysis,August,2006,etc.). 014084 .. Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 45 of106 for the most part,the main adverse entrainment effects these studies identified were to species offorage fish (e.g.,gobies,queenfish,etc.)similar to those identified in Poseidon's study,and each studyresulted in a requirement ofsubstantial mitigation for the identified losses.Some studies evaluated intake volumes in the same range as those proposed by Poseidon -for example,the entrainment study for the Huntington Beach power plant determined that its use of253 MGD ofocean water resulted in Habitat Production Foregone ofover 100 acres.Each ofthe three recent studies done for intakes within estuarine environments identified adverse entrainment impacts and substantial mitigation needs.For example,the Moss Landing study showed that its 1224 MGD estuarine intake resulted in Habitat Production Foregone of 1135 acres.Ifapplied proportionally to Poseidon's 304 MGD intake,the HPF would be about 281 acres.Similarly,the study ofMorro Bay's 668 MGD intake.showed an HPF offrom 230 to 759 acres,which is applied proportionally to Poseidon's expected flow would result in an HPF offrom 104 to 345 acres.In each ofthese power plant siting cases,the Commission found that mitigation was necessary to allow .Coastal Act conformity.Finally,the South Bay power plant study ofa 601 MGD intake resulted in an HPF of 1003 acres,which ifapplied to Poseidon's flow would require 507 acres ofmitigation.Poseidon's contentions that its entrainment effects would be minimal or even beneficial are further refuted byboth Coastal Act and Porter-Cologne Act requirements that call for entrainment to be minimized to protect marine biology and water quality. Having seen only the summary Poseidon provided,rather than the full study,the Commission is requiring through Special Condition 8 that Poseidon provide the full study to confiml these contentions,especially in comparison to these other recent entrainment studies, all ofwhich found significant adverse impacts and resulted in HPF and mitigation needs well above Poseidon's proposal.The previous entrainment study done at the Encina power plant in 1979 found that there was an average ofmore than 1400 individuals ofjust the ten most abundant fish species in each 100 cubic meters ofestuarine water.65 The results Poseidon provided ofits more recent study did not include tbis information,but ifthe current densities .are similar,Poseidon's 304 MOD intake would cause entrainment to atleast 16 million fish· .larvae per day (i.e.,304 MOD /100 cubic meters (or 26,400 gallons)=11,515 x 1400 = 16,121,000).That 1979 study also foundthat the power plant's 795 MGD intake would cause annual entrainment losses ofidentified zooplankton (including Crustacea,copepods, Mysidacea,Decapoda,etc.)of30.9x109,ormore than 30 billion organisms per year.When applied to Poseidon's 304 MGD flow volume,this would be about 11 billion ofthese identified organisms per year. Along with the lost productivity that would result from Poseidon's estuarine water use,the water use would also cause significant adverse effects to specific species.The species identified in the study as subject to entrainment include several subject to "take"prohibition or fishing limits and others that provide important functions in the estuarine food web.Of the species that would be entrained,most have a role in the estuary's food web as prey species for higher trophic level species,including many that are important for commercial or recreational fishing.66 65 See Cabrillo Power I LLC,ProposalforInformation Collection Clean Water ActSection 316(b)Encina Power Station,April 1,2006. 66 The recently published report bythe Environment California Research and PolicyCenter,Net Loss:Overfishing Offthe Pacific Coast (October 2007)identifies significant overfishing along the coast ofCalifornia and other states. 014085 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 46 of106 Three species -the garibaldi,California halibut,and Northern anchovy -make up about 6% ofthe identified organisms collected during entrainment sampling.They would constitute a similar percentage of~e millions oforganisms that Poseidon's project would entrain,and therefore representan adverse impact to marine biological resources protected under the Coastal Act. Overall,Poseidon's entrainment study results show that its proposed use ofan estuarine intake would causes a substantial reduction ofimportant individual species and ofproduction within Agua Hedionda.It may also cause losses in nearby nearshore waters due to the intake entraining organisms that would otherwise enter nearshore areas due to tidal discharges;.. however,the studyresults did not identify whether that hydrodynamic-related effect was included. Therefore,although the Final EIR found the project would cause no significant entrainment impacts pursuant to CEQA,the Commission fmds that the project's entrainment impacts will require mitigation to ensure conformity to Coastal Act Sections 30230 and 30231. Mitigating the Impacts Caused by the Poseidon's Use of an Estuarine Open Water Intake: Mitigation Background:The standard approach for identifying,selecting,and implementing appropriate mitigation for project impacts is to first avoid the impacts,to then minimize the impacts,and to finally compensate for the impacts that remain.67 Mitigation sequencing,as it is known,requires that mitigation measures to achieve the first step be considered and selected (or be determined infeasible)before moving to the next step.lfthe third step,compensatory mitigation,is necessary to address remaining impacts,it also includes a preferred sequence -to first create environmental conditions similar to those being lost;to next restote or enhance conditions similar to those being lost;and to finally preserve or protect an area that provides habitat value.Itis generally preferable to select "in-kind"mitigation;that is,to develop mitigation sites with habitat similar to that being adversely affected,ratherthan to develop "out- of-kind"mitigation.Similarly,it is generally considered better to develop mitigation on-site rather than off-site. Avoiding and Minimizinglmpingement Impacts:As noted above,Poseidon's study showed that its use ofthe power plant intake would impinge less than 2.5 pounds offish per day,which the Commission considers a de minimis impact. The primarymethod ofavoiding and minimizing impingement is to maintain intake water velocities below 0.5 feet per second (fps),a rate that the U.S.EPA considers to be "best available technology"for cooling water intakes..This velocity represents the rate from which most fish species are able to swim away from intake screens and avoid being impinged.Poseidon showed in its draft RevisedFlow,Entrainment,and Impingement Minimization Plan that its use ofthe power plant pumps would create intake velocities higher than 0.5 fps and that its preferred operating scenario -using the power plant's Unit 4 pumps-wouldresult in rates between 1.8 Among the populations identified as overfished (i.e.,reduced to below 20-25%ofits original population)are several that rely on fish that would be entrained by Poseidon's project. 67 See,for exainple,the CEQA Guidelines at Section 15370. 014086 Final AdoptedFindings -CoastalDevelopment Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 47of106 and 2.8 fps,or from more than three to five times the acceptable rate.However,in Exhibit B of its November 9,2007 letter to Commission staff,Poseidon states that water velocities at the intakebar racks during stand-alone operations would be less than 0.5 fps,which would conform to the U.S.EPA's "Best Technology Available"standard for minimizing impingement impacts. Additionally,as noted previously,Poseidon has stated it intends to apply for an "incidental take permit"from NMFS.With these measures,the project is not likely to cause substantial adverse impingement effects.Furthermore,Poseidon's Exhibit Band its"Revised Flow,Entrainment,and Impingement Minimization Plan state that it will install variable frequency drives to further decrease water flow intake velocities.With these low velocities,the already de minimis impingement impacts that Poseidon's project may cause are expected to be further reduced and thus mitigated to an insignificant level and consistent with Coastal Act Sections 30230 and 30231. AvoidingEntrainment Impacts:Themost direct way to avoid Poseidon's expected adverse entrainIDent effects would be,iffeasible,to use an alternative intake structure that avoids those effects.Certain types of subsurface intakes may avoid these effects by drawing in water through an overlying layer ofsand.As discussed below,however,the Commission finds that these alternatives are infeasible. The four main types ofintakes are vertical beach wells,Raney-type wells,slant-drilled wells, and infiltration galleries (see Exhibit 4).Vertical beach wells are essentially the same as wells located at inland locations,drilled to a depth where they intercept an underlying aquifer,or for beach wells,where they intercept the seawater "wedge"underlying the beach.Raney-type wells are vertical wells with an additional series ofhorizontal collectorwells extending out from the bottom ofthe vertical well shaft.This type ofwell can signific"antly add to the yield"obtained from a vertical well shaft.Slant-drilled wells are drilled at an angle from the beach or from further inland,with a perforated well casing that extends below the seafloor to intercept water from below the substrate.An infiltration gallery consists ofa series ofperforated pipes that are placed in a trench dug on the seafloor,which is then backfilled with sand.As explained below, the most common adverse effects ofwells would be caused by construction or would berelated to groundwater quality or quantity.For example,an improperly located subsurface intake could draw down aquifers or could intercept areas ofcontaminated groundwater orwater with naturally high mineral content,high salinity concentrations,or high levels ofsuspended solids that are difficult to treat and which may make a project practically or economically infeasible.Adverse effects ofgalleries for this project would include significant environmental impacts related to constructing structures that would affect up to more than 150 acres ofcoastal habitat.Although subsurface intakes can,like open water intakes, cause adverse environmental effects,they may be less severe and temporary,and a properly designed subsurface system can be environmentally benign.At least four desalination facilities along the California coast use beachwells as their feedwater system,and the Commission recently approved two pilot studies to determine the applicability ofboth a st<int-drilled intake and an irifiltration gallery for desalination. The amount ofwater subsurface intakes can take in depends on the permeability ofthe overlying substrate and other geotechnical characteristics.With an infiltration gallery,the substrate can be engineered to allow much higher permeability than would occur with the natural substrate. Subsurface intakes also offer additional operational advantages, such as reduced chemical use and reduced operating costs.Water from subsurface intakes generally has lowerconcentrations ofsolids,organic material,oil and grease,and other constituents that would have to be removed 014087 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)UC ApprovedAugust 6,2008-Page 48 of106 before the water contacts a desalin~tion facility's reverse osmosis membranes.The natural filtering effect ofthe overlying substrate can buffer changes in the open water column caused by storms,runoff,or spills,and they may be able to operate during times when facilities with open water intakes would have to shut down.Subsurface intakes also provide some ofthe pre- treatment needed before seawater goes through desalination filters or membranes,thus· eliminating part ofthe chemical or physical treatment that would otherwise be required at the desalination facility.While subsurface intakes may havehigher initial construction costs,they· can result in long-term operational savings due to their lower pre-treatment and chemical costs, and because water quality from those intakes is generally less variable,which allows for more efficient desalination operations.These characteristics are likely more evident from intakes that extend under the nearshore ocean water column than those that intercept aquifers that maybe .affected by surface infiltration from inland areas orhave high mineral content. Carlsbad EIR analyzed the feasibility and environmental impact ofseveral types ofalternative intake systems pursuant to the Modified Intake Design Alternative.The EIR concluded that the use ofhorizontal wells,vertical beach wells and infiltration galleries in lieu ofthe project's proposed use ofthe power plant intake system was either infeasible and/or had greater environmental impacts than the proposed project.58 Poseidon also provided evidence that subsurface intakes would cause more significant impacts than those caused by the existing power plant intake and that they would be economically infeasible.In support ofthis position, Poseidon has submitted extensive analysis and cost estimates it prepared at the request of Commission staff This information provides further confirmation that alternative intake systems were infeasible and not the environmentally preferred alternative.59 Regarding economic infeasibility,Poseidon believesthat subsurface intake options would be infeasible in part because they would raise the anticipated cost ofdesalinated water from Poseidon's current estimate of $950 per acre-foot to about $1300 per acre-foot. Regarding slant-drilled wells,a recent study conducted by the Municipal Water District of Orange County (MWDOC)showed that that type ofintake could be used to draw in 30 MGD of seawater for its proposed desalination facility near Dana poineo The facility would draw 30 MGD from nine 500-foot long wells extending under the seafloor at about a 20°angle. 68 See Project EIR at Section 6.3. 69 See Poseidon Resources Corporation,Response to California Coastal Commission's Letter ofSeptember 28. 2006,November 30,2006,at pp.24-51;See PoseidonResources Corporation,Response to California Coastal Commission's December 28 Requestfor Additional Information,February 2,2007,atpp.2-4;See Poseidon Resources Corporation,Response to California Coastal Commission's February 20Requestfor Additional Information,June 1,2007,atpp.2-7,10-11;See Poseidon Resources Corporation,Response to California Coastal Commission's July 3 RequestforAdditionalInformation,July 16,2007,at pp.4-8,11-14;Poseidon Resources Corporation,AdditionalAnalysis ofSubmergedSeabed Intake Gallery,October 7,2007;Poseidon Resources Corporation,Issues Related to the Use ofthe Agua Hedionda Inlet Jetty Extension EIR to Recommend an Alternativ~ Seawater Intakefor the Carlsbad Desalination Project,October 8,2007;Poseidon Resources Corporation,Intake Cost Estimates,October 2007.. 70 See Boyle Engineering's Dana Point Ocean Desalination Project -Engineering Feasibility Report (March 2007), .prepared for the Municipal Water District ofOrange County. 014088 FinalAdoptedFindings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6.2008-Page 49 of106 Poseidon submitted evidence stating slant wells are infeasible because pilot testing indicates that the quality ofthe water available from them would be so low as to be difficult,ifnot impossible, to treat due to salinity concentrations twice that ofseawater, excessive iron,and high suspended solids.71 Poseidon's studies also confmned that,at best,one slant well could provide only 5%of the water required by the project.Thus,numerous slant wells would be needed to meet project objectives and address the well-documented water needs in Southern California.As a result of the necessity for multiple slant wells in public areas,this option is infeasible due to their noticeable presence on the beach and disruption ofpublic access and recreation~The EIR prepared by the City ofCarlsbad concluded that the construction and use ofsubsurface intakes for the project would cause adverse environmental impacts to coastal resources at Carlsbad . beach,including but not limited to the creation ofnegative traffic,noise,and air pollution impacts for a period oftwo years during construction,and disturbance ofand,loss ofpublic access to,the beach area occupied by the wells both during and after construction.72 The EIR. also concluded that the slant wells would require the construction ofpermanent access ramps from the Pacific CoastHighway to the beach to transport equipment during construction and to permit well inspection during the life ofthe wells.Because the project would require multiple smaller well facilities to meet its water needs,these wells would result iIi far greater environmental impacts and costs than the project,and they would be neither feasible to address water needs nor consistent with Coastal Act policies.73 An infiltration galleryis anotherpotential alternative.These systems are in place at a number of locations around the world,including one that provides water for a 45 MGD desalination facility, with plans for other galleries that would provide up to several hundred million gallons per day for power plant cooling water use.While these systems would result in seafloor disturbance during construction,they would cause few,ifany,impacts to marine life once in operation. When installed in an area ofopen sandy seafloor,the post-construction benthic habitat conditions would be essentially the same as pre-construction conditions.The initial construction impacts to the offshore sandy bottom habitat would be similarto the continual offshore sand deposition and movement already experiencedby that type ofhabitat. As noted above,once a gallery is installed,it is essentially invisible from the surface ofthe seafloor,both in terms ofits structure and any effects on marine life.The systems are designed so that the pull ofthe pumps are undetectable at the seafloor,thus making it highly unlikely that organismswould be "trapped".While Poseidon's initial geophysical surveys ofan area offshore ofAgua Hedionda showed an area ofover 200 acres offeatureless bottom with fine-grained sand,which may be suitable for such a system,recent surveys ofthe area indicated that 70%of the inspected area would contain sensitive basement and high reliefreefs.74 During construction, not all the seafloor material within the gallery area would need to be removed,and it certainly 71 See Poseidon Resources,Transmittal ofAnalysis ofAlternativ~Subsurface Seawater Intake Structures.Proposed Desalination Plant,Carlsbad,CA,Wiedlin &Associates (January 30,2007),sent February 2,2007;Poseidon Resources Corporation,Response to California Coastal Commission's September 28,2006 RequestforAdditional Information,November 30,2006,at pp.31-41. 72 See Project EIR Section 63. 73 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.16-18. 74 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Ex.B,p.18. 014089 Final AdoptedFindings -Coastal Development Permit Application £-06-013 .Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 50 of106 would not require being transported to a landfill.Most material would likely be suitable for the ongoing longshore sand movement in this area ofthe coast.The largest infiltration gallery used for desalination,at San Pedro del Pinatar in Spain,was selected in recognition ofits location next to the highly sensitive marine environment ofa regional nature reserve.Thatinstallation was also able to use horizontal directional drilling,which significantly reduced its installation impacts.However,based on testimony provided at the Commission's November 15,2007 hearing,the facility in Spain is now having significant fouling problems with the intake;the plant and a future expansion will rely on an open ocean intake for its primary source ofseawater. For this project,infiltration galleries would cause even greater environmental impacts than slant wells and would be economically infeasible.In Exhibit B ofits November 9,2007 letter to Commission staf4 Poseidon confirmed that over 70%ofthis area offshore ofCarlsbad actually consists ofmore sensitive basement and high reliefreefs.Poseidon also provided evidence that an adequately-sized subsurface system would require about 150 acres ofseafloor,which would be adversely affected by gallery installation.Based on this information,environmental impacts to 150 acres ofoffshore habitat would be greater adverse impacts than caused by the proposed existing intake for the following reasons: First,construction ofan infiltration gallery would result in aphysical removal and alteration of 150 acres ofcoastalhabitat,such that a 15-foot thick layer ofocean bottom shelfwith all living organisms in it would be removed,as compared to the annual productivity loss of36.8 acres identified in Poseidon's entrainment study results.75 Second,it would be necessary to excavate and construct 76 intake water collection wells and .trenches for collector piping along a three-mile beach strip ofthe City ofCarlsbad shore,which would limit public access to the beach for a period of2 to 4 years,result in significant loss of recreational activities for the City ofCarlsbad,and result in a permanent loss·in public access and visual resources impacts where the collection wells are located.76 Third,excavation ofthree-mile long by 400 feet wide strip ofseafloor will make this area ofthe . ocean unavailable for recreational activities such as fishing and diving and will result in additional NOx and carbon dioxide gas emissions associated with operation ofbarges and platforms and equipment needed to excavate and remove the ocean shelfmaterial over this vast area.77 Fourth,in order to secure consistent operation ofthe filter bed at this location,the bed may require dredging every one to three yearsto remove the sediment and entrained marine life that .would accumulate in the intake filter bed and which,over time would plug the bed.The dredged material would require disposal away from the one-mile strip ofthe intake filter bed to prevent the removed solids from returning to the area ofthe bed.This would not only result in frequent adverse impacts to the marine flora and fauna in the area but would also render the area 75 See Poseidon Resources Corporation,AdditionalAnalysis ofSubmerged SeabedIntake Gallery,October 8,2007. 76 Id. 77 Id. 014090 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 51 of106 unavailable for recreational activities during maintenance activities.78 Based on the foregoing,a ISO-acre gallery in this area would bephysicallyand environmentally infeasible.Poseidon also submitted evidence demonstrating that such a system would be economically infeasible.Its October 2007 cost estimates show that an infiltration gallery for its Carlsbad facility would cost $646 million. In reviewing the EIR,COmnllssion staff's presentation,and Poseidon's submissions about alternative intake systems,including the potential environmental impacts,site-specific constraints,and costs ofsubsurface intakes,the Commission finds that the substantial weight of the evidence is that subsurface intakes are an infeasible alternative for two reasons.First,the proposed alternativeswould result in greater environmental impacts than the proposed project due to destruction ofcoastal habitat from construction ofthe intake systems,the loss ofpublic use ofcoastal land due to numerous intake collector wells that would be located on the beach, and the adverse environmental impacts to coastal resources during construction,including but not limited to the creation ofnegative traffic,noise,and air pollution impacts.Second,the alternative intake systems are infeasible at the project site due to site-specific geologic and/or water quality conditions,which render the water untreatable,and the increased and prohibitive costs ofsuch intake systems. Minimize or reduce entrainment impacts:Another alternative that was considered to reduce but not eliminate adverse entrainment and impingement impacts would be to move the intake offshore into open coastal waters. In Exhibit B ofits November 9,2007 letter to Commission staff,Poseidon states that using an offshore intake would likely require installation ofa large diameter pipe over one thousand feet long which,depending on placement,might cross areas ofrocky reefhabitat,and terminate in an area near some kelp beds.It also states that the effects ofthis pipe's placement and operations on habitat,sand flow,and sedimentation are not known.Poseidon's experts concluded that entrainment and impingement caused by this intake could potentially affect a greater diversity of organisms than those affected by the existing intake in Agua Hedionda and that organisms colonizing the inside ofthe pipewould consume much ofthe entrained plankton.79 Poseidon also provided evidence that such an intake would also be economically infeasible.On .October 18,2007,Poseidon provided cost estimates showing that a 1000-foot long offshore intake would cost about $150 million. One measure Poseidon offered to include in its facility to reduce entrainment would be to install variable speed pumps (see Poseidon's June 2007 Flow,Entrainment and Impingement Minimization Plan);however,sincethe entrainment rate is primarily a function ofthe amount of water used,this measure would not likely reduce entrainment as long as Poseidon continued to pump the anticipated 304 MGDinto the desalination facility. 78 Id. .79 See Issues Relatedto the Use ofthe Agua Hedionda Inlet Jetty Extension EIR to RecommendAn Alternative Seawater/ntakefor the CarlsbadDesalinationProject,Graham,Le Page and Mayer,October 8,2007. 014091 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,200B-Page 52 of106 Other available mitigation options that would avoid or reduce entrainment impacts include the use ofa zero-discharge system or routing more ofPoseidon's discharge to the sanitary sewer system,as either ofthese options would reduce the amount ofestuarine water needed for dilution.A zero-discharge system uses either mechanical means or evaporation to re-use and reduce discharge volumes.Some ofthese systems may also allow some cost savings through their recovery ofsalts or minerals from the seawater.Although the scale ofthe proposed project may prevent use ofa zero-discharge system for the entire amount,it could possibly used for some ofthe discharge,perhaps in conjunction with routing additional volumes to the sanitary sewer system at the nearby Encina Wastewater Pollution Control Facilities.However,the sewer system has limited capacity;and this option would be feasible only if additional capacity were to be made available.Further,Poseidon has noted that the system is not currently designed to handle what would be a highly corrosive discharge of concentrated seawater,thereby making this option infeasible. As noted in Exhibit B ofits November 9,2007 letter,Poseidon has submitted to the Regional Board a Flow,Entrainment andImpingement Minimization Plan meant to identify feasible methods to minimize the remaining entrainment impacts.The Board's approval ofthat Plan is to be based on Poseidon identifying the best available and feasible operational,technological,and mitigation measures to meet that standard.Poseidon further notes that a proposed condition of' the draft State Lands Commission lease would require,ten years after the lease is issued,that Poseidon be subject to further environmental review to ensure its operations at that time are using technologies that may reduce any impacts.Regarding the potential to route all orpart of its discharge to the nearby sewer treatment system,Poseidon notes that the system is not designed to handle highly corrosive concentrated seawater. Therefore,based on the above,and along with the Regional Board's approval ofPoseidon's Flow,Entrainment andImpingement Minimization PlcIn to ensure that Poseidon implements all feasible methods to minimize the project's entrainment impacts,the Commission finds that Poseidon's proposal is using all feasible methods to minimize or reduce its entrainment impacts. Even so,project operations will result in ongoing substantial entrainmentimpacts that require compensatory mitigation,as described below. Compensatory mitigation:The third main step in mitigation sequencing is to provide compensatory mitigation -thatis,creating,restoring,or enhancing the same or similar types of habitats as those a project would adversely affect.This mitigation step has its own sequence':""it should first be "in-kind",ifpossible -that is,it should result in the same type ofhabitat as that being lost;it should be "on-site"-that is,it should be at or near the site ofthe affected habitat; and it should be "in time"-that is,the mitigation site should provide habitat functions at the same time the affected habitat is losing its habitat value.As mitigation options move away from any ofthese three characteristics,the amount ofmitigation needs to increase to reflect that the mitigation is not fully providing the habitat functions and values being lost.For example,ifa mitigation site is not expected to provide its expected habitat functions for several years -dueto the need to construct it,plant the necessary vegetation,let the vegetation take hold,etc.-that time lag is addressed by requiring mitigation at greater than a 1:1 ratio to make up for the time period between when the habitat impact starts and when the mitigation site begins providing the anticipated habitat function.Similarly,when mitigation is intended to replace lost high-quality habitat,a restoration or enhancement mitigation site will often be larger than the project site to reflect the overall lower quality ofthe habitat that comes about through mitigation.Mitigation 014092 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC . ApprovedAugust 6,2008-Page 53 of106 ratios can range from as low as 1:1 when mitigation is certain,immediate,and ofequivalent value as the lost habitat,to 30:I or higher for lower quality or delayed mitigation to make up for the loss ofhigh-quality habitat. On October 10,2007,Poseidon provided to Commission staff its updated proposed Coastal Habitat Restoration andEnhancement Plan that it intends to submit to the Regional Board.This Plan described seven possible mitigation options at various locations in Agua Hedionda or elsewhere in northern San Diego County.Commission staffevaluated it to detennine whether it would provide adequate mitigation for Poseidon's anticipated entrainment and impingement impacts.As discussed below,the Plan does not yet include the level ofinformation or certainty to determine that any ofthe possible measures would be implemented,would provide adequate mitigation,or would conform to Coastal Act provisions.However;with the Commission's imposition ofSpecial Condition 8,requiring that Poseidon submit for further Commission approval a revised Plan that fully"documents Poseidon's entrainment study,identifies specific mitigation measures,implementation criteria,monitoring measures,and other standard mitigation plan elements,the Commission ensures that the Plan will provide adequate mitigation for Coastal Act conformity. The Commission has authority to require mitigation for the anticipated entrainment impact even though the Regional Board is expected to also address any mitigation needs.Coastal Act Sections 30230 and 30231 confer on the Commission authority to regulate impingement and entrainment impacts ofprocesses that involve the intake ofseawater.This authority is not affected by the limitation ofSection 30412(b)that prohibits the Commission from taking any action that is "in conflict with"any determination by the State Water Quality Control Board or a Regional Board "in matters relating to water quality...."The Commission's position is that adverse entrainment and impingement effects on marine organisms are not matters of''water quality."This interpretation ofthe "no conflict"language ofSection 30412(b)is supported by the second paragraph ofthat provision which provides thatnothing in Section 30412(b)"shall be interpreted in any way...as...limiting the Commission...from exercising"its authority under the Coastal Act "except as provided iIi this section."(Emphasis added.) Past Commission decisions have included findings and conditions based in part on entrainment and impingement impacts to marine resources.Recently,for example,the Commission denied the proposed BlIP Billiton Liquefied NaturalGas terminal (CC #079-06)due in part to its inadequate entrainment mitigation.In several power plant siting cases during the past seven years,the Commission found that the predicted adverse entrainment effects would be significant and would require mitigation to conform to Coastal Act policies.As noted previously,these include Moss Landing,Morro Bay,and South Bay,which have intakes in estuaries. Poseidon stated in the Plan that it would provide up to $2.79 million for various potential mitigation projects in northern San Diego County.The Plan identified those potential projects based on responses to Poseidon's distribution in August 2007 ofa "Request For Expressions of Interest"(REI).The REI asked interested parties to submit mitigation proposals that would "preserve,restore or enhance existing wetlands,lagoons,.or other high:·productivity near-shore coastal areas"in San Diego County.The proposals were also to be consistent withrequirements ofthe Coastal Commission,Regional Board,National Marine Fisheries Service,and other federal,state,and local agencies.Poseidon asked that the proposals cover areas offrom five to 37 acres,that they hold promise for long-term benefits,and that they be technically feasible. 014093 Final AdoptedFindings -CoastalDevelopment Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 54 of106 Poseidon then presented Commission staffwith seven proposals from the responses received. On November 9,2007,Poseidon presented to Commission staffa modified plan focused on just one ofthe seven mitigation options (i.e.,the San Dieguito Coastal Habitat Restoration,shown below)described in its previous plan.The seven proposals are described below: •.San Dieguito Coastal Habitat Restoration:This proposal describes possible mitigation measures at San Dieguito Lagoon,about 12 miles south ofAgua Hedionda.This mitigation site would be adjacent to a lIS-acre mitigation site being developed by Southern California Edison pursuant to Coastal Development Permit #6-81-330.The proposal describes two options,each ofwhich would create about 37 acres ofvarious wetland and upland habitat types -e.g.,high salt marsh,seasonal salt marsh,native grasslands,etc.-for about $2.4 million to $2.79 million.Both options would rely in part on water quality treatment ponds that havebeen funded but not yet constructed.Itis unclear from the description how either option would be selected or implemented. •Lorna Alta Lagoon Restoration:This proposal describes acquiring two privately-owned parcels that total 0.89 acres and restoring those and three other publicly-owned adjacent parcels to add 3.01 acres ofwetlands to an already restored 2.0 acre lagoon in Oceanside. The overall project,proposed by the City ofOceanside,would cost about $5.6 million.It is not clear from the proposal whether other funds have been provided or what amount is being requested from Poseidon.The proposal.does riot provide specific descriptions of the expected habitat types. •Agua Hedionda Lagoon Ecological Reserve Expansion:This proposal describes acquiring and preserving a parcel ofland near the existing Ecological Reserve on the north shore of Agua Hedionda's Inner Basin.The subject parcel is apparently being considered for a housing development,but provides wildlife habitat adjacent to the Lagoon's wetlands. However,the proposal does not identify details about expected mitigation benefits or project costs.Additionally,it is apparently contingenton first determining whether the current owner is interested in selling and then raising other needed funds for the purchase.It describes Poseidon's potential contributions as helping with a down payment or helping to secure a loan for the property. •Agua Hedionda Lagoon Invasive Plant Eradication and Native Plant Restoration:This proposal would involve removing invasive,exotic species from the Agua Hedionda watershed and planting native species.Itproposes a one-year,$1 million project that would locate and map non-native,invasive plants,removal some number ofthose plants,revegetate those areas with native plants,measure water quality and habitat parameters before and after site treatments to determine ecosystem improvements,and provide public education and outreach.However,the proposal does not specify how many acres ofinvasive plants would beremoved or how many acres ofnative plants would be planted,and does not include any monitoring or contingency plans to ensure the areas are maintained. 014094 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 55 of106 •Agua Hedionda Lagoon Abalone StockEnhancement:This proposal bythe Carlsbad Aquafann would involve growing and planting about 100,000 abalone at unspecified sites in Agua Hedionda and other nearby waters.It would require $910,000 and is expected to take from three to five years. •Buena Vista Lagoon Environmental Analysis:This proposal consists ofa request that Poseidon fund the completion of a Restoration Plan and Environmental hnpact Report for the Buena Vista Lagoon Foundation. •Frazee State Beach Coastal BluffHabitat Restoration:This proposal,from the California Department.ofParks and Recte~tion,would restore about 5.8 acres ofcoastal bluffhabitat near Agua Hedionda.The project would cost $508,330 and would involve removing non- native vegetation,perfonning unspecified habitat restoration,and providing public interpretation. Poseidon states that it believes the San Dieguito Coastal Habitat Restoration is best fit to preserve,restore and enhance existing wetlands,lagoons or other high-productivity near-shore coastal areas located in the vicinity ofAgua Hedionda Lagoon and/or elsewhere in San Diego County.80 Poseidon's proposal is to create 40.71 acres ofcoastal wetlands habitat which it states will be comparable to that found in and around Agua Hedionda Lagoon and will provide sustainable,comprehensive environmental benefits for water quality,habitat diversity for species abundance and for sensitive and endangered species.81 Overall,although Poseidon contends this proposal will more than mitigate for Poseidon's anticipated entrainment impacts,Commission staff's evaluation shows that the Plan does not currently provide enough infonnation or certainty to determine what mitigation would actually occur.Staffnotes that the Plan's shortcomings include the following: •The Plan provides no certainty that the potential project would occur,as Poseidon states the .mitigation is contingent upon possible Regional Board approval. Theproposal does not include the type or level ofinfonnation needed to detennine what mitigation benefits would accrue,what perfonnance standards or contingency measures would be used to ensure mitigation success,or other similar descriptions generally required for detennining the adequacy ofa mitigation proposal.The proposal has the potential to mitigate for entrainment impacts,but the Commission would need a substantially more detailed proposal to detennine whether it would meet Coastal Act mitigation standards. The Commission notes,for example,that Poseidon's proposed mitigation area would be adjacent to a wetland mitigation site the Commissionrequired as part ofits approval ofthe San Onofre Nuclear Generating Station (SONGS).To ensure the Commission's approval of the SONGS mitigation plan confonned to Coastal Act policies,it required extensive scientific study,substantial amounts ofdata collection,and detailed impact analyses to 80 PoseidonResources,Carsbad Desalination Project,Coastal Habitate Restoration andEnhancement Plan, November2007,at p.3. 81 Id.at p.7. 014095 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6.2008-Page 56 of106 determine the appropriate types and amount ofmitigation needed to compensate for the identified adverse effects ofthe SONGS once-through cooling system -for example,the mitigation required included creation ofnew kelp beds to address the SONGS'impacts to nearby kelp beds.The Commission's approval also required Southern California Edison to meet specific performance standards and to provide ongoing monitoring efforts to ensure the mitigation area functions as intended.Mitigation necessary to address Poseidon's impacts will need to include a similar approach and level ofdetailed information to ensure Coastal Act conformity. •Commission stafffurther notes that the Plan does not include habitat restoration projects in Agua Hedionda Lagoon,which is already the subject ofextensive study on restoration needs and mitigation work.There are a number ofinitiatives already occurring orplanned that involve enhancing or restoring water quality or habitat inAgua Hedionda,many being implemented with substantial amounts ofpublic funding.Poseidon's planned use ofthe estuarine intake and its proposed compensatory mitigation approach away from Agua Hedionda would diminish many ofthe water quality benefits and habitat values that these other mitigation efforts are expected to provide. As noted previously,for example,Carlsbad and other nearby cities are subject to requirements of an NPDES permit issued by the Regional Board to improve stormwater management practices affecting Agua Hedionda.Also,the State Water Resources Control Board is funding development ofan Agua Hedionda Watershed Management Plan by the Carlsbad Watershed Network.That plan calls for coordinated and integrated planning for watershed management initiatives.As part ofthis plan,the Network is establishing a comprehensive and prioritized list ofmitigation opportunities in the watershed,which it .expects to complete in August 2008.The Network recently completed research identifying shortcomings in the mitigation approach used thus far in the Lagoon that has resulted in low success rates and recommending steps to improve mitigation success.·The Network requested that any mitigation the Commission may require ofPoseidon be integrated with .this existing state-funded effort.Thus far,however,Poseidon's possible mitigation projects do not show the necessary level ofcoordination with these other ongoing efforts. •Poseidon states that the Plan is based on providing 1:1 mitigation for the loss ofabout 37 acres ofhabitat within Agua Hedionda.Staffbelieves,however,that the potential projects offered do not provide "in-kind",on-site mitigation-that is,none would replace the habitat or organisms lost in Agua Hediondadue to entrainment -and so the individual projects or any combination ofprojects would have to provide mitigation at more than a 1:1 ratio. •Commission stafffurther notes that the Plan appears to bebased more on cost than mitigation needs.Poseidon has established an upper limit of$2.79 million for mitigation costs,but that does not appear to reflect the cost to provide adequate mitigation for its expected impacts. For example,the October 10,2007 Plan assumes wetland restoration in Southern California would cost about $75,000 per acre,but it includes several proposals where the costs are unspecified or are weB above that figure.The San Dieguito proposal comes closest to Poseidon's assumed cost figure,but about a quarter ofthe mitigation at that site would be uplands.The Oceanside proposal,to restore about three wetland acres for about $2.5 million is well beyond Poseidon's expected costs.Even the completely out-of-kind mitigation that 014096 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 57 of106 could result from the Frazee coastal bluffrestoration would cost about $100,000 per acre. Regarding Commission staffs concerns about the Plan's relationship to·costs rather than mitigation needs,at the November 15,2007 hearing Poseidon confirmed that it commits to providing 37 acres oftidally-exchanged marine wetlands.Poseidon has also proposed additional marine resources restoration and enhancement beyond that described in the Plan. Poseidon contends,however,that the Plan adequately resolves the concerns raised by Commission staff,will more than fully mitigate any project-related entrainment impacts,and ensun~s that the productivity ofcoastal waters,wetlands and estuaries will be enhanced and restored in compliance with Coastal Act Sections 30230 and 30231,based on the following: •Regarding the concerns about Regional Board approval ofthe Plan,Poseidon's position is that Carlsbad and other nearby cities are subject to requirements of an NPDESpermit issued by the Regional Board to improve stormwater management practices affecting Agua Hedionda.Also,the State WaterResources·Control Board is funding development of an Agua Hedionda Watershed Management Plan by the Carlsbad Watershed Network.That plan calls for coordinated and integrated planning for watershed managements initiatives.82 As part ofthis plan,the Network is establishing a comprehensive and prioritized list of mitigation opportunities in the watershed,which it expects to complete in August 2008.The Network recently completed research identifying shortcomings in the mitigation approach used thus far in the Lagoon that has resulted in low success rates and recommending steps to improve mitigation success.83 The Network requested that any mitigation the Commission may require ofPoseidon be integrated with this existing state-funded effort.84 In addition,the Commission retains full authority to ensure theproject's consistency with the Coastal Act's marine resource protection policies through the imposition ofSpecial Condition 8,which provides that Poseidon submit a Marine Life Mitigation Plan for Commission review and approval.. •Poseidon has stated that it would be very interested in collaborating on a habitat restoration project for Agua Hedionda Lagoon,but that it has not yet received proposals from entities· interested in doing marine wetlands mitigation in the Lagoon.On-site mitigation has not yet been identified asa feasible mitigation option for the project,but the revised Plan provides for further research into on-site mitigatIon opportunities.The revised Plan contains a detailed description ofPoseidon's efforts to identify feasible restoration projects on-site in 82 For example,the Carlsbad Watershed ManagementPlan includes the following objectives: •"Coordinate watershed efforts:"Action Items"should facilitate coordinated efforts between municipalities, regulatory agencies,and environmental organizations to implement watershed management policies and physical improvements at the most functional locations and in the most effective manner,without the restriction ofpolitical boundaries. •Integrate various planning efforts:Planning for land use,transportation,watershed protection and habitat conservation need to be integrated and coordinated."Action Items"related to planning must look for as many overlapping benefits between these planning topic areas as possible." 83 Case Study:Systemic Evaluation o/CompensatoryMitigation Sites Within the Carlsbad Hydrologic Unit,by Nicholas R.Magliocca;UCSD. 84 See September24,2007 letter from Carlsbad Watershed Network to Commission staff. 014097 Final AdoptedFindings -Coastal Development Permit Application E-06-0J3 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 58 of106 Agua Hedionda Lagoon.In August 2007,Poseidon sent "Requests for Expressions of Interest"to 77 public and private entities and individuals that are involved in,have jurisdiction over,or interest in wetlands restoration in the San Diego region,including the Carlsbad Watershed Network.Through this effort,Poseidon received a total ofeight mitigation proposals.Three proposals involved proposed mitigation projects in the Agua Hedionda Lagoon watershed;however,none ofthese proposals addressed the primary purpose ofthe mitigation project -restoration ofmarine wetlands.Because these proposals did not meet the mitigationproject objective,they were not considered further. Because investigations to date have not resulted in the identification ofany mitigation opportunities within Agua Hedionda Lagoon that meet the basic marine wetlands restoration objectives ofthe Plan,Poseidon's proposed mitigation includes a core off-site project that meets the Plan goals and objectives.This mitigation project,located in the San Dieguito River Valley adjacent to the marine wetlands restoration project implemented bySouthern California Edison as mitigation for the entrainment and impingement impacts from its San Onofre Power Plan,is being developed in parallel with continued efforts to identify feasible mitigation opportunities in Agua Hedionda Lagoon. In addition to the core off-site mitigation project,Poseidon's Flow,Entrainment and Impingement Minimization Plan sets forth a mitigation plan that includes additional coordination activities either (1)to identify ifnew mitigation options within AguaHedionda Lagoon have arisen since Poseidon's last Requests for Expressions ofInterest or (2)to confirm the lack ofon-site mitigation opportunities.Ifmitigation opportunities within Agua Hedionda Lagoon have arisen,and such mitigation is determined to be feasible,Poseidon will coordinate with regulatory agencies -including the Corrimission -to implement such mitigation.85 IfAgua Hedionda Lagoon mitigation that meets the objectives is confirmed to be unavailable and infeasible,Poseidon will implement the proposed off-site mitigation project.86 In the meantime,however,on-site mitigation remains as an option to be further explored after approval ofthe Plan. •Poseidon also contends that the Plan provides more than 1:1 mitigation for reduced productivity in about 37 acres ofhabitat within Agua Hedionda.However,in Commission staff's view,none ofthe potential projects offered would provide "in-kind",on-site mitigation -that is,none would replace the habitat or organisms lost in Agua Hedionda due to entrainment -and so the individual projects or any combination ofprojects mayhave to .provide mitigation at more than I:I ratio.In contrast to staff's view,Poseidon contends that the wetlands in the Plan's proposed off-site San Dieguito mitigation are ofthe same type of habitat that would be impacted by desalination plant operations (i.e.,gobies,blennies, anchovy,topsmelt,white croaker,etc.),based on the biological survey ofthe existing tidal wetlands ofthe San Dieguito Lagoon completed as a part ofthe Southern California Edison Restoration Projecl.87 Poseidon therefore states that implementation ofthe proposed restoration project at San Dieguito will create in-kind replacement habitat,which has 1:1 restoration value.Poseidon notes that the Coastal Commission found the San Dieguito 85Id. 86Id. 87 SeE,San Dieguito Wetlands Restoration Project,Final Restoration Plan,November 2005. 014098 Final Adopted Findings -Coastal Development Permit Application E-06-013 . Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 59 of106 Lagoon to be acceptable for mitigation ofthe entrainment and impingement impacts ofthe San Onofre Nuclear Generating Station,which is 45 miles away from the San Dieguito Lagoon and which is impacting open water fish species that do not necessarily reside in a lagoon environment.The proposed desalination facility is much closer to the proposed mitigation site (12 miles)and Poseidon is proposing to replace tidally exchanged coastal lagoon habitat with in-kind mitigation. •Regarding Commission staffs r,oncems about the Plan's relationship to costs rather than mitigation needs,at the November 15,2007 hearing Poseidon did confirm that it commits to providing at least 37 acres oftidally exchanged marine wetlands. In sum,Poseidon has described several mitigation options,but has not yet confirmed which mitigation option(s)it would implement to address impacts caused by its use ofthe estuarine intake.Poseidon has currently identified the need to restore no less than about 37 acres of marine wetlands.However,as described in these Findings and through imposition ofSpecial Condition 8,which requires Poseidon to submit for Commission review and approval a Marine Life Mitigation Plan that includes a full entrainment study that documents its expected impacts and identifies the specific mitigation measures,implementation plans,and compliance monitoring needed to mitigate the impacts identified in that study,the Commission is ensuring that Poseidon will provide the mitigation necessary to address those impacts in a manner consistent with applicable Coastal Act provisions.Special Condition 8 ensures that all project"'- related entrainment impacts will be fully mitigated and that marine resources arid the biological productivity ofcoastal waters,wetlands,and estuaries will be enhanced and restored in compliance with Coastal Act Sections 30230 and 30231. AnticipatedProjectImpacts and CoastalActConformity -Discharge-Related Description ofImpacts:The proposed project would result in it discharge ofabout 250 MGD I from the desalination facility to the outfall currently used by the power plant,which is located on state tidelands and on Carlsbad State Beach.The discharge would contain at least 50 MGD of high salinity water from the facility along with at least about 200 MGD of estuarine water pumped into the intake system to provide dilution for the high salinity discharge.The expected "end ofpipe"salinity ofthe blended discharges is expected to be about 40 parts per thousand (ppt)ofsalinity.·This would be about twenty percent higher than the naturally occurring average salinity ofabout 33.5 ppt in these nearshore waters.Because the discharge would be immediately adjacent to the shoreline,the plume ofhigher salinity water would extend along the beach and nearshore waters.Poseidon's discharge wouid be subject to conditions of an NPDES permit that allows discharges at an average daily concentration ofup to 40 ppt and an average hourly concentration ofup to 44 ppt.The NPDES permit additionally requires Poseidon to conduct monitoring,identify additional methods to minimize its discharge-related impacts,and to implement many ofthose methods. Poseidon's desalination process would also include adding a number ofchemicals to the water during desalination.The chemicals used would be those commonly used in water treatment plants,such as coagulants,alkalinity adjusters,and various membrane cleaning chemicals such as hydrochloric acid,detergents,or caustic soda.Poseidon stated in Exhibit B ofits November 9,2007 Response to StaffReport that chemicals used would be neutralized or sent to the sanitary 014099 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 60 of106 sewer system instead ofthe seawater discharge.The discharge would also include biological matter -i.e.,the entrained organisms from the intake. Poseidon's project as originally proposed -that is,co-located with an operating power plant cooling water system -would have withdrawn 100 MGD ofthe several hundred million gallons used by the power plant,processed that water to produce 50 MGD ofpotable water,and discharged about 50 MGD ofits high salinity waste stream back into the up to eight hundred million gallons ofseawater being discharged by the power plant Blending the desalination discharge with the much larger power plant discharge would have resulted in an overall discharge with salinity levels very close to the natural background levels in the nearshore ocean waters.Without the power plant discharge,however,a 50 MGD high salinity discharge would cause salinity levels.twice that ofseawater and cause significant adverse impacts to marine life in the nearshore waters and on the seafloor. Mitigation measures:To address this issue,Poseidon proposes to maintain a discharge ofat least 254 MGD when the power plant is not operating or is discharging less than that amount Poseidon determined that an overa11254 MGD discharge would dilute its 50 MGD desalination discharge so that salinity levels near the outfall would be about 40 ppt instead of67 ppt This 40 ppt level is about 20 percent higher than the average receiving water salinity and about 15 percent higher than the level ofnatural variation in local seawater salinity.Local seawater averages about 33.5 ppt and varies naturally up to about 34.4 ppt,due to.phenomena such as upwellings,changes in freshwater inputs,and others.The project EIR determined that a discharge of40 ppt salinity would not cause significant adverse impacts to marine life.88 Guidance frOlp.the U.S.EPA recommends that salinity levels from a discharge should not vary more than 4 ppt from the range ofnatural variation iIi areas permanently occupied by food and habitat forming plants (e.g.,hard bottom habitat,kelp beds,etc.).Using the EPA guidance would result in a maximum allowable discharge level ofabout 38.4 ppt in the kelp beds 2000 feet offshore.Poseidon's NPPES permit allows an average daily concentration of40 ppt and an average hourly concentration ofup to 44 ppt.Poseidon's hydrodynamic modeling indicated that as long as the discharge remains at or below these concentrations,the salinity in the kelp bed would be below 36.8 ppt.. Poseidon also submitted modeling results showing the expected extent ofthe salinity plume based on local historical data for characteristics such as ocean temperatures,currents,and salinity levels.The extent ofthe high salinity in the discharge would vary based on how these characteristics interact at any given time.Poseidon's models show that salinity concentrations above the level ofnatural variation would cover about8.3 acres ofthe nearshore seafloor during average conditions (i.e.,a frequency of50%)and would cover up to about 44 acres during extreme conditions (i.e.,a frequency ofless than 0.1%). Under either condition,the salinity range ofthe discharge would not.exceed 40 ppt (or 44 ppt maximum hourly concentration)at the point ofdischarge,and the discharge would be diluted to near 36.5 ppt within the zone ofinitial dilution,which extends 1000 feet from the discharge channel.While the discharge would create conditionsbeyond the range experienced by the local 88 The EIRstated that elevated salinity levels would cause significant impacts ifthey had a substantial adverse effect on marine biota,included extended exposure to salinity levels above 40 ppt or pennanent elevation ofsalinity levels above 38.4 ppt on hard bottom habitat. 014100 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,·2008-Page 61 of106 biota,Poseidon has provided test results showing that a 40 ppt salinity level would cause no acute or chronic effects to several test organisms.The site-specific Comprehensive Salinity Tolerance Study completed for Poseidon byDr.Steven Le Page and Dr.Jeffrey Graham indicates that the proposed discharge will not result in acute or chronic toxicity.The Study included long term (5.5 months)exposure of 18 marine species inhabiting the discharge area to a typical discharge salinity of36 ppt.According to the project's BIR,all ofthe test species were chosen dueto their known existence in the subject area,and several ofthe species (abalone,sand dollar and red sea urchin)where chosen for their susceptibility to environmental stress.(See project EIR,at Appendix E.)Poseidon provides that the results ofthe 5.5 month test of exposure ofthe 18 species to typical discharge salinity of36 ppt indicate that all organisms remained healthy throughout the test period.No mortality was encountered and all species showed normal activity and feeding behavior.Poseidon further provides that additional acute and chronic toxicity studies completed subsequently for the project using the United States Environmental Protection Agency's standard whole emuent toxicity (WET)test have confirmed the validity and results ofthe Salinity Tolerance Study.. However,Commission staffs view is that the organisms studied in the Salinity Tolerance Study are not representative ofthe full suite ofmarine life living in these nearshore waters and benthic habitat that would experience this level ofsalinity.Further,several species used in these tests are generally considered more salinity tolerant than others,so the test results likely do not reflect actual effects that would occur to species exposed to these high salinity levels in the natural environment.For example,a State Board proposal to establish a salinity limit in the state's Ocean Plan includes a proposed limit of36.5 ppt based on study results showing that level caused adverse effects to sea urchin embryos,which is one ofstandard test species more sensitive to salinity differences.89 Other studies show that slight differences in saliIiity levels can affect the population density ofvarious species,their ability to tolerate various environmental stressors,reproductive rates,and other effects.9o In addition to higher than natural levels ofsalinity,Poseidon's discharge would include some as- of-yet unknown amounts ofother constituents that would enter the discharge from various materials or methods used in the proposed facility.As noted above,these include various chemicals and the dead organic matter from organisms entrained in the intake. 89 The State Board is considering an amendment to the state's Ocean Plan that would establish an upper salinity limit for discharges into California's coastal waters.The Ocean Plan at this time does not have a specific salinity limit, butrequires ingeneral protection ofbeneficial uses and water quality objectives for other contaminants and physical water quality characteristics.In June 2007,the State Board issued a Scoping Docwnent for its proposed policy that included three proposed alternatives:''NoAction"-that is,do notadd a salinity limit to the Plan;"No discharges above natural variation"-that is,limit salinity in discharges to the range ofnatural variationwhich is about 10% above average;or,''Numeric water quality objective of36.5 ppt",based on study results showing that salinity levels above than 36.5 pptcaused adverse effects to sea urchin embryos. 90See,for example,Technical Report 39:San Francisco Estuary RegionalMonitoring Program for Trace Substances,Result ofthe Benthic Pilot Study,August 2000;and Voyer,R.A.,and Glen Modica,Influence ofsalinity and temperature on acute toxicity ofcadmium on Mysidopsis bahia,in Environmental Contamination and Toxicology,Vol.19:1,January 1990. 014101 Final AdoptedFindings -Coastal Development Permit Application E-06-013 .Poseidon Resources (Channelside)LLC Approved ~ugust 6,2008-Page 62 of106 Based on the above,Poseidon's proposed discharge would likely result in salinity levels higher than the natural range in from about eight to 44 acres ofnearshore benthic habitat.Although the extent ofthe areas would vary continually based on environmental conditions,some areas would be subject to nearlycontinual salinity concentrations higher than natural salinity variations. The Regional Board studied the project's discharge before issuing the project's NPDES Permit (Regional Board Order No.2006-0065).The Regional Board considered the discharge impacts ofthe project and conditioned all potential discharge-related impacts to ensure compliance with Clean Water Act and California Ocean Plan requirements.The Ocean Plan contains water quality objectives and beneficial uses for ocean waters ofCalifornia.The beneficial uses of ocean waters include industrial water supply;water contact and non-contact recreation,including aesthetic enjoyment;navigation;commercial and sport fishing;mariculture;preservation and enhancement ofdesignated areas ofspecial biological significance;rare and endangered species; marine habitat;fish migration;and fish spawning and shellfish harvesting.The Regional Board determined that an average daily effluent limitation of40 parts per thousand for salinity would protect beneficial uses ofthe Ocean (including protection offish habitat)and ensure that no salinity-related toxicity effects would occur in receiving waters.The NDPES Permit establishes . extensive monitoring and reporting requirements to ensure ~ompliance with this effluent· limitation.91 As noted previously,Poseidon states in its November 9,2007 letter that the project's NPDES permit and the Regional Board's eventual approval ofPoseidon's Flow,Entrainment and Impingement Minimization Plan will ensure that the proposed facility uses all feasible measures to avoid and reduce any discharge-related impacts.Further,the Board's approval is necessary before the facility can operate.Because the Board's [mal approval would include such findings and would ensure that the project's discharges conform to relevant requirements ofthe federal Clean Water Act and the water quality objectives ofthe state's Ocean Plan,the Commission therefore finds that project·related discharges result in minimal adverse effects to water quality and marine life. AnticipatedProjectImpacts andCoastalAct Conformity -Cumulative Impacts In addition to the adverse marine biological effects the proposed project would cause to Agua Hedionda Lagoon and the nearshore waters offofCarlsbad,the project would contribute to cumulative impacts already occurringin those waters~As noted above,Agua Hedionda Lagoon is listed as an impaired waterbody due in part to excess sedimentation.The impainilent affects a . number ofbeneficial uses ofthe waterbody and requires the ongoing dredging described in the next section ofthese Findings.As documented bythe Regional Board's 303(d)listing ofAgua Hedionda Lagoon as an impaired water bodyn and by Poseidon's sediment studies,the 91 See Poseidon Resources COiporation,Response to StaffReport,November 9,2007,Exh.A,atp.12;NPDES· Pennit,Regional BoardOrder R9-2006-0065 at 12,F-18,F-37 (Attachment 1 to Poseidon Resources COiporation, Response to California Coastal Commission's September 28,2006 Request/orAdditionalInformation,November 30,2006). 92 2006 CleanWater Act 303(d)List ofWater Quality Limited Segments Requiring TMDLs,San Diego Regional Water Quality Control Board,June 28,2007. 014102 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 63 of106 sedimentation is due both to fine-grained material from urban runoffbeing deposited in the Lagoon's Inner Basin and to the intake drawing in water from the Lagoon that would otherwise exit through the Lagoon mouth and take much ofthe sediment with it.The source ofthis sediment is the longshore sand movement offthe coast ofCarlsbad,and as a result ofthe jetties and the intake,sediment pulled into the Lagoon is removed from that longshore process, resulting in the need for beach nourishment that causes effects to coastal resources in the form of ongoing dredging every few years and the accompanying disruption ofpublic access to areas of the nearby beaches.As noted previously in Section 4.4 ofthese Findings,sedimentation concems will be addressed through the Regional Board's NPDES review and through ongoing Coastal Commission permit review offuture dredging proposals. Conclusion Regarding entrainment and impingement,Poseidon's proposed project would use 304 MGD of estuarine waters (equal to about 932 acre-feet ofwater per day,which over a year would cover more than 500 square miles up to one foot deep in water)..This water use is assumed to kill all the larval and planktonic organisms in that water,which Poseidon estimates represent about 37 acres worth ofwetland and open water productivity in Agua Hedionda.Poseidon has proposed a compensatory mitigation approach to mitigate these impacts.. Poseidon conterids that the assumption that the project will cause 100 percent mortality to the marine organisms in the seawater diverted from Agua Hedionda Lagoon is overly conservative because it ignores the design and technology features that have been incorporated in the proposed project.Poseidon contemls the project has incorporated several technology features that will substantially lessen the impacts to maritie life,including:mortality will be reduced due to the lower temperature,volume,velocity and turbulence ofthe desalination facility's operations compared to the power plant;and only 35 percent ofthe seawater in the desalination plant's intake will actually enter the desalination facility and be subject to processing that could result illentrainment mortality,while the rest ofthe water will be returned to the ocean. However,as noted above,both the project EIR and the entrainment study protocols used to assess this type ofimpact do nofrecognize a lowermortality rate for these types offactors,and the 100 percent mortality is a reasonable assumption. As noted above,the Commission has determined that alternative intakes that might avoid or minimize environmental impacts are infeasible or would cause greater environmental damage. Therefore,to ensure Poseidon provides adequate compensatory mitigation for the proposed project's marine life impacts and to conform to Coastal Act Sections 30230 and 30231,Special Condition 8 requires Poseidon to submit to the Commission for review and approval a marine life mitigation plan.This plan must document the project's expected impacts to marine life caused by entrainment and impingement and identifY the types and amounts ofmitigation best suited to address those impacts.It must also provide mitigation to the maximum extent feasible in the form ofcreation,enhancement,or restoration ofaquatic and wetland habitat and must include standard mitigation measures,including acceptable performance standards,monitoring, contingency measures,and legal mechanisms to ensure permanent protection ofthe proposed mitigation site(s).The coastal development permit will not be issued until the Commission approves a mitigationplan meeting these requirements.Further,to ensure the identified marine life impacts do not exceed those identified through development ofthis mitigation plan,Special 014103 Final Adopted Findings -CoastalDevelopment Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 64 of106 Condition 9 requires Poseidon to obtain an amendment ofits coastal development permit before any increase in its average seawater flows of304 MGD. Therefore,based on the studies cited and the information provided above,the Commission finds that the project as conditioned,conform to Coastal Act Sections 30230 and 30231. 014104 ·FinalAdopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 65 of106 4.5.2 Use ofWetlands and Coastal Waters (Coastal Act Section 30233) Coastal Act Section 30233(a)states,in relevant part: The diking,filling,or dredging ofopen coastal waters,wetlands,estuaries,and lakes shall bepermitted in accordance with other applicableprovisions ofthis division,where there is no feasible less environmentally damaging alternative,and where feaSible mitigation measures have been prOVided to minimize adverse environmental effects... Coastal Act Section 30233(b)states: Dredging andspoils disposal shall be planned and carriedout to avoidsignificant disruption to marine andwildlife habitats and water circulation.Dredge spoils suitable for beach replenishment should be transportedfor thesepurposes to appropriate beaches or into suitable longshore current systems. Coastal Act Section 30233(c)states: "In addition to the otherprovisions ofthis section,diking,filling,or dredging in existing estuaries and wetlands shall maintain or enhance thefunctional capacity ofthe wetland or estuary.Any alteration ofcoastal wetlands identified by the Department ofFish and Game,including,but not limited to,the 19 coastal wetlands identified in its report entitled,"Acquisition Priorities for the Coastal Wetlands ofCalifornia ",shall be limited to very minor incidentalpublicfacilities,restorative measures,nature study,commerCial fishingfacilities in Bodega Bay,and development in already developedparts ofsouth San Diego Bay,ifotherwise in accordance with this division ... Coastal Act Section 30233 requires in general that dredging in coastal wetlands and estuaries be limited to certaintyPes ofuses,that it be allowed onlywhere there are no feasible less environmentally harmful alternatives,and that it be mitigated to the extent feasible.It also . requires thatdredging be implemented in a manner that avoids significant disruption to marine and wildlife ha:bitats and to water circulation.Section 30233(c)further imposes a more limited set ofallowable uses in some wetlands,including Agua Hedionda Lagoon.Because Agua Hedionda Lagoon is one ofthe coastal wetlands subject to the use limitations in Coastal Act Section 30233(c),that subsection serves for this proposed project as the standard ofreview for allowable uses. Description oftheproject'salteration oJ;andits effects on,Agua Hedionda Lagoon Agua Hedionda Lagoon is one of 19 coastal wetlands identified in the California Department of Fish and Game report,Acquisition Priorities for the Coastal Wetlands ofCalifornia.This report identifies high priority wetlands for acquisition,based primarily on their values for fish and. wildlife habitat and threats to their continued existence as a natural resource.Areas ofthe Lagoon where the plant and animal life is especially valuable due to its special nature in the ecosystem include the Agua Hedionda Lagoon State Marine Reserve and Ecological Reserve, 014105 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 66 of106 which cover about 180 acres extending along about a half-mile ofthe Lagoon's Inner Basin.The Lagoon includes extensive areas ofopen water habitat,eelgrass beds,and various types of wetlands,and provides significant habitat benefits to a number ofspecies,as described previously in these Findings.These Findings also show tha,t Poseidon expects its use ofestuary water would create adverse entrainment effects equal to the loss ofabout 37 acres ofAgua Hedionda's wetland and open water areas.As explained below,Poseidon's proposed water use and the resulting adverse effects would be an alteration ofAgua Hedionda subject to review under Coastal Act Section 30233(c). Agua Hedionda Lagoon as it currently exists is a highlyengineered coastal lagoon.During the past half-century ofpower plant operations,the powerplant's cooling water intake created an imbalance between tidal inflow and outflow,resulting inmore sediment entering the estuarythan leaving.Agua Hedionda Lagoon is on the state's list ofimpaired waterbodies due to high rates ofsedimentation,which are caused primarily by fme-grained sedimentation discharged by urban ronoffinto the Lagoon and in part by the power plant's intake and would continue due to Poseidon's proposed use ofthe intake.As an existing coastal-dependent industrial facility operating in the Lagoon since the mid1950s,the power plant has dredged its cooling water intake channel at least 25 times over the last half-century.93 Since 1954,dredging is estimated to have removed about eleven million cubic yards ofmaterial from the Lagoon. Starting in 1977,the Commission issued a number ofcoastal development permits to allow various amounts ofdredging for one-year or multiple-year periods.During Commission review ofthe last several permits,there was considerable debate about where to deposit the dredged spoils.Much ofthe material was sand suitable for beingplaced on beaches and used for recreation;however,it was believed that material placed on some ofthe nearby beaches, particularly those to the north ofthe Lagoon mouth where recreational benefits were higher, would be quickly transported bytide and currents back into the Lagoon where it would need to be dredged again. The Commission required that some material be placed at various beaches in and near the Lagoon where it would serve a recreational purpose;however,the Commission also required the power plant owner to pay for an independent study to assess sediment transport conditions along the ocean shoreline in and near Agua Hedionda.94 That 1999 study found that,on average,about 80%ofthe sand trapped within the Lagoon comes from longshore transport from north and the rest comes from the south.It recommended that most ofthe dredged spoils be placedto the south ofthe lagoon to reduce the need for "re-dredging"the same material.At about the same time,the San Diego Association ofGovernments (SANDAG)was implementing another program to increase the amount ofsand onnearby beaches with a focus on providing sand to enhance recreational uses ofbeaches to the north (See CDP 6-06-061). While it is clear that continued use ofthe intake will require some level ofdredging,it is unclear at this time how much dredging will be needed and whether dredging would be donejust to ensure the intake channel remains open or would also be done to protect or enhance other lagoon 93 Poseidon's proposed project would be a new,rather than an existing,facility,and withthe pending power plant shutdown,would result in new dredging-related impacts not necessary to maintain operations ofan existing facility. 94 Elwany,Dr.Hany.Study ofSediment Transport Conditions in the Vicinity ofthe Agua Hedionda Lagoon,1999~ 014106 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)UC ApprovedAugust 6,2008-Page 67 of106 functions.Further,the power plant owner has stated it anticipates dredging and maintaining the lagoon as long as it plans to use the existing once-through cooling system.To address these uncertainties,Special Condition 12 clarifies that the Commission's approval at this time does not authorize Poseidon to conduct any dredging and that future proposed dredging activities will require submittal ofnew coastal development permit applications for the Commission's further review and approval.However,Poseidon's proposed withdrawal ofapproximately 304 MOD of estuarine water and the resulting loss ofmarine life and estuarine productivity caused by entrainment represent an alteration to Agua Hedionda subject to review pursbant to Coastal Act Section 30233(c). Analysis ofConformity to CoastalA ctSection 30233(c) Coastal Act Section 30233(c)establishes that alterations to certain wetlands included in the report,Acquisition Prioritiesfor the Coastal Wetlands ofCalifornia,must.be limited to "...very minor incidental public facilities,restorative measures,nature study,commercial fishing facilities in Bodega Bay,and development in already developed parts ofsouth San Diego Bay...".The report lists 19 ofCalifornia's most productive coastal wetlands,which include Agua Hedionda. The proposed project would alter these wetlands in a manner not allowed by Section 30233(c). As stated in Section 30233(c),the allowable activities in Agua Hedionda are "very minor incidental public facilities,restorative measures,[and]nature study...".The project's proposed· development activity -i.e.,alteration in the form ofremoval and use ofabout 304 MOD of estuarine water for desalination that results in a loss ofestuarine productivity equal to about 37 acres ofthelagoon,along with other lost biological functions and associated adverse impacts -is not for a "very minor incidental public facility,"and is not a restorative measure ornature study. Further,although not currently proposed,dredging is expected to be necessary in the future to allow the facility to use water from the lagoon,and this alteration would also be subject to review under Section 30233(c)(see below).Therefore,the project's proposed use ofthese wetlands does not conform to this section ofthe Coastal ACt,95 The Commission further notes· 95 Past Commission decisions have interpreted "minor"and "incidental"activities as those that ate temporary in nature and for which no alternatives exist.For example,in a recent decision approving the placement ofpilings within Agua Hedionda Lagoon to support an existing rail line (Consistency Certification #CC-52-05),the Commission found that determining whether to allow an "incidental"public use under Section 30233(c)should also consider whether there are feasible alternatives to the proposed wetland use.The Commission approved the project in partbecause there were no alternatives,because the project would not affect the functional capacity ofthe lagoon, and becau~e it did not increase the capacity ofthe rail line. In another example,the Court ofAppeal recognized the Commission's approach as a permissible interpretation of the Coastal Act and supported the Commission's interpretation of"incidental"public service.In the case ofBolsa Chica Land Trust et al.,v.The Superior Court ofSan Diego County (1999)71 Cal.App.4th 493,517,the court found that: ...we accept Commission's interpretation ofsections 30233 and 30240...In particular we note that under Commission's interpretation,incidentalpublic services are limited to temporary disruptions anddo notusually includepermanent roadway expansions.Roadway expansions arepermittedonly when no other alternative exists and the expansion is necessary to maintain existingtraffic capacity. As noted above,Poseidon's proposed dredging would not be temporary,as it would occur every three or four years for 30 to 90 years.Also as noted above,there are alternatives available to this proposed dredging.. 014107 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 68 of106 that Section 30233(c)does not allow otheruses in exchange for offsetting mitigation;therefore, the mitigation Poseidon has offered for its entrainment impacts does not provide the needed conformity to this section. However, because the proposed project is considered a "coastal-dependent"industrial facility, the Commission may evaluate it under Coastal Act Section 30260,which allows such projects to be approved in some instances even when they are found to be inconsistent with other Coastal Act provisions.The analysis and findings related to Section 30260 are in Section 4.5.7 ofthese Findings. Additional evaluation oftheproposedproject's dredging component Coastal Act Section 30233 also includes other provisions thatare applicable to projects involving fill or dredging.These include Section 30233(a),which imposes a three-part test to determ.i.lle whether proposed dredging is for an acceptable use,whether there are feasible and less damaging alternatives,andiffeasible mitigation measures are included to minimize adverse environmental effects.Additionally,Coastal Act Section 30233(b)requires dredging and spoils disposal be implemented in a manner that avoids significant disruption to habitat and water circulation. Further,Coastal Act Section 30233(c),in addition to the use limitations noted above,includes a provision that dredging maintain or enhance the functional capacity ofwetlands or estuaries. However,with the Commission's imposition ofSpecial Condition 12 requiring Poseidon to submit separate coastal development permit applications for any proposed future dredging,the project as currentlyreviewed does not include dredging activities that would be subject to these provisions.Further,as noted above,there is substantial uncertainty about how much dredging Poseidon would be required to perform,where the dredging would occur,its effects,and the mitigation needed to address those effects.Additionally,the currently available information shows that the power plant owner plans to dredge and maintain the lagoon for the foreseeable future.It is therefore appropriate to conduct the necessary review for Coastal Act conformity. when these aspects ofany needed dredging are better known.At that time,proposed dredging activities wouldbe reviewed to determine their conformity to applicable Coastal Act provisions. Poseidon contends that its proposed dredging ofthe lagoon would be a permitted use under Coastal Act Section 30233.It states that its dredging would benefit the lagoon and the marine resources,scientific research,fishing,public access and recreational activities that relyon the lagoon.96 Poseidon further contends that there is no feasible alternative to its proposed dredging and that dredging is a project benefit that is fully consistent with the Coastal Act.It states that the Commission has approved dredging ofthe Lagoon on at least 17 separate occasions sInce 1977,most recently in November 2006 (see CDP 6-06-061).Poseidon further contends that, because Cabrillo Power,the owner ofthe power plant,currently dredges.the Lagoon on a routine basis and has done so for the past fifty years,the existing environmental baseline from which the Commission must review the project is an environment in which dredging occUrs routiIiely.97 Poseidon statesthat itwould voluntarily take over this responsibility if,at some point in the future,the powerplant wereto shut down and Poseidon would do nothing to change this existing 96 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A atp.25. 97 See,e.g.,Fat v.County ofSacramento,97 Cal.App.4th 1270 (2002)(environmental baseline consists of environmental conditions as they existprior to the commencement ofenvironmental review ofthe project). 014108 Final Adopted Findings -CoastalDevelopment Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 69 of106 dredging activity other than reduce the frequency ofthe dredge cycle as described in Dr.Scott Jenkin's report,Comparative Analysis ofIntake Flow Rate on Sand Influx Rates atAgua Hedionda Lagoon:Low-Flow vs.No-Flow Alternatives,September 28,2007. Poseidon further contends that routine dredging is required to maintain the Lagoon in its current state and prevent it from reverting to its original state - a slough comprised ofshallow marsh channels filled with anaerobic hyper-saline water -and that the recreational,fishing,and aquaculture activities would halt ifthe power plant shut down and Poseidon did not volunteer to continue maintenance dredging ofthe Lagoon.Poseidon also contends that,while dredging may have minimal short-term environmental impacts,the long-term environmental benefits that dredging provides,includingrrotecting the valuable Lagoon in its current state,far outWeigh the minimal short term impacts.9 Poseidon relies on Comparative Analysis ofIntake FlowRate on SandInflux Rates atAgua Hedionda Lagoon:Low-Flow vs.No-Flow Alternatives,Jenkins and Wasyl,September 28,2007,to demonstrate that there is no alternative to dredging to protect the Lagoon from returning to "stinky water."In the absence ofPoseidon's operations and its assumption ofthe responsibility for maintenance dredging and stewardship ofthe Lagoon after the Encina power station is decommissioned,Lagoon sedimentation from urban run-offwill . result in closure ofthe Lagoon in five to seven years,and nearly complete loss of existing beneficial uses thereafter.99 Poseidon believes its project will therefore enhance marine habitat because it will preserve the Lagoon for both existing organisms and current recreational,fishing and aquaculture activities.. For several reasons,however,the Commission does not concur.Poseidon does not own or control lagoon areas subject to dredging or the various activities described above.Cabrillo,the power plant owner,owns the lagoon,including the underlying aquatic lands,and has stated it intends to continue its dredging and maintenance activities for the foreseeable future,both to ensure a water supply for any ofits generating units that may be needed as a regional back-up power supply and to maintain the lagoon's amenities to preserve the value ofits adjacent upland properties.Itis therefore not apparent that Poseidon will be conducting dredging,or that it would be able to conduct dredging without permission from Cabrillo and approval from the State Lands Commission,and the Commissionis not aware ofsuchany agreements or approvals that could be incorporated into these Findings or Special Conditions.1OO.The Commission also notes that the original power plant owner dredged the lagoon and started operating in the 1950s,well before adoption ofthe Coastal Act,and that Poseidon's proposal would represent a new use of the lagoon.The Commission notes,too,that it approved previous power plant-related dredging activities on a case-by-case basis by reviewing detailed dredging proposals provided bythe powerplant owners and making [mdings on those specific proposals.Poseidon has not yet proposed or submitted a detailed dredging plan that describes how it would conduct dredging or how it would maintain these lagoon functions and activities.Such a plan would not only require 98 See Sierra Club v.California Coastal Commission,19 Cal.App.4th 547,562 (4th Dist.1994)(fmdingthat ''the Commission has the power inparticularcases to pennit significant short-termdisruption [fromdredging]inorder to provide long-tenn benefits [to coastal resources]"under Coastal ActSection 30233.) 99 Comparative Analysis ofIntake Flow Rate on Sand Influx Rates atAguaHedionda Lagoon:Low Flow vs.No- Flow Alternatives,Dr.ScottJenkins,September 28,2007. 100As described previously,Coastal Act Section30601.5 requires in partthat an applicant demonstrate,prior to issuance ofa coastal development permit,its ability to comply with all conditions ofapproval. 014109 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 70 of106 landowner approval and other regulatory approvals,but would require detailed analyses ofthe amounts and locations ofdredging needed to maintain the water intake channel,additional dredging that may be needed to maintain these various functions and activities,and further analyses to detennine whether there are feasible and less environmentally damaging alternatives to dredging for both the intake and the other functions.Additionally,Cabrillo's existing State Lands Commission lease for the lagoon inlet structure on state tidelands is limited to use for power plant operations only and would require modification to allow Poseidon's proposed use or subsequent dredging in areas subject to State Lands Commission jurisdiction.It would therefore be speculative for the Commission at this time to concur with Poseidon's contentions,and the Commission is therefore requirIng these issues be appropriately addressed through Special Condition 12,which will ensure the Commission has the opportunity in the future to determine whether proposed dredging activities conform to applicable Coastal Actprovisions. Conclusion The proposed project would represent a use and alteration ofthe Agu"a Hedionda wetlands not permitted by Coastal Act Section 30233(c);therefore,based on the studies cited and the information provided above,the Commission finds that the project as proposed does not conform to this Coastal Act provision.However,because the proposed project is considered a "coastal- dependent"industrial facility,the Commission may therefore evaluate it under Coastal Act Section 30260,which allows such projects to be approved in some instances even when they are found to be inconsistent with other Coastal Act provisions.The analysis and [mdings related to Section 30260 are in Section 4.5.7 ofthese Findings.The Commission further [mds that the project as currently proposed does not include dredging but that imposition ofSpecial Condition 12 ensures that Poseidon will apply for new,separate coastal development pennits for any future dredging projects it may propose.Commission review at that time will determine whether a particular proposed dredging project will conform to applicable Coastal Act provisions. 014110 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 71 of106 4.5.3 Public Access Coastal Act Section 30210 states: In carrying out the requirement ofSection 4 ofArticleX ofthe California Constitution, maximum access,which shall be conspicuously posted,and recreational opportunities shall be providedfor all the people consistent with public safety needs andthe need to protectpublic rights,rights ofprivate property owners,and natural resource areasfrom overuse. Coastal Act Section 30211 states: Development shall not interfere with thepublic's right ofaccess to the sea where acqUired through use or legislative authorization,including,but not limited to,the use of dry sandand rocky coastal beaches to the first line ofterrestrial vegetation.. Coastal Act Section 30212(a)states: Public accessfrom the nearest public roadway to the shoreline and along the coast shall . beprOVided in·newdevelopment projects except where (1)it is inconsistent with public safety,military security needs,or theprotection offragile coastal resources,(2)adequate access exists nearby,or (3)agriculture would be adversely affected.Dedicated accessway shall not be reqUired to be opened to public use until a public agency or private association agrees to accept responsibilityfor maintenance and liability ofthe accessway. Coastal Act Section 30212.5 states: Wherever appropriate andfeasible,publicfacilities,includingparking areas orfacilities, shall be distributed throughout an area so as to mitigate against the impacts,social and otherwise,ofovercrowding or overuse by the public ofany single area. Coastal Act Section 30213 states,in relevant part:014111 Lower cost visitor andrecreational facilities shall be protected,encouraged,and,where feasible,provided.Developments providingpublic recreational opportunities are preferred... The proposed project would be built largely on a site already occupied by industrial uses and would not affect public access to the shoreline at that location.The project also includes constructing pipelines underroads within the coastal zone,although the pipeline construction would be similar to other road construction projects and its temporary impacts would likely not result in adverse effects on public access to the shoreline. The project's proposed use ofestUarine water from Agua Hedionda Lagoon,and its reliance on intakejetties and a discharge structure on State tidelands would affect public access by limiting accessibility to those areas.However,as noted previously in these Findings,no feasible Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 72 of106 alternatives exist that would allow cessation ofuse ofthese structures.Further,the project would require ongoing dredging within the Lagoon and deposition ofthe dredged spoils (which would be subject to Cabrillo,Poseidon,or another dredging proponent obtaining a new,separate coastal development pennit),which could allow for beach nourishment along nearby beaches. WhileJhese activities would cause temporary disruptions to public access,they would have a long~tenn public benefit by adding sand to the beach.The alternatives determined by the Commission to be infeasible would cause impacts to public access during construction and possibly during operations.. To address the public access impacts ofits project as proposed,Poseidon has offered to dedicate to the City ofCarlsbad the following sites to be used for public access: • A site ofabout two acres,known as the Hubbs Site,on the north side ofthe Lagoon's Outer Basin that would include a trail system and expansion ofthe existing fish hatchery and aquatic research uses; • A site ofabout 2.4 acres on the west shore ofthe Lagoon's Outer Basin to be used as a fishing beach; • A site ofabout 10.2 acres ofbluffs west ofthe power plant site and adjacent to the shoreline to be used for recreation and coastal access;and, • A parking area covering about 0.3 acres at the south end ofthe power plant for public parking. These sites total about 15 acres,and are described in more detail in the City's precise development permit for the project,and Poseidon's coastal development pennit application submittals.To ensure these sites are made available for public use,Special Condition 11 requires that,prior to starting operations ofthe desalination facility,Poseidon ensure these parcels are dedicated for public access and recreation as described in the City's Precise Development Plan #PDP 00-02.These public access dedications provide adequate confonnity to the Coastal Act's public access provisions. Conclusion Based on the above,the Commission finds that the project as conditioned conforms to the Coastal Act's public access provisions. 014112 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 73 of106 4.5.4 Scenic and Visual Resources Coastal Act Section 30251 states: The scenic and visual qualities ofcoastal areas shall be considered andprotected as a resource ofpublic importance.Permitted development shall be sited and designed to protect views to andalong the ocean andscenic coastal areas,to minimize the alteration ofnatural landforms,to be visually compatible with the character ofsurrounding areas, and,where feasible,to restore and enhance visual quality in visually degraded areas. New development in highly scenic areas such as those designated in the California Coastline Preservation alid Recreation Plan preparedby the Department ofParks and Recreation and by local government shall be subordinate to the character ofits setting. The proposed project would be built largely within the existing developed area ofthe Encina powerplant.The desalination facility site is currently occupied by large oil tanks that are no longer in use and that have been proposed for demolition.The desalination facility would create less ofavisual impact than the currently existing tanks. Poseidon's project plans include a number ofmeasures to minimize any adverse visual effects of the proposed facility.The facility would be a relatively low profile building ofabout 44,000 square feet and reaching about 35 feet above the existing grade.Its appearance would be similar toa large warehouse.As part ofthe facility design,Poseidon has added both vegetative and architectural screening to ensure that exposed pipelines,tanks,and other industrial-type equipment are screened from public view. The Commission considered several intake alternatives,including slant wells and an intake gallery,and concluded that they are environmentally inferior to the proposed project.With respect to visual and scenic resources,each ofthe alternatives would require development of permanent structures onthe beach that could result in a permanent impact to visual resources. The slant well alternative would require between 20 and 200 beach wells along a two mile stretch ofcoast;and associated access roads,parking,pipelines and electrical supply.101 The intake gallery alternative would require 78 beach wells,each of which would require approximately 2,800 square feet ofbeachfront property,for a combined loss ofseven acres of beachfront property.102 Construction ofthe intake gallery·alternative would also require trenches for collection piping and could limit access to the beach for a period of2 to 4 years,and would require the creation ofpermanent access ramps from the Pacific Coast Highway to the beach to transport equipment during construction and to permit well inspection during the life ofthe wells.103 Therefore,the proposed project is the environmentally superior alternative. 101 See PoseidonResources Corporation,Response to StaffReport,November 9,2007,Exh.B atp.16. 102Id.at 17-19. 103 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,EXh.A at pp.17-18. 014113 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 74 of106 To ensure the facility confonns to the Coastal Act's scenic and visual resource policies,Special Conditions 13 and 14 require Poseidon to submit,prior to starting construction,a Screening Plan and a Lighting Plan showing the planned appearance ofthe facility.The plans must describe how Poseidon will screen the facility's industrial and mechanical equipment and how the facility and surrounding area will be lighted to provide the necessary level ofsafety and security while minimizing offsite glare aild other adverse affects.Both plans must be submitted to the Executive Director for review and approval before construction can begin. .Conclusion Based on the above,the Commissionfinds that the project,as conditioned,will confonn to the Coastal Act's scenic and visual resource provisions. 014114 Final AdoptedFindings -Coastal DevelopmentPermit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 75 of106 4.5.5 Energy Use and Green.house Gas Emissions (Coastal Act Section 30253(4)). Coastal Act Section 30253(4)states: New development shall:...(4)Minimize energy consumption and vehicle miles traveled. Section 30253(4)'s requirement to minimize energy consumption reduces impacts to coastal resources caused by greenhouse gas emissions.Most ofthe electricityPoseidon would use would be produced by natural gas-fired power plants,with some produced by coal,hydroelectric,or renewable.sources. According to methods developed by the California Climate Action Registry (CCAR),Poseidon's proposed electrical use would result in from about 134,400,000 pounds (or about 61,000 metric .tonnes)to 200,000,000 pounds (about 90,000 metric tonnes)ofcarbon dioxide emissions per year.104 The difference betweenthe Commission's conclusion and Poseidon's estimates is further described below. Note:The anticipated emissions described herein,in Commission staff's view,likely represent the very low end ofthe range of actual greenhouse gas contributions Poseidon would generate.. These analyses evaluate only those carbon emissions that would be generated by Poseidon's .electrical use for pumping and desalinating water and transporting it to Maerkle Reservoir.It does not include emissions that would result from project construction,manufactureofreverse osmosis membranes,dredging needed to maintain the intake channel,etc.Also,it includes only carbon dioxide emissions,not emissions of other greenhouse gases generated by power plants.Commission staffs analyses also credit Poseidon with emission reductions that may occur through its potential use ofa high-efficiency energy recovery device thatis still being tested and that Poseidon has not yet committed to use. Emissions from this facility's electrical use would be greater than those created by other water sources and would contribute to California's greenhouse gas einissions.They would also cause significant adverse effects to many coastal resources the Coastal Act is meant to protect.The global heating,sea level rise,and ocean acidification resulting from greenhouse gas emissions affects public access (Coastal AciSections 30210-30214),recreation (Sections 30212.5,30213,30220-30222),marine resources (Sections 30230-30231),wetlands (Sections 30231,30233),ESHA (Section 30240),. agriculture (Sections 30241-30242),natural land forms (30251),and existing development (Sections 30235,30253). Poseidon'sposition IS that it shares the Governor's commitment to address climate change,but disagrees with Connnission staffthat the project will be a contributing factor to climate change for several reasons:the project is consistent with its proposed Climate Action Plan,which Poseidon 104 Protocols developed bythe California Climate Action Registry estimate carbon dioxide emissions from California's electricity sources total 804.54 pounds per megawatt-hour.Poseidon's expected electrical use ofabout 250,000 megawatt- hours per year would therefore total justover 200,000,000 pounds ofcarbondioxide.These calculations are described in more detail below. For comparison,200,000,000 pounds ofcarbon dioxide is aboutthe same amount produced during 235 million vehicle miles traveled or is the amount ofcarbon stored eachyear in 75,000 acres ofgrowing forest (see the U.S.EPA and U.S.Agency for International Development Climate Technology Gateway at www.usctcgateway.net). 014115 Final Adopted Findings -Coastal Development Permit Application E-06-013 ..Poseidon Resources (Channelside)LLC ApprovedAugust 6,200B-Page 76 of106 believes will result in a reduction in regional greenhouse gas emissions,and the project includes numerous components to ensure that it will use only the minimum energy necessary.105 Moreover, Poseidon maintains that the Commission's authority to impose greenhouse gas emission standards or emissions-related mitigation is limited.106 Poseidon states that due to the importance ofthe project and Poseidon's environmental stewardship,it has proposed a Climate Action Plan pursuant to which Poseidon commits to measures that will offset the project's net carbon emissions so that the project is net carbon neutral.107 As described below,Poseidon will demonstrate that its proposed project will conform to the Section 30253(4)requirement to minimize energy consumption to avoid or mitigate adverse effects to coastal , resources caused by energy-related greenhouse gas emissions through its conformity to Special Condition 10,as described below. Issue Background One ofCalifornia's biggest overall energy uses,and one ofits most intensive energy uses,is moving water around the state.With most ofits water in the north and most ofits population in the south, California has established conveyance systems to move water hundreds ofmiles and over hundreds of feet of elevation gain.Because wat.er is relatively heavy,it requires significant amounts ofelectricity to transport -for example,the State Water Project uses up to about 5 billion kilowatt-hours each year to move millions ofacre-feet ofwater from Northern to Southern California.Its average demand per acre-foot is about 3,400 kilowatt-hours,which is about the same as the annual residential use for each person in the U.S. Compared to California's existing water supply systems,seawater desalination is an even more energy intensive source ofwater.Although desalination's energy needs have decreased significantly in the past several years,reverse osmosis facilities such as Poseidon's proposed project still require much more electricity than is needed for other water sources.For example,Poseidon's proposal is expected to require no less than about 4,400 kilowatt-hours per acre-foot,about 30%more than the State Water Project,which provides a part ofthe water imported to the San Diego area,and about 120%more kilowatt-hours per acre-foot than water imported to the area from the Colorado River,which requires about 2000 kilowatt-hours per acre-foot. ill many parts ofthe state,the electrical grid needed to provide water is under a great deal ofstrain. Southern California,in particular,will be challenged to meet its energy needs due to its need to reduce its reliance on aging power plants and to develop new energysources,developing updated transmission infrastructure,and other similar difficulties.108 Poseidon's proposal would rely on the local and regional electrical grid,which generates most ofits electricity from fossil fuel-fired power plants. The proposed facility's electrical use would therefore result in substantial greenhouse gas emissions due to its use ofthis type ofelectricity..illresponse,Poseidon has proposed a Climate Action Plan,which is discussed in greater detail later in these Findings. 105 See Poseidon Resources Corporation,Response to StafJReport,November 9,2007,Exb.A at pp.20-21. 106 See Poseidon Resources Corporation,Response to StafJReport,November 9,20Q7,Exh.A at pp.20-21. 107 See id. 108 See,for example,the California Energy Commission's 2007 Draft IntegratedEnergy Policy Report. 014116 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 77 of106 Background ofGreenhouse Gas-related Issues and Impacts:The Fourth Assessment Report of Working Group I ofthe Intergovernmental Panel on Climate Change (IPCe)(2007)represents the consensus offifty top international scientists working in fields related to climate change.More than one hundred national governments,including the United States,have approved the report.The report concludes that the evidence ofglobal climate system warming is unequivocal,as is now evident from observations ofincreases in global average air and ocean temperatures,widespread melting ofsnow and ice,and rising global mean sea level OPCC,2007).Further,the report concludes that "most ofthe observed increase in globally averaged temperatures since the mid-20th century is very likely [greater than 90%probable]dueto the observed increase in anthropogenic greenhouse gas concentrations." The report cites numerous long-tenn changes in climate,including changes in Arctic air temperatures, decreases in the amount ofArctic sea ice,widespread changes in precipitation amounts,increase in ocean salinity,changes in wind patterns and increased incidences ofextreme weather including droughts,heavy precipitation,heat waves and tropical stonns. Many studies consider a climate heating ofmore than 2 degrees Celsius above pre-industrial temperatures as representing "dangerous"level ofclimate disruptions.Based on six emissions scenarios ranging from "businessas usual"to aggressive shifts to cleaner technologies,the best· estimates ofglobal average temperature increase are between 1.8 and 4.0 degrees Celsius by 2099.A more recent study has found that comparing actual "on the ground"data compiled during the lastten years shows that the model used to develop these scenarios has vastly underestimated the rate and degree ofglobal wanning effects.It suggests that limiting global heating to no more than 2 degrees Celsius will require measures that result in the equivalent of complete elimination ofindustrial emissions (see Weaver et.al.Long term climate implications of2050 emission reduction targets,in Geophysical Research Letters,October6,2007). These six emission scenarios also estimate that sea level will rise between 0.18 and 0.59 m.This amount ofsea level rise does not include contributions from rapid melting ofeither the Greenland or Antarctic ice caps.(Bindschadler,2006;Ekstrom et al.,2006;Joughin,2006;Kerr, 2006).In addition,the ocean's absorption ofcarbon dioxide leads to a reduction in ocean pH with concomitant consumption ofdissolved carbonate"ions,which adversely affects ca1cite- secreting marine organisms,marine water quality and the abundance and distribution ofmarine species (The Royal Society,2005). Impacts to the California Coastal Zone:In July 2006,the California Climate Change Center released a series ofreports describing ongoing and future effects ofglobal warming onthe California environment (Baldocchi and Wong,2006;Battles et aI.,2006;Cavagnaro et aI.,2006;Cayan et aI., 2006a;Cayan et aI.,2006b;Cayan et al.,2006c;Drechsler et aI.,2006;Franco and Sanstad,2006; Fried et aI.,2006;Gutierrez et aI.,2006;Joyce et aI.,2006;Lenihan et aI.,2006;Luers et aI.,2006; Luers and Moser,2006;Medellin et aI.,2006;Miller and Schlegel,2006;Moritz and Stephens,2006; Vicuna,2006;Vicuna et al.,2006;Westerling and Bryant,2006).Drawing on three projected warming scenarios (low,medium,and high),the reports projected severe impacts by the end ofthe century in the areas ofpublic health,waterre~ources,agriculture,forests and landscapes,and sea level.Manyof these effects will adversely impact resources ofthe coastal zone.The adverse effects include worsened air quality,changes in species distribution,significant reductions in plant and animal diversity,loss of various kinds ofagriculture (such as fruit trees),expansion ofinvasive plant and animal species, increase in plant pathogens,increase in number and severity ofwildfires,rising sealevel,coastal flooding,and increased coastal erosion.In addition,absorption ofcarbon dioxide by the ocean is causing a reduction in ocean pH with concomitant consumption ofdissolved carbonate ions.which is 014117 Final AdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLe ApprovedAugust 6,2008-Page 78of106 adversely impacting calcite-secreting marine organisms.The warming ofocean waters is also adversely affecting marine resources. As identified in the 2006 Climate Change Center reports,air quality will be compromised by soot from wildfires,which the report predicts will increase.Coastal agriculture,already threatened by land development and habitat fragmentation,will be subject to further impacts from climate change.hnpacts to coastal agricultural will include impacts to wine grapes,which will be subject to premature ripening and decreased fruit quality;·adverse impacts to fruit and nut trees,many ofwhich will no longer be able to produce once the number of"chill hours"per day drops below that necessary for proper ripening;and adverse impacts to milk production;Other threats to coastal agriculture identified by the Climate Change Center reports include the expansion ofthe rangesofagricultural weeds and an increase in plant pests and pathogens. Coastal forests andscrublands will be increasingly susceptible to wildfires due to longer and warmer periods ofsummer drying.This,together with the warmer climate itself,will lead to shifts in vegetation type,probably resulting in the loss ofcoastal scrub as it is converted to grasslands.Inasmuch as suitable habitat exists,species requiring cooler climates can migrate northward or to higher elevations.Their ability to do this,however,will be limited bythe speed with which they are able to disperse,the suitability and interconnectivity ofavailable habitat,and their ability to compete with non-native invasive species which,bydefinition,are able to disperse and exploit habitat efficiently.All ofthese effects wi1l1ead to a decline in forest productivity,with a concomitant loss in habitat... The most direct impacts ofglobal wanning focused on the coastal zone are sea level rise and its associated·impacts,ocean warming,and ocean acidification: •Sea Levelllise:According to tide gage data,global mean sea level has been rising at the rate ofapproximately 1.8 InmIyr for the past century (IPCC,2001).Although no acceleration of this rate is apparent from the tide gage data (IPCC,20tH),satellite measurements starting in the early 1990s indicate an annual rate ofapproximately 2.8 mm/yr (Church and White, 2006).Sea level is clearly rising,and the rate ofincrease may in fact be accelerating.Since land can also change elevation due to either uplift or subsidence,global sea level change affects various coastal areas differently.Much ofthe California coast is rising;however the rate ofuplift is,everywhere except northernmost California,lower than the rate ofsea level rise.The relative historic rate ofsea level rise (relative sea level rise is global sea level minus local land uplift or plus local land subsidence)has been calculated by Commission staffto range from a high of2."16 ±0.11 mm/yr in San Diego to a low of0.92 ±0.17 InmIyr in Los Angeles.Relative sea level is actually falling at Crescent City due to the high rates of tectonic uplift at that locality.(California Coastal Commission,2001). Even the 0.18 to 0.59 meter rise in sea level by 2100 predicted by the IPCC will have a large impact on the California coast.The effects ofa much largerincrease in sea level due to large contributions from the Greenland and/or Antarctic ice sheet would be truly catastrophic.The 2001 Coastal Commission report concluded: The most obvious consequence ofa large rise in sea level will be changes in areas that are submerged.Lands that now are only wet at high tide could be wet most ofthe day.Structures that are built above the water,like docks andpiers,will be closer to the water,or eventually· submerged.A second consequence will be an increase in wave energy.Wave energy is afactor 014118 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 79 of106 ofwave height.Wave heights along the California coast are influenced greatly by bottom depths andfor most locations along the coast,the heights ofnearshore waves are "depth limited".When the water depth increases,the wave height can be higher.Thus,higher waves impact the coast during high tide than during low tide.Wave energy increases with the square ofthe wave height.Thus,a 2-100t (0.6-meter)wave would have 4 times the energy ofa 1-100t (O.3-meter)wave.Small changes in water leve'can cause significant changes in wave energy and thepotentialforshoreline damagefrom waveforces.A 1-100t to 3-/00t (0.3 to 0.9 meter) rise in sea level,such as projected to occur over the next 100years,would cause enormous changes in nearshore wave energy.The consequences ofa 1-100t to 3-100t (0.3 to 0.9 meter) rise in sea level arefar reaching.Along the California coast,the best analogyfor sea level rise is thought to be EI Nifzo,where a Significant rise in sea level will be /ike ElNifio on steroids. One ofthefactors that contributed to the amount ofdamage caused by the 1982/83 El Nifzo was that several storms coincided with high tide events and the elevated water levels (from . tides and lowpressure system combined)brought wavesfurther inland than would have occurred otherwise... Beaches and Coastal Bluffs;'Open coastal landforms like beaches andbluffs will be exposed to greater and morefrequent wave attack.There will more potentialfor erosion andshoreline retreat.For gently sloping beaches,the general rule ofthumb is that 50 to 100feet ofbeach width will be lostfrom use for everyfoot ofsea level rise...Some global circulation models predict significant increases in run-offfrom coastal watersheds in California (Wolock and McCabe,1999)... In general,erosion ofthe landward edge ofa beach,dune,or coastal bluffcreates additional beach area,and so even in a period ofsea level rise such as the present,in which the seaward extent ofthe beachis reduced by flooding and erosion,new beach creation can result in a relatively constant beach width.However,when threats to existing development from erosion lead to the constrnction ofshoreline protective devices that halt the landward migration ofthe back beach,continued flooding ofthe seaward beach results in a reduction in beach width. Thus,on beaches experiencing erosion due to rising sea level,the protection ofthreatened structures will result in the loss ofbeaches wherever propertyowners choose to harden the coast to prevent coastal erosion.This loss ofbeach has immense negative impacts,including loss ofrecreational value,tourism,marine mammal haul-out area,sandy beach habitat,and buffering capacity against future blufferosion. The 2001 Coastal Commission report goes on to indicate other potential impacts of sea level rise on the California coast:. Wetland changes also will be affected by inland development.Historically,wetland areas migrated both upward and landward as they were inundated.Ifthe inland area has a slope and soil composition that can support a wetland and is not already developed,then inland migration may bepossible.Ifthere is a steep bluffor some type offzxed development,such as a highway or bulkhead,inland ofa wetland,inland migration will not be possible and the wetland area will diminish over time. 014119 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 80 of106 Anotherphysicalchange to wetland in response to a rise in sea level is an increase in the tidal currents,with the potentialfor increased scour.Also,for estuarine systems there will be a shift in the location ofthe salt water-freshwater interface,and an inland movement ofthe zone of brackish water... Ports,Harbors and Marine Facilities:Much ofthe infrastructure ofa port or harbor will be affected by a change in sea level.So too will marine terminals andoffshore structures.All of the horizontal elements,such as the decking ofwharves andpiers,will be exposed more frequently to upliftforces larger than those ocCurring now.Compared to current conditions, ships will ride higher at the dock and cargo-handlingfacilities will have less access to allparts ofthe ship.Loading and unloading may have to bescheduledfor low tide periods to allow greatest access into the ship,or else mooring and cargo handlingfacilities will need to be elevated. Ifbreakwaters orjetties protect the harbor,these structures will become less efficient as water levels increase.The breakwaters andjetties will need to be enlarged and heightened to keep up with the rise in sea level,or the harbor will have to accepta higher level ofovertopping and storm surge,and a higherprobability ofstorm damage.The increase in water level could also increase the tidal prism ofthe harbor,resulting in increased scour at the foundations ofany structures in the harbor.So,it mayalso be necessary to reinforce the base ofthe breakwater or jetty to insure stability.Benefits that couldoccurfrom a rise in sea level would be the opportunityfor harbors to accommodate deeper draught ships and a decrease in dredging to maintain necessary channel depths. Seawalls and other engineered shoreline protection:[Seawall]foundations would be exposed to greaterscour and the main structure would be exposed to greater andmorefrequent wave forces.As with breakwaters andjetties,these structures will need to be reinforced to withstand these greaterforces,or a lower level ofprotection will have to be acceptedfor the backshore property. •Ocean Warming:In December 2006,the Commission held the first in a series ofworkshops on global warming.One ofthe well-recognized connections between the atmosphere and the ocean is heat exchange.Global warming ofthe atmosphere is expected to cause an increase in ocean wanning as the ocean absorbs greater amounts ofthermal energy from the atmosphere.At the workshop,Dr.James Barry (Associate Scientist,Monterey Bay Aquarium Research ·Institute)presented a summary ofobserved and predicted effects of ocean warming on California coastal ecosystems.Dr.Barry inventoried intertidal animals along the Monterey coast,and compared his results to a 1932 baseline inventory.He found that species thatincreased in abundance in southern California had increased markedly since the baseline study.Over the same time,there was a dramatic decline in species more associated with northern California.This demonstrates that the observed warming ofthe ocean over the past 60 years has resulted in a shift in the geographic ranges ofspecies.With continued wanning,species can be expected to continue to migrate northward as long as suitable habitat is available. 014120 Final AdoptedFindings -Coastal Development Permi/Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 81 of106 Some instances ofremarkable biodiversity are due to the fottuitous combination ofsuitable ocean temperature and suitable geomorphic conditions.For example,one ofthe most diverse shallow water habitats in California is found in the rocky-bottom waters around the northern Channel Islands.This is a zone ofmixing ofspeCies characteristic ofa "southern California realm"and a "northern California realm."The abundant rocky bottom habitat in the shallow waters ringing the isiands provides a niche in which this diversity is.expressed.If,because of global wanning,the suitable temperature zone migrates northward,it will be moved offof the abundant rocky bottom habitat and the diversity and ocean productivity might decrease significantly. Declines in ocean productivity due to habitat shifts are an indirect consequence ofocean warming.Ocean wanning can cause a direct loss ofprimary productivity as well.Warming ofthe surface ofthe ocean results in increased ocean stratification,limiting the upwelling of deep,"nutrient-rich waters that are responsible for California's rich coastal productivity. Roemmich and McGowan (1995)report a 1.2 to 1.4 degree centigrade increase in ocean temperature between 1950 and 1994.This was accompanied by a 75%reduction in zooplankton biomass.Reductions in phytoplankton and zooplankton biomass have profound cascading effects throughout the food chain.Short term warming events,such as El Niiio events,have resulted in abrupt decline in commercial fish species,marine mammals,and birds (Laws,1997;Nezlin et al.,2005).Similar effects might accompany global warming on a longer time scale,vastly affecting California's coastal resources. Ocean warming could also create a disconnect between historic feeding and breeding grounds for many species.Welch and others (1998)reported on potential changes in sockeye salmon distribution due to future global warming.Sockeye salmon,which spend 2-3'years in .waters ofthe northern Pacific,migrate northwards to areas ofhigh productivity,such as the Bering Sea,in the summer.Productivity decreases with temperature increase,however,and as the Bering Sea warms,migration routes would have to be longer.Eventually,the metabolic cost ofmigrating further northwards to feeding grounds could make the migration infeasible.When summer feeding grounds are disconnected from winter breeding grounds,a population crash maybe anticipated.A population crash in such species would not only impact commercial fishing in California,but would ripple up through the food chain, impacting protected coastal resources such as marine mammals and birds. •Ocean Acidification:Just as there is an exchange ofthermal energy between the atmosphere and the oceans,there is an ongoing exchange ofgases between the atmosphere and the ocean. Each year some 92 billion metric tonnes ofC02 annually are directly absorbed by the ocean from the atmosphere.At the same time,approximately 90 billion metric tonnes are released back to the atmosphere (Schlesinger,1997).The net increase in dissolved C02 in the ocean is a direct result ofincreases in the atmosphere related to changes humans are making to the carbon cycle-most notably fossil fuel burning and land use changes (deforestation,mostly in the tropics).The ocean is an enonnous reservoir that can absorb a vast amount ofCO2, although the rate ofocean mixing is too slow to prevent the current buildup in the atmosphere.Without this net absorption ofCO2 by the oceans,the atmospheric buildup-and global warming-would be far greater than it is now. 014121 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 82 of106 Over the past 200 years,the oceans have taken up approximatelyhalfofthe industrial age CO2emissions,substantiallyreducing the net atmospheric concentrations ofC02.This effect does not come without a cost,however.When CO2is absorbed by the ocean,some ofit combines with water to form carbonic acid (H2C03).This results in only a modest decrease in oceanpH,however,because most ofthe carbolic acid recombines to fonn bicarbonate ions (HC03).In the process,carbonate ions (C03-2)are consumed,with the net result being. that absorption ofe02 by the ocean consumes carbonate ions and reduces the pH ofthe ocean.The decrease in pH is minor because ofthe "buffering capacity"ofthese carbonate· reactions,but appears to have decreased mean average surface water pHby 0.1 pH units over the past 200 years (Caldeira and Wickett,2003).Because the pH scale is logarithmic,this decrease in ocean pH (commonly called "ocean acidification,"but more properly referred to as a decrease in alkalinity)means that hydrogen ion activity (which defines acidity)has increased by some 30%in this time frame.(The Royal Society,2005). The effects ofdecreasing ocean alkalinity and carbonate ion concentration are twofold.First, many species are·directly affected by the reduction in pH.Inhis presentation before the Commission in December 2006,Dr.Barry identified several physiologic stresses to which some species are susceptible.These stresses include respiratory stress (reduced pH lirilits oxygen binding and transport byrespiratory proteins,such as hemoglobin,leading to reduced .aerobic capacity),acidosis (disruption ofacid/base balance which impairs function and requires energy to restore or maintain optimal pH balance),and metabolic depression' (reduced pH associated with increased environmental CO2can cause some animals to enter a state oftorpor or semi-hibernation).In addition to these physiologic effects,calcite-secreting organisms (including many phytoplankton,zooplankton,clams,snails,sea stars,sea urchins, crabs,shrimp,and many others)have more difficulty secreting their shells or tests under reduced carbonate ion concentrations.Deep-sea species will be particularly affected because increasing CO2levels in seawater decreases the saturation state ofseawater with respect to calcium carbonate (CaC03)and raises the saturation horizon closer to the surface.The CaC03saturation horizon is a depth in the ocean above which CaC03can form,but below which CaC03 dissolves.Increasing surface CO2 levels could have serious consequences for organisms that make external CaC03 shells and plates (The Royal Society,2005).The consequences ofreduced calcification are not fully known,but are likely to include changes to plankton communities,higher metabolic costs for water-breathing species,resulting in lower growth,survival and reproduction,and higher metabolic cpsts for calcite secreting organisms.The effect on food webs is unclear,but it is very likely that these effects will result in a loss ofbiodiversity and complexity in California's coastal marine ecosystems. Analysis ofPoseidon's Anticipated Greenhouse Gas Emissions andPoseidon's Response .As noted above,Commission staffestimates that Poseidon's electricity use would generate no less than 200,000,000 pounds (about 90,000 metric tonnes)ofcarbon dioxide emissions each year,based on Poseidon's use ofapproximately 250,000 megawatt-hours per year from the San Diego Gas &Electric Company (SDG&E)energy portfolio.Conversely,Poseidon,relying on California Climate Action Registry (CCAR)Protocol,.estimates that its electricity use would generate approximately 61,004 metric tonnes ofcarbon dioxide emissions each year,based upon its use of246,156 megawatt-hours per year from SDG&E,which has a CCAR certified 014122 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC .ApprovedAugust 6,2008-Page 83 of106 emissions factor of546.46 lbs ofC02/MWH.Since Poseidon intends to buy all ofits energy from SDG&E system power,Poseidon states that the appropriate emission factor to use for the project's indirect carbon emissions from its electricity purchases is SDG&E's annual emission factor for delivered electricity as stated in their CCAR Annual Emissions Report.109 SDG&E last filed an Annual Emissions Report with the CCAR on March 7.2007,and it provides an emission rate of546 lbs ofC02/MWH. In October 2007,Poseidon submitted several letters and memoranda to Commission staffdescribing the proposed facility's expected electricity use,some possible measures that would reduce its expected use,and measures that Poseidon may use to address its greenhouse gas emissions.These are described in moredetail below. Poseidon's most recent estimates show that it expects the project would use 4,833 kilowatt-hours to produce each acre-foot ofpotable water,but that this figure would be lowered to about 4,400 kilowatt- hours by implementing measures described below.This includes using the power plant's pumps to bring water into the intake channel,piunping that water into the proposed facility,pretreating the. water,producing desalinated water using reverse osmosis membranes,and pumping the water from the water from the facility to delivery points in Carlsbad and nearby communities.At 4,833 kilowatt- hours per acre-foot,Poseidon's electrical use would total 270,648 megawatt-hours per year.110 Poseidon's estimates also show that its expected continual electrical demand would be betWeen 28.1. and 33.8 megawatts,with an average demand'ofabout 30 megawatts.Using these figures,Poseidon's electrioal use would range from 246,156 to 296,088 megawatt-hours per year,with an average annual use of262,800 megawatt-hours.III Poseidon's proposed Climate Action Plan describes several measures that it may use to reduce its electrical use.Those measures include a high-efficiency energy recovery device thatPoseidon is still testing,but which could reduce its electrical use by about 10%,to about 4400 megawatt-hours per acre-foot ofproduction.Although Poseidon has not yet committed to using this device,the emissions analysis in these Findings credits Poseidon with the emission reductions that would occur due to its use.Using the 4400 megawatt-hour per acre-foot figure would result in Poseidon's electrical use being246,400 megawatt-hours per year,or approximately 250,000 megawatt-hours per year,whichis used as the basis for the analyses in these findings.Using Commission staff's calculations,this would result in carbon dioxide emissions ofabout 200,000,000 pounds (about 90,000 metric tonnes)per year.112 As noted above,the analyses in these Findings do not include several emission sources that could add significantly to Poseidon's total.Theanalyses do not include emissions resulting from project construction and manufacture ofmaterials used. 109 See Poseidon ResourcesCorporation,Response to StajfReport,November 9,2007,Exh.A at pp.23-24. 110 4,833 X 56,000 acre-feet per year/1,000 kilowatts per megawatt =270,648 megawatt-hours. IIIAt a steadyrate ofelecricaluse,30 megawatts X 24 hours per day X 365 days peryear =262,800 megawatt-hours. 112 Based on the CCAR average rate of804.54 pounds per megawatt-hour ofcarbon dioxide emissions from California's electrical sources. 014123 Final AdoptedFindings -Coastal Development Permit Application £-06-0J3 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 84 ofJ06 Recent letters and memoranda from Poseidon (see October 21 and 22,2007)provide a much lower estimate ofits anticipated greenhouse gas emissions.Poseidon,citing the most recent CCAR protocol and certified SDG&E emission rate,contends that its emission rate should be based on 546 pounds of carbon dioxide emissions per megawatt-hour,based on emissions expected from the energy sources in SDG&E's energy supply portfolio.This would result in about 134,400,000 pounds (about 61,000 metric tonnes)ofcarbon dioxide per year instead of 200,000,000 pounds (90,000 metric tonnes). However,Commission staff's analysis shows that in comparing the SDG&E portfolio withthe CCAR's average California portfolio,the SDG&E portfolio appears to result in an even higher emission figure than the California average.1I3 For example,coal and natural gas,which have average emission rates much higher than 804.54 pounds per megawatt-hour,1I4 make up a larger proportion of San Diego's portfolio than the state portfolio.Additionally,SDG&E testimony before the California Public Utilities Commission suggests its carbop.dioxide emissions are in the range ofi 100 pounds per megawatt-hour,based on an average ofa range ofnatural gas technologies and heat rates.IIS Elsewhere,SDG&E's emissions are cited as 915 pounds per megawatt..;hout for electricity it purchases.1I6 Commission staff,therefore,contend that Poseidon's reliance on the latest published CCAR rate calculations for SDG&E may be in error.The CCAR-certified figure is derived from SDG&E's 2005 self-reported Annual Entity Emissions report,which states that SDG&E expects emissions of546 pounds per megawatt-hour from owned and purchased generation sources;however, that figure is not supported by other SDG&E sources or by other agencies,including the California Energy Commission and State Lands Commission,in their determations related to emissions from different types ofelectricity sources.For example,the State Lands Commission in its October 30, 2007 hearing used 815 pounds per megawatt-hour as the basis ofits review,with a "best-case"low emission rate of690 pounds and a high rate ofl100 pounds.Poseidon,however,states thatthe CCAR-certified figUre is not erroneous,since CCAR is the only certifying entity currently authorized by California and because CCAR used SDG&E's credible self-reported Annual Entity Emissions report.117 113 Poseidon provided the following percentages ofSDG&E's electricity sources,and the California averages are from the California Energy Commission's 2006 Gross System PowerReport: Resource Type:SDG&E Percent:State Percent: Coal 18.0 15.7 Natural Gas 50.0 41.5 Large Hydro 10.0 19.0 Nuclear 15.0 12.9 Biomass 3.0 2.1 Geothermal 2.0 4.7 Small Hydro <1 2.1 Solar <1 0.2 Wind 3.0 1.8 114 Natural gas emissions range from about 800-1200 lbs/megawatt-hour,and coal emissions are more than 2000 lbs/megawatt-hour. lIS See page 12 ofthe PreparedRebuttal Testimony ofSan Diego Gas &Electric Company -1.Str~ck,in the CPUC's Application No.06-08-010 for the Sunrise PowerlinkTransmission project,June 25,2007. 116 See Powers,Bill,Assessment ofEnergy Intensity and C02 Emissions Associated with Water Supply Optionsfor San Diego County,October 12,2007. 117 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.23-24. 014124 Final Adopted Findings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 85 of106 In selecting an appropriate rate to use for these analyses,Commission staffused CCAR's standard figure for California to establish Poseidon's 200 million pound contribution to greenhouse gas emissions.lls Poseidon disagrees,stating that because Commission staffdid not follow the CCAR protocol or rely on the CCAR certified SDG&E emissions factor,staff's analysis was in error.119 Regardless,because SDG&E reports its overall emission rate on an annual basis and that rate changes based on the particular mix ofelectricity sources SDG&E uses each year,the rate used to detennine Poseidon's greenhouse gas contributions each year is at this point unknown but will be determined through Commission review and approval ofPoseidon's Energy Minimization and Greenhouse Gas Reduction Plan as described later in these Findings. In its October 21,2007 memorandum,Exhibit D to its November 9,2007 letter to the Commission,and iiI its presentation to the Commission at the Nove~ber 15,2007 hearing, Poseidon presented its proposal to offset or reduce the proposed project's energy use and greenhouse gas production so that the facility's operations would be ~et carbon neutral. Poseidon states that it will develop a Climate Action Plan that (1)would ensure the project minimizes energy consumption in compliance with Coastal Act Section 30253(4),and (2)would render the project net carbon neutral.Poseidon stated its Climate Action Plan may include the following,which are described in more detail below: Energy Minimization Measures: •Installing a state-of-the-art high efficiency energy recovery system that will decrease the amount of electricityreq~iredby the facility by 10%or about 433 kWh/AF. •Evaluating the proposed project through a LEED:'type process,and implementing as many of the LEED Checklist items as feasible ("LEED"is the "Leadership in Energy and Environmental Design"program). •Installing variable-frequency drives onthe intake water pumps ofthe desalination facility to improve the energy-efficiency ofthese pumps. •Installing low-friction piping materials (e.g.,FRP and HDPE)wherever possible to reduce head losses and related energy consumption through the piping. Carbon Neutrality Measures: •Acquiring renewable power through installation ofphotovoltaic array and other renewable energy sources. •Acquiring Renewable Energy Credits (RECs)or purchasing carbon offset projects. •Restoring and preserving coastal wetlands for carbon sequestration. •Providing$1 million worth oftrees for reforestation in the San Diego area. As noted previously,Poseidon initially estimated that its facility would require 4,833 kilowatt-hours of electricity to prod1,lce each acre-foot ofpotable water (kWh/AF)and transport that water to delivery points in and near Carlsbad.This figure would otherwise be somewhat higher-about 5,990 kWh/AF .us Using the nexthigher credible estimate (1100 pounds per megawatt-hour)would resultin Poseidon's emissions being closer to 300,000,000 pounds per year. 119 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at pp.23-24. 014125 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 86 of106 -however,Poseidon plans to use an energy recovery turbine to reduce electricity demand by about 1,103 kWb/AF.Poseidon is also exploring the use of a relatively new energy recovery device known as a pressure exchanger,which it expects could reduce electrical use by an additional 10%.This would resultinelectrical usage ofabout 4,400 kWhlAF and would reduce Poseidon's expected carbon dioxide emissions toabout 200 million pounds (90,000 metric tonnes)per year according to . Commission staff's calculations,or about 134 million pounds (61,000 metric tonnes)per year using Poseidon's calculations.Itwould clearly be to Poseidon's advantage to use any cost-effective energy efficiency devices available to reduce its operating costs,and Poseidon has committed to use this device,so the emisSion estimates in these Findings already credit Poseidon with the emission reductions that would result from its use. Poseidon is also exploring a number ofother energy efficiency measures,including installing variable speed pumps,installing high efficiency lighting and motors throughout the facility,and using low- friction piping material and installing larger diameter piping where possible.It is proposing to implement as many LEED items as feasible,including providing bicycle storage,using water efficient landscaping,providing recycling capability,using low-emission adhesives and sealants,etc.It is also considering installing a rooftop solar energy system.The Commission supports Poseidon's proposed use ofthe LEED guidelines,as implementing LEED-related measures would likelyprovide numerous benefits;however,those guidelines would not result in significantly lower emissions from Poseidon's anticipated electrical use.Further,Poseidon has not yet committed to these measures. Poseidon also states that it could further reduce its energy use by operating at 80%capacity during the eight hours per day ofpeak electricity demand and then operate at 108%ofits average capacity during the remaining hours each day.120 This proposed operating scenario,however,would not necessarily reduce energy use or emissions;it would instead shift energy use from one time ofday to another. This would be beneficial in that it would lower Poseidon's electricity costs and reduce demand on the electricity grid during those peak hours,but Poseidon would still produce about the same amount of water each day requiring the same amount ofelectricity for each acre-foot. Poseidon further contends it should be credited with emission reductions because its project would result in less water being transported to the San Diego region from the State Water Project.Although the State Water Project emits fewer emissions per acre':foot than Poseidon's project would,applying a credit for any foregone use would lower Poseidon's overall greenhouse gas contributions by about 77%(i.e.,the difference between Poseidon's 4400 kilowatt-hour per acre-foot energy use and the State Water Project's 3400 kilowatt-hour per acre-foot).121 Poseidon states that the Carlsbad facility will supply 56,000 acre-feet ofwater per year to the San Diego region,water that would otherwise have to be pumped into the region through either the State Water Project or the Colorado RiverAqueduct. Poseidon further contends,as staterl by all Carlsbad desalination project water agency partners in letters to the State Lands Commission dated November 6 and November 7,2007,which were also provided to the Coastal Commission,that water from the desalination plant will provide direct,one- 120 An annual daily average of50 MGD equals 2,083,333 million gallonsperhour.Operating at 80%capacityfor eight bours would produceabout 16.6 million gallons,and operating at 108%capacityfor sixteen bours would produce about 33.3 million gallons,for an overall total ofabout 49.9 MGD.Since the energy required to produce each acre-foot is about 4400 kilowatt-bours,the overall energy difference between continual production of50 MGD (153.4 AF)and variable production of49.9 MGD (153.1 AF)would be minimal. 121 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.D (Climate Action Plan). 014126 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 87 of106 for-one replacement ofimported water to meet the requirements oftheir Urban Water Management Plans,thus eliminating the need to pump 56,000 acre feet ofwaterinto the region.III Conversely, Poseidon contends that ifthe project is not approved the demand for imported water by the eight public water agencies will increase by 56,000 AFfY starting in 2010.Additionally,Metropolitan Water District of Southern California (MWD)has committed to pay Poseidon's customers $250/AF for each acre-foot ofwater purchased from the project that offsets.a demand on MWD.The availability ofMWD funding is subject to annual audit demonstrating that the desalinated water was used to offset a demand for imported water that would otherwise have to be delivered by MWD. Poseidon concludes that,ifthe replaced water is pumped into the region for other uses,then the associated carbon emissions from such pumping should be and is the responsibility ofthe proponents ofthose other uses.Poseidon believes that any other result would be an unfair and unwarranted "double counting"ofcarbon emissions,requiring Poseidon to offset emissions caused by other activities not associated with its"own operations.123 For"several reasons,however,the Commission staffbelieve this "crediting"approach is not warranted. First,Poseidon's proposed project does not ensure a decrease in imported water supplies to the San Diego Region.124 Other factors may contribute to such a decrease -e:g.,supply cutbacks imposed by court order,a shift in water prices,etc.-but Poseidon's project itselfdoes not include measures that would implement such a decrease,such as retiring distant water rights or assigning water rights to instream uses. Poseidon acknowledges that theSt~te Water Projectwould continue to pump available water to Southern California users,but then argues that it should still be credited for what would then be a non- existent reduction in emissions.Additionally,because Poseidon's water would be more expensive than imported sources,available imported water would likely remain the water ofchoice for most users,and so Poseidon's project would not likely affect the cost preference for imported water (e.g., the San Diego County Water Authority has contracted with the hnperial Irrigation District for up to 200,000 acre-feet per year -about 175 MGD -at less than $300 per acre-foot).Further,much bfthe water imported to San Diego comes from the Colorado River,which requires about a third less electricitythan water imported from the State Water Project (approximately 2,000 kilowatt-hours per acre-foot versus 3,400 kilowatt-hours peracre-foot),so even if"crediting"was appropriate,it would be at a much lower level than Poseidon proposes. Poseidon further contends that its project should be seen as part ofa proposed regional water supply portfolio that would result in an overall reduction ofelectrical use and greenhouse gas emissions from the area's water use.Poseidon states that the planned shift in the San Diego region's water portfolio- .using less imported water,gaining water through conservation,recycling,and canal lining projects, using seawater desalination,etc.-will result in an overall 19%reduction in the energy use per acre- foot now used for theregion's water supply.While such a shift would likely reduce overall electrical use and einissions,those measures are not a part ofPoseidon's proposal and those components ofthe proposed future portfolio would not reduce Poseidon'~carbon dioxide emissions. 122 See Poseidon Resources Corporation.Letter to Paul Thayer Re:Desalination Project's Impact on Imported Water Use,November 8,2007,including attachments from eight water agencies. 123 See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at p.24. 124 We note that the San Diego County Water Authority continues to seek out additional imported water sources that would be used regardless ofPoseidon's project. 014127 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 88 of106 In sum,Commission staffs analysis shows the electrical demand ofPoseidon's proposed project would contribute approximately 200 million pounds (90,000 metric tonnes)ofcarbon dioxide annually,and Poseidon's calculations,using the most recent CCAR-certified emission factor estimate about 134 million pounds (61,000 metric tonnes)ofcarbon dioxide emissions annually. Poseidon and the Commission staffwill consult with CCAR and CARE and other agencies to ensure that the carbon emissions will be neutralized regardless ofthe actual output,and Special Condition 10 will assure that all net greenhouse gas emissions will be offset.Additionally,as noted above,because the SDG&E emission factor will change each year based on its electricity portfolio,the method used to determine Poseidon's needed emission reductions each year would need to be identified in the plan reviewed and approved by the Commission. As described above,Poseidon's proposed Climate Action Plan presents a variety ofmeasures it is exploring to reduce the plant's electricity consumption and resulting emissions and to offset the remaining emissions.The Plan does not currently commit to specific electricity minimization measures beyond those identified above;however,Poseidon is still exploring its options in regard to further electricity minimization and the Plan commits to specific electricity reductions.., To ensure Poseidon's proposal will conform to Coastal Act Section 30253(4)and other applicable Coastal Act provisions by minimizing energy consumption and reducing effects of greenhouse gas emissions on coastal resources,Special Condition 10 requires Poseidon,prior to issuance Of its coastal development permit,to submit to the Commission for review and approval a revised Energy Minimization and Greenhouse Gas Reduction Plan.That Plan is to be developed in conjunction with Coastal Commission staffand staffofother interested agencies and is to describe the procedures and mitigation measures that will be implemented to minimize electricity consumption ofthe desalination facility and to reduce or offset emissions resulting .from the facility's remaining electrical use. As noted above,Poseidon contends that its Climate Action Plan further provides a commitment that Poseidon will render the project "net carbon neutral"through measures including: •Acquiring Renewable Energy Credits (RECs) •Purchasing carbon offset projects •Restoring and preserving coastal wetlands for carbon sequestration •Providing $1 million worth oftrees for reforestation in the San Diego area. Poseidon states that it would consider purchasing RECs,which are credits bought and sold in an open market and used to fund renewable energy sources.For example,a renewable energy provider can be credited with one REC for every megawatt it produces,and can sell its RECs to make up some ofthe difference between the generally higher-cost energy produced from the renewable source and the generally lower-cost energy produced by a conventional fossil fuel source.125 Carbon offsets are 125 Recent REC prices have ranged from about $5 to $90 per megawatt-hour,with an average cost in 2006 ofabout $20 (see u.s.Department ofEnergy,Energy Efficiency and Renewable Energy website at: http://www.eere.energy.gov/greenpower/markets/certificates.shtml?page=l).Based on the average 2006 cost,offsetting Poseidon's anticipated use of250;000 megawatt-hours per year would require it to purchase $5 million worth ofRECs, equal to about $90 foreach acre-foot ofwater it produced.. 014128 Final AdoptedFindings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 89 of106 similar,inthat they can be purchased through various market systems -non-profit or for-profit organizations,fonnal trading systems,etc.-and used for projects that reduce atmospheric carbon, such as energy conservation projects,methane capture,reforestation,etc.One method ofoffsetting carbon emissions involves sequestering carbon in growing plants,either through reforestation,or as Poseidon describes,through restoring and preserving coastal wetlands.126 As part ofits proposal, Poseidon has committed to purchase one million dollars worth ofnative and non-invasive trees to be planted in areas ofSan Diego County that were burned during the October 2007 wildfires.The Commission requested that Poseidon work with the San Diego Air Quality Management District to detennine what kinds oftrees would be appropriate to use.However,Poseidon has not provided further details about the type or am~untofemission credits it would purchase or what kinds of emission reduction projects it would undertake.An additional concernis that there are only limited methods currently available for offsetting emissions,and it may be necessary to commit those offsetting measures to existing and critically needed facilities rather than a proposed and highly energy-intensive use such as this desalination facility.Further,rather than use offsets,Poseidon would be better able to confonn to the Coastal Act Section30253(4)requirement by including with its proposed project an energy conservation plan that commits to specific measures it will take to minimize energyuse and its associated greenhouse gas emissions.A plan focusing on onsite and offsite energyconservation measures that result in an annual 200 million pound decrease in carbon dioxide emissions would be most closely related to Section 30253(4)'s mandate to minimize energy use.Ifthose measures are inadequate,the plan could then provide offsets for the remaining emissions. To ensure Poseidon's proposal will avoid and offset the adverse coastal resource impacts noted above and will confonn to applicable Coastal Act provisions,Special Condition 10 requires Poseidon,prior ,to issuance ofits coastal developmentpennit,to submit to the Commission for review and approval a revised Energy Minimization and Greenhouse Gas Reduction Plan.That Plan is to be developed in conjunction with Coastal Commission staffand staffofother interested agencies and is to describe the procedures and mitigation measures'that will be impleinented to determine the amount ofcarbon dioxide emitted due to Poseidon's electrical use and to ensure that project operations are "net carbon neutral".These may include measures described above and others,such as conflnned use of renewable energy sources like solar or wind power that would reduce the project's carbon footprint. Conclusion Special Condition 10 requires Poseidon to submit to the Commission for review and approval a Revised Energy Minimization and Greenhouse Gas Reduction Plan that address,es comments submitted by the staffs ofthe Commission,State Lands Commission and the Air Resources Board prior to issuance ofthe pennit.The Commission finds that imposition ofSpecial Condition 10 will ensure that Poseidon minimizes electricity consumption ofthe project and mitigate any effects ofthe project's emissions on coastal resources,and that,as mitigated and conditioned,the project is ,consistent with the requirements ofSection 30253(4)and other relevant Coastal Act provisions.The proposed project is meant in part to respond to the threat ofdrought and dwindling water supplies,and with adequate minimization and compensatory mitigation measures,the project will help achieve those goals.Poseidon's revised plan shall establish that the project will avoid,minimize,or mitigate adverse 126 To provide a comparison,the U.S.EPA and U.S.Agency for International Development Climate Technology website calculates that sequestering 200,000,000 pounds ofannual carbon emissions each year requires about 75,000 acres of growing forest (see www.usctcgateway.net).' 014129 Final Adopted Findings -Coastal Development Permit Application E-06';'013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 90 of106 impacts to a wide range ofcoastal resources,including public access,recreation,marine respurces, wetlands,ESHA,agriculture,natural land forms,and existing development associated with its minimized and mitigated energy consumption.Based on the above,the Commission finds that the project,as conditioned,will conform to Coastal Act provisions related to minimizing energy use and mitigating any adverse effects on coastal resources from greenhouse gas emissions. 014130 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 91 of106 4.5.6 Development and Public Services (Coastal Act Sections 30250 &30254) Coastal Act Section 30250(a)states: New residential,commercial;or industrial development,except as otherwise provided in this division,shall be located within,contiguous with,or in close proximity to,existing developed areas able to accommodate it or,where such areas are not able to accommodate it,in other areas with adequate public services andwhere it will not have significant adverse effects,either individually or cumulatively,on coastal resources.In addition,land divisions,other than leases for agricultural uses,outside existing developed areas shall bepermitted only where 50percent ofthe usableparcels in the area have been developed and the created parcelswould be no smaller than the average size ofsurroundi1l;gparcels. Coastal Act Section 30254 states: New or expandedpublic worksfacilities shall be designed and limited to accommodate needs generated by development or uses permitted consistent with the provisions ofthis divisipn;provided,however,that it is the intent ofthe Legislature,that State Highway Route 1 in rural areas ofthe coastal zone remain a scenic two-lane road.Special districts shall not beformed or expanded except where assessment for,andprovision oj, the service would not induce newdevelopment inconsistent with this division.Where existing orplannedpublic worksfacilities can accommodate only a limited amount of new development,services to coastal-dependent land use,"essentialpublic services and basic industries vital to the economic health ofthe region,state,or nation,public recreation,commercial recreation,andvisitor-serving land uses shall not beprecluded by other development. Coastal Act Section 30250(a)generally requires that new industrial development,such as the proposed project,be sited in developed areas able to accommodate it or in areas with adequate public services and where it will not result in significant adverse effects to coastal resources. The facility would be located on an existing industrial site in an area with public services provided.Coastal Act Section 30254 requires in part that development not preclude public works facilities able to accommodate only limited new development from providing essential public services.Taken together,these policies are meant to ensure,in part,that new development not outpace the ability ofcommunities to provide necessary public services and that development be supportive ofother coastal resources. The project's capacity of56,000 AFY ofnew water supply for the San Diego region is about ten percent of500,000 AFY ofdesalinated water identified by the California Department ofWater Resources as needed by 2030,as stated in its 2006 Water Plan Update.This Update lists the project as a potential source ofdesalinated water.The Metropolitan Water District ofSouthem California's Integrated Water Resources Plan identified a need for 250,000 AFY ofseawater desalination (including 56,000 AFY from the Carlsbad project)to ensure regional water supply reliability.In addition,the San Diego County Water Authority updated its 2005 Urban Water Management Plan inApril 2007 specifically to reaffirm the ne~d for 56,000 AFY ofseawater desalination from the project by 2011.The project is a central component ofstate,regional and local water supply planning to meet already-identified demand.. 014131 Final Adopted Findings -CoastalDevelopment Permit Application £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 92 of106 The proposed project conforms to Sections 30250(a)and 30254 because any adverse effects to coastal resources will be mitigated as described in other sections ofthese Findings.Regarding growth implications,the Commission finds that the project will not induce growth since Poseidon will be selling its produced water to various public water districts.In this instance,use ofthat water bythose districts will be subject to the applicable current and future growth plans, allowable levels ofbuild-out,and conservation plans adopted by those districts or by the local jurisdictions they serve.The project provides part ofthe water supply that the California Department ofWater Resources has identified as being needed in the area.The project does not induce growth,but rather,concentrates on providing a secure water supply for a region importing about 85%ofits water and whose sources ofimported water maynot be secure..Accordingly, the project is a needed component of,and is consistent with,state,regional,and local water supply planning to meet an identified demand.. Conclusion Based on the above,the Commission fmds that the project will not result in growth-inducing impacts and,as proposed and conditioned conforms to Coastal Act Sections 30250 and 30254. 014132 Final AdoptedFindings -Coastal Development PermitApplication £-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 93 of106 4.5.7 Coastal-Dependent "Override"(Coastal Act Section 30260) Coastal Act Section 30101 states: "Coastal-dependent development or use"means any development or use which requires a site on,or adjacent to,the sea to be able tofunction at all. Coastal Act Section 30260 states: Coastal-dependent industrialfacilities shall be encouraged to locate or expand within existingsites andshall be permitted reasonable long-term growth where consistent with this division.However,where new or expandedcoastal-dependent industrialfacilities cannotfeaSibly be accommodated consistent with otherpolicies ofthis division,they may nonetheless bepermitted in accordance with this section and Sections 30261 and30262 if(1)alternative locations are infeasible or more environmentally damaging;(2)to do· otherwise would adversely affect the public welfare;and (3)adverse environmental effects are mitigated to the maximum extentfeasible. Coastal Act Section 30260 provides for special consideration ofcoastal-dependent industrial facilities that may otherwise be found inconsistent with the Coastal Act's Chapter 3 policies.Such coastal-dependent proposals must fIrst be evaluated for consistency to all other applicable policies and standards contained in Chapter 3.Ifa proposal is found to be inconsistent with any Chapter 3 policy,Section 30260 provides that it may be approved,notwithstanding its inconsistencies with those other policies,but only upon application ofa three-part test -(1)that alternative locations are infeasible or more environmentally damaging;(2)that adverse environmental effects are mitigated to the maximum extent feasible;and (3)that to do otherwise (i.e.,to deny the project)would adversely affect the public welfare.. Poseidon's proposed seawater desalination facility would be a coastal-dependent industrial facility, as it would need to be sited on or adjacent to the sea in order to function at·all.Additionally,as determined previously in these findings,the Commission has found that the proposed project,as· conditioned,would conform to applicable Coastal Act policies except Section 30233(c).Therefore, the Commission's approval ofthe project requires use ofthe Section 30260 "override".As shown in the discussion below,the Commission has determined that the project,as conditioned,meets the three tests ofSection 30260 and thereby conforms to this Coastal Act policy.Each ofthe three tests is applied below. Test l-Alternative Locations are Infeasible orMore Environmentally Damaging Under Section 30260,the project can be approved ifthe Commission fmds there are no alternative location,s that would lessen the project's environmental impacts,Previously in Section 4.5.1 ofthese Findings,the Commission found that there are no feasible alternative locations that would signifIcantly reduce any impacts ofthe proposed intake and the outfall. 014133 Final Adopted Findings -Coastal Development Permit Application £-06.;.013 . Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 94 of106 Based on the analysis provided previously in these Findings,the Commission fmds that there are no feasible and less environmentally damaging alternative locations available for the project's seawater intake and discharge components and that the proposed project meets the first test ofSection 30260. Test2 -Adverse environmental effects are minimized to the maximum extent feasible Section 30260's second test requires that a proposed project include maximum feasible mitigation measures.Poseidon's proposal meets this test ofSection 30260 through imposition ofSpecial Conditions 4 (Other Agency Approvals);8 (Marine Life Mitigation Plan),9 (Seawater Withdrawal), 10 (Energy Minimization and Greenhouse Gas Reduction Plan);11 (public Access),12 (Dredging), 13 (Visual Resources),15 (Construction Plan),16 (Storm Water Pollution Prevention Plan)and 17 (Water Quality),which,among other protections,impose requirements that Poseidon implement mitigation measures that will minimize potential adverse environmental effects to the maximum extent feasible.These conditions will,among other things require Poseidon to (1)submit to and obtain from the Commission approval ofa revised Marine Life Mitigation Plan in the form of an amendment to the CDP that will mitigate to the extent feasible project-related impacts to marine life; (2)submit to and obtain from the Commission approval ofa revised Energy Minimization and . Greenhouse Gas Reduction Plan that results in reduction in electrical use and reduction or offset of greenhouse gas emissions associated with the project's operations to the maximum extent feasible through Poseidon's agreement that the project will be net carbon neutral;and (3)submit separate coastal development permit applications to the Commission for future dredging ofthe Lagoon so the Commission can ensure that future dredging is consistent with the Coastal Act.Together,these and the other Special Conditions ensure the project will mitigate to the maximum extent feasible the project's adverse effects on coaStal resources. Based on the above and on the previous Findings herein,the Commission finds that the proposed project as conditioned mitigates its impacts to the maximum extent feasible and that it meets the second test ofSection 30260. Test 3 -To notpermit the development would adverselyaffectpublic welfare Section 30260's fmal test provides that coastal-dependent industrial development may be permitted ifto do otherwise would adversely affect the public welfare.This test requires more than a fmding that,on balance,a project as proposed is in the interest ofthe public.It requires that the Commission find that there would be a detriment to the public welfare were the Commissionto deny the project.The Commission recognizes that it is clearly in the interest ofthe San Diego region to develop local and reliable water sources and that seawater desalination is a part ofthis portfolio.For the reasons below,the Commission fmds that denial of the proposed project is not in the public interest. •Effects of environmental impacts on pUblic welfare:Through imposition ofSpecial Conditions 8 and 10,the Commission finds that the project as mitigated will address the need to improve marine life productivity and will therefore be consistent with the goals ofSections 30230 and 30231.The Lagoon also provides many beneficial uses to the public that this project will support through continued and increased opportunities for public access,ongoing use for marine life science and research,and others.Additionally,Special Condition 12 requires 014134 FinalAdoptedFindings -Coastal Development Permit Application £-06-013 Poseidon Resources (Channels ide)LLC ApprovedAugust 6,2008-Page 95 of106 Poseidon to obtain separate coastal development pennits for any proposed future dredging activities in the Lagoon,which will ensure those activities conform to applicable Coastal Act proVisions. •Public welfare as applied to pubiic or private water supplies:As noted in the Commission's 2004 report,Seawater Desalination and the California Coastal Act: Afundamental Coastal Actprinciple is that many coastal resources are imbued with a .public interest andvalue that must be vigorouslyprotectedfor the benefit ofcurrent and future generations.Unlike many coastalresources that areprivately owned,ocean .water,and the uses and values it embodies,constitute a public trust resource held in commonfor public use and enjoyment.This principle is codified in numerousfederal andstate laws and regulations,including the Coastal Act...Notwithstanding the public nature ofcoastal,ocean waters,use ofsuch waters and ofliving and non-living resources in and under them have historically been allowedfor non-publicpurposes. Ocean water serves a number ofbeneficial uses and vital environmental,social,and economicfunctions.It ispart ofthe sharedpublic "commons",it serves as habitatfor a multitude ofspecies,it is a source offood and livelihoodfor society,and it is used to support transportation,commerce,recreation,and other importantsocietal uses.For the mostpart,these uses are non-consumptive andsustainable,in that using ocean waterfor one ofthese purposes does not necessarily impair its ability to be usedfor others. Privatization ofwater supplies,in and ofitself,maynot cause effects on coastal resources different than those caused by a public agency.Most differences would be due to how each type ofentity implements its water use.Both public and private projects may include particular characteristics that change how they affect resources and how theymeet the public interest. Further,California has recognized there is a role for private water purveyors and for providers of other basic utilities such as gas and electricity.The state has a system to regulate public and .private utilities to ensure that public interests are being met. Private entities can clearly bring benefits to public agencies.One ofthe benefits stated by the public agencies involved with Poseidon's proposed project is that Poseidon is willing to provide the initial capital investment and obtain the approvals needed to build and operate the facility, which can represent a significant savings to public agencies.However,this benefit comes with risks and costs,as noted by the Commission in previous decisions. The Commission in the past has both approved and denied proposed private desalination facilities.For example,it approved a privately-owned facility on Catalina Island inpart because there wereno feasible alternatives for the proposal.In 1994,the Commission denied construction ofa private desalination facility (A-3-SNC-94-008-E2,Steding Center in the City ofSand City)based in part that it would result in fragmentation ofpublic works facilities.In 1995,the Commission's Findings for an adopted LCP amendment to the Santa Barbara Coastal Program stated:"Private desalination facilities also raise the basic policy question ofthe effect of allowing the proliferation ofprivately owned and operated watersupply facilities on the ability to comprehensively plan for the provision ofessential public services".Those Findings go on to express concerns about the abilities ofprivate owners to operate and be accountable for desalination operations,to mitigate associated impacts,to maintain the facility in a manner 014135 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 96 of106 necessary for public health and environmental safety,and other issues.The Findings also state that proliferation ofprivate desalination facilities could fragment public utility services.127 .They conclude bystating that proliferation ofsuch facilities where consolidation is feasible is inconsistent withthe Coastal Act.In 1997,the Commission found in its consideration ofa LUP update in San Luis Obispo County that a proposed desalination facility would be inconsistent with Coastal Act policies because it would provide for continued urban development that could not be supported by existing water supplies. The recent history ofprivatizing water services has identified some ofthese risks and has resulted in some keyquestions about such proposals:Will there be adequate public oversight and monitoring,and transparency in decision-making and financial issues?;What measures will ensure that ecosystem values are protected?;How will privatization affect initiatives related to water-use efficiency and conservation?;and,What happens ifit doesn't work?128 Regarding transparency in decision-making and financial issues,both the State Desalination Task Force and the California Resources Agency have recognized that private desalination proponents should disclose the same infonnation as that disclosed by public entities.129 Public water districts are required by law to publish financial statements that disclose the basis ofa district's revenues,costs,cash flow,and other basic economic data that describe the financial health ofthe district.These statements are public documents and serve to infonn the public about the basis for a district's rates,the need for additional funding for various projects,etc. Many districts provide this infonnation on their websites,along with meeting agendas,meeting minutes,infonnation about health and safety-related characteristics oftheir water supplies,and other infonnation useful to the public to find out about its water and about the important decisions to be made about its water supply.Poseidon's water purchase agreements with the eight municipal water agencies that will be purchasing water from the project are public documents,which provide the public with transparency regarding the project's financial relationship with the agencies.130 Additionally,as noted previ9usly in Section 4.2 ofthese Findings,Poseidon's contracts with the Carlsbad MUnicipal Water District provide that the Water District couid assume operation or ownership ofthe facility ifnecessary,and Poseidon is required to post securities to ensure site remediation or removal ofthe facility,ifwarranted.Additionally,Poseidon's water purchase agreements with the various public water districts primarily obligate the purchasers to buy up to a certain amount ofwater at a specified price.Decisions about use and distribution ofthat water will remain the purview ofthese public water districts. 127 However,the San Diego County Water Authority supports the desalination facility and passed a resolution onJune 28,2007 in support ofthe Project fmding that "the Carlsbad Desalination Project is essential to the Water Authority's .ability to achieve the supply diversification goals contained in the 2005 UWMP [Urban Water Management Plan]." 128 See the Pacific Institute's report,The New Economy ofWater:The Risks andBenefits ofGlobalization and Privatization ofFresh Water,February 2002. 129 See State Desalination Task Force recommendations and March 15,2004 letter from Resources Secretary Mike Chrisman to Coastal Commission.. 130 See Reporter's Transcript ofProceedings,Application No.E-06-013,November 15,2007,Agenda Item No.7.a., atp.275-276. 014136 Final AdoptedFindings -Coastal Development PermitApplication £-06-013 .Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 97 of106 Overall,however,the Commission recognizes the importance and the urgency in providing a reliable water supply in the San Diego region during a time ofdeclining availability ofimported water and a time ofsignificant ilscal constraints on public water agencies..Even with regional initiatives to emphasize water conservation and to reuse existing supplies,the population and economy ofthe SanDiego area is heavily reliant on maintaining and creating an adequate water supply such as the supply created by this facility.Further,this facility's initial development and construction costs,which are expected to exceed $300 million,will be borne directly by a willing private entity rather than by the water districts that have agreed to purchase the water produced at the facility.Further,as noted above,the San Diego County.Water Authority withdrew its proposal to construct a desalination facility at this site,leaving Poseidon as the only entity willing to undertake construction and operation.The Commission therefore [mds in this case that it is in the public interest to allow private development ofa portion ofthe region's water supply. •The combination ofthis facility and other alternatives provide for the public welfare:The Commission also believes that in combination with a well-designed desalination facility that conforms to Coastal Act provisions,other water sources are available to provide a local and reliable water supply.These other sources,including conservation,recycling,andothers,are feasible,less environmentally damaging,and are already being done to some degree in the San Diego area and elsewhere. Regarding conservation,it is considered the least expensive and often the least environmentally damaging type oflocal water supply.Water users and providers in the San Diego region have already implemented a number ofeffective conservation measures to·increase the local water supply and have recognized it as a necessary part ofthe regional water portfolio.For example, the San Diego County Water Authority's May 2007 draft Blueprintfor Water Conservation states that conservation is thecheapest form ofnew water supplies and shows that it expects conservation to go from providing about seven percent ofthe region's supply (about 51,000 acre- feet per year)to about twelve percent (100,000 acre-feet per year)by 2030.As noted previously in these Findings,the Blueprint also shows that seawater desalination is expected to provide about ten percent (89,000 acre-feet per year)ofthe regional supply by 2030.Similarly,in March 2002,the San Diego County Board ofSupervisors adopted PolicyNo.A-I 06,which emphasizes the need for water conservation as a significant part ofthe County's water portfolio. The region could develop even more new water through conservation,similar to other coastal areas in California with limited local water supplies but with ongoing growth.For example,in Long Beach,conservation is expectedto provide 15 percent ofthe water supply by 2015,and in the Monterey County area,conservation accounts for about twenty percent ofthe supply. Applying those percentages to San Diego's total expected water use in 2030 would result in conservation supplies ofabout 125,000 to 160,000 acre-feet per year. Although many ofthe region's water districts have developed effective conservation programs, there are still a substantial number ofconservation measures and initiatives that could provide significant amounts ofwater.For example,many ofthe agencies that have agreed to purchase water from Poseidon are members ofthe California Urban Water Conservation Council,which has developed a menu ofcost-effective Best Management Practices (BMPs)to reduce urban water use.These member agencies are implementing some,but not all,ofthe Council's fourteen adopted BMPs,suggesting that there is an as-of-yet untapped source ofconservation water 014137 Final Adopted Findings -:-Coastal Development Penni!Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 98 of106 available.Other sources include recycling and even indirect potable reuse.Carlsbad recently reported that it is using less than halfthe recycled water it has availableto it,which suggests it has an underused local and reliable option.l3l We note,too,for example,that the same treatment system Poseidon proposes for its facility is used in indirect potable reuse applications.The Commission expects that the use ofthese and other conservation measures will continue and will increase,with or without the proposed project. Even with these conservation measures in place and with other conservation measures still available,the Commission finds that it isin the public interest for this desalination facility to provide water that augments these other sources.The project would provide an important and much-needed source ofpotable water for Southern California.Since Poseidon filed its CDP application,the water supply situation in the State ofCalifornia -alreadybad -:-has substantially deteriorated.Poseidon has previously provided the Commission.with newspaper reports that recognize a looming water crisis and clearly identify the need for California,and more specifically San Diego County,to lessen its demand on the State Water Project and Colorado River watersheds,which were critically dry in 2007.132 State,regional,and local water plans all have confirmed that the immediate and pressing water needs are so great,that.they cannot be met by conservation and recycled water alone and that a substantial investment in seawater desalination,including the project,is required. The project's capacity of56,000 AFY ofnew water supply for the San Diego region is about ten percent of500,000 AFY ofdesalinated water identified by the California Department of Water Resources as needed by 2030,as stated in its 2006 Water Plan Update.·This Update lists the project as a potential source ofdesalinated water.The Metropolitan Water DistriCt ofSouthern California's Integrated Water Resources Plan identified a need for 150,000 AFY . ofseawater desalination (including 56,000 AFY from the Carlsbad project)to ensure regional water supply reliability.In addition,the San Diego County Water Authority updated its 2005 Urban Water Management Plan in April 2007 specifically to reaffirm the need for 56,000 AFY ofseawater desalination from the project by 2011.The project is a central component ofstate,regional and local water supply planning to meet already- identified demand.133 Eight public water agencies have already entered into long-term agreements with Poseidonto receive 1OO%.ofthe supply ofdesalinated water from the project.These agencies have some ofthe most aggressive water recycling programs in the region,but they have stressed the need for desalinated water to ensure regional water supplyreliability and to meet existing demands and planned-for future growth,and they have identified the project's water supply as a component oftheir water plans.134 The entire plant's output will be put to public use by these public agency partners,ensuring that the water will remain in the public domain. 131 See Carlsbad's 2007 State o/Effectiveness Report. 132 See Poseidon Resources Corporation,Response to SiaffReport,November 9,2007,Exh.A at p.5. 133 See id.at p.6. 134 See Poseidon Resources Corporation,Letter to State Lands Commission Executive Director re:Desalination Project's Impact on Imported Water Use,November 8,2007 (including attachments from water districts);PoseidonResources Corporation,Carlsbad Desalination Project Briefing Package,CDP Application No.E-06-013,November 2007. 014138 FinalAdoptedFindings -Coastal Development PermitApplication E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 99 of106 Public agencies will continue to control the allocation and use ofthe water,so local government oversight will be preserved.Under Poseidon's contracts with each public water agency,the customers'price ofwater will not exceed the price that the customer would have paid for the imported water supply from the San Diego County Water Authority. The region expects further restrictions in the amount ofwater being imported to the area.Ifthe restrictions are as severe as expected -i.e.,reductions ofup to about 30%--it will need to rely on conservation,desalination,and other means to make up the water deficit.This facility is therefore a necessary and integral part ofthe region's water portfolio. •Public benefits resulting from increased shoreline access opportunities:In addition to the above public welfare benefits,the project will result in increased access to the shoreline of both Agua Hedionda Lagoon and the Pacific Ocean.As part ofits project,Poseidon has offered to dedicate for public use four sites totaling about 15 acres on or near the shore of both the Lagoon and the ocean.The dedicated area will not only provide greater public access to formerly private ocean and Lagoon front property,but it will provide additional opportunities for recreation,fishing and marine research and restoration.13S Specifically,the dedicated area would be used for expansion ofthe existing fish hatchery and aquatic research uses,a fishing beach,recreation and coastal access,and public parking.To ensure the sites are made available for public use,Special Condition 11 requires that,prior to starting operations ofthe desalination facility,Poseidon ensure these parcels are dedicated for public access and recreation as described in the City's Precise Development Plan#PDP 00-02. These public access dedications provide adequate conformity to the Coastal Act's public access provisions.One ofthe Coastal Act's primary goals is to maximize public access and recreational opportunities along the coast136,and the project's public access aspects support that goal. Based on the above,the Commission finds that the proposed project meets the final test of Section 30260. Conclusion The Commission recognizes that the San Diego region is clearly in need ofreliable and local water . sources.As noted above,the Commission has found that this coastal-dependent industrialfacility, as conditioned,conforms to all applicable Coastal Act policies except Section 30233(c).However, the Commissionhas determined through applying the three tests above that the project conforms to the "override"provisions ofCoastal Act 30260 provided for such facilities.The Commission therefore finds that by meeting the requirements ofthese three tests and with imposition ofthe Special Conditions described previously in these Findings,the project conforms to Coast31 Act Section 30260.The Commission may therefore approve the project pursuant to that Coastal Act policy. I3S See Poseidon Resources Corporation,Response to StaffReport,November 9,2007,Exh.A at p.4,26. 136 See,for example,Coastal Act Section 30001.5,which states in relevant part:"The Legislature further finds and declares that the basic goals ofthe state for the coastal zone are to...(c)Maximize public access to and along the coast and maximize public recreational opportunities in the coastal zone consistent with sound resources conservation principles and constitutionally protected rights ofproperty owners." 014139 Final Adopted Findings -Coastal Development Permit Application E-06-013 .Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 100 of106 5.0 CALIFORNIA ENVIRONMENTAL QUALITY ACT On June 13,2006,the City ofCarlsbad certified an Environmental hnpact Report for the proposed project.In addition,Section 13096 ofthe Commission's administrative regulations requires Commission approval ofCDP applications to be supported by a finding showing the application,as modified by any conditions ofapproval,to be consistent with any applicable requirements ofthe California Environmental Quality Act (CEQA).Public Resources Code Section 21 080.5(d)(2)(A)prohibits approval ofa proposed development ifthere are feasible alternatives or feasible mitigation measures available that would substantially lessen any significant impacts that the activity may have on the environment. As discussed above,although the project is not an allowable use pursuant to Section 30233(c),it is a coastal-dependent industrial facility and the Commission has ther~fore approved the project pursuant to the policies ofCoastal Act Section 30260,which allows such projects to be approved ifthe Commission finds there are no feasible less environmentally damaging alternative locations,that all adverse environmental impacts are mitigated to the maximum extent feasible, and that to not approve the project would not be in the public welfare.Pursuant to these Findings and the review conducted in the City ofCarlsbad's EIR,the project includes all available and feasible measures to avoid or minimize significant adverse environmental impacts. There are no feasible alternatives or feasible mitigation measures available that would .substantially lessen any significant adverse impact that the activity would have on the environment.·Therefore,the Commission finds that the proposed project,as conditioned,is consistent with the requirements of CEQA. 014140 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 101 of106 APPENDIX A:SUBSTANTIAL FILE DOCUMENTS £-06-013 Alpert,H.,Borrowman,c.,and B.Haddad.Evaluating Environmental Impacts of Desalination in California,Center for Integrated Water Research,at http://ciwr.ucsc.eduJdesalplanninglworkshops.htrnl,July 27,2007., Bay,Steven,and Darrin Greenstein.Toxic effects ofelevated salinity and desalination waste brine,Southern California Coastal Water Research Project,1994. Cabrillo Power I LLC.Proposalfor Information Collection Clean Water Act Section 316(b) Encina Power Station,April 1,2006. Cabrillo Power I LLC.Letter to Coastal Commission staffregarding current and anticipated future conditions at Encina Power Station,July 12,2007. 'California Coastal Commission.Approved coastal development permits and mitigation plans for San Onofre Nuclear Generating Station (SONGS),including CDP #6-81-330A (1974)and #06- 04-88 (2005). California Coastal Commission.Seawater Desalination and the California Coastal Act,March 2004. California Department ofWater Resources.California Water Plan Update,2005. California Energy Commission.AESHuntington Beach Generating Station Entrainment and Impingement Study,2005 and Entrainment and Impingement Final StaffAnalysis,August,2006. California Energy Commission.Issues andEnvironmental Impacts Associatedwith Once- Through Cooling at California's Coastal Power Plants,June 2005. CaliforniaEnergy Commission.Morro Bay Power Plant 316(b)Resource Assessment,2001. California Public Utilities Commission.San Diego Gas and Electric Company's Divesture of Electric Generating Assets -Environmental Review (No.97-12-039). California Public Utilities Commission.Initial Studyfor SanDiego Gas &Electric Company's Application No.97-12-039,October 13,1998. California State Desalination Task Force.Draft Desalination TaskForce Report,September 2003. California State Lands Commission staffreport for Poseidon Resources Channelside LLC State Lands Lease Application,October 30,2007. California State Lands Commission and U.S.Army Corps ofEngineers.Draft Environmental Impact Report /Environmental Assessment -Agua Hedionda Northern Inlet Jetty Restoration, January 2005. California State Water Resources Control Board.California Ocean Plan,2005. 014141 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC Approved August 6,2008-Page 102 of106 Carlsbad Watershed Management Plan,2002. City of Carlsbad.CertifiedLand Use Plan,adopted August 27,1982. City ofCarlsbad.Final Environmental Impact Reportfor Precise Development Plan and Desalination Plant,EIR 03-05 -SCH#2004041081. City ofCarlsbad.Additional Responses to Comments on the Final ElR 03-05 for the Precise. Development Plan and Desalination Plant Project #2004041081,June 13,2006. City of Carlsbad.Master Water Plan Update,March 2003. Clean Air,Cool Planet.A Consumer's Guide .to Retail Carbon Offtet Providers,December 2006. Coast Law Group.June 4,2007 letter to California State Water Resources Control Board re: Seawater Desalination Intakes and Once-Through Cooling Regulations. Coast Law Group,letter to State Lands Commission re:CarlsbadJPoseidon Ocean Desalination Project,October29,2007 Coast Law Group.Issue papers on Coastal Dependent Use Exceptions (Coastal Act Section 30260),Failure to Adequately Consider andMinimize Energy Use,Failure to Adequately Consider Discharge-RelatedImpacts,Failure to Adequately Consider Intake Alternatives, Lagoon Sedimentation Impacts,and MarineLife Mortality From Entrainment,provided November 13,2007. Collector Wells International,Inc.Collector Wells for Filtered Seawater,n.d.;andFiltered Seawater Supplyfor Desalination,2001.. Cooley,Heather,Dr.Peter Gleick,and Gary Wolff.Desalination,With a Grain ofSalt,Pacific Institute,June 2006. Dale,Larry,Camilla Dunham Whitehead,and Andre Fargeix.Electricity Price and Southern California's Water Supply Options,in Resources,Conservation and Recycling,Volume 42,Issue 4,November 2004. Del Bene,J.V.,Gerhard Jirka,and John Largier.Ocean brine disposal,in Desalination,Volume 97,1994. Dickie,Phil.Desalination:Option orDistractionfor a Thirsty World,World Wildlife Fund, June 2007. Gleick,Dr.Peter H.,Heather Cooley,and David Groves.California Water 2030:An Efficient Future,Pacific Institute,September 2005 Hunt,Henry.Filtered Seawater Supplies -Naturally,in Desalination and Water Reuse,Volume 6,No.2. 014142 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 103 of106 Imam,Dr.Abdelghani,Samir Dweiri,Diego Fernandez &Dr.Paul Kent.AnnexIll: Desalination Costs,for the United States Agency for International Development,March 2007 Latham &Watkins.Letter to State Lands Commission Re:CEQA Issues Raised for Poseidon Project ByCoastal Commission Staff,October 31,2007. Latham &Watkins.Letter to Chair Kruer and Commissioners transmitting Poseidon's Proposed Special Conditions and Proposed Instructions to StaffRegarding Preparation ofRevised Findings,November 15,2007. Latham &Watkins.Letter to Chair Kruer and Commissioners transmitting Poseidon's Suggested Basis for Findings and Updated Requested Additions to List ofSubstantive File Documents,November 15,2007. Lilien,Ben.Public Versus Private Ownership ofSeawater Desalination FaGilities,Stanford Environmental Law Clinic,June 2005. McRae,Timothy.Coastal Desalination,."Coastal-Dependency"andthe California Coast:How today's desalination proposals could affect tomorrow's coastline,pub!.In prep.2007. Metropolitan Water District ofOrange County.Dana Point Ocean Desalination Project,April 2007. Miri,Rachid,and Abdelwahab Chouikhi.Ecotoxicological marineimpactsfrom seawater desalination plants,in Desalination 182,2005. National Marine Fisheries Service and U.S.Fish and Wildlife Service.Recovery Plan for us.Pacific Populations ofthe East Pacific Green Turtle (Chelonia mydas),1998. Perata,Senator D.Letter to P.Kruer re:Carlsbad Desalination Project,November 13,2007. Peters,Thomas,Domenec Pinto,and Esteve Pinto.Improvedseawater intake andpre-treatment system basedon Neodren technology,inDesalination #203,2007. Planning and Conservation League.Investment Strategyfor California Water,2004. Poseidon Resources Corporation.Application for Coastal Development Permit,August 28,2006, including (but not limited to)attachments: •Final Environmental Impact Report •Verification ofAll Other Permits or Approvals Applied for by Public Agencies •City ofCarlsbad Resolution No.2006-156 -EIR 03-05 •City ofCarlsbad Resolution No.420 -RP 05-12 •City ofCarlsbad Ordinance No.NS-805 -SP 144 (II) •City ofCarlsbad Ordinance No.NS-806 -PDP 00-02 •Planning Commission Resolution No.6093 -SUP 05-04 •Planning Commission Resolution No.6092 -CDP 04-41 •.Planning Commission ReSOlution No.6090 -DA 05-01/Development Agreement,Finding ofFact •CEQA Mitigation Monitoring and Reporting Program for the FEIR 014143 Final Adopted Findings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 104 of106 •Planning Commission Resolution No.6094 -HMPP 05-08 •Planning Commission Resolution No.6088 -PDP 00-02 .•Planning Commission Resolution No.6091 -RP 05-12 •Planning·Commission Resolution No.6089 -SP 144 (H) Poseidon Resources Corporation.Response to California Coastal Commission's September 28, 2006 Request for Additional Infonnation,November 30,2006,including (but not limited to) attachments: •San Diego Regional Water Quality Control Board,Order No.R9-2006-0065 (''NPDES Pennit'') •Poseidon Resources Corporation.Response to California Coastal Commission's December 28,2006 Request for Additional Infonnation (including attachments),January 19,2006. •Poseidon Resources Corporation.Transmittal ofAnalysis ofAlternative Subsurface Seawater Intake Structures,Proposed Desalination Plant,Carlsbad,CA,Wiedlin &Associates (January 30,2007),sent February 2,2007. •Poseidon ResoUrces Corporation.Response to California Coastal Commission's February 20, 2007 Request for Additional Infonnation (including attachments),June 1,2007. •Poseidon Resources Corporation.Appeal ofCalifornia Coastal Commission's July 3,2007 Notice ofIncomplete,July 6,2007. •Poseidon Resources Corporation.Response to California Coastal Commission's July 3,2007 Request for Additional Infonnation (including attachments),July 16,2007. •Poseidon Resources Corporation.Additional Analysis ofSubmerged Seabed Intake Gallery (induding attachments),October 8,2007. •Poseidon Resources Corporation.Analysis ofOffshore Intakes,October 8,2007,including attachments: o Scott A.Jenkins,Ph.D.and Joseph Wasyl.Comparative Analysis ofIntake Flow Rate on Sand Influx Rates at Agua Hedionda Lagoon:Low-Flow vs No-Flow Alternatives, September 28,2007. o J.B.Graham,S.Le Page and D.Mayer.Issues Related to the Use ofthe Agua .Hedionda InIet'Jetty Extension ErR.to Recommend An Alternative Seawater Intake .for the Carlsbad Desalination Project,October 8,2007. •Poseidon Resources Corporation.Coastal Habitat Restoration and Enhancement Plan (including attachments),October 9,2007. •Poseidon Resources Corporation.Updated Response to Coastal Commission's September 28, 2006 Request for Additional Infonnation,Section 13,CDP Energy Use,GHG Production & Mitigation,October 9,2007. •Poseidon Resources Corporation.Transmittal ofIntake Cost Estimates,October 17,2007. •Poseidon Resources Corporation.Climate Action Registry C02 Conversion Calculation, October 18,2007. •Poseidon Resources Corporation.Updated Response to Coastal Commission's September 28, 2006 Request for Additional Infonnation,Section 13,CDP Energy Use,GHG Production & Mitigation,October 21,2007. •Poseidon Resources Corporation.Transmittal ofGHG Emission Baseline Protocol,October 22,2007.. •Poseidon Resources Corporation.Transmittal ofSDG&E GHG CCAR Report 2005,October 22,2007. 014144 Final AdoptedFindings -Coastal Development PermitApplication £-06-013 Poseidon Resources (Channelside)LLC ApprovedAugust 6,2008-Page 105 of106 •Poseidon Resources Corporation.Carlsbad Desalination Project Briefing Package,CDP Application No.E-06-013,November 2007. •Poseidon Resources Corporation.Transnllttal ofGaribaldi Study and Coastal Development Permit for Southern California Edison and San Dieguito River Valley Joint Powers Authority's San Dieguito Wetland Restoration Plan,November 7,2007.. •Poseidon Resources Corporation;Letter to Chainnan Kruer and Honorable Commissioners Attaching Draft Proposed Conditions ofApproval,November 7,2007. •Poseidon Resources Corporation.Letter to State Lands Commission Executive Director Re: Desalination Project's Impact on hnported Water Use,November 8,2007,including the following attachments:. o Carlsbad Municipal Water District.Letter to State Lands Commission Executive Director Re:Desalination Project's hnpact on hnported Water Use (including attachments),Novembe~7,2007. o Valley Center Municipal Water District.Letter to State Lands Commission Executive Director Re:Desalination Project's hnpact on hnported Water Use (including attachments),November 6,2007. o Rincon del Diablo Municipal Water District.Letterto State Lands Commission Executive Director Re:Desalination.Project's hnpact on hnported Water Use .(including attachments),November 6,2007. o Rainbow Municipal Water District.Letter to State Lands Commission Executive Director Re:Desalination Project's hnpact on hnported Water Use (including attachments),November 6,2007. o Sweetwater Authority.Letter to State Lands Commission Executive Director Re: Desalination Project's hnpact onhnported Water Use (including attachments), November 6,2007. '0 Vallecitos Water District.Letter to State Lands Commission Executive Director Re: Desalination Project's hnpact on hnported Water Use (including attachments), November 6,2007. o Santa Fe Irrigation District.Letter to State Lands Commission Executive Director Re: Desalination Project's Impact on hnported Water Use (including attachments), November 7,2007.. o Olivenhain Municipal Water District.Letter to State Lands Commission Executive .Director Re:Desalination Project's hnpact on Imported Water Use (including attachments),November 6,2007. •Poseidon Resources Corporation.Letter to T.Luster Transmitting State Lands Commission HearingPresentation,November 8,2007. Poseidon Resources Corporation.Letter to Chair Kruer and Commissioners,Response to Staff Report,November 9,2007,including the following exhibits: •Exhibit A:Response to StaffReport •Exhibit B:Correction ofStaffReport Misstatements,Inaccuracies and Omissions •Exhibit C:Draft Proposed Conditions ofApproval •Exhibit D:Climate Action Plan,November 2007 . •Exhibit E:Requested Additions to Substantive File Documents Poseidon Resources Corporation.E-mail to T.Luster transmitting updated Climate Action Plan, November 11,2007. 014145 Final AdoptedFindings -Coastal Development Permit Application E-06-013 Poseidon Resources (Channelside)LLC .Approved August 6,2008-Page 106 of106 Poseidon Resources Corporation.Hardcopy printout ofPowerPoint presentation prepared prior to November 15,2007 hearing,submitted at November 15,2007 hearing. Poseidon Resources Corporation.Revised electronic version ofPowerPoint presentation presented at November 15,2007 hearing,submitted electronically at November 15,2007 hearing. Poseidon Resources Corporation.Bound compilation of72 supporter letters,submitted to Commission at November 15,2007 hearing.. Powers,Bill,P.E.Assessment ofEnergy Intensity and C02 Emissions Associated with Water Supply Optionsfor San Diego County,October 12,2007. San Diego County Water Authority.2006-2007 Annual Report. San Diego County Water Authority.Draft Integrated Regional Water Management Plan. San Luis Rey Municipal Water District.Final Programmatic Environmental Impact Report - Master Water Plan,August 2007. Soil/Water/Air Protection Enterprise,LLC.Desalination White Paper:Reverse Osmosis product Water Quality Issues andPresent Regulatory Status,prepared for Environment Now, August 24,2006.. Southern California Edison.San Onofre Nuclear Generating Station (SONGS)Mitigation Documents,including San Dieguito Lagoon Final Restoration Plan,2005,and as referenced at http://www.sce.comIPowerandEnvironment/PowerGenerationIMarineMitigationIBackground.htm. Steinbeck,John,John Hedgepeth,Peter Raimondi,Gregor Cailliet,and David Mayer.Assessing PowerPlant Cooling Water Intake System Entrainment Impacts,prepared for the California Energy Commission,October 2007. U.S.EPA..Water Quality Standards Handbook (publication EPA-823-B-94-005),August 1994 as revised June 2007. Valley Center Municipal Water District.Comprehensive Annual Finq.ncial Report Fiscal Year Ended June 30,2006. Voutchkov,Nikolay.Challenges and Considerations when Using Coastal Aquifers for Seawater Desalination,in Ultrapure Water,Volume 23:6,September 2006. Voutchkov,Nikolay.The "Inconvenient Truth n About Desalination,in American Membrane Technology Associates Newsletter,Summer 2007 Wolff,Gary.The Economics ofDesalination,Pacific mstitute,September 9,2006. World Health Organization.Desalinationfor Safe Water Supply:Guidancefor the Health and EnvironmentalAspects Applicable to Desalination,2007.. 014146 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD SAN DIEGO REGION 9174 Sky Park Court,Suite 100 (858)467-2952'Fax (858)571-6972 http://www.waterboards.ca.gov/sandiego ORDER NO.R9-2009-0038 AMENDING ORDER NO.R9-2006-0065 (NPDES NO.CA0109223) WASTE DISCHARGE REQUIREMENTS FOR THE POSEIDON RESOURCES CQRPORATION CARLSBAD DESALINATION PROJECT DISCHARGE TO THE PACIFIC OCEAN VIA THE ENCINA POWER STATION DISCHARGE CHANNEL The California Regional Water Quality Control Board,San Diego Region (hereinafter Regional Board),finds that: 1.On August 16,2006,the Regional Board adopted Order No.R9-2006-0065 (NPDES No. CA0109223)(Order No.R9-2006-0065)establishing waste discharge requirements for Poseidon Resources Corporation (Discharger or Poseidon)to discharge up to 57 million gallons per day (MGD)of a combined waste stream comprised of concentrated saline waste seawater and filter backwash wastewater from the Carlsbad Desalination Project (COP)into the Pacific Ocean via the Encina Power Station (EPS)cooling water discharge channel.Intake source water from Agua Hedionda Lagoon (AHL)is to be drawn in through the existing EPS intake structure.The total flow rate of source water needed to operate the COP at full production was determined to be 304 million gallons per day,in order to produce 50 MGD (MGD)of potable water.Of this source water,107 MGD will be used for the production of 50 MGD of potable water (and 57 MGD of wastewater).The remaining 197 MGD of source water not used for production is needed as dilution water to comply with the salinity requirements of the NPDES Permit.This results in a total discharge flow rate of 254 MGD (57 MGD of wastewater and 197 MGD of dilution water). 2.Section 13142.5(b)of the California Water Code requires new or expanded coastal industrial facilities using seawater for cooling,heating,or industrial processing,to use the best available site,design,technology,and mitigation measures feasible to minimize the intake and mortality of all forms of marine life. 3.Section VI.C.2.e.of Order No.R9-2006-0065 requires Poseidon to submit for Regional Board approval,within 180 days of adoption,a Flow,Entrainment and Impingement Minimization Plan (Minimization Plan)that "shall assess the feasibility of site-specific plans,procedures,and practices to be implemented and/or mitigation measures to minimize the impacts to marine organisms when the COP intake requirements exceed the volume of water being discharged by the EPS."The Order requires an approved Minimization Plan to ensure that the COP complies with section 13142.5(b)of the Water Order No.R9-2009-0038 - 2 -May 13,2009 Code when the COP is co-located with EPS,but COP's intake requirements exceed the volume of water being discharged by EPS under power generation operations ("co- location operation for COP benefit").Co-location operation for COP benefit can occur under conditions (1)when EPS is temporarily shut down or (2)when EPS is operating but its discharge volume is not sufficient to meet COP's intake requirements. 4.If EPS permanently ceases operations and the Discharger proposes to independently operate the existing EPS seawater intake and outfall for the benefit of the COP ("stand- alone operation"),it will be necessary to evaluate whether,under those conditions,the COP complies with the requirements of Water Code section 13142.5(b).Additional review will be necessary in part because under stand-alone operations,the Discharger will have more flexibility in how it operates the intake structure and outfall and additional and/or better design and technology features may be feasible.The Discharger will be required to submit a new Report of Waste Discharge to the Regional Board for authorization to operate in stand-alone mode,and shall seek review under CWC section 13142.5(b)for such stand-alone operation,with permanent shut down of the EPS facility, within 90 days after EPS provides written notice to the California Independent System Operator of its intent to shutdown permanently all of its generating units. 5.The Discharger anticipates that there may be times when one or more units at EPS are temporarily shutdown and not operating the seawater intakes for power generation operations.As discussed in Findings 29 and 38,the Discharger proposes to implement certain technology and design features during times of temporary shutdown.It is possible that under prolonged,but not permanent,EPS shutdown,additional technology or design features to further reduce intake and mortality of marine organisms could become available for implementation.The Discharger will be required to submit a technical report to the Executive Officer for review and approval evaluating the feasibility of any additional design or technology features within 45 days of being notified by EPS that all generating units will be non-operational for power production,without seawater intake for power production purposes,and unavailable to be called upon by the California Independent System Operator to produce power for a period of 180 consecutive days or more.If the Discharger identifies additional measures that could be implemented under such conditions,the Executive Officer may require the Discharger to implement them as soon as reasonably practicable for the duration of the prolonged period of temporary shutdown. 6.On February 13,2007,the Discharger submitted a draft Minimization Plan dated February 12,2007,intended to comply with Order R9-2006-0065.On June 29,2007,in response to Regional Board and interested persons'comments,the Discharger submitted a revised Minimization Plan,dated June 1,2007.The Regional Board reviewed the revised Minimization Plan,and in a letter dated February 19,2008,informed the Discharger that the revised Minimization Plan was incomplete and included a detailed listing of items that needed to be addressed before the Regional Board could approve the revised Minimization Plan. Order No.R9-2009-0038 - 3 -May 13,2009 7.On March 7,2008,the Discharger submitted an updated version of the revised Minimization Plan,dated March 6,2008. 8.On April 9,2008,in a public meeting,the Regional Board adopted Resolution No.R9- 2008-0039.The Regional Board determined that the revised Minimization Plan did not satisfy all of the requirements in Section VI.C.2.e.of Order No.R9-2006-0065,but conditionally approved the Plan subject to the conditions (1)that within six months,the Discharger submit an amended Minimization Plan that includes a specific proposal for mitigation of the impacts,by impingement and entrainment upon marine organisms resulting from the intake of seawater from Agua Hedionda Lagoon and (2)that the amended Plan address the items outlined in the February 19,2008 letter to Poseidon and the following additional concerns: a)Identification of impacts from impingement and entrainment; b)Adequate monitoring data to determine the impacts from impingement an entrainment; c)Coordination among participating agencies for the amendment of the Plan as required by Section 13225 of the California Water Code; d)Adequacy of mitigation;and e)Commitment to fully implement the amendment to the Plan. 9.Following the April 9,2008 meeting,there was coordination among various state agency staff,including the Regional Board staff and the Discharger worked to develop the Marine Life Mitigation Plan (MLMP).The MLMP was heard by the Coastal Commission in August,2008,and final language was agreed to between the Coastal Commission staff and the Discharger on or about November 7,2008. 10.On November 18,2008,the Regional Board received the MLMP,dated November 14, 2008,as an amendment to the March 6,2008,Minimization Plan.The Discharger intended the MLMP to satisfy the conditions in Resolution No.R9-2008-0039. 11.On February 11,2009,in a public meeting,the Regional Board was scheduled to consider whether the MLMP satisfied the.conditions established in Resolution No.R9- 2008-0039 or whether failure to satisfy the conditions rendered the Resolution inoperative by its own terms.At the commencement of the meeting,the Executive Officer identified a list of outstanding issues concerning the March 6,2008 Minimization Plan,as supplemented by the MLMP.The outstanding issues were identified as follows:"(1) Placing Regional Water Board and its Executive Officer on equal footing,including funding,with Coastal Commission and its Executive Director,in the MLMP,while minimizing redundancies (e.g.,only one Scientific Advisory Panel),with details of dispute resolution process to be worked out;(2)Reducing the number of sites to five,in consultation with the Coastal Commission,with the existing proviso that other sites within Order No.R9-2009-0038 -4 -May 13,2009 the Regional Board boundaries could be added.;(3)Poseidon to provide the flow- proportioned calculations for Poseidon's impacts due to impingement,to help support the Board's determination that these impacts are de minimis.;and (4)Poseidon to provide a consolidated set of all requirements imposed to date by the various agencies." 12.The Regional Board heard public comment at the February 11,2009 hearing,but with the concurrence of the Discharger,continued the matter to its April 8,2009 meeting.The Regional Board directed staff to work with the Discharger to expeditiously address the list of the outstanding issues identified by the Executive Officer and further directed staff to prepare for Regional Board consideration a resolution or order approving the Flow, Entrainment,and Impingement Minimization Plan required by Order No.R9-2006-0065. 13.Following the February 11 ,2009 rneeting,Regional Board staff and the Discharger met on numerous occasions to discuss the outstanding issues.On March 9,2009,the Discharger submitted a further revised Minimization Plan,including the MLMP,for Regional Board consideration.On March 27,2009,the Discharger submitted revisions to the March 9,2009 Minimization Plan.The March 9,2009 Minimization Plan,as revised on March 27,is hereinafter referred to as the March 27,2009 Minimization Plan. 14.The Regional Board reviewed the March 27,2009 Minimization Plan to determine whether its implementation will result in the "use [of]the best available site,design, technology,and mitigation measures feasible to minimize the intake and mortality of all forms of marine life"under co-location operation for CDP benefit. SITE 15.Chapter 2 of the March 27,2009 Minimization Plan addresses identification of the best available site feasible for the CDP to minimize the intake and mortality of marine life under conditions of co-location operation for CDP benefit. 16.The CDP will be co-located with EPS and use EPS's existing intake and discharge facilities,which draw cooling water from AHL and discharge into the Pacific Ocean'. 17.The Discharger has defined four fundamental project objectives for the CDP:(1)to provide a local and reliable source of potable water not subject to variations of drought or political or legal constraints;(2)to reduce local dependence on imported water;(3)to provide water at or below the cost of imported water supplies;and (4)to meet the CDP's planned contribution of desalinated water as a component of satisfying regional water supply planning goals. 18.Co-locating the CDP with EPS allows the CDP to use the existing EPS intake and discharge facilities.Using EPS's existing intake and discharge facilities allows the CDP to minimize the intake and mortality of marine life by reducing the amount of source water Order No.R9-2009-0038 - 5 -May 13,2009 required to be withdrawn directly from AHL for desalination purposes by the amount of water discharged by EPS. 19.By co-locating with the EPS,the CDP will use the wastewater stream discharged by the EPS as its first source of water.The discharge of the EPS wastewater to the Pacific Ocean is subject to R9-2006-0043,a NPDES permit issued to Cabrillo Power I LLC by the Regional Board.The Discharger's proposed beneficial reuse of EPS's discharge water is a form of conservation of water resources through water recycling expressly encouraged by the State of California. 20.The Discharger evaluated three sites in the City of Carlsbad that would accommodate a large desalination project.These sites include (1)other locations on the EPS property, (2)the Encina Water Pollution Control Facility,and (3)the Maerkle Reservoir. 21.The Discharger concluded that all three alternatives were found to be infeasible for the following reasons: (1)Other locations within the Encina Power Station property:Alternative sites within the EPS property were infeasible because the power plant owner has reserved the remaining portion of the site to accommodate future power plant modifications, upgrades or construction of new power plant facilities (2)Encina Water Pollution Control Facility:This site could only accommodate a desalination plant with a 10 MGD production capacity,due to the outfall constraints. Use of this site would also require the construction of an intake pipeline to convey source water from the power plant cooling canal;and (3)Maerkle Reservoir:The public rights-of-way between the reservoir and the Pacific Ocean do not have sufficient space to accommodate an intake pipeline and concentrate line.Use of this site would also require the pumping of over 100 MGD of seawater to an elevation of 531 feet (compared to 70 feet at the proposed site)for processing.This area has also been zoned as "Open Space." 22.The Project EIR,certified by the City of Carlsbad on June 13,2006,evaluated only alternative 2 above,and concluded the Encina Water Pollution Control Facility site would not be as effective as the proposed location in satisfying the objectives of the project. The EIR did not evaluate other locations within the EPS since other locations within the EPS were determined to be substantially the same as the proposed site. 23.The Discharger concludes that the proposed location for the CDP at the EPS (as previously approved by the Regional Board in NPDES Permit No.R9-2006-0065)is the best available site for the Project because there are no feasible and less environmentally damaging alternative locations. Order No.R9-2009-0038 - 6 -May 13,2009 24.The EPS site is the only site in reasonable proximity to the existing seawater intake and outfall,and to key delivery points of the water distribution system of the City ofCarlsbad , the largest user of proposed desalinated water anticipated by the Discharger.The use of existing intake and discharge facilities at the EPS site avoids construction of a major new intake system and discharge facilities. 25.Under the scenario proposed in the Discharger's Report of Waste Discharge for Order No.R9-2006-0065 as described in Section II.B.of that Order,there are no better alternative and feasible sites available for the COP.The Regional Board finds that the proposed site for the COP is the best available site feasible under co-location operation for the benefit of COP. DESIGN 26.Chapter 3 of the March 27,2009 Minimization Plan addresses identification of the best available design feasible to minimize the intake and mortality of marine life under co- location operation for COP benefit. 27.A key feature of the proposed design is the direct connection of the desalination plant intake and discharge facilities to the discharge canal of the power generation plant.This approach allows the COP to use the power plant cooling water as both source water for the seawater desalination plant and as a blending water to reduce the salinity of the desalination plant concentrate prior to the discharge to the ocean.Under the conditions of co-location with the EPS,however,Poseidon has little control over the intake structure. 28.When EPS is producing power and is discharging 304 MGD or more of seawater for once-through cooling,the March 27,2009 Minimization Plan concludes that the proposed desalination plant operation would cause a de minimis increase in entrainment and impingement of marine organisms.Under conditions of co-location operation for COP benefit,the Discharger must comply with Water Code section 13142.5(b)and use best available design feasible to minimize incremental increases in intake and mortality of marine life for operation under these conditions.Based on flow data submitted by the Discharger,the EPS would have provided approximately 89%of the COP required flow in 2008 indicating that the COP would have been responsible for minimizing intake and mortaiity of the additional approximately 11 %increment in impacts from EPS operations conducted for the benefit of COP.The March 27,2009 Minimization Plan concludes that under this condition,direct use of the EPS discharge and variable frequency drives on the desalination plant intake pumps will result in a substantial reduction in intake and mortality of marine life. 29.The March 27,2009 Minimization Plan also concludes that additional design features will be employed to minimize intake and mortality of marine life when EPS is temporarily shut down.The COP must comply with the best available design requirement in Water Code section 13142.5(b)when EPS is operating for the benefit of COP (whether EPS is Order No.R9-2009-0038 - 7 -May 13,2009 temporarily shut down or not otherwise discharging sufficient volume of water to meet COP's operational needs).Features that will be incorporated in the desalination plant design to reduce impingement,entrainment,and flow collection when EPS is temporarily shut down include operation of a modified (EPS)pump configuration to reduce both inlet (bar racks)and fine screen velocity,and ambient temperature processing.While the percentage of time EPS is temporarily shut down has not been predicted and the Discharger has not quantified the expected reduction in impingement and entrainment during operation under these conditions,it is reasonable to conclude that reductions in impingement and entrainment will occur when COP implements these features. 30.Available information shows that under the conditions of co-location operation for COP's benefit,the Discharger has little control over the intake structure and the corresponding intake pumps.Under the conditions of co-location operation,the existing intake meets the best available design criteria.The Regional Board finds that the proposed design for COP operations is the best available design feasible under co-location operation for the benefit of COP. 31.The Discharger indicates that the design features it will use under limited co-location operations would also serve as best available design under stand-alone conditions.As indicated above,the Regional Board is not considering the adequacy of design alternatives for stand-alone operating conditions at this time.Once EPS permanently shuts down and the COP is operated as on stand-alone basis,the Discharger will have more flexibility in design implementation.It will be appropriate to undertake additional evaluation under ewc section 13142.5 at that time to determine whether any additional and/or superior design features are feasible for COP stand-alone operations. TECHNOLOGY 32.Chapter 4 of the March 27,2009 Minimization Plan addresses identification of the best available technology feasible to minimize the intake and mortality of marine life under co- location operation for the COP's benefit. 33.Because COP will be co-located with the EPS,technological modifications to the existing intake channel to minimize the intake and mortality of marine life must be compatible with both EPS's and COP's operations.In addition,the Amendment of Lease PRC 8727.1 [State Lands Commission lease with Cabrillo Power LLC I (EPS operator)]to authorize COP's use of the intake and outfall recognized that entrainment and impingement minimization measures cannot interfere with,or interrupt ongoing power plant operations. 34.The Discharger analyzed and investigated a number of alternative seawater intake, screening,and treatment technologies prior to selecting the desalination plant intake, screening,and seawater treatment technologies planned for the COP.When economic, environmental and technological factors are taken into account,the power plant intake Order No.R9-2009-0038 - 8 -May 13,2009 screening alternatives are not capable of being accomplished in a successful manner within a reasonable period of time. 35.The Discharger analyzed the following intake alternatives:(1)Subsurface intake (vertical and horizontal beach wells,slant wells,and infiltration galleries);(2)new open ocean intake;(3)Modifications to the existing power plant intake system;and (4)Installation of variable frequency drives (VFDs)on seawater intake pumps. 36.The Discharger compared screening technologies to identify the best available technology feasible including:(1)Fish net,acoustic and air bubble barriers upstream of the existing intake inlet mouth;(2)New screening technologies to replace the existing inlet screens (bar racks);and (3)fine vertical traveling screens. 37.Implementation of the alternatives associated with the modification of the existing power plant intake and screening facilities were infeasible because they would interfere with,or interrupt,power plant scheduled operations.Taking into account economic, environmental and technological factors,the power plant intake screening alternatives are not capable of being accomplished in a successful manner within a reasonable period of time. 38.The Discharger identified intake technologies it will employ to reduce intake and mortality of marine organisms during temporary or permanent shutdown of the EPS.The COP intake pump station design will incorporate variable frequency drives to reduce the total intake flow for the desalination facility to no more than that needed at any given time, thereby minimizing the entrainment of marine organisms. 39.Under the conditions of co-location operations for COP's benefit,the Discharger has little control over the intake structure and little flexibility in implementing different technologies. Under these circumstances,the Discharger has identified the best technologies feasible to minimize the intake and mortality of marine life at this time.The Regional Board finds that the proposed technology for the COP is the best available technology feasible under co-location operation for the COP benefit.Because different and/or better technologies may be feasible under stand-alone operations,the Regional Board will require evaluation of COP's compliance with Water Code section 13142.5(b)under those conditions. MITIGATION 40.Chapter 6 of the March 27,2009 Minimization Plan describes mitigation measures associated with the COP,incorporates the November 14,2008 Marine Life Mitigation Plan previously submitted by the Discharger,and addresses identification of best mitigation feasible to minimize intake and mortality of marine life under conditions of co- location operation for CDP benefit.By attachment,Poseidon includes baseline studies of the existing marine system in the area that could be affected by the facility. Order No.R9-2009-0038 - 9 -May 13,2009 41.The MLMP sets forth a plan for mitigation and monitoring for impacts due to entrainment from the CDP as means of complying with Water Code section 13142.5(b).It was developed by the Discharger in consultation with multiple resource agencies including the Regional Board,and was approved by the California Coastal Commission (Commission) on August 6,2008.Coastal Commission staff worked with the Discharger and the final language for the MLMP was approved by the Coastal Commission on December 10, 2008.The MLMP was written for stand-alone operation,and proposes phased implementation of up to 55.4 acres of wetland mitigation within the Southern California Bight.Phase I requires the creation of 37 acres,and Phase II requires an additional 18.4 acres which the Discharger may propose to eliminate or reduce if it proposes alternative mitigation,such as new entrainment reduction technology or mitigation credits for dredging. 42.The MLMP proposes mitigation to be selected from among 11 potential sites in southern California.These sites are Tijuana Estuary,San Dieguito River Valley,Agua Hedionda Lagoon,San Elijo Lagoon,Buena Vista Lagoon,Huntington Beach Wetland,Anaheim Bay,Santa Ana River,Los Cerritos Wetland,Ballona Wetland,and Ormond Beach. Additional sites may be incorporated if appropriate.The Minimization Plan clarifies that preference will be given to mitigation in the San Diego Region,to the extent feasible. 43.Within 10 months of receiving the Coastal Development Permit from the Commission,the Discharger must submit to the Commission,and the Regional Board,a list of the selected mitigation site or sites,and corresponding preliminary restoration plans,for review and agency approval.Within two years of issuance of the Coastal Development Permit for the CDP,the Discharger must submit a complete application to restore at least 37 acres of estuarine wetlands.Six months following the Regional Board's and Commission's approval of the selected sites and proposed restoration,pending necessary permits,the Discharger must begin wetland construction.The Discharger must submit similar plans for Phase II implementation,if Phase II implementation is required,within 5 years of receiving the Coastal Development Permit for Phase I implementation. 44.The MLMP also contains mitigation monitoring requirements,and criteria for performance standards similar to those required of Southern California Edison's mitigation for SONGS at San Dieguito lagoon.The MLMP also provides for the oversight of such monitoring by a scientific advisory panel,and commits to public availability of monitoring results. 45.The Regional Board considered multiple approaches to estimating impingement associated with the CDP's projected operations under co-located conditions as presented in the March 27,2009 Minimization Plan.The estimates derived from the multiple approaches range from 1.56 kg/day to 7.16 kg/day of fish impinged.The Discharger contends that the appropriate estimate of impingement is 1.56 kg/day and contends that the estimate of 4.7 kg/day overstates the projected impingement associated with CDP's operations.The Discharger and Regional Board staff disagree as to whether,and to what extent,it is appropriate to exclude two days of very high impingement during the Order No.R9-2009-0038 -10 -May 13,2009 2004-2005 sample year when projecting impingement.The Discharger refers to the data from the two very high impingement days as "outliers."Staff disagrees that the Discharger has adequately justified its characterization of the data as "outliers"and disagrees with the Discharger's proposed exclusion of the data from the estimate of future impingement.The Regional Board finds that it is unnecessary to resolve these disputes.The Regional Board finds that 4.7 kg/day is a reasonable,conservative estimate of impingement associated with COP's projected operations under co-located conditions and notes that the Discharger has agreed to meet a fish productivity standard of 1,715.5 kg/year,derived from the estimate of 4.7 kg/day,in the mitigation wetlands. 46.It is appropriate to establish a fish productivity requirement that must be achieved to compensate for projected impingement based on the estimate of 4.7 kg/day.Using this estimate,it is reasonable to establish 1,715.5 kg/year as the fish productivity requirement.This requirement will be considered a "Biological Performance Standard" under section 5A.b.of the MLMP. 47.To demonstrate that the mitigation wetlands required by the MLMP achieve the fish productivity requirement of 1,715.5 kg/year as described in Section 6.2.1 of the Minimization Plan,the Discharger will conduct fish productivity monitoring pursuant to a Productivity Monitoring Plan (PMP).The Discharger will be required to submit a proposed PMP concurrently with the proposed Restoration Plan in section 2.0 of the MLMP for review by the Scientific Advisory Panel (SAP)established in the MLMP and review and approval by the Executive Officer.The measurement of productivity shall be conducted in accordance with the methodology used in Allen,"Seasonal Abundance,Composition, and Productivity ...,"Fishery Bulletin,Vol.80,NO.4 1982,pages 769-790,and shall follow,but need not be limited to,Allen's methodologies as set forth on pages 771-773 and 779-783.Productivity monitoring shall be conducted once per month for a 13 month measurement period (per Allen's methodology),beginning four years after completion of the construction of the wetlands,with a review of the results by the SAP.For the purposes of determining fish biomass available to contribute toward the fish productivity requirement of 1,715.5 kg/year,the Discharger will use the accounting method set forth in a modification to the March 27,2009 Minimization Plan approved by this Order in ordering paragraph 1.b.The SAP will review the proposed PMP for adequacy in design for the purpose of allowing the Regional Board to evaluate the Discharger's compliance with the fish productivity requirement.The PMP is subject to the framework established in Conditions Band C of the MLMP and to the Regional Board's corresponding authorities under Condition B for purposes of administration. 48.Once operations commence,it will be valuable to consider impingement over the course of a one year period per permit cycle to evaluate impingement impacts associated with COP's operations.The Regional Board will require the Discharger to sample and report on impingement according to an impingement monitoring program (IMP)using the methods set forth in sections 9.3 and 10.2 of Attachment 4 (and Attachment C, referenced therein)to the March 27,2009 Minimization Plan,excluding heat treatment Order No.R9-2009-0038 events. -11 -May 13,2009 49.Based upon the results of the IMP,the Executive Officer may determine that it is appropriate to adjust the fish productivity requirement of 1,715.5 kg/year upward or downward for the next permit cycle. 50.Although the CDP will rely on EPS discharge water for its source water to the extent it is available,the mitigation provided for in the Minimization Plan,incorporating the MLMP,as conditioned below is expected to fully offset projected entrainment and impingement losses for up to 304 MGD of source water withdrawn directly from the Agua Hedionda Lagoon under conditions of co-located operation.With these required modifications to the March 27,2009 Minimization Plan,the Regional Board finds that the proposed mitigation for the CDP is the best available mitigation feasible for the CDP. GENERAL 51.This Order amends Order No.R9-2006-0065 to require the Discharger to implement and comply with the March 27,2009 Minimization Plan under co-location operations to benefit the CDP. 52.Implementation of the March 27,2009 Minimization Plan will ensure that the CDP is in compliance with Water Code section 13142.5(b)under co-location operations to benefit the CDP. 53.Implementation of the March 27,2009 Minimization Plan is not required by the federal Clean Water Act and does not represent an effluent standard or limitation within the meaning of section 1365 of the federal Clean Water Act [Title 33,Federal Water Pollution Control Act,section 505].Failure to implement and comply with the Minimization Plan is not a violation subject to mandatory minimum penalties under section 13385,subdivision (h)or subdivision (i)of the Water Code,because it is not an "effluent limitation"as defined by Water Code section 13385.1,subdivision (c). 54.EPS's operations are regulated in part by Regional Board Order No.R9-2006-0043 (NDPES No.CA0001350)issued to Cabrillo Power I,LLC,on August 16,2006.The Discharger's and EPS'use of the intake structure in accordance with Order No.R9-2006- 0065,and the March 27,2009 Minimization Plan during co-location operations to benefit the CDP,does not constitute "cooling water flow"as that term is used in Section V.B.of Order No.R9-2006-0043.Therefore,EPS need not comply with Section V.B,but shall continue to comply with Sections V.A and V.C.of Order No.R9-2006-0043,when operating the intake structure during co-location operations to benefit the CDP. 55.According to Section 13263(e)of the California Water Code,the Regional Board may, upon application by any affected person,or on its own motion,review and revise waste discharge requirements.Section 122.62(a)of title 40 of the Code of Federal Regulations Order No.R9-2009-0038 -12 -May 13,2009 authorizes the reopening and modification of an NPDES permit based upon new information. 56.Order No.2006-0065 is not being reopened for any other purpose than the revisions contained herein.Except as contradicted or superseded by the findings and directives set forth in this Order,all of the previous findings and directives of Order No.R9-2006- 0065 remain in full force and effect. 57.This action supersedes Resolution No.R9-2008-0039,which considered an earlier version of the March 9,2009 Minimization Plan,in its entirety.Resolution No.R9-2008- 0039 has no ongoing force or effect. 58.This action is exempt from the requirement of preparation of environmental documents under the California Environmental Quality Act [Public Resources Code,Division 13, Chapter 3,Section 21000 et seq.]in accordance with Section 13389 of the California Water Code. 59.The Regional Board has notified all known interested parties of its intent to adopt Order No.R9-2009-0038. 60.At its public meeting on April 8,2009,the Regional Board reviewed the March 27,2009 Minimization Plan to determine whether its implementation will result in the "use [of]the best available site,design,technology,and mitigation measures feasible to minimize the intake and mortality of all forms of marine life"pursuant to CWC section 13142.5(b)when CDP is operated under co-located conditions for CDP benefit.After receiving and considering evidence and testimony concerning the March 27,2009 Minimization Plan and adoption of Order No.R9-2008-0038,the Regional Board closed the public hearing on April 8,2009.The Board continued the matter to May 13,2009 for final decision to allow staff time to revise the Tentative Order consistent with individual board member comments and to prepare written responses to comments received throughout the proceeding for Regional Board consideration. 61.On May 1,2009,a revised Tentative Order was circulated and mailed to interested persons.On May 8,2009,interested persons were notified that a responsiveness summary prepared by Regional Board staff was posted on the Regional Board's website. The Regional Board has reviewed the responsiveness summary and concurs with the responses therein.The responsiveness summary is hereby incorporated as findings of the Regional Board. 62.The Regional Board in a public hearing on May 13,2009 heard and considered all comments pertaining to the adoption of Order No.R9-2009-0038. 63.If during preparation of the final adopted documents the Executive Officer determines that minor,non-substantive corrections to the language of the adopted Order,including Order No.R9-2009-0038 -13 -May 13,2009 the response to comments,are needed for clarity or consistency,the Executive Officer may make such changes,and shall inform the Board of any such changes. THEREFORE,IT IS HEREBY ORDERED: 1.The March 27,2009 Minimization Plan submitted pursuant to Provision VI.C.2.e.of Order No.R9-2006-0065 is hereby approved subject to the following conditions: a.Biological Performance Standard: The March 27,2009 Minimization Plan is amended at p.6-10 to establish a biological performance standard (requirement)of fish productivity (Le.,the production of new fish biomass)of 1,715.5 kilograms (kg)/year to be achieved in the wetlands mitigation site(s) created or restored through the MLMP.A new row is added at the end of section 5.4 ("Post-restoration Monitoring and Remediation")with the following language inserted in column 3 as follows: "5.4.b.('Biological Performance Standards')7.Impinged Fish Productivity. Commencing four years after construction of the wetlands has been completed, the Discharger shall demonstrate that the wetland site(s)achieve no less than 1,715.5 kg of fish productivity per year (as determined through the monitoring and accounting method set forth in section 6.5.1 of the Minimization Plan).The Executive Officer shall consider any adjustment to the biological performance standard/fish productivity standard proposed by the Discharger pursuant to section 6.5.2,and any other relevant information,in determining whether to adjust the standard of 1,715.5 kg/year for the next permit cycle.The Discharger may seek review of the Executive Officer's determination by an appeal to the Regional Board." b.Productivity Monitoring Plan.The March 27,2009 Minimization Plan is amended at page 6-8 to add new section 6.5.1 that requires the Discharger to submit a proposed Productivity Monitoring Plan consistent with the Minimization Plan at section 6.2.1.as follows: "The Discharger shall submit a Productivity Monitoring Plan (PMP)concurrently with the Wetland Restoration Plan reqUired by Section 2.0 of the MLMP to the Scientific Advisory Panel (SAP)for review and to the Executive Officer for review and approval.The measurement of productivity shall be conducted in accordance with the methodologies used in Allen,"Seasonal Abundance, Composition,and Productivity ...,"Fishery Bulletin,Vol.80,NO.4 1982,pages 769-790 (set forth in Attachment 7 of the March 27,2009 Minimization Plan). Implementation of productivity monitoring in accordance with Allen's methodology shall be for the purpose of determining productivity,defined by Allen as rate of production of biomass per unit of time (measured in grams per Order No.R9-2009-0038 -14 -May 13,2009 unit area per unit time)and shall follow,but need not be limited to,Allen's methodologies as set forth in pages 771-773 and 779-783.Monitoring shall be conducted once per month for a 13-month period beginning four years after completion of construction of the mitigation wetland site(s),and every fifth year thereafter.The Executive Officer,upon consultation with the SAP,may designate a different representative 13-month period.To the extent feasible,the 13-month period shall be coordinated to match the 12-month period set forth in 1.c.(1)below for impingement monitoring.The Discharger may propose modifications to or variations from Allen's productivity methodologies when it submits the PMP or through a subsequent proposed revision to the PMP.Any proposed revisions following initial approval of the PMP are also subject to review by the SAP and review and approval by the Executive Officer.If the Executive Officer,after consulting with the SAP,determines that the project is successful in meeting the biological productivity standard,the monitoring program may be waived. The PMP shall describe the design and proposed implementation of the PMP, including a description of the proposed sampling timing,frequency,locations and methodology and shall describe the fish biomass available to contribute to the fish productivity requirement based on the following accounting: a.Most Commonly Entrained Lagoon Species:Gobies,Blennies,and Garibaldi; b.Most Commonly Entrained Ocean Species:White croaker,Spotfin croaker, Queenfish,Northern anchovy,California halibut; c.All Other Species:All other entrained and non-entrained fish. The biomass from Lagoon,Ocean,and Other Species shall be deemed available to contribute to the annual fish productivity requirement in the following proportions:0%(Most Commonly Entrained Lagoon Species);88%(Most Commonly Entrained Ocean),and 100%(All Other Species). Available Fish Biomass (i.e.,biomass available to contribute to the annual fish productivity requirement)shall be calculated as follows: Available Fish Biomass =(88%x Biomass of Most Commonly Entrained Ocean Species)+(100%x Biomass of All Other Species) The PMP shall explain when and how baseline productivity will be assessed and the methods and frequency for evaluating productivity.The SAP will review the proposed PMP and make recommendations on design and implementation to the Executive Officer prior to approval. Order No.R9-2009-0038 -15 -May 13,2009 The PMP is subject to the framework established in Conditions Band C of the MLMP and to the Regiona.l Board's corresponding authorities under Condition B for purposes of administration.The Discharger agrees to fund the SAP's work in reviewing the proposed PMP (and any later proposed revisions thereto)and subsequent review of monitoring results when consulted by the Executive Officer,up to $25,000 beyond the annual cap of $100,000 established in the MLMP." c.Impingement Monitoring Program.The March 27,2009 Minimization Plan is amended at page 6-8 to add new section 6.5.2 to require the Discharger to conduct impingement sampling at the EPS seawater intake and report results pursuant to an Impingement Monitoring Program (IMP)and pursuant to the additional reporting requirements established below. (1)Compliance Schedule.Monitoring shall be conducted one day per week for 52 continuous weeks during the first 12 months after the CDP commences full operations that also occurs entirely within the next permit cycle.Thereafter,monitoring shall be conducted in the first year of each permit cycle.The Executive Officer may designate a different representative 12-month period prior to the commencement of CDP operations. (2)Impingement Sa.mpling.The Discharger shall sample impingement in accordance with the methodology described in Attachment 4 of the March 27,2009 Minimization Plan (Sections 9.3 and 10.2,and Section 4.2 of Attachment C,referenced in both Sections 9.3 and 10.2)such that impingement monitoring shall be of fish and macroinvertebrates following the 2004-2005 sampling protocol,excluding the requirement for impingement sampling during heat treatment. (3)Reporting.A report containing a detailed analysis of the fish impingement sampling data shall be submitted in hard copy and in an electronic copy in workable format (e.g. Word or Excel)to the Regional Board within 6 months after the sampling program is complete.The Discharger shall report all impingement data as follows: (a)Impingement shall be adjusted to reflect the flow proportional approach,as described in and consistent with Proportional Approach 3-B of the March 27, 2009 Minimization Plan,unless the Regional Board determines that a different approach is appropriate and shall be used. (b)Impingement shall not be proportionally adjusted in accordance with section c.3.(a)of this section when impingement results from a non-flow related event. Whether an event is non-flow related shall be determined by the Discharger in consultation with the Executive Officer and shall be based upon information provided by the Discharger about survey rainfall data,tide data,turbidity data, Order No.R9-2009-0038 -16 -May 13,2009 salinity data,dredge operation status and unusual conditions within the lagoon or related to the EPS/CDP plant operations. (c)The Discharger shall report all recorded data and provide a report that presents (i)a clear presentation of fish and invertebrate impingement at the shared intake for normal (non-heat treatment)operations during the sampled year;(ii)an analysis of impingement and flow volume;(iii)an analysis of the impingement and velocity;(iv)dates on which a modified pump configuration was in operation during the year sampled,if any;and (v)any other information deemed reasonable and necessary by the Executive Officer,and reasonably available to the Discharger,upon review of the report.The Discharger shall include in the report any proposed adjustment to the biological performance standard/fish productivity standard of 1,715.5 kg/yr for the next permit cycle. 2.Section VI.C.2.e in Order No.R9-2006-0065 is amended as follows: On March 27,2009,the Discharger shall submit submitted a Flow,Entrainment and Impingement Minimization Plan (March 27,2009 Minimization Plan)within 180 days of adoption of the Order which was approved by the Regional Board on May 13,2009. The approved Plan shall assess identifies the best available site,design,technology. and mitigation feasible to be used by the Discharger to minimize the intake and mortality of all forms of marine life during COP operations the feasibility of site specific plans,procedures,and practices to be implemented and/or mitigation measures to minimize the impacts to marine organisms when the COP is co-located with EPS,but the COP intake requirements exceed the volume of water being discharged by the EPS and EPS operates its seawater intake and outfall for the benefit of the COP.The Discharger shall implement and comply with the terms of the Minimization Plan as approved by the Regional Board.The plan shall be subject to the approval of the Regional Water Board and shall be modified as directed by the Regional VVater Board.!!l. the event that the EPS permanently ceases operations,and the Discharger proposes to operate the seawater intake and outfall independently for the benefit of the COP as a stand-alone facility,additional review to determine whether the CDP complies with Section 13142.5 (b)of the Water Code will be required. 3.The following will be added as Section VI.C.2.f.in Order No.R9-2006-0065 as follows: Within ninety days after the EPS provides written notice to the California Independent System Operator of its intent to shutdown permanently all of its generating units,the Discharger shall submit a Report of Waste Discharge to the Regional Board for authorization to operate in stand-alone mode with permanent shutdown of the EPS facility and shall seek review under California Water Code section 13142.5(b)for such stand-alone operation. Order No.R9-2009-0038 -17 -May 13,2009 a.The conditions of Order No.R9-2006-0065,as amended by this Order,or as amended or replaced by subsequent orders,shall remain in force until the Regional Board takes final action on the Discharger's Report of Waste Discharge to operate in stand-alone mode. 4.The following will be added as Section VI.C.2.g.in Order No.R9-2006-0065 as follows: After commencement of discharge from the COP,the Discharger shall submit a technical report to the Regional Board Executive Officer within 45 days after the Discharger is notified by the EPS that all units at the EPS will be non-operational for power generation,without seawater intake,and unavailable to the California Independent System Operator to be called upon to produce power for a consecutive period of 180 days or more.The technical report shall include a detailed description of any feasible design or technology measures,in addition to those identified in the March 27,2009 Minimization Plan for temporary shut down,that Poseidon will use to minimize the intake and mortality of all forms of marine life while EPS is in a period of prolonged temporary shutdown.Upon approval by the Executive Officer, Poseidon shall implement the additional minimization measures in accordance with the technical report as soon as practicable and for the duration of the prolonged temporary shutdown. 5.Table 12 in the Fact Sheet will be modified as follows: Potential EIR Finding EIR-Required Regional Board Issue MitiQation Analysis Entrainment &No Significant Impact.When In the event the EPS were The COP is not subject to Impingement operating in conjunction with to permanently cease 316(b)regUlations.To EPS,the operation of COP will not operations,~nsure compliance with change EPS flows and flow and the Developer were to California Water Code velocities,nor cause additional independently operate the Section 13142.5(b) impingement losses.Additional eXisting EPS seawater requirements when the entrainment loss is -0.01 %to intake and outfall for the COP is co-located with 0.28%.When operating benefit of the project,such the EPS but the COP independent of EPS,flow volume independent operation will intake requirements and velocity would be substantially require CEQA compliance exceed the volume of reduced,meeting federal and perm its to operate as water being dischargedperformancestandardsforrequiredbythen-by the EPS and EPSimpingement.Entrainment loss applicable rules and operates for the benefitwouldrangefrom2%to 34%of that regulations for the City of the COP,ProvisionofEPS.and other relevant VI.C.2.e of Order No.R9 I agencies.2006 0065 requires the discharger to develop a_J plan to ",ini",iZ~Jentrainmentand I impingement,2btain Order No.R9-2009-0038 -18 -May 13,2009 Regional Board approval for the plan,and implement the plan.the discharger must implement and compl'l with the March 27,2009 Flow.Entrainment and Impingement Minimization Plan approved by the Regional Board on May 13.2009.If EPS ceases operations and the Discharger proposes to operate the seawater intake structure and outfall independently for the benefit of the COP as a stand-alone facility, the Regional Board will require reevaluation of the reguirements of Water Code section 13142.5(b). 6.Section VII.B.2.e in the Fact Sheet will be modified as follows: e.Flow,Entrainment and Impingement Minimization Plan The Discharger's Report of Waste Discharge assessed EPS cooling water flows over a 20.5-year period and concluded that historical EPS flows were sufficient to supply COP intake flows and provide sufficient dilution water to insure that receiving water salinity is not adversely impacted.The Discharger also concluded that during temporary periods when power generation is suspended for maintenance,unheated EPS thru-flows would be adequate to supply COP and provide sufficient dilution water to protect receiving water salinity.The Regional Water Board recognizes that future EPS flows may not follow historical trends.For this reason,the Regional Board reguires the Discharger to implement and comply with the approved it is \Narranted to require the Discharger to prepare a Flow,Entrainment and Impingement Minimization Plan to ensure that the requirements of section 13142.5(b)of the Water Code are complied with when COP's intake requirements exceed the volume of water being discharged by the EPS and. EPS operates for the benefit of the COP..The Flow Minimization,Entrainment and Impingement Minimization Plan shall be submitted within 180 days of adoption of the Order. The plan shall assess the feasibility of site specific plans,procedures,and practices to be implemented and/or mitigation measures to minimize the impacts to marine organisms Order No.R9-2009-0038 -19 -May 13,2009 when the COP intake requirements exceed the volume of '.'Vater being discharge by the EPS.The plan shall be subject to the approval of the Regional '/Vater Board and shall be modified as directed by the Regional Water Board. 7.Section VII.B.4.b in the Fact Sheet will be modified as follows: b.California Water Code Section 13142.5(b)Applicability.Water Code Section 13142.5(b) requires industrial facilities using seawater for processing to use the best available site, design,technology,and mitigation feasible to minimize the intake and mortality of all forms of impacts to marine life.The COP is planned to operate in conjunction with the EPS by using the EPS cooling water discharge as its source water.When operating in conjunction with the power plant,the desalination plant feedwater intake would not increase the volume or the velocity of the power station cooling water intake nor would it increase the number of organisms impinged and entrained by the Encina Power Station cooling water intake structure.Recent studies have shown that nearly 98 percent of the larvae entrained by the EPS are dead at the point of the desalination plant intake.As a result,a de minimis of organisms remain viable which potentially would be lost due to the incremental entrainment effect of the COP operation.Due to the fact that the most frequently entrained species are very abundant in the area of the EPS intake,Agua Hedionda Lagoon and the Southern California Bight,species of direct recreational and commercial value would constitute less than 1 percent of all the organisms entrained by the EPS.As a result,the incremental entrainment effects of the COP operation in conjunction with the EPS would not trigger the need for additional technology or mitigation to minimize impacts to marine life. In instances when the COP's intake requirements exceed the volume of water being discharged by EPS,the COP will implement the approved Flow,Entrainment and Impingement Minimization Plan to comply with the requirements of Water Code section 13142.5(b)to use the best available site,design,technology and mitigation feasible to minimize the intake and mortality of marine life. However,in!!:!the event that the EPS were to cease operations,and the discharger were to independently operate the seawater intake and outfall for the benefit of the COP,such independent or stand-alone operation will require additional Regional Board review !.Q.. ensure that CDP operations comply with the requirements of pursuant to Water Code Section 13142.5(b)by employing any additional and/or better design or technology features that were not feasible when EPS was in operation.The Regional "'later Board review and approval of the Flow Minimization,Entrainment and Impingement Minimization Plan will address any additional review required pursuant to VVater Code Section 8.The following will be added as Section VII.B.2.f in the Fact Sheet: f.Productivity Monitoring Plan Order No.R9-2009-0038 -20 -May 13,2009 This Order modifies the March 27,2009 Minimization Plan to add a Productivity Monitoring Plan component that will be used to evaluate whether the Discharger has achieved the annual fish productivity requirement of 1,715.5 kg/year established in the Minimization Plan. Of the up to 55.4 acres of mitigation wetlands that the Discharger has agreed to create or restore to offset potential stand-alone entrainment,the Discharger explained that 49 acres (88%)are designated to mitigate for the entrainment of the most commonly entrained lagoon species (i.e.,gobies,blennies and garibaldi),and 6.4 acres (12%)are designated to mitigate for the entrainment of the most commonly entrained ocean species (i.e.,white croaker,northern anchovy,California halibut,queenfish,spoHin croaker)such that, therefore,all other species (i.e.,other entrained and non-entrained species)present in the wetland are "available"to offset losses due to impingement.In order to be consistent with Section 6.2.1 of the March 27,2009 Minimization Plan,the biomass of gobies,blennies and garibaldi shall be excluded from productivity calculations,and available fish biomass for productivity calculations shall be calculated as follows: Available Fish Biomass =(88%x Biomass of Most Commonly Entrained Ocean Species)+(100%x Biomass of All Other Species) 9.The following will be added as Section VII.B.2.g in the Fact Sheet: g.Impingement Monitoring Program As issued on August 16,2006,this Order did not require the Discharger to monitor for fish impingement.In conjunction with the approval of the March 27,2009 Minimization Plan on May 13,2009,the Regional Board determined that monitoring for impingement is necessary.The Order modifies the March 27,2009 Minimization Plan to add a requirement to perform and report impingement pursuant to an Impingement Monitoring Program (IMP)over a one year period per permit cycle.The IMP provisions in the Minimization Plan establish the impingement monitoring requirements. The objective of the impingement monitoring is to obtain periodic estimates of impingement levels at the shared intake when the COP is in co-located operation with EPS.The results of the impingement monitoring will be used to evaluate whether the 1,715.5 kg/year fish productivity requirement should be adjusted in the next permit cycle. The current COP impingement projection of 1,715.5 kg/year is based on sampling conducted at EPS during 2004-05,prior to the operation of the COP.Although the current projection was adjusted to account for a COP flow of 304 MGD (in accordance with Proportional Approach 3-B of Attachment 5 to the March 27,2009 Minimization Plan),a projection based on sampling conducted once the COP is in operation may be more representative than the current projection. Order No.R9-2009-0038 -21 -May 13,2009 I,John H.Robertus,Executive Officer,do hereby certify the foregoing is a full,true,and correct copy of a Order adopted by the California Regional Water Quality Control Board,on May 13,2009. CALENDAR ITEM 55 A 74 08/22/08 W 26202 PRC 8727.1 S 38 J. Brown M. Meier S. Mindt AMENDMENT OF LEASE LESSEE: Cabrillo Power I, LLC (Cabrillo) 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 APPLICANT: Poseidon Resources Channelside LLC (Poseidon Resources) 501 West Broadway, Suite 1260 San Diego, CA 92101 AREA, LAND TYPE, AND LOCATION: 5.548 acres, more or less, of sovereign lands in the Pacific Ocean, city of Carlsbad, adjacent to Agua Hedionda Lagoon, San Diego County. AUTHORIZED USE: Continued use and maintenance of existing intake and outfall structures. LEASE TERM: Twenty years, beginning December 14, 2006. CONSIDERATION: First year’s rent of $123,000, referred to as the “Base Rent”. The “Base Rent” to be adjusted annually by the Consumer Price Index (CPI) for All Urban Consumers, San Diego, CA, with the State reserving the right to fix a different “Base Rent” periodically during the term of the lease, as provided in the lease. This consideration is for the lease as a whole, and not simply for the amendment here considered. Revised 8/20/08 -1- CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -2- A) PROPOSED AMENDMENT: The proposed Amendment includes Poseidon Resources (Channelside) LLC as a co-Lessee and allows the intake of sea water and the commingling of brine water discharge for the desalination facility. Poseidon shall, at all times during the term of the Lease, fully offset all of the direct and indirect greenhouse gas emissions from the generation of electricity and other energy used for the construction and operation of the desalination facility. The calculations conducted to ensure compliance with this provision shall include accurate and transparent measurements and independent verification to the satisfaction of the Executive Officer in accordance with procedures outlined by the California Climate Action Registry (CCAR), California Air Resources Board (CARB), or state-approved programs under the control of local air control districts, hereinafter referred to collectively as “Air Boards”. Poseidon must submit annual reports to the Commission’s Executive Officer showing Air Board verification of accounting and offset measures. Determination of compliance with this provision will be made annually by the Commission’s Executive Officer. Poseidon shall, at all times during the term of the Lease, comply with the Energy Minimization and Greenhouse Gas Reduction Plan (the GHG Plan), as adopted by the California Coastal Commission on August 6, 2008, except that, notwithstanding the provisions of that Plan: a) Poseidon shall also, at all times during the term of the Lease, fully offset direct greenhouse gas (GHG) emissions from the generation of electricity and other energy used for the construction and operation of the desalination facility. Additionally, Poseidon will be deemed to have offset construction impacts by obtaining 1,327 tons of carbon offsets/RECs subject to the verification procedures in the GHG Plan; b) The provisions of the GHG Plan entitled, “Contingency if No GHG Reduction Projects are Reasonably Available,” shall not apply to this Lease; c) At any time during the term of the Lease, Poseidon may seek a determination from Commission’s Executive Officer that (i) offsets in an amount necessary to mitigate the Project’s GHG emissions are not reasonably available; (ii) the “market price” for carbon offsets or RECs is not reasonably discernable; (iii) CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -3- the market for offsets or RECs is suffering from significant market disruptions or instability; or (iv) the market price has escalated to a level that renders the purchase of offsets/RECs economically infeasible to the Project. Any request submitted by Poseidon shall be considered and determined by the Commission’s Executive Officer within 60 days. A denial of any such request may be appealed by Poseidon to The Commission for consideration at the next available public meeting of Commission. If Poseidon’s request for such a determination is approved by the Commission’s Executive Officer, Poseidon may delay or postpone acquisition of carbon offsets or RECs required under this lease for a period of up to three years following the Commission’s Executive Officer’s determination, provided that Poseidon does ultimately acquire all carbon offsets or RECs required under this lease; d) In calculating the amount of reduction in GHG emissions from the State Water Project (SWP) that Poseidon may take when calculating the amount of carbon offsets or RECs it must acquire under the GHG Plan, Poseidon shall take into account only that amount of water from the SWP to which the Metropolitan Water District (MWD) is entitled to take, but that the MWD does not take. Poseidon shall provide 55.4 acres of marine wetlands restoration to compensate for the unavoidable intake (impingement and entrainment) and mortality of marine life associated with the use of the Lease premises. Restoration may be implemented in no more than two phases, with the first phase comprising not less than 37 acres. The Plan for implementation of Phase II shall be completed and submitted to the California Coastal Commission and the California State Lands Commission within five years after the issuance of the Phase I coastal development permit application. Poseidon shall be responsible for providing funds reasonably necessary, as determined by the Commission’s Executive Officer, to operate, monitor and maintain the marine wetland restoration area(s) required by another federal, state or local regulatory agency but for no less than the term of the lease. Construction and planting of the Phase I site(s) shall be completed prior to the operation of the desalination facility. Compliance with this provision shall require that the restoration site(s) attain performance standards as are approved by the Executive Officer. Performance standards shall address, at minimum, water salinity, dissolved oxygen, elevation, sedimentation and erosion, soil organic matter, algae cover and species- CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -4- richness, vascular native plant cover and species-richness, and fish density and species-richness. Obligations for Phase II of the wetland mitigation may be proportionally amended by the Commission if it finds that Poseidon will implement technologies to reduce marine life impacts caused by entrainment and impingement. Mitigation sites shall be self-sustaining prior to release of the performance bond. Self sustaining is defined as meeting the wetland performance standards without being artificially-maintained through use of methods such as fertilization, irrigation, or weeding for a period not less than three years. Poseidon shall, at all times during the term of the Lease, comply with the Marine Life Mitigation Plan, as adopted by the California Coastal Commission on August 6, 2008. Poseidon will provide copies of all reports that are required to be provided to the California Coastal Commission to the Commission’s Executive Officer at the time any such reports are required to be submitted to the California Coastal Commission. The restoration project shall require up to 55.4 acres of wetlands restoration to be implemented in two Phases, with the first Phase (Phase I) comprising not less than 37 acres of wetlands restoration, and the second Phase (Phase II) comprising up to an additional 18.4 acres. Obligations for Phase II of the wetland mitigation comprise 18.4 acres, but may be proportionally reduced by the California Coastal Commission if it finds that Poseidon has reduced marine life impacts caused by entrainment and impingement. The provision of the Marine Life Mitigation Plan not withstanding, Poseidon shall receive no mitigation credits for direct benefits to marine life from dredging that would otherwise be required pursuant to compliance with the Marine Life Mitigation Plan. 24 months after issuance of the Coastal Development Permit for the desalination facility, Poseidon shall submit to the Commission’s Executive Officer, for his or her review and approval, proposed performance standards for Phase I of the wetland mitigation. Prior to submitting its Coastal Development Permit application for Phase II of the wetlands mitigation, Poseidon shall submit to the Commission’s Executive Officer, for his or her review and approval, proposed performance standards for Phase II of the wetland mitigation. The Commission’s Executive Officer shall coordinate his or her review with the staff of the Coastal Commission and the Regional Water Quality Control Board. The Performance Standards CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -5- in Phase I and II shall be modified if so directed by the Commission’s Executive Officer. Poseidon shall use the best available design, technology, and mitigation measures at all times during which this Lease is in effect to minimize the intake (impingement and entrainment) and mortality of all forms of marine life associated with the operation of the desalination facility. Monitoring, maintenance and operation of the wetland restoration site(s) and the reference site(s) may be modified by the Executive Officer to conform to equivalent or superior standards and requirements developed by the San Diego Regional Water Quality Control Board or the California Coastal Commission or any other federal, state, or local entity having applicable jurisdiction. Ten years from the effective date of this Amendment, or upon notice by Cabrillo that it will no longer require the use of the Lease Premises for the purposes of generating electrical power, the Commission will undertake an environmental review of the ongoing impacts of the operation of the desalination facility to determine if additional requirements pursuant to the Lease, as Amended, are required. The Commission may hire a qualified independent environmental consultant at the sole expense of Poseidon, to analyze all environmental effects of facility operations and alternative technologies that may reduce any impacts found. Poseidon shall be required to provide a non-cancelable operational performance deposit in the amount of not less than $1,000,000 and a non-cancelable wetland performance deposit in the amount of $3.7 million to ensure implementation of compensatory mitigation, monitoring and maintenance as described in the approved plan. Prior to commencement of construction, Poseidon shall be required to provide an unconditional guarantee by parent company Poseidon Water LLC for full performance by Poseidon of all the obligations under the Lease. Prior to use of the Lease Premises, Poseidon shall provide to the Commission a detailed report of compliance with Order No. R9-2006-0065, NPDES No. CA0109223, adopted by the San Diego Regional Water Quality Control Board, on June 14, 2006, and became effective on October 1, 2006, and any subsequent amendments thereto. Within five years of the effective date of this lease amendment, Poseidon shall provide a written report to the Commission, for use at a public hearing, regarding the status of compliance with the terms of the lease. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -6- In the event that Poseidon fails to comply with any or all of its separate obligations under this Lease, Cabrillo the Commission may terminate Poseidon’s rights under this Lease Amendment without affecting any or all of Cabrillo’s rights or obligations under this lease. Poseidon shall be responsible for reimbursing all of Commission staff’s expenses incurred to monitor compliance by Poseidon of all of its reservations, terms, covenants and conditions of the Lease for the term of the lease. Upon acceptance of the Lease Amendment, Poseidon shall execute a Reimbursement Agreement with the Commission and shall submit an expense deposit of $25,000 as a cash surety to ensure performance. As its separate obligation within this lease Amendment, Cabrillo shall notify the Commission in writing prior to discontinuing its use of the Lease Premises in connection with the production of electricity. Upon receipt of notification by the Commission, Cabrillo may apply to the Commission for approval of an assignment of its obligations under the lease to Poseidon. Cabrillo and Poseidon shall be jointly and severally liable for all provisions of this Lease except for those provisions that specify a separate obligation of one or the other. B) BACKGROUND INFORMATION 1) PROJECT DESCRIPTION On February 6, 2007, Poseidon Resources applied to the Commission for consideration of the desalination use of the existing intake and outfall structures. Poseidon proposes to co-locate a four-acre desalination facility within the 95-acre Encina Generating Station currently owned by Cabrillo. The desalination facility as designed would produce up to 50 million gallons per day (MGD) of reverse osmosis (RO) product water. From the desalination plant, the product water would be distributed along several pipeline routes (some proposed, some planned, and some existing) to the city of Carlsbad and various local water districts in Northern San Diego County. Poseidon Resources has indicated that the desalination plant is proposed to be operational by 2010. Poseidon Resources and Cabrillo have entered into a Ground Lease and Easement for approximately 33 years from the anniversary of the commercial operation date of the desalination facility with an option to extend the term for up CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -7- to two consecutive additional periods of ten years that is binding on successors in interest. The Cabrillo power plant currently uses once through cooling (OTC technology to cool its generators, and the desalination facility would use this water as its source water. This source water would be desalinated using RO technology producing approximately 50 MGD of product water and up to 56 MGD of concentrated seawater (brine) as a by-product. The brine solution would then be commingled, diluted, and discharged with the OTC flows originating from the power plant. Total sea water volumes that would be needed for the desalination process under current conditions would be approximately 106 MGD plus the additional water needed to meet the Board required dilution of the brine. Cabrillo and Poseidon Resources have entered into an Agreement that specifies the operational and maintenance responsibilities for co-locating the proposed desalination plant adjacent to the existing power plant. According to Poseidon Resources, eight San Diego County public water agencies (Carlsbad Municipal Water District, Valley Center Municipal Water District, Rincon del Diablo Municipal Water District, Sweetwater Authority, Rainbow Municipal Water District, Vallecitos Water District, the Sana Fe Irrigation District and Olivenhain Municipal Water District) have entered into public-private partnerships with Poseidon Resources Corporation and signed long-term purchase agreements to receive 100 percent of the desalinated water from the Carlsbad desalination plant. The water agencies have provided written statements indicating that the water to be received from Poseidon will replace existing imported or other purchases of water. 2) TAMPA BAY SEAWATER DESALINATION PROJECT At the public’s request, the Commission’s staff interviewed staff of Tampa Bay Water to ascertain Florida’s experience with a Poseidon project at Tampa Bay, Florida. In 1999, Tampa Bay Water entered into an agreement with Poseidon Resources to design, build and transfer a 25 million gallon per day desalination facility. Two of the three contractors hired to complete the project filed for bankruptcy. The second contractor completed construction of the desalination facility, but failed to pass the performance acceptance test before filing bankruptcy. Tampa Bay Water then exercised the option to own the desalination facility, and Poseidon Resources was retained for a short period of time as a consultant. In November 2004, Tampa Bay Water’s Board selected American Water-Pridesa to remediate the facility and operate it long-term. The plant went offline in June 2005, and CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -8- remediation construction began in November 2005. The remediated plant passed an extensive acceptance test, which concluded on November 7, 2007. The initial cost to build the reverse osmosis plant and 15-mile pipeline was approximately $110 million; however, after completion of significant remediation, the approximate total capital cost of the project was $158 million. According to Tampa Bay’s website, pursuant to a Partnership Agreement, the Southwest Florida Water Management District will reimburse Tampa Bay Water $85 million of the plant’s eligible capital costs through locally collected ad valorem taxes to offset the cost of alternative water supply development. 3) DESALINATION BACKGROUND INFORMATION Desalination is a process that removes dissolved minerals (including, but not limited to, salt) from sea water, brackish water, or treated wastewater. A number of technologies have been developed for desalination, including RO, distillation, electrodialysis, and vacuum freezing. The proposed Poseidon desalination project would involve the RO process. In the RO process, ocean water is pretreated to remove particles and then pumped at high pressure through permeable membranes to separate the salts from the water. The quality of the water produced depends on the pressure, the concentration of salts in the water, and the salt permeation constant of the membranes. Product water quality can be improved by adding a second pass through the membranes, whereby product water from the first pass is fed to the second pass. 4) ONCE-THROUGH COOLING BACKGROUND INFORMATION By drawing in substantial volumes of ocean water, the desalination facility will have some of the same impacts as once-through-cooling operations at coastal power plants. "Once-through-cooling" (OTC) is the process wherein ocean water is pumped through power plants for cooling and then discharged back into the ocean. Environmental impacts from OTC include the potential for marine organisms to be impinged and entrained as a result of the large volume of seawater intake required for cooling (Exhibit E). Impingement occurs when marine organisms are trapped against components of the cooling water system, such as screens, where they die. Entrainment is the induction of smaller marine organisms into and through the cooling water system where most, if not all, of the organisms are destroyed by mechanical systems, temperature increases or toxic stress. In addition, OTC results in biological impacts through thermal discharge. Thermal discharge refers to the release of cooling water at temperatures above ambient conditions resulting in elevation of the temperature of marine waters in the CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -9- immediate vicinity of the outfall. These effects adversely impact coastal and ocean resources and uses as well as public trust resources that are within the jurisdiction of the Commission. Due to the adverse environmental effects from OTC at coastal power plants that impact coastal and ocean resources and uses, as well as adverse impacts to public trust resources, that are within the jurisdiction of the Commission, on April 17, 2006, the Commission adopted a Resolution regarding “Once-Through Cooling in California Power Plants”. However, the California Office of Administrative Law in 2006, OAL Determination No. 2, rendered the Resolution void for procedural reasons. The California Ocean Protection Council (Council), responsible for facilitating interagency regulatory and oversight efforts related to the protection of California’s coastal resources, supported the Commission’s interests in reducing environmental impacts associated with once-through-cooling coastal power plants by adopting a similar Resolution on April 20, 2006. As a result of this resolution, an interagency coordinating committee was established to integrate agency actions and coordinate regulatory authorities. The Council funded a study to analyze the feasibility of each of the existing coastal plant’s conversion to alternative technologies or installation of best technology available, absent an environmental analysis to implement such technologies. The study entitled, “California’s Coastal Power Plants: Alternative Cooling System Analysis” was released in February of this year. Section 316(b) of the Clean Water Act is a federal statute that is used by the U.S. Environmental Protection Agency and authorized States to develop regulations regarding cooling water intakes. The State Water Resources Control Board (Water Board) is currently in the process of developing regulations pursuant to section 316 (b) and is preparing an environmental analysis and recommendations for adoption concerning the State’s policy on the best available technology for OTC power plants. The Water Board staff’s recommendations are anticipated to be considered at a public hearing sometime in 2008. A federal court found last year that the federal regulations adopted pursuant to section 316 (b) were substantially inconsistent with Section 316(b) and did not adequately protect the environment. On May 10, 2007, the Commission authorized a 20-year General Lease – Industrial Use No. PRC 8727.1, to Cabrillo for the continued use and maintenance of existing intake and outfall structures, for the use as components of an OTC system associated with the upland Encina Power Plant and for the discharge of water from an existing permitted upland desalination test facility. As a result of the Commission’s concerns over the impacts of OTC, Cabrillo’s lease CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -10- contains special language that assures that Cabrillo will be in compliance with various regulations governing the use of facilities involving intake of seawater, including but not limited to, Section 316 (b) of the Clean Water Act, and federal and state regulations. The existing lease allows the Commission to modify the terms and conditions of the lease should that become necessary based on changes to the technology of cooling for power plants that may be required in their authorized capacities by other governmental regulatory agencies. The following are pertinent provisions contained in Cabrillo’s OTC Lease: a. Cabrillo is required to provide an annual written report to the Commission identifying conditions imposed upon it by other agencies pursuant to Federal and State laws including the Federal Clean Water Act, section 316(b) and California’s Porter-Cologne Water Quality Act. The report shall indicate and provide evidence of Cabrillo’s full compliance or engagement in an agency-directed process to achieve full compliance with the identified imposed conditions. b. The Commission will conduct a public hearing five years after the effective date of the lease in order to publicly review and evaluate Cabrillo’s compliance with the terms of the lease as provided for in Section 4, Paragraph 6, including, but not limited to, compliance with the federal Clean Water Act, section 316 (b) and California’s Porter-Cologne Water Quality Control Act. c. Cabrillo agrees to continue periodic maintenance dredging of the entrance and outer basin of Agua Hedionda Lagoon consistent with the provisions of existing Lease PRC 932.1, including amendments thereto, issued by the Commission for placement of dredged spoils. Such maintenance dredging shall continue for so long as the existing power plant requires cooling water from the Lagoon. 5) RELATIONSHIP OF DESALINATION TO OTC As stated, OTC impacts for power plant operations and desalination operations are similar. Seawater intake for desalination purposes, in some cases, caused less, as compared to OTC, mortality of aquatic organisms impinged on the intake screens due to lower flow rates, but may give rise to increased effects on aquatic organisms due to higher rates of salt brine in the discharge water. Both operations are similar in that organisms will be entrained within the system. The extent of the impacts of each operation are primarily dependent upon flow rates, water temperatures used for cooling the power generators and water CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -11- temperatures used in cleaning organisms attached to the interior walls of the pipes utilized for intake, process and discharge of seawater. The principal benefit afforded to desalination projects located with power plants comes from use of the power plants discharged cooling water. The desalination facility does not have to pay for construction of new intake and discharge facilities. There is an additional economy because feed water has already been pumped out of the ocean by the power plant. Finally, the desalination facility is not imposing an additional entrainment and impingement impact when it uses the water discharged by a power plant. The primary incremental impact is from increased brine discharges. The Commission adopted the OTC resolution last year, not out of concern over any one power plant, but because of the cumulative impact of California's coastal power plants. According to information provided by the California Energy Commission in a June 2005 Staff Report entitled “Issues and Environmental Impacts Associated with Once-Through Cooling at California Coastal Power Plants”, there are 21 coastal plants in California that utilize OTC systems with cumulative cooling water intake flow estimated at over 16 billion gallons per day that generate approximately 24,000 megawatts of power annually (Exhibit E). There are nine existing desalination plants in California and 19 currently proposed desalination facilities along the coast of California, see Exhibit D. If these desalination facilities are required to dilute their brine discharge to the same level as the San Diego Regional Water Quality Control Board has required of the Carlsbad facility, staff has estimated that the intake of sea water required for these plants would be 1.75 to 2.75 billion gallons per day (Exhibit E). At 304 MGD, Poseidon's Carlsbad facility diverts less than 2 percent, and all of the planned and existing desalination facilities listed in the 2006 report would divert only about 14 percent, of the ocean water diverted by the state's coastal power plants. Thus, in the near future, the cumulative impingement and entrainment impacts of all anticipated desalination facilities are substantially less than the impact of the power plants. However, the anticipated new 316(b) regulations adopted by both state and federal agencies and the trend towards repowering existing power plants with generating technology that does not rely on OTC is likely to reduce the impacts from power plants. For example, both the El Segundo power plant and the Cabrillo plant associated with the CDP, plan to reduce or eliminate OTC. Conversely, should the Poseidon desalination facility be successful, many more such facilities could be proposed and, in the long run, entrainment and impingement impacts from these facilities could surpass those of power plants. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -12- Section 316(b) and the implementing regulations adopted by the US EPA and the State Water Resources Control Board apply only to power plants and not to desalination facilities. Technology developed to meet those regulations may also help reduce the entrainment and impingement impacts from desalination facilities. Several of the mitigation measures proposed by Commission staff to be included in the lease provisions and discussed below will require Poseidon to add future technology if it will reduce these impacts. However, recent informal conversations with State Board staff suggest that the 316(b) regulations now being drafted for the Board will focus on cooling towers and similar technology that will eliminate OTC altogether, rather than reduce its impacts. This technology would not be applicable to desalination facilities. 6) MITIGATION OF ENTRAINMENT AND IMPINGEMENT AT POSEIDON'S CARLSBAD FACILITY As a condition in Poseidon’s NPDES permit, Poseidon Resources is required to submit a Flow, Entrainment and Impingement Minimization Plan (Flow Plan) to the Water Board. This Flow Plan requires that Poseidon Resources submit a proposal for achieving the best technology available to minimize impacts to marine life. The Flow Plan will give the Water Board the ability to accept or reject mitigation measures offered by Poseidon Resources in response to potential operating impacts to marine life within the five-year period authorized by the NPDES permit that will expire October 1, 2011. The Board approved the Plan in April 2008 but major aspects of the plan were left to Board staff to determine, such as the total acreage of wetland mitigation. On November 30, 2007, the California Coastal Commission considered and approved Poseidon’s coastal development application for the subject project. Because the Commission approved modifications to the permit conditions, revised findings were prepared and adopted by the Coastal Commission on August 6, 2008. Through negotiations between Poseidon and Coastal Commission staff for the coastal development permit, the name of the Flow Plan was modified to be entitled the Marine Life Mitigation Plan. The State Lands Commissioners asked that staff review Poseidon’s Marine Life Mitigation Plan to determine if the plan provides adequate mitigation. There is little specificity in the plan. The plan amounts to a description of a process by which they will ultimately complete a plan. Therefore, it is difficult to make an adequacy determination at this time. Staff recommends that the lease require 55.4 acres of compensation of similar habitat located within San Diego or Orange counties, and that site-specific performance standards be developed for the release of the performance bond. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -13- Poseidon has proposed to offset the impacts to marine life from impingement and entrainment at 37 acres, which is based on a 1:1 mitigation ratio and 50% confidence level. In prior actions by the California Coastal Commission on other projects, a 50% confidence level was allowed, as long as that number was increased by a greater than a 1:1 Mitigation ratio (e.g., 2 or 3:1). The California Coastal Commission hired an expert, Dr. Peter Raimondi, to evaluate Poseidon’s calculations of the impingement and entrainment impacts (expressed as Area of Production Foregone) and to aid with setting an appropriate acreage for full compensation of impacts. Dr. Raimondi and the Coastal Commission staff stated that either an 80% confidence level be used to determine the acreage, or that the mitigation ratio be increased to deal with the high level of uncertainty inherent in a 50% confidence interval and in wetland mitigation in general. At the August 6, 2008, Coastal Commission hearing, Poseidon agreed to the 80% confidence level, which equates to 55.4 acres. Staff of the Commission concurs with this Coastal Commission decision and recommends the same level of compensation for our lease. The total weight of organisms entrained by this project is 0.96 kg/day or 2.11 lbs/day. However, this represents about 96,000 individual organisms many of which are eggs and larvae. This translates to a yearly impact of 770 pounds or 35 million organisms. Over the expected 30 year life of the project, this correlates to over 23,000 pounds or over 1 billion organisms. The projected cumulative capacity of desalination in the state of California from the nine existing facilities and the 19 currently proposed facilities (see Exhibit D, attached) is 290 million gallons per day. If these facilities are required to dilute the process water in the same ratio as the Poseidon facility (3:1), then the total process water would be over 1.7 billion gpd or over 620 billion gallons annually. In light of the significant potential cumulative impacts of the desalination on the resources of the state, performance standards should be required to ensure that the mitigation produces the desired results. Concurrently, Poseidon has not found nor secured an appropriate location for wetland restoration and therefore it is difficult to write quantitative performance standards for an unknown type of wetland, in an unknown location. Staff recommends that, as part of the plan ultimately submitted according to the timelines in the lease amendment, performance standards be developed by Poseidon, approved by the Commission’s Executive Officer, and that a performance bond for wetland mitigation be tied to these standards. 7) GREENHOUSE GAS EMISSIONS ASSOCIATED WITH THE PROJECT CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -14- The Final EIR certified by the City of Carlsbad was prepared prior to enactment of AB 32, which establishes a comprehensive greenhouse gas reduction program for California. Accordingly, that document did not include an analysis of greenhouse gas (GHG) emissions. At the October 2007, meeting, the Commission directed staff to verify that Poseidon would meet is announced objective - that its project would be “carbon neutral”. After extensive collaboration with staffs of the California Coastal Commission, California Energy Commission, and the California Air Resources Board regarding Poseidon’s Energy Minimization and Greenhouse Gas Reduction Plan (formerly the Carbon Action Plan), it is the opinion of the Commission’s staff that Poseidon’s plan will not render the project carbon neutral as that term is normally understood. To become truly carbon neutral, the plan would need to offset direct emissions generated during construction and operation including construction materials, transportation and equipment, as well as emissions generated indirectly through energy consumed during all aspects of the facilities operations. However, Poseidon proposal does not do this. Poseidon and the Commission’s staff have come to an understanding of what Poseidon is proposing to offset, and that is the electricity consumption from on-going operation of the desalination plant, which is estimated to be at least 95% of the annual emissions associated with the plant. After considerable discussion with Poseidon and the aforementioned agencies, it was determined that “net carbon neutral for indirect energy consumed” is the most descriptive term for what Poseidon is proposing with respect to addressing GHG emissions. Staff and Poseidon have agreed that the baseline for the annual accounting to determine the indirect carbon foot print to be offset will be based on the master meter reading for the facility multiplied by the most recent annual emissions factor, as posted on the California Climate Action Registry (CCAR) website, for San Diego Gas and Electric. That number will be expressed in metric tons. That number will likely be in the 90,000 range per year. Most, if not all, of the agencies with which staff is coordinating (CCAR, CARB, CEC, CCC) are following six criteria in regards to carbon offsets. Those criteria, as stated in AB 32 (Nunez, 2006), are the following: carbon offsets are “real,” “permanent,” “quantifiable,” “verifiable,” “enforceable,” and are “in addition to” (what may be required under regulation). Poseidon is proposing to use a number of offsets that are not easily measurable, quantifiable or verifiable. For example, Poseidon is proposing to use the reduced carbon foot print of a wastewater disposal and treatment plant. Poseidon claims that because of the high quality of the desalination water, the waste going CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -15- through the wastewater plant will be less salty and therefore will not need to be processed as much, thereby saving energy at the wastewater treatment plant. At best, this will be very difficult if not impossible to measure (quantify) and verify. Another remaining issue that will affect Poseidon’s ability to offset all of its indirect emissions fully is whether its largest proposed offset, reductions in deliveries from the State Water Project (SWP), would likely qualify as an offset. Poseidon is proposing to use the “indirect energy consumed” in delivering water from the SWP to offset a portion of the energy used to produce the desalination water. Simply stated, Poseidon’s position is that the desalination water is replacing the SWP water, and therefore, Poseidon should be able to offset its carbon footprint by the carbon foot print of the SWP water. This position has been expressly supported by the California Air Resources Board (CARB), the California Energy Commission (CEC), MWD and other water districts that would benefit from Poseidon’s project. It has been argued, however, that the water from Poseidon’s project will not replace SWP water, but will in fact be generated as additional water; that is Poseidon should not be given credit for reductions in GHG emission from the SWP because use of SWP water will not be reduced as a result of Poseidon’s project. Neither the Department of Water Resources nor the Metropolitan Water District (MWD) has agreed to decrease their exports and imports, respectively, from the SWP by the 56,000 acre feet that Poseidon will produce. As noted in each of the local water agencies’ long-term planning documents, none of the water agencies that have contracts to receive Poseidon’s water are willing to give up any water rights. Therefore, a corresponding reduction in SWP water is not likely to result from operation of the desalination plant. Consequently, there will not likely be a reduction in greenhouse gasses from the importation of SWP water, and, in fact, regionally there will be an increase of greenhouse gases directly attributed to the desalination plants operation. Poseidon has proposed that the question of replacement or additional water be viewed in the CEQA context, even though Poseidon’s commitment to the Commission is not governed by CEQA. Baseline conditions, to which all impacts are compared in a CEQA document, are set at the time of the Notice of Preparation (NOP). Poseidon’s argument is simply that the amount of energy that would have been used to supply the 56,000 acre-feet from the SWP to the San Diego Region sets the baseline for the emissions for the Poseidon desalination project. The energy consumed to deliver an acre-foot of water through the SWP at the time of the NOP was 3.4 KWh. Poseidon argues that the footprint of the SWP should be subtracted from the actual footprint of the desalination plant as it “replaces” 56,000 acre-feet of water with desalinated water. The carbon footprint of this water from the SWP is approximately 67,352 CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -16- metric tons of CO2. The footprint to produce 56,000 acre-feet of desalinated water is approximately 90,000 metric tons. Poseidon would like to subtract the SWP footprint from the desalination facility’s footprint (90,000 metric tons minus 65,352 metric tons), leaving a net footprint of 22,648 metric tons. This is the baseline where Poseidon is proposing to begin to offset its project carbon footprint. This argument, however, assumes that the project water will replace the SWP water in every year and that if the water was diverted to another end user, the CEQA process would require an evaluation by that new end user. First, the SWP will not decrease their exports based on the Poseidon desalination project, and MWD may not decrease its imports. Since MWD already has the rights to the SWP’s 56,000 acre-feet, the water would not be classified as new water, and therefore, would not be evaluated in the CEQA arena for a new end user. The regional carbon footprint does not decrease with the addition of the desalination plant, in fact it will increase. It should also be noted that MWD will subsidize $250 per acre foot up to $14,000,000 per year for water that replaces MWD water. Whether water from Poseidon’s project should be considered “replacement water” therefore affects more than just the question as to the amount of GHG emissions that must be offset. In order to resolve the issue as to whether all or some of the water produced by Poseidon’s facility will replace SWP water, staff also considered the fact that MWD does not take all of its Table A water (the term for the water delivered to MWD under their allocation) from the SWP. To the extent that, if and when Poseidon’s facility is operating, MWD does not need all of the SWP water to which it is entitled, then the desalinated water may be considered as replacing SWP water. The table below provides the SWP data from 2000-2008 (courtesy of Ms. Gwen Knittweis, Chief of the Department of Water Resources’, Water Delivery Analysis and Documentation Branch): CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -17- Metropolitan Water District of Southern California (MWD) Historical Deliveries and Unused Table A Amounts 2000 2001 2002 2003 2004 2005 2006 2007 2008 Contract Table A (acre-feet) 2,011,500 2,011,500 2,011,500 2,011,500 2,011,500 1,911,500 1,911,500 1,911,500 1,911,500 Water Year 90% 39% 70% 90% 65% 90% 100% 60% 35% Total Deliveries (All Types) 1,551,992 1,093,451 1,333,927 1,672,019 1,724,380 1,478,045 1,512,186 1,515,038 Table A Allocation (Contract X Water Year) 1,507,136 784,485 1,408,050 1,810,350 1,307,475 1,720,350 1,911,500 1,146,900 Table A Delivered 1,270,258 686,545 1,190,348 1,418,081 1,145,746 1,197,183 1,103,538 1,047,046 Carryover Spilled the Following Year* 0 2,060 46,607 0 3,853 71,468 201,902 0 Unused Table A 36,878 0 0 44,994 51,844 243,167 577,962 0 0 *Carryover is limited by both storage and conveyance capacity for both MWD and SWP As indicated in this table, MWD has not used all of its Table A water in five of the last nine years (55%). However, MWD has not used all of the Table A water in an amount equal to or greater than 56,000 acre-feet (the amount Poseidon will create) in only two of the last nine years (22%). In an additional three years, some Table A water was unused, but less than that to be produced by Poseidon. It would appear, then, that water availability from the SWP is highly variable; that in some years, Poseidon will provide replacement water and, in some years, it will be additional water. Therefore, an appropriate calculation for allowing an offset that Poseidon could claim from the SWP would be based on the amount of unused acre-feet for any one year (up to a maximum of 56,000 acre-feet) then multiplied by the SWP emission factor for that year; that is, for the year 2000, Poseidon could claim 36,878 acre-feet of replacement water (the remaining 19,122 acre-feet [56,000 – 36,878] would be considered additional water). The replacement water would be multiplied by the SWP emission factor for that year, or approximately 22,998 tons of carbon offsets for the year 2000. It should be noted, however, that in light of the current drought, climate change, and recent and anticipated legal decisions giving rise to reductions in SWP CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -18- exports from the Delta, MWD may be expected to take all of the SWP water that they can get in the foreseeable future. Staff therefore does not recommend that the Commission accept the Poseidon plan as written. Rather, staff proposes that the Commission approve lease terms that use the established voluntary market to account for emissions from the project and required offsets and that the Commission’s Executive Officer be the arbitrator of the amount of offset from the SWP allowed each year, based on the unused Table A water. To meet the objective discussed by Poseidon at the Commission’s October, 2007, meeting, Poseidon would also need to provide offsets for both direct and indirect emissions from the project. Staff calculates that the carbon footprint to be offset could be estimated as follows: Description Carbon produced in metric tons All Construction related activities (estimate) 1320 Pipe Construction 7 Subtotal 1327 Description Carbon produced in metric tons Daily Operations 10 Energy consumption of facility 90,000 Subtotal 90,010 Total Construction & Operation: 91,337 If Poseidon is allowed to claim as carbon offsets the SWP emissions, estimated at approximately 67,352 metric tons, then Poseidon would need to offset the remaining 23,985 metric tons of carbon. If Poseidon were to only buy renewable energy certificates (REC’s) at the current rate ($5 - $20) this would equal between $119,925 and $479,700. If Poseidon were to choose to do other forms of offsets, the range could be much larger. If the Commission accepts the “indirect energy consumed” definition for “carbon neutral” and Poseidon is allowed to use the SWP as an offset (67,352 metric tons), then the remaining carbon footprint would be 22,648 metric tons. Again, if only REC’s were purchased ($5 - $20), the cost would be $113,240 - $452,960. If the SWP water offset is not allowed, the project would cost Poseidon an additional $336,760 to $1,347,040 each year. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -19- Poseidon has proposed that the carbon accounting and offset measures be verified by a three-member committee, two of which would be representatives of Poseidon and the third being Poseidon’s consultant. This proposal does not comply with basic principles addressing conflicts of interest and does not comport with the provisions of AB 32, which is that measurements of GHG emissions must be transparent and independently verified. Therefore, staff have drafted language into the lease amendment that state, “(t)he calculations conducted to ensure compliance with this provision of the lease amendment shall include accurate and transparent measurements and independent verification and shall be conducted in accordance with the procedures outlined by the CCAR, California Air Resources Board (CARB), or state-approved programs under the control of local air control districts.” Processes ultimately adopted by CCAR and CARB may not allow Poseidon to claim reductions in SWP emissions as an offset, as it will not be “verifiable or additional,” as stated in AB 32. Therefore, staff recommends that the final decision be delegated to the Commission’s Executive Officer, as set forth in the proposed lease amendment. At the Commission’s meeting of October 30, 2007, staff was requested to work with Poseidon regarding differences in estimating the carbon footprint of the proposed Carlsbad desalination plant. Poseidon’s estimate was substantially lower than that of CSLC staff. Representatives from Poseidon and CSLC staff met on November 7, 2007, to discuss the basis for the differences. The disparity revolves around development of the emission factor provided by San Diego Gas and Electric (SDGE) with respect to the carbon emissions associated with its energy purchases. SDGE developed its emission factors utilizing protocols developed by the California Climate Action Registry (CCAR). During CSLC staff’s consultation with staff at the California Energy Commission (CEC) and staff of the California Air Resources Board (CARB), both staffs have commented that the protocols provided by the CCAR, allow for considerable latitude by the reporting entity (in this case SDGE) in accounting for emissions. In addition, the “certification” for the emission factor provided by SDGE for their energy mix, is completed by “approved” consultants listed on the CCAR. These consultants use the information provided by the entity who hires them. This “certification” is voluntary, does not have the benefit of regulatory overview, has a wide degree of latitude for accounting emissions, and has no associated penalties for poor accounting practices. Forthcoming regulations will have less latitude than those currently used by the CCAR to estimate emission factors. Therefore, as a result of CSLC staff’s consultation with CEC and CARB, the 546 pounds of CO2 per MWH were found to be a low estimate. At the Commission’s October 30, 2007 meeting, Poseidon agreed to consult with CARB, the CEC, and the California Climate Action Registry (Registry), to obtain CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -20- a third-party review and recommendation on Poseidon’s CAP. Poseidon’s desalination project is not anticipated to be completed until the last quarter of 2010, which would give the Commission an opportunity to evaluate Poseidon’s Plan approved by the California Coastal Commission prior to Poseidon’s operation of the desalination plant. Finally, in order to address instability and volatility in the GHG emissions offset market, Poseidon proposes that it be permitted to deposit funds into an escrow account if it is determined that the markets for RECs are too volatile or excessive in c costs. This would be in lieu of the provision that would otherwise operate; i.e., where under Poseidon would be required to purchase RECs sufficient to mitigate GHG emissions not otherwise addressed. In the event that this escrow provision is put into operation during such period of volatility, Poseidon proposes that the amount it would be required to deposit in that event would be $10 per ton of carbon. However, Poseidon proposes that it would then not be required to pay additional amounts beyond that $10 per ton for the period in which it makes deposits into escrow. Poseidon contends that, under current market conditions, RECs are available from between $6 and $12 per ton and that the fact that market rates may exceed $10 per ton would not, in and of itself, be evidence of volatility or excess sufficient to bring this provision into operation. Therefore Poseidon admits that, ordinarily, it may frequently be paying more than $10 per metric ton for RECs. However, staff has found the market generally available to Poseidon at this time provides offsets from $5 to $20, that the offsets most readily available cost at least $12 per ton, that the market price in places such as Europe are substantially higher and that there is little likelihood that $10 per ton would in the future be considered a reasonable amount needed to acquire RECs. Given the disparity between current and anticipated market rates and Poseidon’s proposal, staff cannot recommend adoption of the proposal. 8) REPOWERING OF THE CABRILLO POWER PLANT On September 14, 2007, the Carlsbad Energy Center LLC (an indirect wholly owned subsidiary of NRG Energy, Inc. which also owns Cabrillo Power I, LLC) submitted an application to the California Energy Commission for certification to develop a 558 megawatt gross combined-cycle thermal power plant at the Encina Power Station in the city of Carlsbad. This project would close Units 1, 2, and 3 OTC power units utilized by the Cabrillo power plant and install new generators that utilize a “closed cycle” cooling system. This system would use a cooling tower, reclaimed water, and potable water supplied by the city of Carlsbad instead of the existing seawater intake and discharge channels authorized by the Commission. Units 4 and 5 would continue to be operated by Cabrillo on an “as needed” basis by contract with the California Independent System Operator. These units would continue to need OTC in order to operate. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -21- Prior to certification of the EIR for this project, the city of Carlsbad provided a response to public comments addressing the issue of Poseidon’s operation of Cabrillo’s intake structures during periods when Cabrillo would not be operating the intake or discharge of seawater for the purpose of generating electrical power. Carlsbad’s FEIR analysis concluded that operation of the desalination facility without the power plant would not generate significant impacts. Therefore, the FEIR addressed the consequences of the discontinuance of the use of OTC by the power plant that may occur as a result of the repowering. In fact, operation of the OTC facilities by the power plant during the first six months of 2007 averaged 124 MGD, much less than will be required by the desalination facility. On November 15, 2007, the California Coastal Commission considered the Coastal Development Permit for the Poseidon Desalination Project. The Coastal Commission approved the desalination project subject to conditions of approval. Two of the most significant conditions include preparation of a comprehensive Climate Action Plan and Marine Life Mitigation Plan for consideration by the Coastal Commission prior to issuance of the Coastal Development Permit. C) OTHER PERTINENT INFORMATION: Poseidon Resources has agreed to provide a Performance Deposit in the amount of $1,000,000 in addition to the $500,000 bond already posted by Cabrillo that will ensure the financial wherewithal to accomplish restoration of the lease premises in the event that the facilities are no longer being used and to ensure compliance with all of the terms of the lease. This includes removal of the jetties at the mouth of the Agua Hedionda Lagoon and at the outfall channel. Additionally, a parent guaranty will be provided by Poseidon Water LLC to ensure Poseidon Resources’ compliance with the terms of the lease. Poseidon Resources must provide the Performance Deposit and parent guaranty prior to commencement of construction. The amendment will not be executed by Lessor until after those items are provided. Commission staff has received many letters of support for favorable consideration of the proposed desalination project from a variety of sources including, but not limited to, local interest groups, members of the California Legislature, various water districts and water agencies, water-dependent businesses operating in Agua Hedionda Lagoon, local homeowner’s associations, union representatives, and various San Diego city and county businesses and administrative entities. CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -22- In addition, Commission staff has received approximately 1,575 e-mails from the general public in opposition to the project and requesting that the project be fully mitigated as well as letters of opposition from the Coast Law Group, attorneys representing the Surfrider Foundation and the San Diego Coast Keeper, indicating that a new EIR or supplemental EIR is necessary as previous environmental documents relied on a more consistent OTC operational water flow. They suggest that the proposed desalination plant cannot rely consistently on water from OTC; therefore, a subsequent EIR should consider whether the desalination plant should intake or discharge ocean water into state tidelands at all. On June13, 2006, the City of Carlsbad, acting as Lead Agency under CEQA, certified EIR 03-05 (SCH#2004041081) and a Mitigation Monitoring Program for the proposed project. The CSLC staff has reviewed such document and Mitigation Monitoring Program adopted by the lead agency. The CSLC will be acting as a Responsible Agency under CEQA and, as such, must generally use the EIR certified by the Lead Agency. Section 15162 of the CEQA Guidelines provides the only criteria under which a Responsible Agency may prepare a subsequent or supplemental EIR, and those relate essentially to major changes in the project or in the circumstances under which the project is built or to address new information of substantial importance. In this case, EIR 03-05 did address impacts in the event that the power plant no longer needed cooling water and that the proposed desalination project is to draw directly all the seawater it needs. Preparation of a supplemental or subsequent EIR would therefore not appear to be permitted under Section 15162 of the CEQA Guidelines. Additionally, the California Coastal Commission prepared a Coastal Development Permit for this project that received final approval of the findings and conditions on August 6, 2008. The California State Lands Commission staff has reviewed such documents and Mitigation Monitoring Program adopted by the lead agency. Findings made in conformance with the State CEQA Guidelines (Title 14, California Code of Regulations, Section 15091 and 15096) are contained on file in the Sacramento Office of the California State Lands Commission. A Statement of Overriding Considerations made in conformance with the State CEQA Guidelines (Title 14, California Code of Regulations, Section 15093) is contained on file in the Sacramento Office of the California State Lands Commission. This activity involves lands identified as possessing significant environmental values pursuant to Public Resources Code sections 6370, et seq. Based upon CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -23- the staff’s consultation with the persons nominating such lands and through the CEQA review process, it is the staff’s opinion that the project, as proposed, is consistent with its use classification. APPROVALS OBTAINED: City of Carlsbad, the California Regional Water Quality Control Board, the California Coastal Commission (conditionally), and the Department of Health Services EXHIBITS: A. Site and Location Map B. Table 1 - Assessment, Reduction and Mitigation Of Indirect GHG Emissions C. Table 2 – All Subsequent Years D. Existing and Proposed Desalination Plants in California as of August 2008 E. Table of Entrainment Impacts of California Power Plants F. Amendment of Lease PRC 8727.1 CALENDAR ITEM NO. 55(CONT’D) Revised 8/20/08 -24- RECOMMENDED ACTION: IT IS RECOMMENDED THAT THE COMMISSION: CEQA FINDING: FIND THAT AN EIR SCH# 2004041081 WAS PREPARED FOR THIS PROJECT BY THE CITY OF CARLSBAD AND CERTIFIED ON JUNE 13, 2006, AND THE CALIFORNIA COASTAL COMMISSION APPROVED A COASTAL DEVELOPMENT PERMIT ON AUGUST 6, 2008, AND THAT THE COMMISSION HAS REVIEWED AND CONSIDERED THE INFORMATION CONTAINED THEREIN. ADOPT THE FINDINGS MADE IN CONFORMANCE WITH TITLE 14, CALIFORNIA CODE OF REGULATIONS, SECTIONS 15091 AND 15096 (h), AS CONTAINED ON FILE IN THE SACRAMENTO OFFICE OF THE CALIFORNIA STATE LANDS COMMISSION. ADOPT THE MITIGATION MONITORING PROGRAM, AS CONTAINED ON FILE IN THE SACRAMENTO OFFICE OF THE CALIFORNIA STATE LANDS COMMISSION. ADOPT THE STATEMENT OF OVERRIDING CONSIDERATIONS MADE IN CONFORMANCE WITH TITLE 14, CALIFORNIA CODE OF REGULATIONS, SECTION 15093, AS CONTAINED ON FILE IN THE SACRAMENTO OFFICE OF THE CALIFORNIA STATE LANDS COMMISSION. SIGNIFICANT LANDS INVENTORY FINDING: FIND THAT THIS ACTIVITY IS CONSISTENT WITH THE USE CLASSIFICATION DESIGNATED BY THE COMMISSION FOR THE LAND PURSUANT TO PUBLIC RESOURCES CODE SECTIONS 6370, ET SEQ. AUTHORIZATION: AUTHORIZE THE AMENDMENT OF LEASE NO. PRC 8727.1, A GENERAL LEASE – INDUSTRIAL USE, IN SUBSTANTIAL FORM AS FOUND ON EXHIBIT “F”, ATTACHED, OF LANDS SHOWN ON EXHIBIT A ATTACHED AND BY THIS REFERENCE MADE A PART HEREOF, EFFECTIVE AUGUST 22, 2008; ALL OTHER TERMS AND CONDITIONS OF THE LEASE WILL REMAIN IN EFFECT WITHOUT AMENDMENT. 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 providing Carlsbad with approximately 21,000 AFY of desalinated water (out of a total output of 56,000 AFY),and the Project's location is critical for servicing Carlsbad and surrounding water districts in North San Diego.AR 550,5874.The Project's expected output of 50 million gallons per day ("MGD")is a central component of regional water supply planning,as the Project will provide approximately 10%ofthe desalinated water needed in California by 2030.AR 14057,10153. A Carlsbad locale is material to a project that will supply a significant percentage ofits output to Carlsbad and satisfy 100%of Carlsbad's water needs.Substantial evidence supports the determination that siting the Project within its service area is central to Poseidon's ability to feasibly fulfill the Project's purpose of providing a local,drought-proof water source at or below the cost of imported water supplies.The record reflects that benefits ofthe Project site include its close proximity to the existing EPS intake and outfall and key delivery points ofthe distribution system of Carlsbad, the largest water user.AR 5874 and 5877.The location allows the Project to optimize the cost of delivery of the produced water and the environmental impacts associated with the construction and operation of the Project.Id.It also avoids the construction of new intake and discharge facilities, providing significant environmental and cost benefits.AR 5874. Similarly,the quantity of water to be produced by a desalination plant is mandated by the Project's objectives.Producing sufficient water to satisfy Carlsbad's demand,the demand of other local agencies,and the Project's planned contribution of desalinated water as a component of regional water supplies are key objectives that could not be met with a scaled down project.AR 14054, 14057, 5857-58.The administrative record indicates that a reduced output alternative (25 MGD)was considered but found insufficient to meet objectives with no environmental benefits.AR 5857-58, 1729-32,546.The Commission also found that replacing the Project with multiple smaller desalination facilities would result in far greater environmental impacts and costs,would not address the water needs of Carlsbad and the San Diego area,and would not conform to Coastal Act policies. AR 14089,9833-35,14184. A desalination project separately proposed for Dana Point by the Municipal Water District of Orange County is not a feasible alternative site for this Project.AR 2294.The record establishes that the Dana Point project would serve Orange County,rather than Carlsbad/San Diego,and that it will -9-