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2009-09-15; City Council; 19964 Part 8; Part 8 - Desalination Project Changes - EIR 03-05A |DA 05-01A|HMP 05-08A|PDP 00-02B|RP 05-12A|SP 144J|
STATE OF CALIFORNIA-NATURAL RESOURCES AGENCYCALIFORNIACOASTALCOMMISSION45FREMONT,SUITE 2000SANFRANCISCO,CA 94105-2219VOICE(415)904-5200FAX(415)904-5400TDD(415)597-5885May6,2009SanDiegoRegional Water Quality Control Board9174SkyParkCourt,Suite 100SanDiego,CA 92123-4340 ARNOLD SCHWARZENEGGER,GOVERNORRE:Proposed Order No.R9-2006-0065/NPDES No.CA0109223 for Poseidon ResourcesCorporationCarlsbadDesalinationProjectVIAFACSIMILE:(858)571-6972 and EMAIL:RB9agenda@waterboards.ca.govDearChairWrightandBoardMembers:We appreciate the opportunity to comment on the proposed Order and to coordinate with youandyourstaffonthisimportantproject.We understand the Board may be making a decision atitsupcomingmeetingbasedinpartoninformationPoseidonrecentlyprovidedtoyouaboutitsproposedfacilityandaboutthemitigationplanapprovedbytheCoastalCommission.Parts ofthatinformationappeartobeincorrect,and key portions ofPoseidon's recent submittals for theBoard's May 13,2009 hearing are based on these apparent inaccuracies.This letter focuses oncorrectingtherecordbeforeyouontwomainissues:1)Change in Project Description -Increased Intake Velocities:Poseidon has changeditsprojectdescriptionsothatitsexpectedintakevelocitiesduringbothstandaloneandco- located operations are above the velocity range reviewed by the Coastal Commission. The higher velocities,and the higher adverse impingement impacts that accompany them, require Poseidon to return to the Commission for further action on its coastal development permit. 2)Need For Additional Mitigation:Poseidon has incorrectly characterized the Coastal Commission-approved Marine Life Mitigation Plan (MLMP)as being adequate to mitigate for its recently identified higher adverse impingement impacts.The MLMP as approved bythe Commission does not include mitigation for these additional impacts. Further,Poseidon's recent proposals to you regarding the Tentative Order would not adequately modify the MLMP to provide sufficient mitigation for these impacts.We expect the Commission will consider requiring additional mitigation in the MLMP as part ofits upcoming review ofPoseidon's permit. We have asked Poseidon to submit an application to amend its permit to address these issues.I We expect that a prompt and complete reply byPoseidon will not unduly delay your decision or the project;however,we are concerned that unless these inaccuracies are corrected,the Board 1 We understand the City ofCarlsbad is reviewing a proposed change to the project that would re-orient the facility at the project site.We anticipate handling that change as part ofthe permit amendment needed to address these intake velocity and impingement-related issues. Comments to San Diego Regional Water Quality Control BoardRe:Tentative Order No.R9-2006-0065 /NPDES No.CAO]09223May6,2009Page20/5mayinadvertentlyadoptadecisionthatmaynotbeconsistentwiththeCommission's approvedFindingsandMLMP.It could also result in contradictory requirements that would preventPoseidon(or any other entity that may take on its mitigation obligations)from meeting therequiredmitigationperformancestandards.1)Change in Project Description -Increased Intake Velocities:Poseidon's recentsubmittalstotheBoarddescribeachangeintheproject-i.e.,an increase in intake velocities -that will require additional action by the Coastal Commission.We have asked that Poseidonsubmitwithitsapplicationupdatedintakevelocitycalculationsandadditionalproposedmitigationtoaddresstheincreasedimpingementeffects.During the Commission's review,both Poseidon and the project's Environmental Impact Report(EIR)stated that Poseidon's use of304 million gallons per day ofseawater would cause intakevelocitiesof0.5 feet per second or less,which is the velocity range considered "best availabletechnology"by the U.S.EPA.The Commission relied on characterizations by Poseidon and intheEIRinapprovingtheprojectandindeterminingwhatmitigationrequirementswereneededfortheprojecttoconformtoCoastalActpolicies.2Asitturnsout,the characterizations made both by Poseidon and in the project EIR regardingintakevelocityareincorrect.As shown in a Poseidon January 2009 submittal to the Board,3 it isphysicallyimpossibleforPoseidon(and/or the power plant operator)to pump 304 milliongallonsperdaythroughtheintakeatvelocitiesof0.5 feet per second or less.The actualvelocitiesattheintakebarracksrangefromabout40%to more than 250%higher than theoriginallystated0.5 feet per second (i.e.,from a minimum ofno less than 0.7 feet per second toanas-of-yet undetermined maximum that would be several times higher).4 This change in the project appears to relate to the recently identified rate ofimpingement that is substantially higher than previously disclosed and is higher than reviewed by the Commission. The higher impact rates are based on updated impingement calculations Poseidon and Board staffhave developed during the past two months.During the Commission's review,the expected impingement rate was about 0.96 kilograms per day offish,but the expected impingement rates 2 Poseidon stated inits April 6,2009 letter to the Board that "Poseidon has remained consistent that the Project's intake water flows would be 0.5 fps or less at the Project intake's bar racks".Poseidon also stated in that letter that this velocity range "is consistent with U.S.EPA's 'best available technology'guidance for cooling water intakes". This April 6th letter also refers to Poseidon's November 7,2007 statement to the Coastal Commission that "Poseidon has documented that the velocity ofthe water at the entrance to the bar racks is below 0.5 feet per second." Poseidon further confirmed in its letter that the Commission relied on Poseidon's characterization when it concluded in the Commission's permit findings that "Poseidon has documented that stand-alone operation ofthe facility would result in intake water velocities at or below 0.5 feet per second". 3 See Poseidon's January 26,2009 submittal ofthe "Clean Water Act Section 316(b)Impingement Mortality and Entrainment Characterization Study:Effects on the Biological Resources ofAgua Hedionda Lagoon and the Nearshore Ocean Environment",prepared by Tenera Environmental for Cabrillo Power LLC,January 2008. 4 See Attachment 1 to this letter,which provides a range ofvelocities under expected conditions. Comments to San Diego Regional Water Quality Control BoardRe:Tentative Order No.R9-2006-0065 /NPDES No.CAOI09223May6,2009Page30/5arenowhigherbyabout60%to 750%(depending on which calculations are used).s TheseimpingementratesexceedtherangedeterminedbytheCommissiontobedeminimisandrepresentanimpactofuptoalmostthreetonsoffishperyear,which Poseidon and others havecalculatedwillrequiremorethan11acresofmitigationareatooffset.As part ofits upcomingreview,we expect the Commission will evaluate the updated velocity calculations andimpingementratesandthenindependentlydeterminetheappropriatebasisforanyadditionalmitigation(see below).This review will ensure the project remains in conformity with CoastalActpoliciesandwilllikelyresultinachangetotheCommission's previously-approved MLMP.2)Need For Additional Mitigation:Poseidon submitted documentation for your April andMayhearingsstatingthatitexpectstomitigateforitsrecentlyidentifiedhigherimpingementratebyusing"excess"production at the mitigation site(s)required through the Commission'sMLMP.Its April 30,2009 submittal for your May hearing proposes "crediting"variousproportionsoffishproducedinitseventualmitigationsite(s)towards Poseidon's higherimpingementimpacts.However,the MLMP approved by the Commission does not include "excess"production anddoesnotprovidefor"crediting"mitigation towards an impact that the Commission was notinformedaboutandthatwasnotincludedinitsdeliberations.The Commission's review focusedondetermininghowlargeanareawouldbeneededtoprovidesufficienthabitatforproducingthelarvaelosttoentrainment.The Commission's MLMP approval was based primarily onmitigatingtheproject's entrainment impacts,along with a relatively small amount ofimpingementimpacts(i.e.,the above-referenced 0.96 kilograms of fish per day).6 The approvedMLMPisexpectedtoprovide80%certainty that it will fully mitigate for all entrainment impacts.At best,the Commission-approved MLMP could provide mitigation credit for up to 0.96 kilograms per day ofimpingement.Poseidon's proposed "crediting"approach for impingement impacts is not consistent with the Commission's approval and will require additional Commission review and action. We expect the Commission's review will rely in part on recommendations from members ofa Science Advisory Panel the Commission convened to provide independent assessment ofanother similar wetland mitigation project in the San Diego region and that the Commission relied on last 5 Regarding the 0.96 kilograms per day rate,the Commission during its review was aware ofone correction Poseidon made -in its conversion from kilograms to pounds,Poseidon had originally calculated 0.96 kilograms as being equal to 1.96 pounds and then corrected it to 2.1 pounds.However,this correction did not change the impingement rate from 0.96 kilograms per day. 6 See,for example,the Commission's December 2008 Condition Compliance Findings for the MLMP,which state: "The Commission determined that Poseidon's entrainment impacts resulted in a loss ofmarine organisms equivalent to that produced in a 55.4-acre area ofestuarine and nearshore habitat";that requiring 55.4 acres ofestuarine wetland mitigation "provides a sufficient degree ofcertainty that the facility's entrainment impacts will be fully mitigated";and,that "implementation ofthe Plan will ensure the project's entrainment-related impacts will be fully mitigated."[emphasis added.] Comments to San Diego Regional Water Quality Control BoardRe:Tentative Order No.R9-2006-0065 /NPDES No.CAOI09223May6,2009Page4of5yearduringitsreviewofPoseidon's mitigation proposaL?In approving the MLMP,theCommissionreliedonPanelmemberrecommendationsregardingthetypeofmitigation neededtoaddressPoseidon's entrainment impacts and adopted Panel member Dr.Pete Raimondi'srecommended80%certainty level (instead ofPoseidon's suggested 50%level)and hisrecommended55.4 acres ofmitigation acreage (instead ofPoseidon's suggested 37 acres).To beconsistentwiththeCommission's previous findings and MLMP approval,we expect to have thePanelconductasimilarreviewofPoseidon's updated impingement levels and proposedmitigationapproachaspartoftheupcomingreviewofPoseidon's permit amendment.We are also concerned about Poseidon's latest submittals to the Board with suggested measuresforsamplingandmonitoringimpingementratesandimpingementmitigation.Poseidon proposesmonitoringfocusedlargelyondeterminingfishbiomass,but as Poseidon and others have noted,mitigation needed for impingement effects should take the form offish productivity,whichrequiresasubstantiallymoreinvolvedandcomplexapproachthanmonitoringforbiomass.Poseidon's proposed monitoring conditions are not likely to provide the data needed todeterminewhetheritseventualmitigationsite(s)is capable of,and actually produces,thenecessaryamountoffish.We note,too,that Poseidon's proposals would have its ownconsultantsdeterminenecessarymonitoringandsamplingmeasures;however,this would notprovidethelevelofindependentpeerreviewandconfirmationthattheCommissionreliedon inapprovingtheMLMP.The Commission's Science Advisory Panel has already developedrigorousmonitoringmethodologiesthatarecompletelyconsistentwiththescientificliterature,and we expect the Commission will likely rely on the Panel to review Poseidon's proposedmonitoringapproachforadequacyandtoensureconsistencywiththeexistingMLMPmonitoringrequirementsthatthePaneldeveloped.Please note,too,that changes the Boardmight make to the MLMP will require Commission concurrence -for example,ifthe Board requires Poseidon to conduct additional monitoring,the Commission will evaluate whether Poseidon will need to provide additional funds to support that monitoring. Closing:In sum,Poseidon has changed its project in a way that will require additional Commission review and has proposed a mitigation approach that is not consistent with its current Commission approval.Additionally,as noted above,we are concerned that Poseidon's proposed Order,ifadopted by the Board,may result in nonconformity with the Commission's approved MLMP and may result in mitigation site(s)that cannot meet the performance standards required ofPoseidon (or ofany other entity that may take on the mitigation obligations). 7 The Panel is a team ofindependent scientists that provides guidance and oversight to the Commission on ecological issues associated with the San Dieguito Restoration Project.The Panel also reviewed Poseidon's entrainment study last year and made recommendations to the Commission regarding necessary mitigation.The Panel includes Dr.Richard Ambrose,Professor and Director ofEnvironmental Science &Engineering Program, Department ofEnvironmental Health Sciences,University ofCalifornia Los Angeles;Dr.John Dixon,Senior Ecologist,California Coastal Commission;Dr.Mark Page,Marine Science Institute,University ofCalifornia at Santa Barbara;Dr.Pete Raimondi,Professor and Chair ofEcology and Evolutionary Biology,University of California at Santa Cruz;Dr.Dan Reed,Marine Science Institute,University ofCalifornia at Santa Barbara;Dr. Steve Schroeter,Marine Science Institute,University ofCalifornia at Santa Barbara;and,Dr.RussSchmitt, Director ofCoastal Research Center,University ofCalifornia at Santa Barbara. Comments to San Diego Regional Water Quality Control BoardRe:Tentative Order No.R9-2006-0065 /NPDES No.CA0109223May6,2009Page5of5Toconclude,we request the Board incorporate the corrected infonnation provided herein in itsconsiderationoftheproposedTentativeOrder.Regardless ofthe Board's action,Poseidon willneedtoreturntotheCommissionforadditionalreviewandaction.We anticipate coordinatingwithyouandyourstaffastheCommissioncontinuesitsreviewoftheproject.cc:Poseidon Resources -Peter MacLagganSanDiegoRegionalWaterQualityControl Board -John RobertusCaliforniaStateLandsCommission-Paul ThayerCityofCarlsbad-Scott Donnell Comments to Regional Board re:Poseidon Resources Tentative Order No.R9-2006-0065andNPDESNo.CAI09223 -May 6,2009ATTACHMENT 1IMPINGEMENTVELOCITIESATPOSEIDON /ENCINAINTAKEFOR304MILLIONGALLONPERDAYSEAWATERUSESummary:Based on infonnation Poseidon provided to the Regional Board in January 2009,'pumping 304 million gallons per day of seawater through the Encina intake (by either Poseidonorthepowerplantoperator)will always result in velocities higher than 0.5 feet per second at theintaketrashracks.Calculations and Dimensions Used:The calculations below are based on fundamental flowequationQ=av,where Q =discharge (or intake volume)in cubic feet per second,a =cross-section ofintake in square feet,and v =velocity in feet per second.The equation illustrates therelationshipthatthelargeranintakecross-section,the lower the velocity for a given intakevolume.All calculations use a Q of304 million gallons per day,which is equal to 470 cubic feetpersecond.The intake dimensions are from the document cited above,which shows the intakeconsistsoffoursectionstenfeetwideand23.5 feet high.The intake is covered with trash rackbarsapproximatelyoneinchwideandseparatedbygapsofaboutthree-and-a-half inches.Thetidalrangeattheintakeisapproximately+7.2 MLLW to -2.1 MLLW,and at 0.0 MLLW,theintakedepthisabout12.3 feet.Calculating Intake Velocities Under Expected Conditions:Ifthe full cross-section oftheintakewasavailable(i.e.,ifthe intake was completely underwater),the lowest possible velocity would be:Q =470 cfs;a =940 square feet,so Q =av results in a velocity of0.5 feet per second. However,several intake characteristics act to increase the actual velocities: •The top ofthe intake is above the usual tidal range ofthe lagoon,so the full intake cross- section is rarely,if ever,completely underwater,so velocities are higher than the theoretical minimum shown above.Calculated velocities at different tidal heights are provided below. •Trash racks occupy part ofthe intake opening,thereby reducing the cross-section and increasing velocities.The calculations below assume the area occupied by trash rack bars reduce the intake width by fifteen percent (i.e.,a I-inch bar every 3.5 inches along a 40-foot width represents about a 16.5%reduction, which is rounded in the calculations to 15%).The useable intake width is therefore about 34 feet (40'X 0.85)- •The bottom ofthe intake is subject to sedimentation and the trash racks are subject to fouling with vegetation,both ofwhich further reduce the cross-sectional area and increase velocities. The calculations below do not include these factors,so the actual intake velocities will be higher than shown below when the intake is fouled with sediment or vegetation. 1 See "Clean Water Act Section 316(b)Impingement Mortality and Entrainment Characterization Study:Effects on the Biological Resources ofAgua Hedionda Lagoon and the Nearshore Ocean Environment",prepared by Tenera Environmental for Cabrillo Power LLC,January 2008,provided by Poseidon to the Regional Board on January 26, 2009. •Velocities against the trash racks will be higher during incoming tides or with a currentcomingfromthenorth(however,because the pull of the intake pumps would remainconstant,velocities will not be reduced due to outgoing tides).The calculations below do notincludethesehighervelocities.•The intake structure creates turbulence,which can result in higher or lower velocities in someareasoftheintake.The calculations below do not consider turbulence.During high tides (lowest expected velocity):High tides in Agua Hedionda range around +7.2MLLW.At that water level,the wetted cross-section ofthe intake would be 19.5 feet deep by 34feetwide,or about 663 square feet.Solving for velocity:Q =470 cfs;a =663 square feet,so Q =av results in a velocity of0.71 feet per second.Near the midpoint of the tidal cycle:At 0.0 MLLW,the wetted cross-section ofthe intake is12.3 feet deep by 34 feet wide,which equals about 418.2 square feet.Solving for velocity:Q =470 cfs;a =418.2 square feet,so Q =av results in a velocity of1.12 feet per second.During low tides:Low tides in Agua Hedionda are approximately -2.1 MLLW.At that waterlevel,the wetted cross section ofthe intake is 10.2 feet deep by 34 feet wide,which equals about346.8 square feet.Solving for velocity:Q =470 cfs;a =346.8 square feet,so Q =av results in a velocity of1.36 feet per second. Conclusion:The velocities in all cases will exceed the EPA "best available technology"range of up to 0.5 feet per second.As noted above,the calculations do not include sedimentation, fouling,or effects ofan incoming tide or current,all ofwhich would result in higher velocities. 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. o. .. . • .t. t..iAL Encina Power Station 4600 Carlsbad Boulevard Carlsbad, CA 92008-4301 Main: (760) 268-4000 Fax: (760) 268-4026 CABRILLO POWER I LLC n:] jdi JU H iz- zii v toon-f^L July 29, 2009 Surface Water Unit California Regional Water Quality Control Board - San Diego Region 9174 Sky Park Court. Suite 100 San Diego, CA 92123 Attention: Executive Officer Gentlemen: Pursuant to Order No. R9-2006-0043 (NPDES No. CA0001350). section VII. paragraph B.2, we are herewith submitting the discharge monitoring report for the Encina Power Station. The report is for the month of June 2009. There were no exceedances for the month of June 2009. Please contact Sheila Henika, P.E. at (760) 268-4018, if you have any questions regarding this report. Sincerely, Cabrillo Power I LLC By: Its Authorized Agent, By: NRG Cabrillo Power Operations Inc. Jerry L. Carter Plant Manager tOOOrv^UJ-vO© CABRILLO POWER I, LLC I hereby submit the June 2009 discharge monitoring report(s) for ENCINA POWER STATION in accordance with the Waste Discharge Requirements prescribed in Regional Board Order No. R9-2006-0043. "I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations." Signature Title Plant Manager Cabrillo Power I, LLC Date July 29. 2009 U3©ON^lj^OO CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Wastestream: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed ^=5=^ Exact Sample Point: QW inlet and discharge Collected By: Operations personnel Analyzed By: Operations personnel Once-through Cooling Water (Intake and Combined Discharge) PARAMETER: UNITS: Temperature at Combined Discharge 0F Minus Water Intake "F Degrees Fahrenheit DATE DAILY AVERAGE DIFFERENCE DAILY MAXIMUM DIFFERENCE 6/1/2009 6/2/2009 6/3/2009 6/4/2009 6/5/2009 6/6/2009 6/7/2009 6/8/2009 6/9/2009 6/10/2009 6/11/2009 6/12/2009 6/13/2009 6/14/2009 6/15/2009 6/16/2009 6/17/2009 6/18/2009 6/19/2009 6/20/2009 6/21/2009 6/22/2009 6/23/2009 6/24/2009 6/25/2009 6/26/2009 6/27/2009 6/28/2009 6/29/2009 6/30/2009 0.1 0.5 4.4 1.2 0.0 0.0 0.0 0.0 0.1 0.0 0.2 0.1 0.1 0.2 0.2 0.0 0.0 0.1 5.9 0.0 0.0 0.1 0.1 0.2 0.2 0.0 1.8 2.2 1.8 0.9 0.5 3.5 6.9 2.0 0.6 0.3 0.0 0.0 1.2 0.5 0.9 0.8 0.7 1.1 0.6 0.4 0.3 0.5 10.8 0.3 0.1 0.3 0.5 0.7 0.6 0.4 6.4 6.9 3.8 3.2 DISCHARGE DAYS AVERAGE 0.7 1.8 REQUIREMENTS: 20.0 25.0 toOOf^M/a ^.oo CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Wastestream: PARAMETER: UNITS: DATE 6/1/2009 6/2/2009 6/3/2009 6/4/2009 6/5/2009 6/6/2009 6/7/2009 6/8/2009 6/9/2009 6/10/2009 6/11/2009 6/12/2009 6/13/2009 6/14/2009 6/15/2009 6/16/2009 6/17/2009 6/18/2009 6/19/2009 6/20/2009 6/21/2009 6/22/2009 6/23/2009 6/24/2009 6/25/2009 6/26/2009 6/27/2009 6/28/2009 6/29/2009 6/30/2009 Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed \ Exact Sampjfe Collected By: Analyzed By: ' u OXJ.^ V" C^A>— Foint: (tW inlet Operations personnel Operations personnel Once-through Cooling Water (Intake and Combined Discharge) Temperature Degrees Fahrenheit DAILY AVERAGE TEMPERATURE 65.4 66.5 66.9 66.6 66.4 66.9 66.1 65.9 65.2 64.9 65.7 66.5 67.6 67.8 68.7 70.3 70.6 71.1 70.4 69.6 70.3 70.2 70.3 70.7 71.4 71.7 71.2 70.5 69.2 68.0 REQUIREMENTS: DAILY MAXIMUM TEMPERATURE 66.9 68.5 67.5 67.1 67.5 68.0 67.2 67.7 67.5 66.3 69.0 68.4 70.0 69.0 70.2 72.9 72.5 73.3 71.4 70.1 72.4 71.8 72.5 72.8 73.7 73.6 72.7 71.9 70.7 69.2 — tOOOTO^tjMXCO CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Wastestream: PARAMETER: UNITS: DATE 6/1/2009 6/2/2009 6/3/2009 6/4/2009 6/5/2009 6/6/2009 6/7/2009 6/8/2009 6/9/2009 6/10/2009 6/11/2009 6/12/2009 6/13/2009 6/14/2009 6/15/2009 6/16/2009 6/17/2009 6/18/2009 6/19/2009 6/20/2009 6/21/2009 6/22/2009 6/23/2009 6/24/2009 6/25/2009 6/26/2009 6/27/2009 6/28/2009 6/29/2009 6/30/2009 Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 \ Signed Exact Sar / \ J I y jp JL x M Kr^^JU^ riple Point: lCW discharge Collected By: Operations personnel Analyzed By: Operations personnel Once-through Cooling Water (Intake and Combined Discharge) Temperature Degrees Fahrenheit DAILY AVERAGE TEMPERATURE REQUIREMENTS: 65.5 67.0 71.3 67.8 66.4 66.9 66.1 65.9 65.3 64.9 65.8 66.6 67.7 68.0 68.8 70.4 70.6 71.1 76.3 69.6 70.3 70.3 70.4 70.9 71.6 71.7 73.0 72.7 71.0 68.9 — DAILY MAXIMUM TEMPERATURE 66.9 68.7 74.0 68.7 67.5 68.0 67.2 67.7 67.5 66.3 69.0 68.4 70.0 69.0 70.2 72.9 72.5 73.3 81.2 70.2 72.4 71.8 72.5 72.8 73.7 73.6 78.9 77.4 72.6 72.1 — co©Oiv^4/^,eo CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Encina Power Station Order No: R9-2006-0043 Monthly June, 2009 August 1,2009 Signed Report Freq: Report For: Report Due: Wastestream: A^M Exact Sample Point: Collected By: Analyzed By: Heat Treatment (Cooling Water Discharge) Cooling water discharge Operations personnel Operations personnel Date/Time Treatment Began: NO HEAT TREATMENT DURING JUNE 2009 Date/Time Treatment Ended: PARAMETERS UNITS REQUIREMENTS RESULT Total Time of Treatment Maximum Discharge Water Temperature (Target Temperature) Hours:Minutes Degrees F 120 Target Temperature Duration Hours: Minutes 02:00 COMPLETE THE FOLLOWING IF TARGET TEMPERATURE WAS EXCEEDED: Maximum Temperature Attained Degrees F Degrees Above Target Temperature Degrees F 10 Maximum Temperature Duration Minutes 15 cooois^ijr^oo CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed *XAA Collected By: Analyzed By: t Operations personnel Operations personnel Wastestream: Combined Discharge, Low Volume Waste, & Metal Cleaning Waste • ' •'' —' — •.-..••.— . .. _ PARAMETER: FlowRate UNITS: Million Gallons per Day (MGD) DATE 6/1/2009 6/2/2009 6/3/2009 6/4/2009 6/5/2009 6/6/2009 6/7/2009 6/8/2009 6/9/2009 6/10/2009 6/11/2009 6/12/2009 6/13/2009 6/14/2009 6/15/2009 6/16/2009 6/17/2009 6/18/2009 6/19/2009 6/20/2009 6/21/2009 6/22/2009 6/23/2009 6/24/2009 6/25/2009 6/26/2009 6/27/2009 6/28/2009 6/29/2009 6/30/2009 DISCHARGE DAYS AVERAGE: DAILY MAXIMUM COMBINED DISCHARGE 228.6 372.1 443.5 439.6 293.8 293.8 263.8 144.0 39.9 0.0 12.4 0.0 0.0 0.0 0.0 0.0 0.0 47.3 232.3 144.0 144.0 144.0 111.9 7.6 0.0 0.0 410.5 341.8 667.1 565.4 178.3 667.1 LOW VOLUME WASTE 0.065 0.138 0.064 0.068 0.104 0.205 0.075 0.025 0.069 0.041 0.041 0.038 0.067 0.048 0.038 0.057 0.038 0.080 0.060 0.036 0.048 0.029 0.066 0.034 0.042 0.071 0.102 0.089 0.124 0.072 0.068 0.205 METAL CLEANING WASTE 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 REQUIREMENTS: 857.3 4.0905 0.7971 cDOOro'M/^OD CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed Collected By: Analyzed By: Xyj^A Operations personnel Operations personnel WASTESTREAM NAME: PARAMETER NAME: Combined Discharge CHLORINE, TOTAL RESIDUAL UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments Mg/L GRAB Instant Maximum 200 <40 6 TRC samples were analyzed on 6/4/2009. 5 sample results were non-detectable. UNIT DURATION OF CHLORINATION IN MINUTES 0 0 0 120 120 TIDE DURING SAMPLING AND ANALYSIS Start Tide: End Tide: Moon Phase (in days after the New Moon): + 3.5 ft + 3.3 ft 10 days tf>CDOiv Mj^os CABRILLO POWER \, LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed Collected By: Analyzed By: ^A r Operations personnel Operations personnel WASTESTREAM NAME: PARAMETER NAME: Combined Discharge CHLORINE, TOTAL RESIDUAL UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments Mg/L GRAB Instant Maximum 200 < 40 7 TRC samples were analyzed on 6/10/2009. 7 sample results were non-detectable. UNIT DURATION OF CHLORINATION IN MINUTES TIDE DURING SAMPLING AND ANALYSIS Start Tide: End Tide: Moon Phase (in days after the New Moon): + 3.1 ft + 3.4 ft 16 days tcOON^l/a^oa CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Encina Power Station Order No: R9-2006-0043 Report Freq: Monthly Report For: June, 2009 Report Due: August 1, 2009 Signed Collected By: Analyzed By: Operations personnel Operations personnel WASTESTREAM NAME; PARAMETER NAME: Combined Discharge CHLORINE, TOTAL RESIDUAL UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments Mg/L GRAB Instant Maximum 200 <40 7 TRC samples were analyzed on 6/16/2009. 7 sample results were non-detectable. UNIT DURATION OF CHLORINATION IN MINUTES TIDE DURING SAMPLING AND ANALYSIS Start Tide: End Tide: Moon Phase (in days after the New Moon): + 3.0 ft + 1.8 ft 22 days 10 CDOON^U^CO CABRILLO POWER I, LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For; Report Due: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed Collected By: Analyzed By: Operations personnel Operations personnel WASTESTREAM NAME: PARAMETER NAME: Combined Discharge CHLORINE, TOTAL RESIDUAL UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments Mg/L GRAB Instant Maximum 200 <40 8 TRC samples were analyzed on 6/26/2009. 8 sample results were non-detectable. UNIT DURATION OF CHLORINATION IN MINUTES TIDE DURING SAMPLING AND ANALYSIS Start Tide: End Tide: Moon Phase (in days after the New Moon): + 1.6 ft + 2.0 ft 4 days 11 tDOCDfv^ U4^00 CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed_ XJL Collected By: Analyzed By: t GL-fc Operations personnel Operations personnel WASTESTREAM NAME: PARAMETER NAME: Combined Discharge CHLORINE, TOTAL RESIDUAL UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments Mg/L GRAB Instant Maximum 200 <40 10 TRC samples were analyzed on 6/30/2009. 8 sample results were non-detectable. UNIT DURATION OF CHLORINATION IN MINUTES 120 120 120 120 120 TIDE DURING SAMPLING AND ANALYSIS Start Tide: End Tide: Moon Phase (in days after the New Moon): + 2.6 ft + 2.9 ft 8 days 12 tOGON^U^co CABRILLO POWER I, LLC - MONTHLY REPORT Facility Name: Encina Power Station Order No: R9-2006-0043 Report Freq: Monthly Report For: June 1, 2009 Report Due: August 1, 2009 Signed XLk.KJs t J -G Collected By: Analyzed By: Operations personnel SDG&E Environmental Lab/ Operations personnel WASTESTREAM NAME: PARAMETER NAME: Combined Discharge pH UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments PH GRAB 6.0-9 8.04 WASTESTREAM NAME: PARAMETER NAME: Combined Discharge RESIDUE, non-filterable (TSS) UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments MG/L GRAB 4.5 WASTESTREAM NAME: PARAMETER NAME: Combined Discharge TURBIDITY UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments NTU NTU GRAB GRAB Daily Maximum 100 Instant Maximum 225 2.8 2.8 13 tOOOiv^4^^o& CABRILLO POWER I, LLC - MONTHLY REPORT Facility Name: Encina Power Station Order No: Report Freq: Report For: Report Due: R9-2006-0043 Monthly June 1,2009 August 1,2009 Signed Collected By: Analyzed By: Operations personnel SDG&E Environmental Lab WASTESTREAM NAME: PARAMETER NAME: Low Volume Waste pH UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments pH GRAB 6.0-9 7.46 WASTESTREAM NAME: PARAMETER NAME: Low Volume Waste N-HEXANE EXTRACTABLE MATERIAL (HEM; OIL & GREASE, gravimetric) UNIT SAMPLE TYPE MG/L GRAB MG/L GRAB MG/L GRAB WASTESTREAM NAME: PARAMETER NAME: UNIT SAMPLE TYPE MG/L GRAB MG/L GRAB MG/L GRAB REQT TYPE Daily Maximum Instant Maximum Monthly Average REQT VALUE 20.0 20.0 15.0 Low Volume Waste RESIDUE, non-filterable (TSS) REQT TYPE Daily Maximum Instant Maximum Monthly Average REQT VALUE 100.0 100.0 30.0 RESULT <5.0 <5.0 RESULT 1.2 1.2 Comments Comments There was no discharge during the month for the sources listed below: Metal cleaning waste, Discharge Point 001-A Fuel line/tank hydrotest. Discharge Point 001-F Saltwater R.O. (brine). Discharge Point 001-D Seawater R.O. pretreatment, Discharge Point 001-E Discharge Point 001-G described below 14 tOOON^U^oo CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Encina Power Station Order No: Report Freq: Report For: Report Due: R9-2006-0043 Monthly June 1,2009 August 1,2009 Signed Collected By: Analyzed By: Operations personnel SDG&E Environmental Lab/ Operations personnel WASTESTREAM NAME: PARAMETER NAME: Cooling Water (Cooling Water Intake) PH UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments pH GRAB 8.10 WASTESTREAM NAME: PARAMETER NAME: Cooling Water (Cooling Water Intake) RESIDUE, non-filterable (TSS) UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments mg/L GRAB 0.9 WASTESTREAM NAME: PARAMETER NAME: Cooling Water (Cooling Water Intake) TURBIDITY UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments NTU GRAB <1.0 15 coOOt^^M/^oa CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Encina Power Station R9-2006-0043 Monthly June 1,2009 August 1,2009 Signed Collected By: Analyzed By: Operations personnel SDG&E Environmental Lab/ Operations personnel METHODOLOGY and METHOD DETECTION LIMITS Matrix Combined Discharge Combined Discharge Combined Discharge Combined Discharge Low Volume Waste Low Volume Waste Once-Through Cooling Water Once-Through Cooling Water Once-Through Cooling Water Parameter Chlorine, total residual pH Residue, non-filterable Turbidity N-Hexane Extractable Material- (HEM; Oil and Grease) Residue, non-filterable (TSS) PH Residue, non-filterable (TSS) Turbidity Methodoloev SM 4500-Cl G SM 4500-H+ B SM 2540 D EPA 180.1 EPA 1664 A SM 2540 D SM 4500-H+ B SM 2540 D EPA 180.1 MDL 40 0.4 1.0 5.0 0.4 0.4 1.0 Units Mg/L SU mg/L NTU mg/L mg/L SU mg/L NTU 16 tOOOWMw^oo CABRILLO POWER 1, LLC - MONTHLY REPC Facility Name: Order No: Report Freq: Report For: Report Due: Fncina Power Sfstinn R9-2006-0043 Monthly June, 2009 August 1,2009 TOTAL RESIDUAL CHLORINE RESULTS Station: Combined Discharge Date: 6/4/2009 Sampling Time 0915 0919 0923 0927 0931 0934 Date: 6/10/2009 Sampline Time 1805 1809 1813 1817 1821 1825 1829 Date: 6/16/2009 Sampline Time 0803 0807 0811 0815 0819 0823 0827 Date: 6/26/2009 Sampling Time 1001 1004 1008 1012 1020 1024 1028 Result fue/L) < 40 pg/L < 40 ug/L < 40 pg/L 50 pg/L < 40 pg/L < 40 pg/L Result (ue/L) < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L Result f ue/L) < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L Result (ug/L) < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L < 40 pg/L ,RT ^ c Signed \ Addendum 1 r o -o i XA 4 v_a--w-X'—^ " J Collected By: Operations personnel Analyzed By: Operations personnel Date: 6/30/2009 Sampline Time Result (ue/L) 1301 < 40 pg/L 1304 < 40 pg/L 1308 < 40 pg/L 1312 < 40 pg/L 1316 < 40 pg/L 1320 50 pg/L 1323 40 pg/L 1326 < 40 pg/L 1329 < 40 pg/L 1333 < 40 pg/L 17 <OOOlV-4N\00 CABRILLO POWER I. LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For; Report Due: Encina Power Station R9-2006-0043 Monthly June 1,2009 August 1,2009 Signed Collected By: Analyzed By: Addendum 2 Operations personnel SDG&E Environmental Lab WASTESTREAM NAME: PARAMETER NAME: Low Volume Waste - Desalination Reverse Osmosis Return* pH UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments pH GRAB 6.0-9 7.77 WASTESTREAM NAME; PARAMETER NAME: Low Volume Waste - Desalination Reverse Osmosis Return* N-HEXANE EXTRACTABLE MATERIAL (HEM; OIL & GREASE, gravimetric) UNIT SAMPLE TYPE REQT TYPE REQT VALUE RESULT Comments MG/L GRAB MG/L GRAB MG/L GRAB WASTESTREAM NAME: PARAMETER NAME: UNIT SAMPLE TYPE MG/L GRAB MG/L GRAB MG/L GRAB Daily Maximum Instant Maximum Monthly Average 20.0 20.0 < 5.0 15.0 <5.0 Low Volume Waste - Desalination Reverse Osmosis Return* RESIDUE, non-filterable (TSS) REQT TYPE Daily Maximum Instant Maximum Monthly Average REQT VALUE RESULT Comments 100.0 100.0 0.4 30.0 0.4 Comprised of seawater R.O. pretreatment and brine Chemical Usage: Ferric Sulfate Sodium Bisulfite Sodium Hypochlorite Ferric Chloride Sulfuric Acid Sodium Hydroxide Hydrochloric Acid Cytec Polymer Superfloc Vitec 3000 0.0 gallons 68.8 pounds 0.0 gallons 0.0 gallons 0.0 gallons 0.0 gallons 0.0 gallons 0.0 gallons 0.0 gallons 68.5 gallons 18 CDOOTO^-O/J^OO CABRILLO POWER I, LLC - MONTHLY REPORT Facility Name: Order No: Report Freq: Report For: Report Due: Wastestream: Encina Power Station R9-2006-0043 Monthly June, 2009 August 1,2009 Signed iboo^f Collected By: Analyzed By; Poseidon Pilot Desalinization Plant (seawater R.O. system) A) \_z Addendum 3 Operations personnel Operations personnel PARAMETER: Flow Rate UNITS: Million Gallons per Day (MGD) DATE Flow Stream 6/1/2009 6/2/2009 6/3/2009 6/4/2009 6/5/2009 6/6/2009 6/7/2009 6/8/2009 6/9/2009 6/10/2009 6/11/2009 6/12/2009 6/13/2009 6/14/2009 6/15/2009 6/16/2009 6/17/2009 6/18/2009 6/19/2009 6/20/2009 6/21/2009 6/22/2009 6/23/2009 6/24/2009 6/25/2009 6/26/2009 6/27/2009 6/28/2009 6/29/2009 6/30/2009 Totals Average Maximum Compl. Limit 1 0.003 0.000 0.000 0.000 0.003 0.003 0.003 0.003 0.000 0.000 0.002 0.002 0.003 0.003 0.003 0.003 0.003 0.003 0.001 0.000 0.000 0.000 0.000 0.001 0.003 0.003 0.003 0.003 0.003 0.003 0.063 0.002 0.003 0.029 2 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 3 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.005 0.000 0.005 0.000 0.000 0.000 0.000 0.003 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.014 0.000 0.005 0.036 4 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.005 0.000 0.005 0.000 0.000 0.000 0.000 0.003 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.014 0.000 0.005 0.036 Referring to San Diego County Regional Water Quality Control Board Letter of September Wastestream 1) Diverted 0.050 0.061 0.046 0.036 0.033 0.033 0.033 0.033 0.036 0.029 0.018 0.021 0.033 0.033 0.056 0.061 0.055 0.061 0.028 0.000 0.000 0.000 0.000 0.027 0.061 0.061 0.061 0.061 0.061 0.061 1.151 0.038 0.061 0.187 24,2002: Backwash water from pretreatment system (containing removed suspended solids) Wastestream 2) Wasted pretreated sea water Wastestream 3) Backwash water from the RO system (waste brine) Wastestream 4) Product (desalinated) Wastestream 5) Stream 6) Diverted non-treated water seawater rejected back to the ocean Total flow diverted from the ocean input into the system Total Pumped 0.065 0.065 0.065 0.065 0.065 0.065 0.065 0.065 0.065 0.065 0.040 0.045 0.065 0.065 0.065 0.065 0.065 0.065 0.030 0.000 0.000 0.000 0.000 0.029 0.065 0.065 0.065 0.065 0.065 0.065 1.568 0.052 0.065 0.288 19 tOOOKJ^UJ^CO 169 Saxony Road Suite 204 Encinitas, CA 92024 Tel 760-942-8505 Fax 760-942-8515 www.coastlawgroup.com May 7, 2009 Via Electronic Mail John Robertus , Executive Officer jrobertus@waterboards.ca.gov Chiara Clemente, Senior Environmental Scientist cclemente@waterboards.ca.gov Regional Water Quality Control Board San Diego Regional Water Quality Control Board 9174 Sky Park Court, Suite 100 San Diego, CA. 92123-4340 RE: Proposed Order NO. R9-2006-0065, NPDES No. CA 0109223 Poseidon Resources Corporation Carlsbad Desalination Project Flow, Entrainment and Impingement Minimization Plan Dear Mr. Robertus and Ms. Clemente: Please accept the following comments on behalf of the Surfrider Foundation and San Diego Coastkeeper (Environmental Groups) pertaining to Poseidon Resources LLC’s (Poseidon) proposed Carlsbad Desalination Project (CDP) referenced above. At the April 8, 2009 hearing, the Regional Board directed staff to prepare responses to comments received and make revisions to the proposed Tentative Order consistent with Board direction. However, the Regional Board did not reach consensus on a variety of issues discussed, and in some instances was silent on key points presented. The Revised Tentative Order, as proposed, is not consistent with the Board’s intent as expressed at the hearing.1 Moreover, the Revised Tentative Order does not meet the requirements set forth in the NDPES Permit or Porter-Cologne section 13142.5(b). Procedural Objections The Regional Board counsel specifically instructed the Board not to act at its April 8th hearing due to procedural irregularities. Due to the systemic informational gaps and last-minute changes throughout the administrative approval process for the CDP, the public once again suffers for Poseidon’s gamesmanship. Impingement impacts came to light shortly before the April hearing, leaving Regional Board staff and the public little time to respond to Poseidon’s calculation error. See Email correspondence between Chiara Clemente and Peter MacLaggan from March 17 to March 30, 2009. As the Flow, Entrainment and Impingement Minimization Plan (Minimization Plan) was due in January 2007, and has yet to be approved as of the most recent hearing on May 9th, Poseidon cannot credibly argue that expediency is an issue. Although Poseidon takes every opportunity to stress the urgency of CDP water production, it is and has been incumbent upon Poseidon to provide the necessary information in a timely manner. Unarguably, Poseidon has failed in this regard. Further, staff’s Response to Comments previously received has not yet been released, but is expected after the close of the public hearing and the public comment period for the May 13th hearing. Contrary to public policy, the closure of the comment period before the Response to Comments are produced results in a disservice to the public, staff and to the Regional Board. Rather than a thoughtful response to legitimate concerns, the Regional Board will now have a post-hoc rationalization of its directive, immune from public 1 Although a second Revised Tentative Order was released on the evening of May 6, 2009, the following comments reflect page numbers in the prior version of the Revised Tentative Order, released on May 1st, 2009. However, the comments contained herein are equally applicable to the latest version of the Revised Tentative Order. Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 2 scrutiny. In so far as the public notice for the May 13th hearing limits public comment to “proposed revisions made to the Tentative Order following the April 8, 2009 meeting” and receipt by May 6th, this deprives the public of meaningful participation. Environmental Groups request an opportunity to respond to the forthcoming Response to Comments at the May 13th hearing, and will be providing written comments for the record as well.2 Poseidon’s submission of proposed Findings and Order before the public release of the Regional Board’s Revised Tentative Order or any supportive findings is prejudicial to both the Board and to the public. The Regional Board closed the comment period and is accepting only comments pertaining to the revisions to the Revised Tentative Order, yet Poseidon has preemptively provided detailed and extensive comments in the form of its proposed order and supporting findings. Although this type of procedure is standard practice for Poseidon at every administrative level, it is highly prejudicial and should not be condoned. Staff and the public must now focus their efforts on rebutting Poseidon’s proposals instead of focusing on staff’s independent assessment. Poseidon is the applicant in this process, but it is the Regional Board, with the aid of staff, that should be driving the approval process. Poseidon’s standard practice puts staff and the public on the defensive. Although this procedure results in a “stream-lined” approval with an artfully crafted order and findings supporting Poseidon’s position, it shows a lack of trust in the Regional Board and staff to do their jobs correctly. Poseidon has volunteered to do the Board and staff’s job, and the Regional Board members and the public should be highly suspect of any applicant doing the Board’s work. Regional Board Directive As a preliminary matter, the Regional Board itself did not provide a transcript of proceedings, and any reliance on the transcript prepared by Poseidon is a matter of practicality (Preliminary Transcript of Relevant Excerpts of Regional Board’s Deliberation at April 8, 2009 Regional Board Hearing, Prepared by Latham & Watkins LLP From Audio Files, hereinafter “Poseidon Transcript”). However, it appears that much of the Regional Board discussion, Regional Board staff and counsel comments, and public comments relevant to the Regional Board’s deliberation and direction to staff have been selectively omitted from the transcript. Although the record is colored by these selective omissions, Environmental Groups provide the following comments based on an assumption of accuracy in that portion of the transcript Poseidon has chosen to provide. The Board members who spoke at the April 8th hearing (and whose testimony was transcribed by Poseidon) provided little to no testimony on several topics. Contrary to Poseidon’s position, the Board did not give anything remotely resembling “thorough consideration” to these subjects, and gave virtually no direction to staff. Poseidon Key Points of Poseidon’s Proposed Order and Supplemental Findings, April 30, 2009, p.3. Poseidon’s characterization of the Board’s position is merely an attempt to insulate the project from litigation, and a blatant mischaracterization of the administrative review process. Poseidon should be reprimanded for its continued manipulation of agency approval processes and admonished to more accurately represent Board action in all future submissions. Further comments on specific issues of concern include the following: 2 See 40 C.F.R. §§ 124.17, 124.12. Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 3 1) The Regional Board did not discount heat treatment impingement data collection. To the contrary, the Regional Board specifically asked for impingement real-time assessment, which would include heat treatment data. During his public comment, Mr. Garret specifically and repeatedly called for impingement monitoring similar to that conducted in 2004-05 for Encina Power Station (EPS) by Tenera. Poseidon Transcript, p. 15-16. This monitoring, which was the basis of all entrainment and impingement assessments presented by Poseidon, included heat treatment monitoring. 2) The Regional Board did not state that 55.4 acres of wetland mitigation for entrainment would be enough to offset impingement losses. The Board did not decide that Poseidon’s MLMP requirement to provide 55.4 acres of mitigation in two phases was a “proper amount of wetlands mitigation acreage” and “the proper amount of wetlands mitigation acreage needed to fully offset projected Project entrainment and impingement losses.” Poseidon Key Points of Poseidon’s Proposed Order and Supplemental Findings, April 30, 2009, p.1. The Regional Board did not find 55.4 acres sufficient, nor did it find such acreage would fully offset impacts. As a practical matter, further impingement monitoring on a real-time basis was required in order to accurately reflect impacts and require mitigation based on such assessment. Had the Regional Board been convinced by Poseidon’s expert testimony, it would not have found the need to require real-time assessment. Poseidon’s own transcript shows the Board members were not convinced that enough data existed to conclusively prove the extent of impingement impacts, and therefore required 55.4 acres as floor. Board Member Destache: Is it important to Staff to see what the long term possibilities of a mitigation is by using this project as a, on a go forward basis to look at what the mitigation of wetlands could produce because in everything that I’ve heard it’s either we don’t have enough empirical data or we’re just guessing. Poseidon Transcript, p.2 (emphasis added). Board Member Loveland: I think this gives us an opportunity to go forward and learn. At the same time taking appropriate action that takes into account the best available information that we have right now and develop a program for monitoring of the impingement entrainment losses and the productivity of the mitigation. And make those appropriate changes as circumstances change when and if it becomes a stand-alone operation which everybody seems to agree is headed in that direction. Poseidon Transcript, p. 4 (emphasis added). Board Member Rayfield: I think at this time to close the public hearing. I think we should move forward on Option No. 3. I would add just a couple of points to the points that you have already made for us. On the staff we accept Option 3. I think the staff should come back to us with some specific measures. The thing I like about Option 3 is that it is performance based or performance standard based. But I think we ought to know what those standards might be and how they might be applied. Poseidon Transcript, p. 5 (emphasis added). Chair (this actually seems to be Board Member Thompson): OK. So, what Alternative #3 really means, because it doesn’t specifically say that, is that there would be additional monitoring required in addition to ensuring we meet the 1,715 requirement. And, on top of the 55 acres that’s currently in the plan, we would have to give . . . provide . . . require them to provide an additional 11 to 18 acres, but it doesn’t say that. But that is what that means? Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 4 Board Member Rayfield: OK. Well, I too thought Option #3 meant that roughly 55 acres in mitigation. And if we were to go with that Option #3, that’s where I would start. And that’s why I think we want the additional monitors to say, “is that or is that not adequate and should it be adjusted upward or possibly downward?” Poseidon Transcript, p. 10. Mr. Robertus: Then there’s another . . . A question I have is: Does the monitoring that is contemplated as additional monitoring in Option #3 include continued monitoring to measure the actual impingement values in the increase? Ms. Clemente: Yes. And I would like for it not just to be numbers; but,…Yes, the monitoring would be to measure the impingement values and the intake as well as the mitigation . . . not the impingement and mitigation productivity of the mitigation. But, I also want to make sure that it be not just in terms of kilograms but in terms of species and numbers. Chair: I will clarify with board members what was just said monitoring would include monitoring not just in mitigation production in the wetlands, in the wetlands acreage, but also continuing to monitor to build on the database we are working with now to determine what the acreage should be. Chair: That’s my understanding of it . . . Yeah . . . Board Member Rayfield: That’s . . . that’s mine, too. And I have . . . I find myself in agreement with Dr. Jenkins. I don’t think the confidence level is very meaningful in this context at all. We just don’t know enough. So, I wouldn’t . . . personally, I’m not persuaded by 50% or 85% or 95% confidence level. I think we have to mitigate for whatever the effects of the impingement are. And that’s why I think it’s so important to have the performance measures. Poseidon Transcript, p. 11 (emphasis added). Board Member Loveland: I think Mr. Rayfield. It’s the safest thing . . . is how I feel about what the direction should be. One point of clarification, you talked about, maybe, the decrease is moot because you wouldn’t see a decrease. I actually don’t think that it is moot because if we’re going to do this based on actuals, do the monitoring and make decisions based on what actually happens, if we find out that it is more productive. I’m not holding out a great deal of hope for that, but should it be, then I think there should be a move to release some of that for remedial mitigation perhaps. What if in 20 years from now or 50 years from now the plant wants to increase the [inaudible], then some of that could be remedial mitigation. So, I don’t think decreasing is moot . . . and although it’s unlikely, I’m not going to… Poseidon Transcript, p. 11 (emphasis added). Mr. Wyels: Yes, thank you. Yes there was also some discussion about….there would need to be mitigation monitoring for these impingement impacts, whether its monitoring to determine whether this fixed amount of 1715 kilograms per year is being met or its open-ended that whether more equivalent production….equivalent to what’s actually being impinged is being achieved. You’re right. Poseidon Transcript, p. 15 (emphasis added). Mr. Wyels: Yes, Mr. Garrett is correct. Catherine informed me that I mis-spoke. What I was really talking about was 55.4 acres Poseidon believes they will achieve this productivity of 1715 within that 55.4 acres, if it turns out that they’re incorrect. There would have to be additional Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 5 acreage. But if they are correct they would not have to do additional acreage. Poseidon Transcript, p. 16 (emphasis added). Thus, what can be gleaned from the transcript is that there was Board member uncertainty as to what the actual impingement rate would be, and the Board members thus were inclined to require real-time impingement monitoring. The 55.4 acres of mitigation required for entrainment would be a floor, dependent upon the real-time impingement monitoring results. As detailed further below, in light of the Coastal Commission Executive Director’s reiteration that the entire 55.4 acres are allocated to entrainment mitigation, using the same acreage to mitigate for impingement impacts is no longer an option. Coastal Commission Comments to the Regional Board, May 6, 2009, p. 2-4. 3) Temporal losses need to be taken into account. Because the Revised Tentative Order contemplates impingement monitoring after construction of the CDP, during its first year of operation, temporal losses must be considered. First, after the impingement monitoring data is analyzed and presented to the Board, any discrepancy between the impingement losses attributable to CDP operations and the fish productivity of restored wetlands (to the extent there is any allowable overlap for entrainment and impingement mitigation) will need to be addressed. Further, before the wetlands potentially reach the required productivity to offset impingement mitigation, losses due to impingement and entrainment need to be mitigated through further wetland restoration acreage. The temporal loss accounting requirement is not required in the current order, and should be included therein. The Regional Board testimony provided by Poseidon reflects, at a minimum, the Board considered this something to be vetted by staff or the Science Advisory Panel at the time of MLMP implementation. Mr. Gonzalez: So, as long as it’s clear that if you’re doing something like that, that it might mean that you’re going to get more acres then the biomass that you’re trying to replace because you also have to replace for temporal loss. One of the other things that needs to be certain is in the measurement of productivity of the wetlands in the scenario for the impingement for the impinged fish is staff needs to be certain that they give direction that you can’t always just go into a wetland and measure biomass and say here is the productivity because productivity is a snapshot of time. So impingement data is collected as how many fish do you lose per day whereas when you come into a wetland you don’t produce a certain amount of fish per day and you produce them based on their life cycles, and there needs to be some mechanism for equating that in this context. Chair: I think staff would figure it out or our experts would figure it out. Okay. Are we ready to close the hearing. Poseidon Transcript, p. 17 (emphasis added). Therefore, the Revised Tentative Order should include some provision that either defines a method to account for temporal losses, or assigns this function to the Science Advisory Panel. 4) Biological productivity assessment was to be determined by the Science Advisory Panel. The Regional Board agreed that assessment of the biological productivity of the wetlands, created as required for entrainment impacts and as a floor for impingement impacts, would be determined by the Science Advisory Panel. Contrary to Poseidon’s contentions, the Regional Board did not agree that 55.4 acres “will more than fully offset potential stand-alone impingement.” Poseidon Key Points of Poseidon’s Proposed Order and Supplemental Findings, April 30, 2009, p.2. Nor did the Regional Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 6 Board direct staff to write a Revised Tentative Order requiring calculations of wetland productivity that specifically contemplated Poseidon’s proposed calculation method. The testimony reflects the Regional Board’s understanding that this would be determined by the Science Advisory Panel. Chair: . . . Mr. Loveland’s comment about . . . it had to do with the variety of species, monitoring for species and varieties… Ms. Clemente: With regards to that last comment; there’s a hundred (100) different species from day to day. We just want them to monitor it, not…we’re not asking them to match every species in terms of mitigation. But, we’re asking them to collect the data in terms of numbers, species, age, etc., so we can make an educated comparison of the two. Otherwise, we’ve just got a bucket of fish. Board Member Loveland: I would agree. Do you have some sense of what the criteria for making an evaluation would be? Ms. Clemente: Actually, that’s what the Scientific Advisory Panel is for. That is part of the marine life . . . MLMP is their panel of experts that can provide much more of an educated opinion than I would. Poseidon Transcript, p. 12 (emphasis added). Impingement Monitoring – Heat Treatments and Effect As mentioned above, the limited transcript provides no evidence that the Regional Board intended any impingement monitoring to exclude heat treatments. In light of the seemingly perpetual co-located operation due to the strictly worded stand-alone trigger, EPS is likely to continue operations at minimum flow rates, while CDP becomes the almost exclusive driver of operations. It would be illogical and contrary to the mandates of Porter-Cologne to minimize mortality to attribute none of these heat treatment impacts to CDP operations. Revised Tentative Order, p. 11. Though Poseidon argues that it would be more appropriate to obtain heat treatment data from EPS, this argument is wholly without merit. The impingement data relied upon by the Regional Board and by Poseidon was conducted based on EPS operations. The intake and discharge are operated by EPS. The pumps are owned and operated by EPS. Using Poseidon’s logic, no entrainment or impingement should ever be attributed to Poseidon as long as EPS owns the intake and discharge channels and the intake pumps. However, the Regional Board, along with the Coastal Commission and State Lands Commission, has rejected such a notion. When CDP flows are the driving force, the impacts are attributable to CDP, not EPS. Thus, heat treatments conducted by EPS for the benefit of CDP would also be attributable to CDP. As mentioned previously by Environmental Groups and staff, CDP operations will necessarily contribute to increased frequency and impacts of heat treatments. See Carlsbad Desalination Project, Environmental Groups’ Supplemental Comments, April 6, 2009, p. 10- 11. Further, in light of the proposed stand-alone and new design or technology triggers proposed, the heat treatment impingement impacts will continue regardless of EPS flow rate so long as EPS is subject to Reliably Must Run (RMR) status by Cal-ISO. Thus, even operating at 304 MGD with 99.99% of impacts attributable to CDP, Poseidon will never have to mitigate for heat treatments until EPS shuts down completely. Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 7 Impingement Mitigation The Regional Board cannot refuse to make a decision as to the significance of the CDP marine life impacts, especially under the Porter-Cologne mandate to minimize intake and mortality. Without actually requiring the best design, site, or technology to minimize intake and mortality, the Regional Board has chosen to rely wholly upon mitigation measures. This in and of itself is problematic and does not comport with Porter-Cologne. A refusal to acknowledge reality and require accurate mitigation for CDP impacts is completely inadequate. The Regional Board, finding it “unnecessary to resolve” disputes of whether impingement rates of 1.56kg/day to 7.16kg/day are more accurate because 4.7kg/day is “a reasonable, conservative estimate of impingement” is nonsensical. Revised Tentative Order, p. 10. First, the Regional Board inherently makes a decision as to the reasonableness of the impingement rates by using a middle-of- the-road number of 4.7kg/day. The Regional Board could find 4.7 kg/day supportable in light of the range of numbers provided, or 4.7 kg/day as a good compromise position because both the low and high end of the range are equally likely. However, merely stating that the Regional Board has found 4.7 kg/day reasonable without stating why, in light of an unresolved dispute between staff, Environmental Groups, and Poseidon, provides no insight into the Regional Board’s decision-making process. Second, the Regional Board, by basing the wetland productivity requirement on the 4.7 kg/day presumed impingement impacts proves that determining impingement impacts is of the utmost importance. As written, the Regional Board’s basis for impingement mitigation calculations in the order is the assumption that a productivity of 1,715.5 kg/year will offset impingement impacts. This 1,715.5 kg/year productivity is “derived from the estimate of 4.7 kg/day” of impacts. Revised Tentative Order, p. 10. Thus, if the Regional Board truly found it unnecessary to resolve the dispute over what the CDP impingement rate is, there would be no numerical value whatsoever assigned to such impact. Further, the Regional Board directed staff to require, and has required through the Revised Tentative Order, impingement monitoring once CDP operations begin. Revised Tentative Order, p. 11. Contrary to the language currently contained in the order, this monitoring of impingement impacts is not merely of passing interest as something “valuable to consider.” Id. The order also allows the Regional Board to require an adjustment of the annual fish productivity requirement of 1,715 kg/year dependent on these impingement monitoring results. Thus, 1,715 kg/year is established as the benchmark from which productivity, and by implication mitigation, is increased or decreased. If the impingement monitoring results show an increased productivity, Poseidon will likely ask for mitigation credit. Phase I of the MLMP requires only 37 acres of mitigation, with an additional 18.4 acres conditionally required in Phase II. Revised Tentative Order, p. 9. Thus, if Poseidon meets productivity benchmarks imposed in the Revised Tentative Order (i.e. 1,715 kg/year) and the real-time impingement monitoring shows impacts less than 4.7 kg/day, Poseidon may potentially receive credit towards the required entrainment mitigation, resulting in less than 55.4 acres of total mitigation. Thus, the 4.7 kg/day impingement calculation is truly important, as it impacts the amount of mitigation required above and beyond 55.4 acres, and it also provides a mitigation banking mechanism where none existed before, and more importantly, was never intended as described in more detail below. As the Coastal Commission has reiterated, the CDP’s impingement impacts have only recently come to light, and the mitigation imposed by the Coastal Commission in the MLMP was for entrainment impacts. Coastal Commission Comments to the Regional Board, May 6, 2009, p. 2-4. At most, Poseidon could receive credit for impingement of .96kg/day. Id. at 4. Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 8 In light of the Regional Board’s requirement of real-time impingement monitoring, it is unsupportable to include in the Revised Tentative Order an arbitrary benchmark, that only serves to benefit Poseidon. A year-long data set of impingement impacts resulting from CDP operations, including heat treatments, would be the best evidence of the CDP’s intake and the resulting mortality. Any impingement mitigation requirement based on this calculation would be the most defensible and scientifically supportable. Biological Performance Standard The biological performance standard productivity requirement of 1,715 kg/year for impingement compensation, and the available fish biomass calculations are unsupported by the record, lack scientific basis, and should be decided by the Science Advisory Panel. Revised Tentative Order, p. 14. As pointed out by the Coastal Commission, the monitoring of wetland mitigation is required to take the form of “fish productivity, which requires a substantially more involved and complex approach than monitoring for biomass.” Id. at 4. Moreover, the “Science Advisory Panel has already developed rigorous monitoring methodologies that are completely consistent with scientific literature…” Id. Poseidon’s attempt to circumvent this process during Regional Board review is contrary to the Regional Board directive and to the Coastal Commission’s requirements in the MLMP. Further, though biomass calculations are wholly inappropriate for determining fish productivity and should not be applied in the manner suggested by Poseidon, the calculation methods themselves are completely unfounded. Revised Tentative Order, p. 14. First, the premise for the calculations themselves is the ability to create wetland mitigation for entrainment and impingement impacts within the same acreage. This matter was not resolved by the Regional Board at its April hearing, nor was the Regional Board clear as to how any such assessment would be made. See, Statement from Peter Raimondi, Ph.D, April 1, 2009 ; Carlsbad Desalination Project, Environmental Groups’ Supplemental Comments, April 6, 2009, p. 11-13; Coastal Commission Comments to the Regional Board, May 6, 2009, p. 2-4. Importantly, the Coastal Commission has since expressly rejected Poseidon’s assertion that the entrainment mitigation can also be used as impingement mitigation. However, the MLMP approved by the Commission does not include “excess” production and does not provide for “crediting” mitigation towards an impact that the Commission was not informed about and that was not included in its deliberations. The Commission’s review focused on determining how large an area would be needed to provide sufficient habitat for producing the larvae lost to entrainment. Coastal Commission Comments to the Regional Board, May 6, 2009, p. 3. The Coastal Commission, at most, accounted for .96 kg/day of impingement in mitigation calculations. Id. Second, the assumption that entrainment mitigation is only for the three most commonly entrained species was not accepted by the Regional Board. The position that these three species are merely a proxy for all entrainment impacts is supported by Dr. Raimondi (who was also the expert involved in the Coastal Commission review process), by Regional Board staff, by contemporary scientific literature and research, and by Environmental Groups. See Carlsbad Desalination Project, Environmental Groups’ Supplemental Comments, April 6, 2009 and Appendix. Thus, a calculation based on the assumption that all species other than the most commonly entrained goby, blenny and garibaldi are “excess production” would be inaccurate. Moreover, even if the calculation allowed for inclusion of species biomass only excepting the three most commonly entrained fish, it would not support Poseidon’s proposed calculation. Not only is a biomass calculation of “all other species” overly inclusive, no basis Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 9 exists to support the proposition that all other biomass can be attributable to impingement mitigation. Even using Poseidon’s logic only impinged organisms could be counted toward these impingement productivity calculations. However, as mentioned repeatedly, the house of cards upon which Poseidon has built its mitigation structure topples when any of the foundational elements are removed: 1) Entrainment mitigation required in the MLMP by Coastal Commission was for entrainment impacts. At most, the Coastal Commission considered .96 kg/day impingement. 2) Impingement impacts at the Coastal Commission were based on a premise of .5fps velocity, now proven to be inaccurate. 3) Poseidon’s impingement calculations were inaccurate, as revealed by staff shortly before the April 2009 hearing. Real-time impingement impacts are the best basis for assessing CDP impingement impacts. Any mitigation required to offset these impacts must be additional, over and above the 55.4 acres required for entrainment impacts. 4) Heat treatments conducted during co-located operations are for the benefit of CDP when the driving factor for intake is CDP, and must therefore be considered in impingement monitoring and mitigation requirements. 5) Biological productivity of wetland mitigation is not equal to biomass, and is meant to be determined by a Science Advisory Panel, as reiterated by the Coastal Commission. Disagreement Between Administrative Agencies The Coastal Commission has repeatedly spoken to the inconsistencies between the proposed mitigation measures in the Revised Tentative Order and those adopted by the Coastal Commission in the MLMP. Comments by the California Coastal Commission, April 6, 2009; Coastal Commission Comments to the Regional Board, May 6, 2009. At its April 9, 2008 hearing, the Regional Board specifically directed staff to work with other agencies in coordination, in order to comply with Section 13225 of the California Water Code. Resolution No. R9-2008-0039, p.3. Not only would adoption of the Revised Tentative Order be contrary to this directive, it would frustrate the Coastal Commission’s requirements. Poseidon would potentially be unable to meet its MLMP performance standards as mandated by the Coastal Commission. Coastal Commission Comments to the Regional Board, May 6, 2009, p.4-5. Trigger for Stand-Alone Analysis Though the Regional Board specifically asked for a trigger that would mandate stand-alone analysis, the Board members did not give direction as to how stand-alone operations would be identified. The proposed trigger for a new Report of Waste Discharge is EPS permanent shutdown of all generating units. Revised Tentative Order, p. 2. This trigger does not take into account the reality of EPS current and future operations. Though EPS is shutting down three of its five generating units, it already operates at a reduced capacity compared to historical operations, and specifically those in 2006 at the time of permit issuance. Once three of the five units are shut-down, EPS flows will be further reduced. Under the current scenario, even if EPS flows are limited to the service pumps, or even to 1 MGD, the Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 10 CDP will not be considered a stand-alone facility. This creates a long-term scenario in which CDP is a stand-alone facility in all but name, which not only incentivizes perpetual EPS operation, but allows CDP to evade stand-alone Porter-Cologne section 13412.5 review. The trigger for design or technology feature implementation to reduce intake and mortality is similarly flawed. Only after EPS gives notice that it will not be operational for 180 days and will not be called upon by Cal-ISO for power production will Poseidon have to evaluate possible design or technology measures. Revised Tentative Order, p. 2. The Revised Tentative Order requires submission of a technical report “evaluating the feasibility of any additional design or technology features within 45 days” of notification of EPS shutdown. Id. The technical report shall include a detailed description of any feasible design or technology measures, in addition to those identified in the [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. Revised Tentative Order, p. 17. Technology and design features that would reduce intake and mortality during temporary periods of EPS shutdown become no more likely at the point of 180 days of shutdown than at one day of reduced operation. Id. The proper time for technology and design feature planning was at the time of the NPDES permit issuance, or within the 180 day timeline articulated in section VI.C.2.(e). The first alarming element of this provision is the requirement of notice that EPS will be shut down for 180 days before a technical report is even required. EPS must first have the foresight to know when it will be shutdown for 180 days, and must simultaneously notify CDP (which is not required anywhere in either the CDP or EPS permits). Then Poseidon has 45 days to develop a plan for technology or design measures to minimize intake and mortality. This plan is subject to Executive Officer review, and is not subject to Regional Board approval or public review. This entire provision amounts to a circumvention of Porter-Cologne and the NPDES Permit section VI.C.2.(e). Not only are these the very measures required by Porter-Cologne at the time of project approval, but they were required under VI.C.2(e). Absolutely no basis exists for allowing Poseidon to formulate design or technology measures subsequent to construction of CDP, and without public review or Regional Board approval. Moreover, the imposition of only design or technology measures does not meet the section 13142.5(b) mandate that “best available site, design, technology, and mitigation measures feasible shall be used to minimize the intake and mortality of all forms of marine life.” Porter-Cologne § 13142.5(b). Another fatal flaw of the proposed requirement is the assertion that any feasible design or technology measures are identified in the Minimization Plan. The Revised Tentative Order asserts that CDP has little control over co-location operation and therefore the existing intake meets the best available design criteria. Revised Tentative Order, p. 7. Thus, no design measures are required. The only measures mentioned in the order are modified EPS pump configuration to reduce inlet and fine screen velocity and ambient temperature processing. Id. However, with little to no explanation, these measures are predetermined likely to be successful. 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 Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 11 reductions in impingement and entrainment will occur when CDP implements these features. Id. With no information or quantification, it is unreasonable to assume any reductions in mortality will result. Moreover, the Coastal Commission has provided evidence that Poseidon has misrepresented intake velocities and that under all operating scenarios (with or without EPS operation) the intake velocities will always exceed the .5 fps required as best technology by EPA. Coastal Commission Comments to the Regional Board, May 6, 2009, p.2 and Attachment 1. Similarly, the Revised Tentative Order states that the proposed technology for the CDP is the best available technology feasible under co-location operation. Revised Tentative Order, p. 8. The alternative intakes and screening technologies were all discounted as infeasible. Specifically, the alternative screening technologies would interfere with EPS operations. Id. Why EPS operations are relevant in light of the requirement that EPS be shut down for 180 days before any co-located technology requirement can even be analyzed (much less imposed) is puzzling. Further, if Poseidon is able to discount certain technologies because of their interference with EPS operations, it would make sense to specifically require those technologies when EPS shuts down for 180 days. Regardless of the unexplained reason for imposition of this trigger, it does not meet section VI.2.C.(e) requirements to require minimization of intake when EPS flows are insufficient to meet CDP needs, as explained below. NPDES Permit and Porter-Cologne Section 13142.5 Compliance The Regional Board cannot adopt the Revised Tentative Order as proposed to meet the section VI.C.2.(e) requirement of Poseidon’s NPDES Permit, Order No. R9-2006-0065. The NPDES Permit was reopened only to assess compliance with this provision. The Discharger shall submit a Flow, Entrainment and Impingement Minimization Plan 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 when the CDP intake requirements exceed the volume of water being discharged by the EPS. The plan shall be subject to the approval of the Regional Water Board and shall be modified as directed by the Regional Water Board. Order No. R9-2006-0065, NPDES No. CA0109223, p. 22 (emphasis added). The basic premise of the condition in section VI.C.2.(e) is a Porter-Cologne analysis for CDP operations when CDP is the driving factor for EPS intake. Because Poseidon’s Minimization Plan was originally due in January 2007, Poseidon has had more than enough time to evaluate the necessary elements of section 13142.5(b). However, in an effort to hurriedly approve the Minimization Plan, the Revised Tentative Order now contains a provision requiring design or technology requirements after CDP is built, upon notice of 180 days of EPS shutdown, subject only to Executive Officer review. Revised Tentative Order, p. 2. As discussed above, the trigger for design or technology measures is inadequate. However, it also fails to meet the Permit section VI.C.2.(e) requirement for requiring assessment of measures to minimize mortality “when the CDP intake requirements exceed the volume of water being discharged by the EPS.” Order No. R9-2006-0065, NPDES No. CA0109223, p. 22. The order requires, as does Porter- Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 12 Cologne, measures to reduce intake and mortality when EPS flows fall below 304 MGD (or would do so but for CDP). Thus, requiring a 6-month shutdown of EPS before design or technology measures are put in place (or even studied) does not meet the section VI.C.2.(e) or section 13142.5(b) requirements. Throughout the approval process, the Regional Board has also made clear and expressed in no uncertain terms that the approval of the Minimization Plan is for co-located operations only. 1) The Plan, including any amendments subsequently approved by the Regional Board, is of limited duration and is applicable only to Poseidon’s current cooperative operation with EPS. Upon Poseidon’s proposal to operate CDP independent of EPS or when EPS permanently ceases power generation operations, it may be necessary to further evaluate appropriate mitigation and/or minimization of impacts to marine organisms of CDP’s operations. Resolution No. R9-2008-0039, April 9, 2008, p. 2. 2) Poseidon's Plan, including any amendments that are subsequently approved by the Regional Board, are of limited duration and are applicable only to CDP's current cooperative operation with EPS. When Poseidon proposes to operate independent of EPS or EPS permanently ceases power generation operations, EPS's cessation of power generation operations, would be necessary to further evaluate appropriate mitigation and/or minimization of impacts to marine organisms of CDP's operations. Resolution No. R9-2008-0039, April 9, 2008, p. 3. 3) This Provision was included in Order No. R9-2006-065 to ensure Poseidon Resources Corporation applies the best available site, design, technology, and mitigation measures that are feasible to minimize the intake and mortality of all forms of marine life during periods when the Desalination Plant requires more seawater than is needed by the Encina Power Generation Station. Provision VI.C.2.e is consistent with California Water Code Section 13142.5(b). Public Notice of Availability Flow, Entrainment And Impingement Minimization Plan Poseidon Resources Corporation Carlsbad Desalination Project, February 21, 2007, p. 1. 4) Poseidon’s Plan, including any amendments that are subsequently approved by the Regional Board, are of limited duration and are applicable only to CDP’s current cooperative operation with EPS. When Poseidon proposes to operate independent of EPS or EPS permanently ceases power generation operations, EPS’s cessation of power generation operations, would be necessary to further evaluate appropriate mitigation and/or minimization of impacts to marine organisms of CDP’s operations. Supplemental Executive Officer Summary Report, April 9, 2008, p. 2. 5) If EPS permanently ceases operations and the Discharger proposes to independently operate the existing EPS seawater intake and outfall for the benefit of the CDP (“stand-alone operation”), it will be necessary to evaluate whether, under those conditions, the CDP 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. Tentative Order No. R9-2009-0038, March 13, 2009, p. 2. Approval of the Minimization Plan, and Porter-Cologne compliance is valid only until EPS shuts down. At that point, a new and thorough section 13142.5(b) analysis will be required. Although the Revised Poseidon Resources Carlsbad Desalination Project Environmental Group Comment Letter May 7, 2009 Page 13 Tentative Order provides a mechanism for additional technology or design review upon EPS shutdown, this is not consistent with the Regional Board and Poseidon’s previous position. While EPS is operating, it is expected to supply the majority of the water needed to support desalination operations. As explained in staff’s March 27, 2009 staff report, even though the Minimization Plan in many places discusses stand-alone operations, the Regional Board will reconsider whether the Project satisfies Section 13142.5(b) should EPS cease to operate. At this juncture, then, the Regional Board only need consider whether the Minimization Plan assures the Project will comply with Section 13142.5(b) when EPS provides insufficient water supply for the Project while operating in co-located mode. Latham and Watkins Comment Letter, April 2, 2009, p. 12. Because the Regional Board repeatedly asserted that CDP stand-alone operations would be subject to new Porter-Cologne analysis, changing this mandate at the last minute, after the close of the comment period, with no explanation, is unsupportable. Further, as discussed at length in our previous comment letter, in light of the impending EPS shutdown and regulatory shift in phasing out once-through cooling power plants, compliance with section 13142.5 requires a broader site alternatives analysis than for a co-located CDP. Carlsbad Desalination Project, Environmental Groups’ Supplemental Comments, April 6, 2009, p. 5-7, 13-16. This is especially true for a stand-alone CDP, where all intake and mortality will be attributable to CDP and Poseidon will have to meet all the elements of section 13142.5(b) independently. The Revised Tentative Order thus should require not only a design and technology review under section 13142.5 upon EPS shutdown, but must also clarify that Porter-Cologne section 13142.5(b) requires consideration of all its elements: the best site, design, technology, and mitigation measures. Conclusion The Revised Tentative Order does not accurately reflect the Regional Board’s directive given at the April 8th hearing, nor does it satisfy the NPDES Permit condition or Porter-Cologne section 13142.5(b). Without the requested revisions and clarifications, the Regional Board cannot move forward with approval of the Minimization Plan or adoption of the Revised Tentative Order. Thank you for your careful consideration of these comments. Sincerely, COAST LAW GROUP LLP Marco A. Gonzalez Livia Borak Attorneys for San Diego Coastkeeper and the Surfrider Foundation State of California The Resources Agency of California Memorandum Date: September 10, 2009 Telephone: (916) 654-4894 To: Vice Chairman James D. Boyd, Presiding Member Chairman Karen Douglas, Associate Member Paul Kramer, Hearing Officer From: California Energy Commission – Mike Monasmith 1516 Ninth Street Project Manager Sacramento, CA 95814-5512 Subject: CARLSBAD ENERGY CENTER PROJECT (07-AFC-6) STATUS REPORT #9 Pursuant to the Revised Committee Scheduling Order dated December 26, 2008, staff issues its final Status Report (#9) for the proposed Carlsbad Energy Center Project (CECP) Application for Certification (AFC). Activities subsequent to Status Report #8, filed on July 20, 2009 The discovery and analysis phase for the proposed CECP is complete. The San Diego Air Pollution Control District (SDAPCD) released their Final Determination of Compliance (FDOC) on Tuesday, August 4, 2009. Accordingly, staff’s incorporation of the FDOC into the Air Quality and Public Health sections of the FSA is now complete. FSA Publication, Culmination of Discovery Staff completed its review, incorporated the FDOC, and finalized the last of the FSA sections on September 9, 2009. Management and legal review, which typically require two weeks to complete, will be expedited to the greatest degree possible. Likewise, document formatting, production and distribution, which typically require a week to complete, will also be expedited to the greatest degree possible. Despite the significant curtailment in staff’s ability to work overtime, and a record number of division proceedings (including prioritized solar AFC projects), staff is committed to publishing the FSA, and turning this two-year old proceeding over to the Committee and Hearing Office by September 24, 2009. cc : Docket (07-AFC-6) Proof of Service List DATE SEP 10 2009 RECD SEP 10 2009 DOCKET 07-AFC-6 PROOF OF SERVICE ( REVISED 5/11/09 ) FILED WITH ORIGINAL MAILED FROM SACRAMENTO ON 9/10/09 TG *indicates change 1 BEFORE THE ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION OF THE STATE OF CALIFORNIA 1516 NINTH STREET, SACRAMENTO, CA 95814 1-800-822-6228 – WWW.ENERGY.CA.GOV APPLICATION FOR CERTIFICATION Docket No. 07-AFC-6 FOR THE CARLSBAD ENERGY PROOF OF SERVICE CENTER PROJECT (Revised 5/11/2009) APPLICANT David Lloyd *George Piantka, PE. Carlsbad Energy Center, LLC 1817 Aston Avenue, Suite 104 Carlsbad, CA 92008 david.Lloyd@nrgenergy.com george.piantka@nrgenergy.com APPLICANT’S CONSULTANTS Robert Mason, Project Manager CH2M Hill, Inc. 6 Hutton Centre Drive, Ste. 700 Santa Ana, CA 92707 Robert.Mason@ch2m.com Megan Sebra CH2M Hill, Inc. 2485 Natomas Park Drive, Ste. 600 Sacramento, CA 95833 Megan.Sebra@ch2m.com COUNSEL FOR APPLICANT John A. McKinsey Stoel Rives LLP 980 Ninth Street, Ste. 1900 Sacramento, CA 95814 jamckinsey@stoel.com INTERESTED AGENCIES California ISO e-recipient@caiso.com INTERVENORS Terramar Association Kerry Siekmann & Catherine Miller 5239 EI Arbol Carlsbad, CA 92008 siekmann1@att.net City of Carlsbad Allan J. Thompson Attorney for the City 21 "C" Orinda Way #314 Orinda, CA 94563 allanori@comcast.net *City of Carlsbad Joseph Garuba, Municipals Project Manager Ron Ball, Esq., City Attorney 1200 Carlsbad Village Drive Carlsbad, CA 92008 E-mail preferred Joe.Garuba@carlsbadca.gov Ron.Ball@carlsbadca.gov California Unions for Reliable Energy (“CURE”) Gloria D. Smith & Marc D. Joseph Adams Broadwell Joseph & Cardozo 601 Gateway Boulevard, Suite 1000 South San Francisco, CA 94080 gsmith@adamsbroadwell.com Center for Biological Diversity c/o William B. Rostov EARTHJUSTICE 426 17th St., 5th Floor Oakland, CA 94612 wrostov@earthjustice.org Power of Vision Julie Baker and Arnold Roe, Ph.D. P.O. Box 131302 Carlsbad, California 92013 powerofvision@roadrunner.com Rob Simpson Environmental Consultant 27126 Grandview Avenue Hayward CA 94542 rob@redwoodrob.com ENERGY COMMISSION JAMES D. BOYD Vice Chair and Presiding Member jboyd@energy.state.ca.us KAREN DOUGLAS Chair and Associate Member kldougla@energy.state.ca.us Paul Kramer Hearing Officer pkramer@energy.state.ca.us Mike Monasmith Siting Project Manager mmonasmi@energy.state.ca.us Dick Ratliff Staff Counsel dratliff@energy.state.ca.us Elena Miller Public Adviser’s Office publicadviser@energy.state.ca.us DECLARATION OF SERVICE I, Teraja` Golston , declare that on September 10, 2009, I served and filed copies of the attached, CEC Staff’s Carlsbad Energy Center Project (07-AFC-6) Status Report #9. The original document, filed with the Docket Unit, is accompanied by a copy of the most recent Proof of Service list, located on the web page for this project at: [http://www.energy.ca.gov/sitingcases/carlsbad/index.html]. The document has been sent to both the other parties in this proceeding (as shown on the Proof of Service list) and to the Commission’s Docket Unit, in the following manner: (Check all that Apply) For service to all other parties: 9 sent electronically to all email addresses on the Proof of Service list; 9 by personal delivery or by depositing in the United States mail at Sacramento, California with first-class postage thereon fully prepaid and addressed as provided on the Proof of Service list above to those addresses NOT marked “email preferred.” AND For filing with the Energy Commission: 9 sending an original paper copy and one electronic copy, mailed and emailed respectively, to the address below (preferred method); OR depositing in the mail an original and 12 paper copies, as follows: CALIFORNIA ENERGY COMMISSION Attn: Docket No. 07-AFC-6 1516 Ninth Street, MS-4 Sacramento, CA 95814-5512 docket@energy.state.ca.us I declare under penalty of perjury that the foregoing is true and correct. Original signed by Teraja` Golston CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET SACRAMENTO. CA 95814-5512 www energy ca gov SUPPLEMENT "A" TO THE APPLICATION FOR CERTIFICATION CARLSBAD ENERGY CENTER PROJECT (07-AFC-6) On September 14, 2007, Carlsbad Energy Center, LLC, (the Applicant) submitted an Application for Certification (AFC) for the Carlsbad Energy Center Project (CECP) to the California Energy Commission to develop a new thermal power plant at the existing Encina Power Station in the city of Carlsbad, California. On October 24, 2007, the California Energy Commission received a supplement to the Carlsbad Energy Center AFC. This supplement provided additional information and more detailed explanations about the information contained in the original AFC. On October 31, 2007, the Energy Commission found that, with the supplement, the application is data adequate. The proposed project would be a 558 megawatt (MW) combined-cycle generating facility configured using two Siemens SCC6-5000F, natural gas-fired combustion turbine generators (CTG), two heat recovery steam generators (HRSG), and two steam turbine generators (STG). The CECP units would connect to the electrical transmission system via 138 kilovolt (kV) and 230 kV lines that connect to the nearby existing San Diego Gas & Electric switchyards at the Encina Power Station. Associated equipment would include air pollution control systems necessary to meet the applicant's proposed emission limits. Nitrogen oxide (NO,) emissions would be controlled at the power plant's stack by a combination of Ultra Low NOx corr~bustors in the CTGs and selective catalytic reduction systems in the HRSGs using aqueous ammonia. An oxidation catalyst would be installed to limit stack carbon monoxide (CO) emissions. Emission reductions would be obtained from the simultaneous shutdown of the Encina Power Station units 1, 2, & 3. The CECP site is located in the city of Carlsbad, in San Diego County in an area zoned Public Utility (PU) which specifically allows electrical generation and transmission facilities. The total land acreage of the existing Encina Power Station is approximately 95 acres. The Encina Power Station consists of an approximately 65 acre parcel containing the existing generating equipment (Assessor Parcel Number [APN] 210-01-43) and an approximately 30 acre parcel west of the railroad tracks containing the fuel tanks that are being removed and upon which CECP would be constructed (APN 21 0-01 -41). The CECP would use air-cooling and reduce the current use of ocean water for cooling when units 1, 2, & 3 shutdown. 'The operation of the CECP would use both reclaimed water and potable water supplied by the city of Carlsbad. The CECP would use an average of approximately 112 acre-feet of reclaimed water per year, with a maximum peak reclaimed water use of 517 acre-feet per year. The reclaimed water would be delivered to CECP by the city of Carlsbad through a new reclaimed water pipeline, approximately 3,600 feet long, from a connection point to the existing reclaimed water pipeline system at Cannon Road and Avenida Encinas. Approximately 1,000 feet of this line would be in publicly dedicated or publicly used property. Steam cycle makeup water for CECP would be provided by treating reclaimed water using reverse osmosis and mixed bed ion- Notice Of Receipt November 2,2007 Page 2 exchange technology. Up to 5 acre-feet per year of reclaimed water would be used to irrigate site landscaping annually. Potable water for drinking, eye protection, safety showers, fire protection and service water would be served from the city's existing potable water system. Sanitary/industrial wastewater disposal would be to the city of Carlsbad (Encina Wastewater Authority) sanitary sewer system. A new 12- inch, 1,100 foot sanitary sewer line would connect the CECP site to an existing Encina Wastewater Authority sewer line located within an existing right-of-way at the Encina Power Station, adjacent to the west side of the CECP site. The two CTGs and STGs would be interconnected to the regional electrical grid through new 138 kV/230 kV transmission connection lines that would exit the CECP site to the west and be routed to the respective existing SDG&E switchyards. No offsite electrical transmission lines would be required. The CTGs would be designed to burn natural gas or~ly. Natural gas would be delivered to the CECP site via an 18-inch-diameter pipeline from an existing Southern California Gas high- pressure natural gas pipeline located on the Encina Power Station. This pipeline would extend from the existing Southern California Gas natural gas pipeline which runs adjacent to the CECP site, on the west side parallel to the rail line. At the CECP site, the natural gas would flow through a flow-metering station, gas scrubbertfiltering equipment, a gas pressure control station, and electric-driven booster compressors prior to entering the CTGs. Two 100-percent capacity electric-driven fuel gas compressors would be provided to boost the-pressure to that required by the CTGs. The gas compressors would be located outdoors. The applicant expects to receive a license from the Energy Commission by November 2008, with construction of the project starting in late December 2008 assuming completion of project financing. The applicant has proposed two construction scenarios. In the Single Phase Project Schedule scenario, Unit 1 commercial operation would begin during May 2010, with Unit 2 commencing commercial operation June 2010. In the Phased Construction Schedule scenario Unit 1 commercial operation would begin during July 201 0, with Unit 2 commercial operation beginning January 201 1. Electric power generated at the CECP facility would be sold to a southern California load-serving entity under a long term power purchase agreement. ENERGY COMMISSION REVIEW PROCESS As the lead agency under CEQA, the Energy Commission is responsible for reviewing and ultimately approving or denying all applications to construct and operate thermal electric power plants, 50 MW and greater, in California. The Energy Commission's facility certification process carefully examines public health and safety, environmental impacts and engineering aspects of proposed power plants and all related facilities such as electric transmission lines and natural gas and water pipelines. The first step in the Energy Comn-~ission's review process is for staff to determine whether or not the AFC contains all the information required by its regulations. Now that the Energy Commission has determined the AFC is complete, staff will begin data discovery and issue analysis phases. At this time, a detailed examination of the issues will occur. CARLSBADSEAWATERDESALINATIONPROJECTENERGYMINIMIZATIONANDGREENHOUSEGASREDUCTIONPLANJULY3,2008 TableofContentsINTRODUCTION.11.ProjectOverview22.CCCDraftEmissionsTemplate33.OverviewoftheProject’sGHGReductionStrategy3PartI.IDENTIFICATIONOFTHEAMOUNTOFGHGEMITTED4A.ElectricityUsebytheProject5B.SDG&E’sEmissionFactor5PARTII:ON-SITEANDPROJECT-RELATEDREDUCTIONOFGHGEMISSIONS6A.IncreasedEnergyEfficiency7B.GHGEmissionReductionbyGreenBuildingDesign11C.On-SiteSolarPowerGeneration12D.RecoveryofCO212E.AvoidedEmissionsfromReducingEnergyNeedsforWaterReclamation14F.AvoidedEmissionsfromDisplacedImportedWater15G.AvoidedEmissionsthroughCoastalWetlands17PARTIII:IDENTIFICATIONOFMITIGATIONOPTIONSTOOFFSETANYREMAININGGHGEMISSIONS18A.Annual“True-Up”Process19B.CarbonOffsetProjects—Definition20C.InitialCarbonOffsetAcquisitionProcessandTimeline21D.ProjectRequirements22E.EvaluationCriteria22F.Third-PartyGHGAccounting,andValidation23G.SubsequentREPProcess24H.ContingencyifNoGHGReductionProjectsareReasonablyAvailable24I.ContingencyifNewGHGReductionRegulatoryProgramisCreated25J.ExamplesofOffsetProjects25K.PotentialOffsetProjectsFundedbyPoseidon26L.SequestrationthroughReforestation27M.RenewableEnergyPartnerships28N.ImplementationSchedule290.TheProject’sAnnualNet-ZeroCarbonEmissionBalance31ListofTablesTable1-IdentificationofGrossIndirectCO2EmissionsfromPurchasedElectricityforProjectOperations6Table2-ComparisonofBaselineandHigh-EfficiencyPowerBudgetfor50MGDWaterProductionCapacity9Table3-StateWaterProjectSupplyEnergyUse16Table4-On-siteandProject-RelatedReductionofGHGEmissions18Table5-PotentialRenewableEnergyPartnerships28Table6-ImplementationScheduleforthePlan30Table7-Assessment,ReductionandMitigationofGHGEmissions32 ListofFiguresFigure1-CarlsbadSeawaterDesalinationProject2Figure2-EnergyRecoverySystemfortheCarlsbadSeawaterDesalinationPlant7Figure3-TampaBayDesalinationPlantPeltonWheelEnergyRecoverySystem10Figure4—RelationshipbetweenfreecarbondioxideingaseousformandpH13 ListofAppendicesAppendixA—PoseidonResources’November20,2007ClimateActionPlanAppendixB—PoseidonResources’WrittenResponsestoCCC/CLCAppendixC—DraftCCCGreenhouseGasTemplate&CommentsandResponsesAppendixD—EnergyRecoveryinCaribbeanSeawaterReverseOsmosisAppendixE—PoseidonResources’!WaterAgencies’LetterstoSLCRe:Project’sImpactonImportedWaterUse,November8,2007AppendixF—PurchasingCarbonOffsetProjectsThroughaRequestforProposals(RFP)ProcessAppendixG—ExamplesofOffsetProjectsAppendixH—BrummittEnergyAssociatesFeasibilityStudyRegardingPhotovoltaicSystem CARLSBADSEAWATERDESALINATIONPROJECTENERGYMINIMIZATIONANDGREENHOUSEGASREDUCTIONPLANJULY3,2008INTRODUCTIONInOctober2007,PoseidonResources(Poseidon)madepublicitsvoluntarycommitmenttoaccountforandbringtozerothenetindirectGreenhouseGas(GHG)emissionsfromtheCarlsbadDesalinationProject(Project).PoseidonfolloweditsunprecedentedcommitmentwiththedevelopmentofaClimateActionPlan(CAP),Poseidon’sroadmaptoachievingitscommitmentoverthe30-yearlifeoftheProject.BasedonprotocolsadoptedbytheCaliforniaClimateActionRegistry(CCAR),theCAPwasreviewedbytheCaliforniaCoastalCommission(CCC),theCaliforniaStateLandsCommission(CSLC),theCaliforniaAirResourcesBoard(CARB)and,attherequestofaCoastalCommissioner,theSouthCoastAirQualityManagementDistrict(SCAQMD).OnNovember15,2007,theCCCapprovedtheProjectsubjecttothecondition,amongothers,thattheCCCapprovetheCAPatasubsequenthearing.Specifically,SpecialCondition10statesthat“priortoissuanceofthepermit,thePermitteeshallsubmittotheCommissionaRevisedEnergyMinimizationandGreenhouseGasReductionPlanthataddressescommentssubmittedbythestaffsoftheCoastalCommission,StateLandsCommissionandtheCaliforniaAirResourcesBoard.ThepermitshallnotbeissueduntiltheCommissionhasapprovedaRevisedEnergyMinimizationandGreenhouseGasReductionPlanafterapublichearing.”SincetheSpecialConditionwasadopted,PoseidonhasreviewedcommentsfromtheNovember15hearingaswellasCCCstaff’sdraftfindings,andcontinuedtoworkwiththeCCC,CSLCandCARBtorefinetheCAPandensureacompleteunderstandingoftheprocessitsetsforthtomeetPoseidon’scommitments.Poseidon’sNovember20,2007draftoftheCAPreflectedchangesmadeinresponsetohelpfulcommentsfromtheseagenciesandisattachedtothisdocumentasAppendixA.Poseidon’swrittenresponsestonumerousquestionsandcommentsfromtheCCCandCSLCabouttheCAPareattachedasAppendixB.Morerecently,CCCstaffissuedtoPoseidonadditionalcommentsandadraft“GreenhouseGasEmissionsTemplate”(theDraftCCCTemplate),andinstructedPoseidontoreviseitsCAPinaccordancewiththetemplate.CCCstaffalsorequestedthatPoseidonrenametheCAPwithanewtitle,theProject’sEnergyMinimizationandGreenhouseReductionPlan(thePlan).TheDraftCCCTemplateandthemostrecentcommentsandPoseidonresponsesareattachedasAppendixC.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page1 OnMay2,2008,PoseidonmetwithrepresentativesoftheCCC,CSLCandvariousagenciesintheSanDiegoregiontofurtherdiscussdetailsofthePlananditsimplementation.ThepurposeofthisdocumentistopresentPoseidon’srevisedPlaninresponsetotheadditionalcommentsreceived,theMay2meeting,andthedraftCCCTemplate.1.ProjectOverview.The50milliongallonperday(MGD)Project(Figure1)isco-locatedwiththeEncinagenerationstation,whichcurrentlyusesseawaterforonce-throughcooling.TheProjectisdevelopedasapublic-privatepartnershipbetweenPoseidonandninelocalutilitiesandmunicipalities.In2006,CalifornialegislationintroducedtheAB32GlobalWarmingSolutionsActthataimstoreducetheGI-IGemissionsofthestateto1990levelsbyyear2020.WhileitisunlikelythatthelegislationoritsimplementingregulationswillapplytotheProjectbecausetheProjectonlyemitssignificantGHGsindirectlythroughelectricityuse,1PoseidonapplaudstheobjectivesofAB32’simplementingregulationsarecurrentlybeingdraftedandwillsubsequentlybereleasedforpubliccomment.AB32’sregulations,whenpromulgated,willlikelytargetdirectemittersofGHGs,includingSDG&E(thesourceoftheProject’selectricity),ratherthanindirectemitterssuchastheProject.Inanycase,PoseidonwillmodifyitsPlantoconformwiththeseregulationstotheextentthattheyareapplicabletotheProject.Figure1-CarlsbadSeawaterDesalinationProjectCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page2 AB32andiscommittedtohelpingCaliforniamaintainitsleadershiproleinaddressingthecausesofClimateChange.Asaresult,PoseidonhascommittedtooffsetthenetindirectGHGemissionsassociatedwiththeProject’soperations.Poseidon’svoluntarycommitmenthasbeenincorporatedintotheProject’spermitthroughSpecialCondition10,adoptedbytheCaliforniaCoastalCommissionandagreedtobyPoseidon.AccordingtoSpecialCondition10andCCCstaffdirection,PoseidonisrequiredtosubmitaplanforCommissionreviewandapprovalshowinghowtheProjectwillminimizeitselectricityuseandreduceindirectGHGemissionsresultingfromnetincreasesinelectricityuseoverexistingconditions.2.CCCDraftEmissionsTemplate.ThedraftCCCTemplateestablishes“aprotocolforhowtoassess,reduce,andmitigatetheGHGemissionsofapplicants,”andcallsfortheorganizationofrelevantinformationintothefollowingthreesections:1.IdentificationoftheamountofGHGsemittedfromtheProject,2.On-SiteandProjectrelatedmeasuresplannedtoreduceemissions,and3.Off-sitemitigationoptionstooffsetremainingemissions.AfterabriefexplanationofPoseidon’soverallstrategyforeliminatingtheProject’snetindirectGHGemissions,thisdocumentthenorganizesthePlanintotheCCC’sthreegeneralcategories.3.OverviewoftheProject’sGHGReductionStrategy.SinceoffsettingnetindirectGHGemissionsisanongoingprocessdependentondynamicinformation,Poseidon’splanfortheassessment,reductionandmitigationofGHGemissionsestablishesaprotocolforidentifying,securing,monitoringandupdatingmeasurestoeliminatetheProject’snetcarbonfootprint.OncetheProjectisoperationalandallmeasurestoreduceenergyuseatthesitehavebeentaken,theprotocolinvolvesthefollowingsteps,completedeachyear:1.DeterminetheenergyconsumedbytheProjectforthepreviousyearusingsubstation(s)electricmeter(s)readingsfromSanDiegoGas&Electric’s(SDG&E)oranyotherentityfromwhichtheProjectobtainsallorpartofitselectricityatanytimeinthefuture.2.DetermineSDG&EemissionfactorfordeliveredelectricityfromitsmostrecentlypublishedCCARAnnualEmissionsReport.ReportsareissuedannuallyandareaccessibleontheCCAR’swebsite.EmissionfactorswillbeobtainedfromCARBifandwhenSDG&E’scertifiedemissionfactorfordeliveredelectricityispubliclyavailablethroughCARB‘santicipatedGHGInventoryprogram.IfatanytimeinthefuturetheProjectobtainsallorpartofitselectricityfromanentityotherthanSDG&E,theappropriateCCARemissionfactorforthatentityshallbeused.WhilecurrentemissionsreportsonlyreportC02,futurereportsareexpectedtoincludethefiveadditionalGHGs(methane,nitrousoxide,hydrofluorocarbons,perfluorocarbons,andsulphurhexafluoride).TotheextentthattheseadditionalGHGsareincludedinfuturereports,theywillbeconvertedtocarbonequivalencefortheProjectandoffsetunderthePlan.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page3 3.CalculatetheProject’sgrossindirectGHGemissionsresultingfromProjectoperationsbymultiplyingitselectricityusebytheemissionfactor.4.CalculatetheProject’snetindirectGHGemissionsbysubtractingemissionsavoidedasaresultoftheProject(AvoidedEmissions)andanyexistingoffsetprojectsand/orRenewableEnergyCredits(RECs).5.Ifnecessary,purchasecarbonoffsetsorRECstozero-outtheProject’snetindirectGHGemissions;provided,however,thatifthroughtheprocesssetforthinPartIIIofthisPlan,itisdeterminedthat(i)suchoffsetsorRECsarenotreasonablyavailable;(ii)the“marketprice”forsuchoffsetsisnotreasonablydiscemable;(iii)themarketforoffsets/RECsissufferingfromsignificantmarketdisruptionsorinstability;or(iv)themarketpricehasescalatedtoalevelthatrendersthepurchaseofoffsetsfRECseconomicallyinfeasibletotheProject,Poseidonshallpayafeeintoanescrowfund,withpriornoticetotheCCCandthirdpartyoversight,forthepurposeoffundingGHGoffsetprojectsastheybecomeavailable.Energyefficiencymeasuresandon-siteuseofrenewableresourceswillbegiventhehighestpriority.Inaddition,throughitsannualprogramtooffsetnetcarbonemissionsforthatyear,Poseidonwillcommitthefirst$1millionspentonthisprogramtofundtherevegetationofareasintheSanDiegoregionimpactedbywildfiresthatoccurredinthefallof2007,asdiscussedindetailinPartIIIbelow.2ThefollowingareelementsofthePlanorganizedinaccordancewiththedraftCCCtemplate.PARTI.IDENTIFICATIONOFTHEAMOUNTOFGHGEMITTEDTheProjectwillproducefreshdrinkingwaterusingreverseosmosismembraneseparation.ThetreatmentprocessesusedatthePlantdonotgenerateGHGs.Thedesalinationprocessdoesnotinvolveheatingandvaporizationofthesourceseawaterandthusdoesnotcreateemissionsofwatervapor,carbondioxide,methane,nitrousoxide,hydrofluorocarbons(HFCs),perfluorocarbons(PFCs),orsulfurhexafluoride(SF6).Reverseosmosismembranesdonotrejectthecarbondioxide,whichisnaturallydissolvedinthesourceseawater,andthiscarbondioxideisretainedindissolvedforminthefreshdrinkingwatercreatedbydesalination.ThemodestnumberoffleetvehiclesusedbyplantpersonnelwillcreateasmallamountofGHGemissions,butsincetheseemissionsmakeuplessthan5%oftheProject’scarbonfootprint,theseemissionsareconsidereddeminimisandarenotrequiredtobereported(CCARGeneralReportingProtocolofMarch2007(Chapter5)).TheProjectwillnotstoreorusefossilfuelsonsite,andwillnotself-generateelectricitythatemitsGHGs.Asaresult,ProjectoperationswillnotcreatesignificantdirectsourcesofGHGemissions.Therearenodirectfugitiveemissionsfromtheplant.2TheCaliforniaCoastalCommissionconditionedtheProject’sCoastalDevelopmentPermitonPoseidoncommittingthefirst$1millionspentonthisprogramtotherevegetationofareasimpactedbywildfiresintheSanDiegoregion.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page4 TheProject’ssolesignificantsourceofGHGemissionswillbeindirectemissionsresultingfrompurchasedelectricity.AlloftheelectricitysupplyforthedesalinationplantoperationswillbeprovidedbySDG&E.Therefore,thecompleteaccountingofsignificantGHGemissionsfortheProjectwillconsistentirelyofindirectemissionsresultingfromelectricitypurchasedfromSDG&E.3Currently,about65%oftheelectricitysuppliedbySDG&Eisgeneratedfromfossilfuels4.Asaresult,untilSDG&Eswitchesto100%“green”powersupplysources,theProjectoperationswillbeindirectlylinkedtothegenerationofGHGs.ThetotalnetindirectGHGemissionsoftheProjectfromthestationarycombustionoffossilfuelstogenerateelectricityisdependentonthreekeyfactors:(1)howmuchelectricityisusedbytheProject;(2)sourcesofenergy(fossilfuels,wind,sunlight,etc.)usedtogeneratetheelectricitysuppliedtotheplant,and(3)theAvoidedEmissions,i.e.,theamountofenergysavedoremissionsavoidedasadirectresultoftheProject’soperations.Thesefactorswillvaryovertime.A.ElectricityUsebytheProject.TheProjectwilloperatecontinuously,24hoursadayfor365daysperyear,toproduceanaverageannualdrinkingwaterflowof50milliongallonsperday(MGD).Thetotalbaselinepoweruseforthisplantisprojectedtobe31.3averagemegawatts(aMW),or4.9MWhperacre-foot(AF)ofdrinkingwater.Thepoweruseincorporatesbothproductionoffreshdrinkingwater,aswellasconveyanceanddeliveryofthewatertothedistributionsystemsofthepublicwateragenciesthathavecontractedtopurchasewaterfromtheProject.ThetotalannualelectricityconsumptionfortheProjectBaselineDesignis274,400MWhIyr.B.SDG&E’sEmissionFactor.TheProjectwillpurchaseallofitselectricityfromSDG&E.5Accordingly,theappropriateemissionfactortousefortheProject’sindirectGHGemissionsfromitselectricityuseisSDG&E’sindependentlyverifiedandpublishedemissionfactorfortheelectricitypurchasedandconsumedduringthepreviousyear.Thecertifiedemissionfactorfordeliveredelectricityin2006issetforthintheutility’sAnnualEmissionsReportpublishedbyCCARinApril2008.InthepublishedEmissionsReport,thecurrentcertifiedemissionfactorforSDG&E’s2006deliveredelectricityis780.79lbsofCO2perdeliveredMWHofelectricity.Typically,GHGemissionsfromconstructionofaprojectarenotincludedintheon-goingreportingofGHGsfromoperations.Infact,GHGsfromconstructionarenottypicallyaccountedforinaGHGinventoryatall.SDG&EPowerContentLabel,September2007IfatanytimeinthefuturetheProjectobtainsallorpartofitselectricityfromanentityotherthanSDG&E,theappropriateCCARemissionfactorforthatentityshallbeused.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page5 CircumstanceswillchangeoverthelifeoftheProject.SDG&E’semissionfactorsareupdatedannuallyandtheamountofenergyconsumedbytheProjectmaychange.6Asaresult,itwillbenecessarytorecalculatethenetindirectGHGemissionsoftheProjectonanannualbasisusingtheactualSDG&EemissionfactorreportedtotheCCAR(orCARB).UntilthemandatoryreportingofemissionfactorsunderAB32isavailable,theemissionfactorsforSDG&EregisteredwithCCARarethebestavailableforpurposesofplanningandpermittingthisProject.StatewideinitiativestoexpandtheuseofrenewablesourcesofelectricityareexpectedtodecreasetheemissionfactorsofallCaliforniapowersuppliersinthefuture.Forexample,approximately6%ofSDG&E’sretailelectricityiscurrentlygeneratedfromrenewableresources(solar,wind,geothermal,andbiomass).7Intheirmost-recentLong-termEnergyResourcePlan,SDG&Ehascommittedtoincreaseenergyfromrenewablesourcesby1%eachyear,reaching20%byyear2017.TheseandotherreductionsareexpectedtofurtherreducetheProject’snetindirectGHGemissionsovertime.Table1summarizestheProject’sestimatedgrossindirectCO2emissionsfrompurchasedelectricityforProjectoperations,basedonthemostcurrentinformation.Table1-IdentificationofGrossIndirectCO2EmissionsfromPurchasedElectricityforProjectOperationsSourceTotalAnnualPower-TotalAnnualUseEmissions(MWh/year)(metrictonsC02/year)FrojectBaselineDesign274,40097,165PARTII:ON-SITEANDPROJECT-RELATEDREDUCTIONOFGHGEMISSIONSTodeterminetheProject’sindirectGHGemissions,on-siteandproject-relatedreductionsinemissionsmustalsobeconsidered.Thesearecarbonemissionreductionsthatresultfrommeasuresthatreduceenergyrequirements(increasedenergyefficiency,potentialonsitesolar,recoveryofCO2andgreenbuildingdesign),aswellasProject-relatedemissionsthatwillbeavoided(AvoidedEmissions)asadirectresultoftheProjectanditsvariouscomponents(coastalwetlandsrestoration,reducedenergyusefromwaterreclamation,andreplacingCustomers’SWPwaterwithwaterfromtheProject).6SDG&EAnnualEmissionsReportstoCCARhavechangedeachyear.Foryears2004,2005and2006theemissionsfactorshavebeen614,546and781lbsofCO2IMWh,respectively.SDG&EPowerContentLabel,September2007.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page6 A.IncreasedEnergyEfficiency.PoseidonhascommittedtoimplementcertainmeasurestoreducetheProject’senergyrequirementsandGHGemissions,andwillcontinuouslyexplorenewtechnologiesandprocessestofurtherreduceandoffsetthecarbonfootprintoftheProject,suchastheuseofcarbondioxidefromtheambientairforwatertreatment.Thesemeasuresaresetforthbelow.TheProject’shigh-energyefficiencydesignincorporatesstate-of-the-artfeaturesminimizingplantenergyconsumption.Onesuchfeatureistheuseofastate-of-theartpressureexchanger-basedenergyrecoverysystemthatallowsrecoveryandreuseof33.9%oftheenergyassociatedwiththereverseosmosis(RO)process.AsignificantportionoftheenergyappliedintheROprocessisretainedintheconcentratedstream.Thisenergybearingstream(shownwithredarrowsonFigure2)isappliedtothebacksideofpistonsofcylindricalisobaricchambers,alsoknownas“pressureexchangers”(shownasyellowcylindersonFigure2).Theseenergyexchangersrecoverandreuseapproximately45%oftheenergyusedbytheROprocess.8Figure2-EnergyRecoverySystemfortheCarlsbadSeawaterDesalinationPlant8The“45%percentenergyrecoveryandreuse”referstothegrossenergyrecoverypotential,whilethe“33.9%energyrecoveryandreuse”referstotheactualenergysavingsassociatedwiththeenergyrecoverysystem.Thedifferencebetweengrossandactualenergysavingsisduetomechanicalinefficienciesoftherecoverysystemandassociatedfrictionlosses.Thus,forpurposesofcalculatingtheoverallenergysavings,TabLe2correctlyreflects33.9%savingsassociatedwiththepressureexchanger.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page7 Currentlytherearenofull-scaleseawaterdesalinationplantsintheUSusingtheproposedstate-of-theartpressureexchangerenergyrecoverytechnologyincludedinthe“HighEfficiencyDesign”(Table2).AllexistingseawaterdesalinationprojectsintheUS,includingthe25MGDTampaBayseawaterdesalinationplant,whichbegancommercialoperationonJanuary25,2008,areusingstandardenergyrecoveryequipment—i.e.,Peltonwheels(seeFigure2).Therefore,thePeltonwheelenergyrecoverysystemisincludedinthe“BaselineDesign”inTable2.ThepressureexchangertechnologythatPoseidonproposestousefortheProjectisanationaltechnology.ThemanufacturerofthepressureexchangersreferencedinTable2oftheProjectPowerBudgetisEnergyRecovery,Inc.,aUScompanylocatedinSanLeandro,California(www.energyrecoverv.com).Apilot-scaleseawaterdesalinationplantusingthepressureexchangertechnologyproposedbyPoseidonandsuppliedbyEnergyRecovery,Inc.hasbeeninoperationattheUSNavy’sSeawaterDesalinationTestingFacilityinPortHueneme,Californiasince2005.Theoverallcapacityofthisdesalinationplantis50,000to80,000gallonsperday.ThepilottestingworkatthisfacilityhasbeenconductedbytheAffordableDesalinationCollaboration(ADC),whichisaCalifornianon-profitorganizationcomposedofagroupofleadingcompaniesandagenciesinthedesalinationindustry(www.affordabledesal.com).AportionofthefundingfortheoperationofthisfacilityisprovidedbytheCaliforniaDepartmentofWaterResources(DWR)throughthestate’sProposition50Program.TheDWRprovidesindependentoversightofthisprojectandreviewsprojectresults.Inaddition,representativesoftheCaliforniaEnergyCommissionandtheCaliforniaDepartmentofPublicHealthareontheBoardofDirectorsoftheADC.Theproposedpressureexchangertechnology(i.e.,thesamepressureexchangeremployedattheADCseawaterdesalinationplant)wasindependentlytestedatPoseidon’sCarlsbadseawaterdesalinationdemonstrationplant.MorethanoneyearoftestinghasconfirmedthevalidityoftheconclusionsoftheADCforthesite-specificconditionsoftheProject.ThetestresultsfromtheCarlsbadseawaterdesalinationdemonstrationplantwereusedtocalculatetheenergyefficiencyofthepressureexchangersincludedinTable2.Poseidon’stechnologyevaluationworkattheCarlsbadseawaterdesalinationdemonstrationplantwasindependentlyreviewedandrecognizedbytheAmericanAcademyofEnvironmentalEngineersandbytheInternationalWaterAssociation,whoawardedPoseidontheir2006GrandPrizeinthefieldofAppliedResearch.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page8 Table2-ComparisonofBaselineandHigh-EfficiencyPowerBudgetfor50MGDWaterProductionCapacityCARLSBADDESALINATIONPROJECTCOMPARISONOFBASELINEANDHIGH-EFFICENCYPOWERBUDGETFt’tRSnMtflWTPRPPflflhIt9lflNraparrryUnit- - --BaselineDesign-PowerUseHighEfficencyDesign-PowerUse—AddftionalCostsforHighEfficiency—-QlquipmentEquipmentHp)quipmejEquipmentEquipmentKeyTrecinneritProcessPumpsEfficiencyTypej5EclengIType(US$2800)PcwerPlantlntndiePumps(Steriu,tktieOperahnn)3750StandardMotors-NoWOno,osJ70%!StandardMoose-NoVmsNoneSeawaterlrdekePsmps2.100Stardardsrs-MoWDa1,83880%Higb0ttMetcrs-VFDsUS$071/VReverseOsmosisPumps- -30.130HighE8Messrs-NeWOo30,18082%HighOttMosoro-NoWOnNoneEnergyRecoverySyetee’-PcwerReduchun(7.550)-251Pelser3Me&s(10,200)33Cre005roEchanc°rs‘JS$S6MMPretLctWeterlrartaterPtan%a10,680SsarajardMaisrs-NaVFOe9,35080%HohEffMetars&VFOsJS$34MMPrêeehnecdF’iNerSesteceEquipment-----——rMicroscreenPampe—- - -150-85%SsandardMstsm-NoWOe15085%StandardMoire-NoWOoNnneUltrahihabonVacuumPumps-780—70%SsandardMeters-toWDs68080%HighEliMoire-wishVFOnUS$03MMFilterBecmoveshBlowers40070%StandardMessrsN°VEDs40070%SsandardMessrs-NoVFDsNoneBecloneehPumps—- -———180—70%StandardMessrs-NoWOn16070%StandardMotors-NoVF0—-None.BacloveshEqeelizahenBasisBluwers6070%StardardMesem-NoVFOs8070%StasdardMotors-NeVFOeNoneUFandP0MembraneCleaningSystems-MembraneClearengPumps3070%StandardMeters-NaWOe3070%StandadMessrs-NoVFDsNoneScavengerTaskMcesgSystem5070%StandardMotors-NeWOe5070%StandardMeters-NoWOeNone‘FlushPemps15070%SsandardMotors-NoWOe15070%SsasdardMessrs-NoWOeNoneCieaossgClnsmicalsSystsm8570%SsasdaodMetereNuVcOs15703%SseodaodMusuou-NeWOsNosesSswsrSystemTraasterPueeps1565%StaodaodMesae-NeWDu1565%SterrdardMosces-NeWDsHereCtesoc&FeedEqtapmnsnt-—--PelymerFeedSystem1565%StandardMeters-NoWOe1565%StandardMotnrs-NoWOoNunsAnnesreaFeedSystem3865%StandardIdaters-NoWOn-3065%StanderdMotme-NeWOnNoneLinesFeesSystem20065%StarstardMotre’s-NoWOe2CM)65%StandardMotors-MoWOnNoneCamonesdsFeedSyrdem3065%Standardwosorn-NoWOe3065%StaredardMsturs-MoWDsNose—SndiumHypochlen0e’FeedSystem4865%StandardMoeem-NoVFOs4065%SsaedardMstersNeWONoneOtherChemicalFeedSputena1865%StandardMessrs-NoWOe1065%StandardMotors-NoWDnNunsSenecaFacdbes‘111/AC-250NAStandardEquipmsrt—NAStandardEqaipmensNoneLighteing120NAStandardEqupmsst—120NA$tguipmustNuneCuntrelsandAutumahun40NAStandardEquipmest40NAStaadardEguiprnentNunsArCumpresnurs100—IdAStandardEquipment100—NA‘StandardEquipmontNoneOtherMincollareuutPowerUses2S0NASandardEquipment,,,,,,,jAStasddEquipmentNoneTOTALDESALINATIONPLANTPOWERUSE41996—37,65—- -31.32MW29.09MW!Page9CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08) Table2presentsadetailedbreakdownoftheprojectedpoweruseoftheProjectunderaBaselineDesignandHigh-EnergyEfficiencyDesign.Asindicatedinthistable,theBaselineDesignincludeshighefficiencymotorsforallpumps,exceptthelargestreverseosmosisfeedpumps,andaPeltonwheelenergyrecoverysystemwhichisthemostwidelyused“standard’energyrecoverysystemtoday.Thetotaldesalinationpower.useundertheBaselineDesignis31.3aMW,whichcorrespondstoaunitpoweruseof15.02kWhlkgal9(4,898kWhIAF)’°.Inadditiontothestateoftheart-pressureexchangersystemdescribedabove,theHigh-EnergyEfficiencyDesignincorporatespremiumefficiencymotorsandvariablefrequencydrives(VFDs)ondesalinationplantpumpsthathavemotorsof500horsepowerormore.ThetotaldesalinationplantenergyuseundertheHigh-EnergyEfficiencyDesignisa28.1MW,whichcorrespondstounitpoweruseof13.488kWhIkgal(4,397kWhIAF)’2.ThemainenergysavingsresultfromtheuseofpressureexchangersinsteadofPeltonwheelsforenergyrecovery.Thepressureexchangersareprojectedtoyield2,650hp(2.0aMW)’3ofpowersavings,whichis6.3%reductionofthetotalpoweruseof31.3aMW.Convertedintounitpowersavings,theenergyreductionof2.0aMWcorrespondsto0.95kWh!kgal14(31031.3MWhx1,000kWIMW/AverageFreshWaterProductionRateof2083kg/h.1015.02kWhlkgalx326kgalJAF.1128.1MWhx1,000kW/MW/2083kgalfh.1213.488KWhJkgaIx326kgaIJAF.132650HPxO.746kwfNP142.0x1000kw/MW/2083kga1/HRFigure3-TampaBayDesalinationPlantPeltonWheelEnergyRecoverySystemCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page10 kWhJAF)’5.Theinstallationofpremium-efficiencymotorsandVFDsonlargepumpswouldresultinadditional1.2aMW(4%)ofpowersavings.Thepowersavingsof0.95kWh!kgalassociatedwiththeuseofpressureexchangersinsteadofPeltonwheelsforenergyrecoveryaresubstantiatedbyinformationfromseveralfull-scaledesalinationplantswhichhaverecentlyreplacedtheirexistingPeltonwheelenergyrecoverysystemswithpressureexchangersinordertotakeadvantageoftheenergysavingsofferedbythistechnology(seeAppendixD).AppendixDcontainsenergydataforaseawaterdesalinationplantinMazarron,SpainwhereaPeltonwheelsystemwasreplacedwithPXpressureexchangers.AsindicatedonTable2ofAttachment1,thereplacementresultedinenergyreductionfrom3.05kWhJm3to2.37kWhJm3(i.e.,0.68kWh/rn3or2.57kWhlkgal).Thetotalactualenergyreductionthatwouldresultfromtheuseofstate-of-the-artdesalinationandenergyrecoverytechnologiesanddesignwillbeverifiedbydirectreadingsofthetotalelectricenergyconsumedbythedesalinationplantattheProject’ssubstation(s)electricmeter(s)anddocumentedassoonastheProjectisfullyoperational.B.GHGEmissionReductionbyGreenBui1dinDesi2n.TheProjectwillbelocatedonasitecurrentlyoccupiedbyanoilstoragetanknolongerusedbythepowerplant.ThistankanditscontentwillberemovedandthesitewillbereusedtoconstructtheProject.Becausethefacilityisanindustrialfacility,LEED-levelcertificationwillnotbefeasible;buttotheextentreasonablypracticable,buildingdesignwillfollowtheprinciplesoftheLeadershipinEnergyandEnvironmentalDesign(LEED)program.LEEDisaprogramoftheUnitedStatesGreenBuildingCouncil,developedtopromoteconstructionofsustainablebuildingsthatreducetheoverallimpactofbuildingconstructionandfunctionsontheenvironmentby:(1)sustainablesiteselectionanddevelopment,includingre-useofexistingindustrialinfrastructurelocations;(2)energyefficiency;(3)materialsselection;(4)indoorenvironmentalquality,and(5)watersavings.Thepotentialenergysavingsassociatedwiththeimplementationofthegreenbuildingdesignascomparedtothatforastandardbuildingdesignareinarangeof300MWhJyrto500MWhJyr.Thepotentialcarbonfootprintreductionassociatedwiththisdesignisbetween106and177tonsofCO2peryear.Theenergysavingsassociatedwithincorporatinggreenbuildingdesignfeaturesintothedesalinationplantstructures(i.e.,naturallighting,highperformancefluorescentlamps,high-efficiencyHVACandcompressors,etc.)arebasedontheassumptionthatsuchfeatureswillreducethetotalenergyconsumptionoftheplantservicefacilitiesby6to10%.AsindicatedinTable2,theplantservicefacilities(HVAC,lighting,controlsandautomation,aircompressorsandothermiscellaneouspoweruses)areprojectedtohavepoweruseof760hp(250hp+120hp+40hp+100hp+250hp=760hp)whenstandardequipmentisused.Thetotalannualenergydemandforthesefacilitiesiscalculatedasfollows;760hpx0.746kWfhpx0.001kW/MWx24hrsx365days=4,967MWhJyr.Ifuseofgreenbuildingdesignfeaturesresultin6%ofenergysavings,thetotalannualpowerusereductionoftheservicefacilitiesiscalculatedat0.06x4,967MWhJyr=298.02MWhJyr(roundedto300MWh/yr).Similarly,energysavingsof10%duetogreenbuildingtypeequipmentwouldyield0.1x4,967MWhIyr=150.95kwhlkgalx326kgal/AFCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page11 496.7MWhJyr(roundedto500MWhlyr)ofsavings.Theactualsavingswillbedeterminedduringthefinalbuildingdesignprocess.C.On-SiteSolarPowerGeneration.Poseidonisexploringtheinstallationofrooftopphotovoltaic(PV)systemforsolarpowergenerationasoneelementofitsgreenbuildingdesign.BrummittEnergyAssociatesofSanDiegocompletedafeasibilitystudyinMarch2007ofaphotovoltaicsystemattheCarlsbadDesalinationPlant.(ThesolarfeasibilitystudyisattachedasAppendixH)IfthesolarinstallationdescribedbyBrummittisimplemented,themaindesalinationplantbuildingwouldaccommodatesolarpanelsonaroofsurfaceofapproximately50,000squarefeet,withthepotentialtogenerateapproximately777MWhJyrofelectricity.Ifinstalled,theelectricityproducedbytheonsitePVsystemwouldbeusedbytheProjectandthereforewouldreducetheProject’selectricaldemandonSDG&E.ThecorrespondingreductionoftheProject’sindirectemissionswouldbe275tonsofCO2peryear.Poseidonisexploringothersolarproposalsandwillupdatethisinformationasitbecomesavailable.Ultimately,theelectricityandcorrespondingGHGsavingsofanyon-sitesolarinstallationwillbedocumentedintheProject’sannualelectricityusageinformation.Poseidonwillusecommerciallyreasonableeffortstoimplementanon-sitesolarpowerprojectifitisreasonablyexpectedtoprovideareturnonthecapitalinvestmentoverthelifeoftheProject.IfPoseidonproceedswithanonsitePVsystem,thetotalactualenergyreductionswillbeverifiedbydirectreadingsofthetotalelectricenergyproducedbythesolarpanelsatthesystem’selectricmeteranddocumentedoncethesystemisfullyoperational.D.RecoveryofCO2.Approximately2,100tonsofCO2peryearareplannedtobeusedattheProjectforpost-treatmentoftheproductwater(permeate)producedbythereverseosmosis(RO)system.CarbondioxideinagaseousformwillbeaddedtotheROpermeateincombinationwithcalciumhydroxideorcalciumcarbonateinordertoformsolublecalciumbicarbonatewhichaddshardnessandalkalinitytothedrinkingwaterfordistributionsystemcorrosionprotection.Inthispost-treatmentprocessofROpermeatestabilization,gaseouscarbondioxideissequesteredinsolubleformascalciumbicarbonate.BecausethepHofthedrinkingwaterdistributedforpotableuseisinarange(8.3to8.5)atwhichCO2isinasolublebicarbonateform,thecarbondioxideintroducedintheROpermeatewouldremainpermanentlysequestered.Duringthetreatmentprocessthecalciumcarbonate(calcite—CaCO3)reactswiththecarbondioxideinjectedinthewaterandformscompletelysolublecalciumbicarbonateasfollows:CaCO3(solid)+CO2(gas)+H20(liquid)—fCa(HCO3)2(liquidsolution)AtthetypicalpHrangeofdrinkingwater(pHof8.3to8.5)thecarbondioxidewillremaininthedrinkingwaterinsolubleform(seeFigure4)andtheentireamount(100%)oftheinjectedcarbondioxidewillbecompletelydissolved.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page12 %oftotaliJorgaflicarbon100806040200pHFigure4—RelationshipbetweenfreecarbondioxideingaseousformandpH(Source:http://www.cotf.edulete/moduleslwaterq3/WQassess3bhtml)16Asmallquantityofcarbondioxideusedinthedesalinationplantpost-treatmentprocessissequestereddirectlyfromtheairwhenthepHofthesourceseawaterisadjustedbyadditionofsulfuricacidinordertopreventROmembranescaling.AlargeramountofCO2wouldbedeliveredtotheProjectsitebycommercialsupplierforadditiontothepermeate.Dependingonthesupplier,carbondioxideisofoneoftwoorigins:(1)aCO2GeneratingPlantor(2)aCO216ThischemicalreactionandinformationpresentedonFigure4arewellknownfrombasicchemistryofwater.SeeAmericanWaterWorksAssociation(AWWA)(2007)ManualofWaterSupplyPractices,M46,ReverseOsmosisandNanofiltration,SecondEdition;http://www.chemI.corn/CQ/hardwater.html;http://www.cotf.edu/ete/modules/waterg3/WQassess3b.html.Oncethedesalinateddrinkingwaterisdeliveredtoindividualhouseholds,onlyasmallportionofthiswaterwillbeingesteddirectlyorwithfood.Mostofthedeliveredwaterwillbeusedforotherpurposes—personalhygiene,irrigation,etc.Thecalciumbicarbonateingestedbyhumanswillbedissociatedintocalciumandbicarbonateions.Thebicarbonateionswillberemovedbythehumanbodythroughtheurine(http://www.chemistry.wustl.edui—courses/genchemlTutorials[Buffers/carbonic.htm).SincetheCO2issequesteredintothebicarbonateion,humanconsumptionofthedesalinatedwaterwillnotresultinreleaseofCO2.Thebicarbonateintheurinewillbeconveyedalongwiththeothersanitaryseweragetothewastewatertreatmentplant.Sincethebicarbonateisdissolved,itwillnotbesignificantlyimpactedbythewastewatertreatmentprocessandultimatelywillbedischargedtotheoceanwiththewastewatertreatmentplanteffluent.TheoceanwaterpHisinarangeof7.8to8.3,whichwouldbeadequatetomaintaintheoriginallysequesteredCO2inasolubleform—seeFigure4above.Otherhouseholdusesofdrinkingwater,suchaspersonalhygiene,donotinvolvechangeindrinkingwaterpHasdemonstratedbythefactthatpHofdomesticwastewaterdoesnotdiffersignificantlyfromthatofthedrinkingwater.Aportionofthehouseholddrinkingwaterwouldlikelybeusedforirrigation.Asignificantamountofthecalciumbicarbonateintheirrigationwaterwouldbeabsorbedandsequesteredintheplantroots(http://www.pubmedcentral.nih.gov/pagerender.fcgi?artid=540973&pageindex=1).Theremainingportionofcalciumbicarbonatewouldbeadsorbedinthesoilsand/orwouldentertheunderlyinggroundwateraquifer.FreelevelsI2345678910H121314CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page13 RecoveryPlant.CO2generatingplantsusevariousfossilfuels(naturalgas,kerosene,dieseloil,etc.)toproducethisgasbyfuelcombustion.CO2recoveryplantsproducecarbondioxidebyrecoveringitfromthewastestreamsofotherindustrialproductionfacilitieswhichemitCO2richgasses:breweries,commercialalcohol(i.e.,ethanol)plants,hydrogenandammoniaplants,etc.Typically,ifthesegasesarenotcollectedviaCO2recoveryplantandusedinotherfacilities,suchasthedesalinationplant,theyareemittedtotheatmosphereandtherefore,constituteaGHGrelease.Totheextentthatitisreasonablyavailable,Poseidonintendstoacquirethecarbondioxidefromarecoveryoperation.UseofrecoveredCO2attheProjectwouldsequester2,100tonsofCO2peryearintheProjectproductwater.Thetotalannualuseofcarbondioxide(i.e.,2,100tons/CO2peryear)inthewatertreatmentprocesswasdeterminedbasedonthedailycarbondioxideconsumptionpresentedinTable4.6-2ofSection4.6“HazardsandHazardousMaterials”ofthecertifiedCarlsbaddesalinationprojectEnviromnentalImpactReport(ER).ThedailyconsumptionofCO2inthistableis12,540lbsofCO2/day.Theannualconsumptioniscalculatedas12,540lbs/dayx365days/2,200lbs/ton=2,080.5lbsofCO2/yr(whichwasroundedto2,100ibs/yr).ThedailyamountofcarbondioxideinTable4.6-2oftheEIRwascalculatedbasedonthedosageneededtoprovideadequatehardness(concentrationofcalciumbicarbonate)intheseawatertoprotectthewaterdistributionsystemfromcorrosion.ThisamountwasdeterminedbasedonpilottestingofdistributionsystempipingandhouseholdplumbingattheCarlsbadseawaterdesalinationdemonstrationproject.Thetestingwascompletedusingthesametypeofcalciumcarbonatechipsasthoseplannedtobeusedinthefull-scaleoperations.Everyloadofcarbondioxidedeliveredtothedesalinationplantsitewillbeaccompaniedbyacertificatethatstatesthequantity,qualityandoriginofthecarbondioxideandindicatesthatthiscarbondioxidewasrecoveredasasiteproductfromanindustrialapplicationofknowntypeofproduction(i.e.,brewery,ethanolplant,etc.),andthatitwaspurifiedtomeettherequirementsassociatedwithitsuseindrinkingwaterapplications(i.e.,thechemicalisNSFapproved).Theplantoperationsmanagerwillreceiveandarchivethecertificatesforverificationpurposes.Attheendoftheyear,theoperationsmanagerwillprovidecopiesofallcertificatesofdeliveredcarbondioxidetotheindependentthirdpartyreviewerresponsibleforverificationfacilitycompliancewiththeEnergyMinimizationandGreenhouseGasReductionPlan.Asnoted,verificationwouldbeprovidedthroughcertificatesoforiginreceivedfromsuppliersofCO2deliveredtotheProjectsiteindicatingtheactualamountofCO2deliveredtothesite,dateofdelivery,originoftheCO2,andthepurityofthisgas.PoseidonwillplaceconditionsinitspurchaseagreementswithCO2vendorsthatrequiretransferofCO2creditstoPoseidonandotherwiseensurethattheCO2isnotaccountedforthroughanyothercarbonreductionprogramsoastoavoid“doublecounting”ofassociatedcarboncredits.E.AvoidedEmissionsfromReducingEnergyNeedsforWaterReclamation.TheProjectwillresultinAvoidedEmissionsbecauseitwillcauseachangeinoperationsbytheCarlsbadMunicipalWaterDistrict(CMWD),whichownsandoperatesawaterreclamationfacilitythatincludesmicro-filtration(MF)andROtreatmentfor25%ofitswatersupply.ThepurposeoftheMF/ROsystemistoreducethesalinityoftherecycledwatertobelow1,000mg/LCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page14 soitwillbesuitableforirrigation.TheelevatedsalinityoftherecycledwaterisdueinparttothesalinityoftheCity’sdrinkingwatersupply.TheProjectwilleffectivelyeliminatethisproblembyloweringthesalinityinthesourcewaterofthecommunitiesupstreamofthewaterrecyclingfacility,therebyeliminatingtheneedforoperationoftheMFIROportionofthewaterrecyclingprocess.ImplementationoftheProjectwillsignificantlyreduceorpossiblyeliminatetheneedtooperatetheMF/ROsystem,leadingtoAvoidedEmissionsfromthelowerelectricityusebyCMWD.ThiswillreducethecarbonfootprintoftheCarlsbadWaterReclamationFacilityasfollows:1,950MWhJyrx780.79lbsofCO2/MWh=1,522,541lbsofC02/yr(690tonsofCO2Iyr).ThetotalactualenergyreductionthatwouldresultfromthehigherqualitywateruseupstreamofthewaterrecyclingfacilitywillbeverifiedannuallybyCMWD,usingactualbillingandperformancedata.Thiswillbeaccomplishedthroughacomparisonofthepre-ProjectenergyuseattributabletotheROJMFportionofthewaterrecyclingprocesstothepost-Projectenergyuse.F.AvoidedEmissionsfromDisplacedImportedWater.AnothersourceofAvoidedEmissionswillresultfromtheProject’sintroductionofanew,localsourceofwaterintotheSanDiegoarea;waterthatwilldisplaceimportedwaternowdeliveredtoCustomersfromtheStateWaterProject(SWP)—asystemwithitsownsignificantenergyloadandrelatedcarbonemissions.OneoftheprimaryreasonsforthedevelopmentoftheProjectistoreplaceimportedwaterwithalocallyproducedalternativedrought-proofsourceofwatersupply.Currently,SanDiegoCountyimportsapproximately90%ofitswaterfromtwosources—theSWPandtheColoradoRiver.Theseimportedwaterdeliverysystemsconsistofacomplexsystemofintakes,dams,reservoirs,aqueductsandpumpstations,andwatertreatmentfacilities.TheproposedProjectwillsupply56,000acre-feetofwaterperyeartotheSanDiegoregion.TheProjectwillprovidedirect,one-to-onereplacementofimportedwatertomeettherequirementsoftheparticipatingwateragencies,thuseliminatingtheneedtopump56,000acrefeetofwaterintotheregion.’7The2003multi-stateColoradoRiverquantitativesettlementagreementforcedMetropolitanWaterDistrictofSouthernCalifornia(MWD)toreduceitspumpingfromtheColoradoRiverby53%--from1.20MAFYto0.56MAFY.Asaresult,MWDnowoperatesitsimportedwaterdeliverysystemtobaseloaditsColoradoRiverallotmentanddrawfromtheSWPonlyasneededtoservedemandthatcannotbemetbythelowercostwateravailablefromtheColoradoRiverAqueduct.Consequently,theproposedProjectwillreducetheCustomersdemandontheSwP.17SeePoseidonResourcesCorporationLettertoPaulThayerRe:DesalinationProject’sImpactonImportedWaterUse,November8,2007,includingattachmentsfromninewateragencies(AttachedasAppendixE).CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page15 ThetotalamountofelectricityneededtoprovidetreatedwatertoPoseidon’spublicagencypartnersviatheSWPfacilitiesisshowninTable1.Thenetpowerrequirementtopumpanacre-footofwaterthroughtheEastBranchoftheSWPis3,248KWh(source:DWR).Approximately2%oftheSWPwaterpumpedtoSouthernCaliforniaislosttoevaporationfromDepartmentofWaterResources’reservoirslocatedsouthoftheTehachapiMountains(source:DWR).Theevaporationlossresultsinanetincreaseof68.3KWhperacre-footofSWPwateractuallydeliveredtoSouthernCaliforniahomesandbusinesses.Finally,priortouse,theSWPwatermustbetreatedtomeetSafeDrinkingWaterActrequirements.TheSanDiegoCountyWaterAuthority(SDCWA)enteredintoaservicecontractwithCH2MHillConstructors,Inc.,tooperateitsTwinOaksWaterTreatmentPlantwithaguaranteedelectricityconsumptionof100KWh/AFofwatertreated(source:SDCWA).TheelectricityrequiredtodeliveranacrefootoftreatedwatertotheSDCWAisshowninTable3.Table3-StateWaterProjectSupplyEnergyUseenergyDemandKWhIAFSourcePumpingThroughEastBranch3248DWRvaporationLoss68DWRfwinOaksWaterTreatmentPlant100SDCWATotal3416ThereductionofdemandforimportedwateriscriticaltoSouthernCalifornia’swatersupplyreliability,somuchsothatMWDnotonlysupportstheProject,buthasalsocommitted$14millionannuallytoreducethecosttoPoseidon’scustomers.UnderMWD’sprogram,$250willbepaidtowateragenciesforeveryacre-footofdesalinatedwaterpurchasedfromtheCarlsbadfacility,solongasthedesalinatedwateroffsetsanequivalentamountofimportedwater.MWDhasestablished“SeawaterDesalinationPolicyPrinciplesandAdministrativeGuidelines”thatrequirerecordkeeping,annualdatasubmittals,andMWDauditrightstoensurethatMWDwaterisoffset.’8ThebenefitsofareductionindemandonMWD’ssystemarereflectedin,amongotherthings,theenergysavingsresultingfromthepumpingofwaterthat—butfortheProject—wouldhavetocontinue.Foreveryacre-footofSWPwaterthatisreplacedbywaterfromtheproposedProject,3.4MWhofelectricityusetodeliverwatertoCustomersisavoided,alongwithassociatedcarbonemissions.AndsincetheProjectrequires4.4MWhofelectricitytoproduceoneacre-footofwater,thenetelectricityrequiredtodeliverwaterfromtheProjecttoCustomersis1.0MWh/AF.BecausetheProjectwillavoidtheuseof56,000AFYofimportedwatertoCustomers,onceinoperation,theProjectwillalsoavoid190,641MWh/yrofelectricityconsumptionotherwise18MWD’sprogramisdocumentedinaJune22,2007letterfromitsGeneralManagertoPeterDouglas,ExecutiveDirectoroftheCaliforniaCoastalCommission,aswellasvariouscontractswithrelevantwateragencies.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page16 requiredtodeliverthatwatertoCustomers,aswellastheGHGemissionsassociatedwithpumping,treatmentanddistributionofthisimportedwater.At780.79lbsCO2perMWh,’9thetotalAvoidedEmissionsasaresultoftheProjectis67,506metrictonsC02/yr.G.AvoidedEmissionsthroughCoastalWetlands.TheProjectalsoincludestherestorationandenhancementofmarinewetlands.TherestorationprojectwillbeintheproximityoftheProject.Thesewetlandswillbeset-asideandpreservedforthelifeoftheProject.Oncethewetlandsarerestoredtheywillactasacarbon“sink”orcarbonsequestrationprojecttrappingCO2.Tidalwetlandsareveryproductivehabitatsthatremovesignificantamountsofcarbonfromtheatmosphere,alargeportionofwhichisstoredinthewetlandsoils.WhilefreshwaterwetlandsalsosequesterCO2,theyareoftenameasurablesourceofmethaneemissions.Coastalwetlandsandsaltmarshes,however,releasenegligibleamountsofgreenhousegasesandtherefore,theircarbonsequestrationcapacityisnotmeasurablyreducedbymethaneproduction.BasedonadetailedstudycompletedinacoastallagooninSouthernCalifornia,theaverageannualrateofcarbonsequestrationincoastalwetlandsoilsisestimatedat0.033kgofC/m2.yr(a5,000yearaverage,BrevickE.C.andHomburgJ.A.,2004).20Intidalecosystems,sedimentaccumulationrates(viasuspendedsedimentsupply,tidalwaterflooding,etc.)exhortamajorcontroloncarbonsequestrationrates.SoilcarbonsequestrationratesdeterminedrecentlyintheTijuanaEstuaryontheMexico/USAborderweredeterminedtobe0.343kgofC/m2.yr(Cahoonet.al1996).21(4=Cahoon,D.R.,J.C.Lynch,andA.Powell,MarshverticalaccretionratesinaSouthernCaliforniaestuary,U.S.A.,Estuar.Coast.ShelfSci.,43,19-32,1996).Giventhatthetotalareaoftheproposedwetlandprojectis37acres,thecarbonsequestrationpotentialofthewetlandsisbetween4.9and51tonsofC/m2.yr.Thesenumbersarecalculatedasfollows:SequestrationRate(.033kgofC/m2.yrand0.343kgofC/m2.yr)xArea(37acres=149,732.5m2)xWeightconversion(1000kgC=1metrictonofC)=tonsofCsequestered/m2.yr(asgivenabove).TogetfromthisunitthestandardgreenhousegasunitoftonsofCO2(notC)ofsequesteredperyear,theconversionfactoris3.664.Therefore,theemissionsavoidedfromthewetlandsareestimatedtobebetween18and188tonsofCO2peryear.Inordertoverifytheactualsoilcarbonsequestrationrateoftheproposedwetlandecosystem,site-specificmeasurementswillneedtobemade.ProtocolsforwetlandsarebeingcurrentlybeingdevelopedforinclusionwithintheCleanDevelopmentMechanismoftheKyotoProtocol,andwewillusetheseprotocolsuntilCCARmakesitsownwetlandprotocolavailable.Weanticipatefullinclusionwetlandprotocolstobecomeavailablewithinthelifetimeofthisproject.ButfortheProject,thewetlandsmitigationwouldnotoccur,andthereforeitsatisfiesthe19SincetheSWPdoesnothaveapublishedAnnualEmissionsReportwiththeCCAR,PoseidonusedthecertifiedemissionfactorforSDG&Esystem.Poseidonbelievesthisaconservativeestimateandwillupdateitscalculationswhenmoreaccuratedataisavailable.20www.sic.ca.govlReports/CarlsbadDesalinizationPlantResponse/Attachment4.pdf21www.sfbayiv.org/tools/climate/CarbonWtlandsSummary07Trulio.pdfCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page17 RegulatorySurplusadditionalitytest.(See,CarbonOffsetProjects—Definition(Page16herein)foramoredetaileddiscussionoftheRegulatorySurplusadditionalitytest.)Table4summarizestheon-siteandproject-relatedreductionsofGHGEmissions.Table4-On-siteandProject-RelatedReductionofGHGEmissionsSourceTotalAnnualTotalAnnualReductionsinPowerEmissionsAvoidedUse(metrictonsC02/(MWbIyearsaved)yearavoided)LeductionduetoHigh-EfficiencyDesign(28,244)(10,001)EreenBuildingDesign(300to500)(106to177)On-siteSolarPowerGeneration(0-777)(0-275)ecoveryofCO2(NA)(2,100)educingEnergyNeedsforWaterRecycling(1,950)(690)EeducedWaterImportation(190,641)(67,506)equestrationinCoastalWetlands(NA)(18to304)SubtotalOn-siteReductionMeasures(NA)(80,421to81,053)PARTIII:IDENTIFICATIONOFMITIGATIONOPTIONSTOOFFSETANYREMAININGGHGEMISSIONSOffsitereductionsofGHGemissionsthatarenotinherentlypartoftheProjectincludeactionstakenbyPoseidontoparticipateinlocal,regional,state,nationalorinternationaloffsetprojectsthatresultinthecost-effectivereductionofGHGemissionsequaltotheindirectProjectemissionsPoseidonisnotabletoreducethroughothermeasures.Onesuchoffsetproject—theexpenditureofonemilliondollarstoreforestareasburnedoutbyfiresintheSanDiegoregioninthefallof2007—hasbeenidentifiedbytheCCCasthefirstpriorityamongthesemeasures.Assetforthinmoredetailbelow,otherprojectswillbeidentifiedthroughaselectionprocessbeginningaboutfifteenmonthsbeforeoperationscommence,startingwiththeissuanceofaRequestforProposal(RFP)forcarbonoffsetprojectsandrenewableenergycredits(RECs).CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page18 TheRFPwillrequirecompliancewithcomprehensivestandardsforcarbonoffsetprojectssuchasthosesetforthinAB32.22Workingwithanexperienced,qualifiedcarbonoffsetbroker—togetherwiththeCaliforniaCenterforSustainableEnergy(CCSE)andarepresentativewithexpertisewithgreenhousegasmitigationandenergyorairregulatorypolicyjointlyselectedwithCCCstaff,—Poseidonwillselectthemostcost-effectivemixthatmeetsthecriteriadescribedherein,andthencontractfortheacquisitionordevelopmentoftheprojectsselected.TheexactnatureandcostoftheoffsetprojectsandRECswillnotbeknownuntiltheRFPprocessiscomplete.OffsetsorRECswillalsobeusedastheswingmitigationoptionto“true-up”changesovertimetotheProject’snetindirectGHGemissions,asdiscussedbelow.A.Annual“True-Up”ProcessSincethequantityofoffsetsrequiredwillvaryfromyear-to-year,thegoaloftheannual“True-Up”processistoenablePoseidontomeetthesubjectyear’sneedformetrictonsofoffsetsbypurchasingorbankingoffsetsintheshort-term,whileallowingPoseidontomakelong-termpurchasesandbankoffsetstodecreasemarketexposureandadministrativecosts.TocompletetheTrue-Upprocess,CCSEwillobtainthelatestSDG&Eemissionfactorfromtheannualweb-basedCARBorCCAREmissionsReportwithin60daysoftheendofeachcalendaryear,orthedateofpublicationoftheCARBorCCAREmissionsReportontherelevantCARBorCCARwebsite,whicheverislater.Within120daysoftheendofthepriorcalendaryearorpublicationoftheemissionfactor(whicheverislater),CCSE,withassistancefromPoseidonasneeded,willgatherelectricityusagedata,relevantdataregardingAvoidedEmissions,andthencalculatethenecessarymetrictonsofoffsetsrequiredforthesubjectyear.Thesubjectyear’semissionswillbecalculatedusingactualbillingdataandtheemissionsfactorfortherelevantannualperiod.Thesubjectyear’scalculatedmetrictonsofoffsetswillbecomparedtotheamountofmetrictonsofoffsetspreviouslyacquiredbyPoseidontodetermineifPoseidonissurplusordeficitforthesubjectyear,andallofthisinformationwillbeincludedintheAnnualGHGReporttobereviewedbytheSanDiegoAirPollutionControlDistrict(“SDAPCD”)forconsistencywiththerequirementsofthisPlanasdiscussedbelow.Ifthereisadeficitofoffsets,Poseidonwillpurchaseoffsetstoeliminatethedeficitwithin6monthsofthedatethedeficitisconcurredwithbySDAPCDafteritsreviewoftheAmiualGHGReport.Ifthereisasurplusofoffsets,thesurplustonsmaybecarriedforwardintosubsequentyearsorsoldbyPoseidonontheopenmarket.PriortothecommencementofProjectoperations,Poseidonwillberequiredtopurchaseoffsetssufficienttocoverestimatednet(indirect)GHGemissionsforatleastthefirstyearofoperation(asdeterminedbyCCSEandsubjecttoSDAPCDconcurrence),ortocoveralongerperiodoftimeatPoseidon’soption,basedonthemostrecentlypublishedSDG&EemissionfactorfromCARBorCCARandestimatedelectricityusagedataforthefirstyearof.theProjectperiodforwhichoffsetsareinitiallypurchased.Poseidonwillhavetheoptiontopurchaseoffsetsforany22Part4,Section38562(d)(1)&(2)statesthatCARBregulationscoveringGHGemissionreductionsfromregulated“sources”mustensurethatsuchreductionsare“real,permanent,quantifiable,verifiable,.. .enforceable[andadditional]”.WhiletheProjectisnota“source”underAB32andthecriteriaarenotcurrentlydefinedunderimplementingregulations,Poseidonwillevaluatepotentialoffsetprojectsagainstthecriteriausingthebestavailableprotocolsthatemploythesamecriteria.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page19 longerperiodoftimeuptoandincludingtheentire30yearlifeoftheProject,subjecttoPoseidon’sabove-statedobligationtoaddressanydeficitincreditsthatmaysubsequentlyarise.B.CarbonOffsetProjects—Definition.23Anoffsetiscreatedwhenaspecificactionistakenthatreduces,avoidsorsequestersgreenhousegas(GHG)emissionsinexchangeforapaymentfromanentitymitigatingitsGHGemissions.Examplesofoffsetprojectsinclude,butarenotlimitedto:increasingenergyefficiencyinbuildingsorindustries,reducingtransportationemissions,generatingelectricityfromrenewableresourcessuchassolarorwind,modifyingindustrialprocessessothattheyemitfewerGHGs,installingcogeneration,andreforestationorpreservingforests.OnetypeofoffsetprojectisRenewableEnergyCredits(RECs),alsoknownasGreenTags,RenewableEnergyCertificatesorTradableRenewableCertificates.EachRECrepresentsproofthat1MWofelectricitywasgeneratedfromrenewableenergy(wind,solar,orgeothermal).ForGHGoffsettingpurposes,purchasinganRECistheequivalentofpurchasing1MWofelectricityfromarenewableenergysource,effectivelyoffsettingtheGHGsotherwiseassociatedwiththeproductionofthatelectricity.RECsmaybesoldseparatelyfromelectricity.Poseidoniscommittedtoacquiringcost-effectiveoffsetsthatmeetrigorousstandards,asdetailedinthisPlan.Byrequiringadherencetotheprinciples,practicesandperformancestandardsdescribedhere,thePlanisdesignedtoassurethatselectedoffsetprojectswillmitigateGHGemissionsaseffectivelyason-siteordirectGHGreductions.AdherencewillensurethattheoffsetprojectsacquiredbyPoseidonarereal,permanent,quantifiable,verifiable,enforceable,andadditional.Additionality.Theconceptof“additionality”wasintroducedinArticle12.5oftheKyotoProtocol,whichstatesthat“emissionreductionsresultingfromeachprojectactivityshallbe.reductionsinemissionsthatareadditionaltoanythatwouldoccurintheabsenceofthecertifiedprojectactivity”.Poseidonwillassesstheadditionalityofeachprojectproposalonacase-by-casebasis.Offsetprojectproposers—i.e.,thosewhorespondtoanRFP—willberequiredtodemonstratetheadditionalityoftheirproject.Specifically,Poseidon,workingwithathirdpartysuchasCCSEandsubjecttoconcurrencebythegreenhousegasmitigationandenergyorairregulatorypolicyexpert,willperformaninitialscreeningofallproposedoffsetprojectsagainstthefollowingadditionalitytestsbeforeevaluatinganyotheraspectsoftheproposedproject.AlongwithapplicableAB32criteria,ifany,thecarbonoffsetacquisitionprocesswillutilizethreewidelyusedteststodetermineaproject’sadditionality:1)RegulatorySurplusTest,2)BarriersTests,and3)CommonPracticeTest.ThesetestsarebasedontheKyotoProtocol’sCleanDevelopmentMechanismmethodology,aswellastheWorldResourceInstitute’sGI-IGProtocolforProjectAccounting;andaretheemergingnormsandbestpracticesintheburgeoningoffsetmarketintheUnitedStatesandinternationally.Test1:RegulatorySurplus.TheRegulatorySurplusTestensuresthattheprojectthatisproposedisnotmandatedbyanyexistinglaw,policy,statute,regulation,orotherlegalobligations.Otherwise,itisassumedthattheprojectisbeingdevelopedtocomplywiththelaworregulationandthuscannotbeconsideredadditionaltothebusinessasusualscenario.23ThefollowingtwosectionsarebasedoninformationprovidedbytheClimateTrust(http://www.climatetrust.org/)CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page20 Test2:ImplementationBarriers.Theimplementationbarrierstestsareattheheartoftheadditionalitydeterminationprocess.Therearethreemainimplementationbarrierstests:1)Financial,2)Technological,and3)Institutional.Aprojectmustmeetatleastoneofthefollowingbarrierstestsinordertobeconsideredadditional.Test2(a):FinancialBarriers.TheFinancialBarriersTestaddresseshowoffsetfundingimpactstheprojectinquestion.Financialbarrierstestsaregenerallyconsideredtobeoneofthemorerigorousandstringenttestsofadditionality.Therearetwomaintypesoffinancialbarriersaprojectcanface:capitalconstraintandinternalrateofreturn.TheCapitalConstraintTestaddresseswhetheraprojectwouldhavebeenundertakenwithoutoffsetfunding.Internalrateofreturnindicateswhetherornotaprojectwouldhavemetestablishedtargetsforinternalratesofreturnwithoutoffsetfunding.Thesearenottheonlyacceptabletestsoffinancialbarriers,butarethemostcommonlyused.Positiveeconomicreturnsdonotnecessarilymakeaprojectnon-additional.Thereareinstanceswhereprojectswithhighratesofreturnremainunimplemented—theenergyefficiencysectoristhemostwellknowoftheseexamples.Todemonstrateadditionalityforprojectsthatgenerateratesofreturn,itcanbeusefultodescribethebarriersfacedbytheprojectbyincludingaclearexplanationoftheprojectsreturnratewithaproformafinancialanalysisshowingboththewithandwithoutprojectcase.Forexample,CompanyYtypicallydoesnotpursueprojectactivitiesunlesstheyprovidea15%rateofreturn.Anenergyefficiencyupgradeatthefacilitywillgeneratea5%rateofreturn.Theadditionalitycaseisthatoffsetfundingcanbeusedtoincreasethereturnoftheefficiencymeasurestoalevelthatisacceptabletomanagement.Test2(b):TechnologicalBarriers.Thereareseveralcategoriesofassessmentthatcouldfallunderthistest.IftheprimaryreasonforimplementingatechnologyisitsGHGreductionbenefits,thatprojectisgenerallyconsideredtobeadditional.Forexample,ifamoreenergyefficient,thoughmoreexpensivetomanufacture,modelofahotwaterheaterisavailableandtheadditionalcostisbarringitsentryintothemarket,offsetfundingcanhelpbridgethatgapandbringatechnologytomarketthatotherwisewouldnothavebeen.Inthiscase,theGHGreductionsresultingfromthedeploymentofthenewtechnologyareclearlyaboveandbeyondbusinessasusual.Test2(c):InstitutionalBarriers.Institutionalbarrierscanbeorganizational,socialorcultural.IfaGHGreductionprojectfallsoutsideofthenormalpurviewofacompanyororganizationandthereisreluctancetoimplementaprojectthatisnotwithinthatpurviewortocapitalizeaprojectwithuncertainreturns,offsetfundingcanoftenassistinovercomingthatbarrier.Test3:CommonPractice.Thistestisintendedtodeterminewhetherornotaprojectistrulyaboveandbeyond“businessasusual”.Ifapracticeiswidelyemployedinafield,itisnotconsideredadditional.C.InitialCarbonOffsetAcquisitionProcessandTimeline.Therearethreephasestotheinitialoffsetacquisitionprocess.Itisexpectedtotakeupto12monthsfromthetimeofthereleaseoftheinitialRFPuntilEmissionReductionProjectAgreements(ERPAs)arecompleted.ThedevelopmentoftheRFPshouldtakeanadditional3months.TheRFPwillbereleasedpriortothecommencementofProjectoperations,and,asstatedabove,PoseidonwillberequiredtodemonstratetheacquisitionofoffsetsforthefirstyearCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page21 oftheProjectbeforeitmaybegintooperate(asdeterminedbyCCSEandsubjecttoSDAPCDconcurrence).PhaseI:SubmissionofProjectInformationDocument.Offsetprojectproponentswillberequiredtocompleteanapplicationgivingsufficientinformationabouttheproposedproject.TheofficialrequirementsforsubmissionwillbesetforthintheRFP.TwoexamplesofashortandlongProjectInformationDocumentareincludedinAppendixF.•PhaseII:DetailedProjectInformationDocument.Aselectedshort-listofproposalswillbeinvitedtosubmitamoredetailedprojectinformationdocument.•PhaseIII:ContractFinalization.SelectedproposalswillbeinvitedtofinalizeanERPA.Theamountofthefunding,tonsofGHGoffsets,andothertermswillbesetforthinthefinalERPA.D.ProjectRequirements.PoseidonwilldetailintheRFP,whichwillbesubjecttoreviewandapprovalbytheCommittee(definedinSectionF.below),therequirementsprojectproposersmustadheretoinordertoqualifyforconsideration.Theprojectrequirementswillinclude,atminimum,thefollowing:•Minimumprojectsize(e.g.,theprojectreducesoravoidsatleast25,000metrictonsofCO2emissionsoverthecontractterm).•Minimumtermforthesaleoftheiremissionsreductions(i.e.,termsof1-5years,atleast5years,uptothelifeoftheproject,orbeyondforsequestrationprojects).•Geographicboundariesforacceptableprojects.Poseidonwillestablishahierarchyofgeographicpreference,beginningwithlocalandregionalprojects,thenin-state,national,andinternationalprojects.•ContracttermsandconditionsbasedonastandardEmissionReductionPurchaseAgreement(ERPA).•PriceTargetforeachmetrictonofcarbonoffset.•Timelineandmilestonedates•DemonstratethroughEvaluationCriteriasetforthinPartIII.Ebelowthattheprojectisreal,permanent,quantifiable,verifiable,enforceable,andadditional.•A$1millioninvestmentinreforestationofareasintheSanDiegoregionimpactedbythewildfiresthatoccurredduringthefallof2007.E.EvaluationCriteria.TheREPwillclearlysetforththecriteriatoevaluateandselectthefinalprojectsforcontracting.EachprojectwillbeevaluatedbytheCommitteetodeterminewhetherornotitmeetstheinitialrequirements,includingwhethertheprojectmeetstheadditionalitytestandisanotherwiseeligibleprojecttype.Onlythosethatpassthesetestswillbeconsideredfurther.Amongotherfactors,proposedoffsetprojectapplicantswillberequiredtocompleteanextensiveapplicationtoallowtheCommitteetofullyevaluatetheproject.PoseidonwillmakethefinaldecisiononwhichCommittee-approvedoffsetprojectstofund.Selectioncriteriawillincludeatleastthefollowing:CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page22 1.CostEffectiveness.ThemeasureofcosteffectivenesswillbedefinedasU.S.dollarspermetricton.Costeffectivenesswillbedeterminedusingcomparativeevaluationcriteria,providedthatnomeasurewillbedeemedcost-effectiveifitexceeds110%ofthegoingmarketprice(totheextentamarketpriceforcarbonoffsetsisreasonablydiscernable)foroffsetsintheUnitedStates.ThisprovisionshallnotapplytoPoseidon’scommitmenttocontribute$1milliontowardsreforestationofareasintheSanDiegoregionimpactedbythe2007wildfires.2.Additional.TheCommitteewillassesswhethertheproposedprojectpassesanyofthethreeadditionalitytestsdescribedabove.3.ReliabilityofProposingEntity.TheCommitteewillconsiderthequalificationsoftheproposingentity,theproposingentitiespastexperiencewithsimilarprojects,ifany,andthequalificationsofanyorganizationscooperatingwiththeproject.ProposingentitiesshouldberequiredtodemonstratetheirfinancialandinstitutionalcapabilitytodelivertheGHGemissionreductionsthattheypropose.Thiscriterionassesseswhethertheprojectisreal,permanentandenforceable.4.ReliabilityofProjectConcept.Inevaluatingthereliabilityofoffsetsdelivery,theCommitteewillconsiderthequalityoftheprojectconceptanddesign,andtheperformanceofsimilarprojects.Thiscriterionassesseswhethertheprojectisreal,permanentandquantifiable.5.MonitoringandVerificationPlan.TheCommitteewillrequirehighqualityMonitoringandVerification(M&V)Planstobeimplementedforallprojects.AlthoughfinalM&VPlansarenotexpectedtobedevelopeduntillaterintheprocess,adetailedM&Vconceptisencouraged.Thiscriterionassesseswhethertheprojectispermanent,quantifiable,verifiableandenforceable.6.MitigatingFinancialRiskofInitiativeParticipants.TheCommitteewillgivepreferencetoprojectsthatreducetheriskthattheirinvestmentmaynotyieldtheanticipatedamountoftonsofGHGoffsets.TheCommitteewillevaluatealltheriskmitigationoptionsthatapplicantspropose.Thiscriterionassesseswhethertheprojectisrealandenforceable.7.WillingnesstoAcceptERPATermsandConditions.Thiscriterionassesseswhethertheprojectisenforceable.8.Location.Thiscriterionassesseswhethertheprojectwillbealocal,regional,in-state,national,orinternationalproject,withpreferencegiventolocal,regionalandin-stateprojects.F.Third-PartyGHGAccountinandValidation.Throughouttheoffsetselectionandimplementationprocess,Poseidonwillworkwithexperiencedthirdpartybrokersthatspecializeintheevaluationandselectionofoffsetprojects.PoseidonwillalsoworkwithCCSE,anindependentthirdpartythatwillbechargedwithimplementingtheoffsetprogramandensuringPoseidon’sGHGaccountingandRFPprocessisaccurateandconformstotherequirementsofthisPlanandrelevantprotocol.AnOffsetEvaluationandMonitoringCommittee(theCommittee)shallbeformedandwillconsistofonerepresentativeeachfromCCSEandPoseidon,withathirdmemberfromacademiatobeselectedjointlybyCCSEandPoseidon,subjecttoCCCStaffapproval.TheacademicianshallhaveaCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page23 backgroundinenergyorairregulatorypolicyandgreenhousegasmitigation.TheCommitteewillhaveprimaryresponsibilityforoverseeingthecarbonoffsetpurchasingandimplementationprocess.AlthoughPoseidonwillhaverepresentationontheCommittee,CCSEwillretainresponsibilityforensuringthatimplementationoftheoffsetprogramconformstothePlanandotherapplicablerequirements,includingthatalloffsetsavailableforselectionbyPoseidonmeettherequirementsofPartIII.Cabove.Subjecttofurtherreviewandapprovalbyitsgoverningboard,SDAPCD24willoverseeonanannualbasistheworkdonebyPoseidon,CCSEandtheCommittee,andwillmanageapubliclyaccessibledatabaseforthePlan.CCSEwillprepareandsubmittoSDAPCDadraftannualreport(theAnnualGHGReport)thatwillanalyzeandvalidate(1)theannualGHGemissioncalculationsfortheProject,(2)thecreditordeficitinPoseidon’sGHGoffsetbank,(3)thevalidityofoffsetprojectsagainstthecriteriasetforthinPartIII.Cabove,and(4)anyotherinformationrelatedtoPoseidon’seffortstomitigateGHGemissionsresultingfromtheProject’selectricityusage.TheAnnualGHGReportshallbesubmittedbyCCSEtoSDAPCDwithin120daysoftheendofthepriorcalendaryearorpublicationoftheSDG&EemissionfactorintheannualCCARorCARBEmissionsReport,whicheverislater,asdetailedabove.SDAPCDwillreviewtheAnnualGHGReportforconsistencywiththerequirementsofthisPlan,andsendthefinalreporttotheCCCandtheCSLC,withcopiestoPoseidonandCCSE.AfterreviewingtheAnnualGHGReport,SDAPCDwillindicatewhetherornotPoseidon’sactivitiesconformtothePlan.IntheeventthatSDAPCD,afterreviewingtheAnnualGHGReport,concursthatPoseidonhasadeficitinitsGHGoffsetbankforaparticularyear,Poseidonshallpurchaseoffsetssufficienttomakeupthedeficitwithinsixmonths.IfanapprovedAnnualGHGReportdemonstratesthatPoseidonpossessesasurplusofoffsetcredits,Poseidonwillbefreetocarrythosecreditsforwardintosubsequentyearsorsellthemontheopenmarket.G.SubsequentRFPProcess.If,aftercirculatingtheinitialRFPandpurchasingoffsetssufficienttocoveratleastthefirstyearofProjectoperations,Poseidonisatanytimerequiredtopurchaseadditionaloffsets,itwillhavetheoptionto:(1)purchaseoffsetsontheopenmarkettotheextenttheyareavailable,thatmeetthecriteriaofthePlanandarereviewedandapprovedbytheCommitteeasconsistentwiththeprovisionsofParts111(b)and(e)ofthePlan,or(2)issueasubsequentRFP(s)solicitingadditionaloffsetprojectsconsistentwiththeprovisionsofParts111(b)and(e)ofthePlan.AnysubsequentRFPshallbeissuedfromtimetotimeinadvanceofthetimewhentheactualpurchaseofadditionaloffsetsisexpectedtoberequired.ThecriteriaforsubsequentRFPsshallbethesameasfortheinitialRFPasoutlinedinthePlan.H.ContingencyifNoGHGReductionProjectsareReasonablyAvailableIf,aftercompletingtheinitialRFPprocess,oranytimethereafter,itisdeterminedbytheCommitteethat(i)offsetprojectsinanamountnecessarytomitigatetheProject’snetindirectGHGemissionsarenotreasonablyavailable;(ii)the“marketprice”forcarbonoffsetsorRECsisnotreasonablydiscernable;(iii)themarketforoffsets/RECsissufferingfromsignificantmarketdisruptionsorinstability;or(iv)themarketpricehasescalatedtoalevelthatrendersthe24PoseidonhasinitiateddiscussionswithSDAPCDandwillprovidefurtherdetailsregardingitsspecificroleastheybecomeavailable.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page24 purchaseofoffsetslRECseconomicallyinfeasibletotheProject,Poseidonwill,inlieuoffundingoffsetprojectsoradditionaloffsetprojects,depositmoneyintoanescrowaccounttobeusedtofundGHGoffsetprogramsastheybecomeavailable,withPoseidontopayintothefundinanamountequalto$10.00çermetrictonforeachtonPoseidonhasnotpreviouslyoffset,adjustedforinflationfrom2008.2Priortoestablishingtheescrowaccount,theCommitteewillprovidenoticetotheExecutiveDirectoroftheCCCoftheCommittee’sdeterminationthatfundsshouldbedepositedintoanescrowaccountinlieuofpurchasingoffsetsfRECs,pursuanttheprovisionsofthissectionofthePlan,alongwithawrittensummaryprovidingthebasisforthatdecision.Theescrowaccountmaybeestablishedwithinthirty(30)daysoftheExecutiveDirector’sreceiptofthenotice,unlesstheExecutiveDirectordisputestheCommittee’sdetermination,inwhichcasethemattershallbereferredtotheCCCforhearingandresolution.I.Contin2encyifNewGHGReductionRegulatoryProgramisCreated.If,atanytimeduringthelifeoftheProjectanyoftheSDAPCD,SouthCoastAirQualityManagementDistrict(SCAQMD),theCaliforniaAirResourcesBoard(CARB),SDG&EorotherrelevantentityinitiatesacarbontaxorcarbonoffsetprogramthatwouldallowPoseidontopurchasecarbonoffsetsorpaymentoffeestocompensateforGHGemissions,Poseidonmay,atitsoption,electtopayintosuchaprograminordertofulfillallorpartofitsobligationsunderthePlantooffsetnetindirectGHGemissionscausedbytheProject.ByreceivingcertificationfromtherelevantreceivingentitythatPoseidonhassatisfieditsobligationsundertheapplicableregulatoryprogram,PoseidonwillbedeemedtohavesatisfieditsobligationunderthePlantooffsetnetindirectGFIGemissionsforthepartoftheoffsetobligationsunderthePlanforwhichsuchcertificationismade.Subjecttotheapprovaloftherelevantreceivingentity,PoseidonmaycarryoveranysurplusoffsetsacquiredpursuanttothePlanforcreditinthenewSDAPCDregulatoryprogram.J.ExamplesofOffsetProjects.Offsetprojectstypicallyfallwithinthesevenmajorstrategiesformitigatingcarbonemissionssetforthbelow.AsimilarrangeandtypeofoffsetprojectsshouldbeexpectedfromasolicitationorpurchasebyPoseidon,althoughitisdifficulttoanticipatetheoutcomeofPoseidon’soffsetRFPprocessatpresent.1.EnergyEfficiency(Projectsizesrangefrom:191,000metrictonsto392,000metrictons;lifeofprojectsrangefrom:5yearsto15years)•SteamPlantEnergyEfficiencyUpgrade•PaperManufacturerEfficiencyUpgrade•BuildingEnergyEfficiencyUpgrades2.RenewableEnergy(Projectsizesrangefrom:24,000metrictonsto135,000metrictons;lifeofprojectsrangefrom:10yearsto15years)•SmallScaleRuralWindDevelopment25$10.00permetrictonisaconservativefigure,asoffsetcreditsweretradingat$4.90permetrictonontheChicagoClimateExchangeasofmarketcloseonJuly2,2008.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page25 •InnovativeWindFinancing•OtherrenewableresourceprojectscouldcomefromSolarPV,landfillgas,digestergas,wind,smallhydro,andgeothermalprojects3.FuelReplacement(Projectsizeis:59,000metrictons;lifeofprojectis:15years)•FuelsforSchoolsBoilerConversionProgram4.Cogeneration(Projectsizeis:339,000metrictons;lifeofprojectis:20years)•UniversityCombinedHeat&Power5.MaterialSubstitution(Projectsizeis:250,000metrictons;lifeofprojectis:5years)•CoolClimateConcrete6.TransportationEfficiency(Projectsizesrangefrom:90,000metrictonsto172,000metrictons;lifeofprojectsrangefrom:5yearsto15years)•TruckStopElectrification•TrafficSignalsOptimization7.Sequestration(Projectsizesrangefrom:59,000metrictonsto263,000metrictons;lifeofprojectsrangefrom:50yearsto100years)•DeschutesRiparianReforestation•EcuadorianRainforestRestoration•PreservationofaNativeNorthwestForestFurtherdetailsontheseprojectsaresetforthinAppendixG.K.PotentialOffsetProjectsFundedbyPoseidon.ParticipantsattheMay2,2008CCCWorkshopproposedseveralpotentialprojectsthatweresuggestedtobewhollyorpartiallyfundedbyPoseidonthroughtheRFPprocess.Proposerswerenotpreparedatthattimetoprovidedetailsfortheseprojectsotherthangenerallydescribingtheprojectconcept.Asaresult,itisnotyetpossibletoevaluatethemforconsistencywiththeapplicablecriteriaforvalidGHGreductionprojects.Theprojectsincludethefollowing:•ReforestationProjectsintheSanDiegoarearavagedbythe2007fires•UrbanForestryprojects•Estuarysequestrationproject•Wetlandsprojects•FleetFuelEfficiencyIncrease&Replacementproject•AcceleratedFleetHybridDeployment•Large-ScaleSolarPVprojectonacoveredreservoir•Mini-HydrofrominstallingpressurereducingPeltonwheels•SolarWaterHeatingforanewcityrecreationswimmingpool•LawnMowerExchangeProgram(gasexchangedforelectricmowers)•TruckFleetConversion(especiallyoldertrucksfromMexico)CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page26 •SchoolBusConversions•WhiteTagprojectsorEnergyEfficiencyprojectsTheseandotherpotentialoffsetprojectsmuststillbeevaluatedthroughtheRFPprocess,althoughoneproject—theSanDiegofirereforestationprojectidentifiedbytheCCCanddiscussedinmoredetailbelow—canbeidentifiedatthistimeandPoseidonhasalreadyagreedtocommit$1milliontowardsthisprogram.Poseidonisalsoexploringoff-siterenewableenergyinitiativeswithsomeofitswateragencypartnersasdescribedbelow.L.Sequestrationthrou2hReforestation.TheCCCidentifiedasacarbonoffsetprojectthereforestationofareasintheSanDiegoRegionimpactedbythewildfiresthatoccurredduringthefallof2007.Specifically,attheCCC’srequest,Poseidonhasagreedtoinvesttheinitial$1.0millionitspendsonoffsetprojectsinreforestationactivitiesintheSanDiegoRegion.AnyAdditionalityRequirementshouldthereforebemet,sincetheCCCdirectedthatareforestationprojecttakeplaceintheSanDiegoRegionimpactedbythe2007fires.Inordertofulfillitsreforestationcommitment,Poseidonwill,priortocommencementofProjectoperations,enterintoaMemorandumofUnderstanding(“MOU”)withaqualifiedorganizationorstateorlocalagency,suchas,bywayofexample,CCSEorCaliforniaStateParks,whichMOUwillmemorializePoseidon’s$1.0millioncommitmenttoreforestation,madefullypayableoverfiveyears(i.e.,$200,000peryear).Afully-executedMOUwillbesubmittedtotheCCCbeforeProjectoperationsbegin.ThequalifiedentitythatadministersthereforestationprogramwillberesponsibleforcalculatingitscarbonsequestrationoffsetsavailabletocreditagainstPoseidon’soffsetobligationunderthePlan,andwilldosobasedtotheextentapplicableontheurbanforestryprotocolscurrentlybeingdevelopedforCCAR.AccordingtoCCSE,theaveragecostforplantinga15gallonsuitable,droughttolerantshadetreeinSanDiegoneighborhoodsaffectedbythe2007wildfiresis$100pertree,includingstafftimeandmarketing.Thereisnoannualwateringandmaintenancecostrequiredforthetreesafterinstallation,sincepropertyownerswouldcovertheseexpenses.Expectedsurvivalratewouldbe90%.Poseidon’s$1.0millioninvestmentinurbanreforestationwithshadetreesisexpectedtoyield9,000maturetreeswithin10-15yearsofplanting.Atanannualtreesequestrationrateof60lbsofCO2pertree,theannualcarbonfootprintreductionassociatedwiththetreeswouldbeapproximately245tonsofCO2peryear(thenumbercouldbeupto25%higherifenergydemandreductionsfromtreesshadinghomeswerealsoincludedinthecalculations).Asstatedearlier,thebestavailableurbanforestryprotocolswillbefollowedbythequalifiedentityadministeringtheprogram,andthenverifiedinaccordancewiththeprovisionssetforthherein.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page27 M.RenewableEnergyPartnerships.Poseidonisexploringthepossibilityofparticipatinginrenewableenergyprojectswithitswateragencypartners.Table5presentsasummaryofsomeoftheprojectopportunitiesandassociatedGHGoffsetsthatareunderconsideration.Table5-PotentialRenewableEnergyPartnershipsDesalinationProjectGreenPowerProjectAnnualCapacityofGreenPublicPartner/DescriptionEnergyProjectedtobeLocationGeneratedbytheProject(MWbIyr)95KW160CityofEncinitasSolarPanelSystemInstalledonCityHallRoofValleyCenterMunicipal1,000KW1,680WaterDistrictSolarPanelSystem420EainbowMunicipalWater250KWDistrictSolarPanelSystemOlivenhainMunicipalWaterVarioussolarandhydro-electricToBeDeterminedDistrictICarlsbadMunicipalgenerationopportunitiesWaterDistrictICityofOceansideSantaFeIrrigationDistrictIydropowergenerationfacilityToBeDetermined\.tR.E.BadgerFiltrationPlantTotalRenewablePowerGenerationCapacity2,260(MWb/yrThecontracttermsforeachofthesepotentialprojectswillbespecifictotheparticularproject.Typically,theamountpaidforeachprojectwouldbethemarketpriceforoffsetsandnotnecessarilythefullpriceoftheproject.Theoffsetprojectswillbeverifiedthroughtheabovecriteriatoensuretheyarereal,permanent,quantifiable,verifiable,enforceable,andadditional.ThetotalcurrentlyquantifiableelectricityreductionfortheproposedprojectsdescribedinTable5is2,260MWhIyr,andthenetindirectGHGemissionsoffsetfortheProjectisprojectedat800tonsofC02/year.ShouldPoseidondecidetoproceedwithoneormoreofthepotentialrenewableenergypartnerships,thetotalactualenergyreductionthatwouldresultwouldbeCarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page28 verifiedbydirectreadingsofthetotalelectricenergyproducedbytheProjectatthepartner’selectricmeter.N.ImplementationSchedule.AnillustrativeschedulesettingforthtimingforimplementationofPoseidon’sPlanelements,assumingregulatoryapprovalisachievedinAugust2008,issetforthinthefollowingImplementationSchedule.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page29 Table6-ImplementationScheduleforthePlanMeasureProcessTimingRegulatoryApprovalAugust2008EvaluationCommitteePoseidonlCCSEappointtheirApproximately18monthsbeforeEstablishedrespectiverepresentativesandoperationscommencejointlyselectacademicrepresentative(subjecttoCCCStaffapproval)RFPDevelopedandPreparedbyCommitteeconsistentRFPdevelopmenttobeginIssuedwithPlancriteriaapproximately15monthsbeforeoperationscommence;RFPtobeissuedapproximately12monthsbeforeoperationscommenceOffsetandRECCommitteewillselectoffsetEstimatedtotakeupto12monthsPurchasesprojectsthatmeetPlancriteria;fromissuanceofRFPtoPoseidonwillchoosewhichcompletionofagreementsforeligibleprojectstofundoffsetprojectsOffsetsfRECsBasedonthemostrecentlyPriortocommencementofpurchasedsufficientpublishedSDG&EemissionfactoroperationsforatleastfirstyearoffromCARB/CCARandestimatedoperationelectricityusagedataforthefirstyearoftheProjectperiodforwhichoffsetsarepurchased,asdeterminedbyCCSEsubjecttoSDAPCDconcurrenceAnnualTrue-UpObtainnewemissionsfactorfromEachyear,CCSEwill(1)reviewProcesstheannualweb-basedCCAR/CARBemissionsreportsCCARICARBemissionsreport;within60daysoftheendofthecalculatesubjectyear’semissionssubjectcalendaryear,orthedateusingactualbillingdataandnewofpublicationoftheemissionsemissionsfactorforthesubjectreportsontheinternet,whicheveryear;calculatecreditordeficit,islater,and(2)calculateconcurredwithbySDAPCD;Poseidon’screditordeficitofpurchaseadditionaloffsetsasoffsetswithin120daysoftheendnecessary,orcarry-forwardorsellofthesubjectcalendaryearorthesurplusoffsetsdateofpublicationofCCARICARBemissionsreports,whicheverislater.Poseidonrequiredtopurchaseoffsetsnecessarytocureanydeficitwithin180daysfromthedateanidentifieddeficitisconcurredwithbytheSDAPCD.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page30 0.TheProject’sAnnualNet-ZeroCarbonEmissionBalance.Table7presentsasummaryoftheassessment,reductionandmitigationofGHGemissionfortheproposedProject.Asshowninthetable,upto83%oftheGFIGemissionsassociatedwiththeproposedProjectcouldbereducedbyon-sitereductionmeasures,andtheremainderwouldbemitigatedbyoff-sitemitigationprojectsandpurchaseofoffsetsorRECs.Itshouldbenotedthaton-siteGHGreductionactivitiesareexpectedtoincreaseovertheusefullife(i.e.,inthenext30years)oftheProjectbecauseofthefollowingkeyreasons:SDG&Eisplanningtoincreasesignificantlythepercentageofgreenpowersourcesinitselectricitysupplyportfolio,whichinturnwillreduceitsemissionfactorandtheProject’snetindirectGHGemissions.AdvancesinseawaterdesalinationtechnologyareexpectedtoyieldfurtherenergysavingsandnetindirectGHGemissionreductions.Overthelast20years,therehasbeena50%reductionintheenergyrequiredforseawaterdesalination.CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page31 Table7-Assessment,ReductionandMitigationofGHGEmissionsPart1:IdentificationofGHGAmountEmittedSourceTotalAnnualPowerTotalAnnualUseEmissions(MWh/year)(metrictonsC02/year)rojectBaselineDesign274,40097,165Part2:On-siteandProject-RelatedReductionofGHGEmissionsReductionduetoHigh-EfficiencyDesign(28,244)(10,001)GreenBuildingDesign(300to500)(106to177)On-siteSolarPowerGeneration(0-777)(0-275)RecoveryofCO2(NA)(2,100)ReducingEnergyNeedsforWaterRecycling(1,950)(690)ReducedWaterImportation(190,641)(67,506)equestrationinCoastalWetlands(NA)(18-304)SubtotalOn-siteReductionMeasures(NA)(80,421to81,053)NetGHGEmissions16,422to16,112Part3:AdditionalOff-SiteReductionsofGHGEmissionsSequestrationThroughReforestation(NA)(245)otentialRenewableEnergyPartnerships(0-2,260)(0-800)SubtotalOff-siteMeasures(NA)(245-1,045)OffsetandRECPurchases(NA)(16,499to15,067)NetGHGEmissiom0CarlsbadDesalinationProject—EnergyMinimizationandReductionPlan(7/3/08)Page32 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. EIR 03-05(A)/PDP 00-02(B)/SP 144(J)/DA 05-01(A)/RP 05-12(A)/ HMP 05-08(A) Project Overview Proposed Changes Recommendation Proposed Desalination Plant Site Encina Power StationI-5Carlsbad Oceanside Vista Pipelines Location Map San Marcos 2006 city approval and EIR certification Other agency approvals Desalinated water purchasers Project design and engineering phase Desalination plant: Reconfiguration Consolidation Relocation and undergrounding Pipelines: Selection of “backbone” alignment Addition of new alignments Proposed changes: Affect physical aspects of plant and pipelines Amend all approved permits Require minor text revisions to PDP and SP Proposed changes do not: Alter the desalination process Increase seawater intake or byproduct discharge Increase desalinated water output EIR 03-05(A) Precise Development Plan PDP 00-02(B) Encina Specific Plan SP 144(J) Redevelopment Permit RP 05-12(A) Habitat Management Plan Permit HMPP 05-08(A) Documents project changes Appropriate to use when: EIR not warranted Existing EIR analysis adequate Changes do not require new mitigation Public circulation not required A “master plan” of the power plant The primary permit for the desalination plant Proposed amendment: Revises text and graphics to reflect proposed project Does not change standards Encompasses power plant and lagoon Proposed amendment: Incorporates PDP 00-02(B) Does not change any standards or land uses Is consistent with Council policy Project in South Carlsbad Coastal Redevelopment Plan SCCRP requires desalination plants to: Obtain a Redevelopment Permit Obtain a Precise Development Plan Make a finding of extraordinary public purpose Permit amendment reflects plan changes Amendment required to reflect plant and pipeline changes Changes are technical in nature Amendment required to reflect plant and pipeline changes Proposed project: Impacts no new habitat Impacts less habitat than approved project Power Plant Power Plant Approved Proposed Approved Proposed Approved Rendering Proposed Pipelines Are located primarily in roadways Reflect a shorter network than considered in the EIR Result in fewer impacts Are within the scope of the certified EIR Are subject to the permits of other agencies Largely same as approved project Changes proposed to: Accommodate new standards Respond to construction schedule Rooftop solar panel Consultation with Cabrillo and Poseidon Public hearing on August 19 Speakers Recommended Approval: Addendum to EIR 03-05 All permit amendments Plant configuration Structure sizes Undergrounding of some features Visible footprint Distribution pipelines General location Quality appearance Seawater intake and discharge Desalination process Desalinated water output “No power plant” condition Public dedications Finding of extraordinary public purpose 2006 EIR analysis and findings Introduce Ordinances amending: Specific Plan 144 Precise Development Plan PDP 00-02 Development Agreement DA 05-01 Adopt Resolution approving: Addendum to EIR 03-05 Amendment to HMP 05-08 Adopt Resolution approving: Addendum to EIR 03-05 Amendment to RP 05-12 LATHAM&WATKINS^p September 14, 2009 Hon. Mayor Lewis Hon. Members of the City Council Carlsbad City Hall 1200 Carlsbad Village Drive Carlsbad, CA 92008 600 West Broadway, Suite 1800 San Diego, California 92101-3375 Tel: +1.619.236.1234 Fax: +1.619 696.7419 www.lw.com FIRM/AFFILIATE OFFICES Abu Dhabi Barcelona Brussels Chicago Doha Dubai Frankfurt Hamburg Hong Kong London Los Angeles Madrid Milan Moscow Munich New Jersey New York Orange County Paris Rome San Diego San Francisco Shanghai Silicon Valley Singapore Tokyo Washington, D.C. 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 Project 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 2 LATHAM&WATKINS^ 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 21 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 § 15164(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 staff s 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 3 LATHAM&WATKINSL 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 § 15164(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 15162 calling for the preparation of a subsequent EIR have occurred." Both CEQA § 21166 and its analog Guidelines § 15162 provide that a SEIR may not be prepared in the absence of the following: (1) substantial changes to the project, (2) substantial changes to the project circumstances, or (3) new information of substantial importance. (CEQA § 21166; Guidelines §§ 15162(a), 15163(a).)' Specifically, Guidelines § 15162(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 References to Pub. Res. Code § 21000 etseq., are preceded by "CEQA" and followed by the section number, and references to 14 Cal. Code of Regs. § 15000 et seq., are preceded by "CEQA Guidelines" and followed by the section number. SD\692334.6 Hon. Mayor Lewis September 14,2009 Page 4 LATHAM&WATKINS"p (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 § 15162(a); accord CEQA § 21166.) The Addendum prepared by the City exhaustively reviews eleven areas of environmental concern and finds that none of the conditions described in CEQA Guideline § 15162 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 f 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Pages LATHAMaWATKINS"- 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 30231."]; Exhibit D, Regional Water Quality Control Board Order No. R9-2009-0038 at f 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."].) 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 15162 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 316(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 § 316(b) does not apply to desalination facilities. The final decision in the case states: By its express terms, CWA section 316(b) applies only to "cooling water intake structures." [ ] In approving the Project's NPDES Permit, the Regional Board found that CWA section 316(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 316(b) issues. [ ] SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 6 LATHAM&WATKINS' The Court holds that CWA section 316(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 1180,1202 [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 51-52.) 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-ISO 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 Project 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 CEQ A 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 "[sjiting 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page? LATHAMaWATKINS^p 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- 51.) 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 MOD of seawater needed for environmentally safe operation of the CDP. Furthermore, the quality of the SD\692334.6 Hon. Mayor Lewis September 14,2009 Page 8 LATHAM&WATKINS^ 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 Project 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 / 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 SD\692334.6 Hon. Mayor Lewis September 14,2009 Page 9 LATHAM&WATKINS"' 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 § 15145; Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1137.) 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, "[t]he 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 cut/fill. 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. SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 10 LATHAM&WATKINS^ 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 Latham & 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 cut/fill 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 cut/fill, 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, "[b]y 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.) SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 11 LATHAM&WATKINS"" 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 31.32 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 4.11-17.) 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 30.31 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 ISO 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 4.11-21.) 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 Project is Properly Located at the EPS Site Under the Project revisions, the Oceanside pump station has since been eliminated from the Project. SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 12 LATHAM&WATKINS"- 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 coast."3 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.)4 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 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. 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. SD\692334.6 Hon. Mayor Lewis September 14,2009 Page 13 LATHAM&WATKINS^p 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. SD\692334.6 Hon. Mayor Lewis September 14,2009 Page 14 LATHAM&WATKINS^ 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 wanning 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 O, 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. United for Responsible Growth v. City of Am. Canyon (Super. Ct. Napa County, issued May 22, 2007, Case No. 26- 27462).) In addition, former Vice President Al Gore's book Earth in the Balance, was published SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 15 LATHAM&WATKINS"" 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 LA. (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 §21166).) Furthermore, this issue has already been litigated in Surfrider Foundation et al. v. State Lands Commission. There, the Court's Tentative Decision found: [Information regarding greenhouse gas ("GHG") emissions is not "new information" under CEQA § 21166 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 AB1493 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 § 21166. 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 16 LATHAM&WATKINS"- issue. (Fed. of Hillside and Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 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 15.) 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 CCAR/CARB methodology to determine GHG emissions, purchase of offsets/renewable 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 § 15 065 (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 § 15065 is inapplicable. Section 15065 establishes the circumstances [ ] where an EIR is required. Any claim that § 15065 required an SEIR must fail because the requisite "substantial change" under CEQA § 21166 has not been established." SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 17 LATHAM&WATKINS^p (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 § 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 39-41.) 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 4-10.) 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 MOD seawater desalination plant and the reconfigured Project remains a 50 MOD 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 MOD of product water." (Addendum, at 4.) There is no change to the operational capacity of the CDP and no plans to change the capacity. SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 18 LATHAM&WATKINS^ N. The Project Does Not Exceed Development Standards / Lot Coverage CLG's comment is unclear but appears to state that the Project does not meet the PDF 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. O. An Amendment to the Project'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 Reiving 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 §§ 15162,15163 and 15164 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 15162 and 15163." (Addendum, Section 11.0.) 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 SD\692334.6 Hon. Mayor Lewis September 14, 2009 Page 19 LATHAM&WATKINS^ 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 Project 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. II. 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, istopher W. Garrett of LATHAM & WATKINS LLP cc: City Manager City Attorney City Planning Director SD\692334.6