In County of Butte v. Department of Water Resources (2023) 306 Cal.Rptr.3d 860, the Third District Court of Appeal rejected all challenges regarding the sufficiency of the Department of Water Resources’ EIR for the relicensing of the hydropower facilities at the Oroville Dam.

Background

Prior to the expiration of the Oroville Facilities licensing, DWR began the process for renewal—opting to engage the alternative licensing process (ALP) authorized by the Federal Energy Regulatory Commission (FERC), which allowed DWR to develop a settlement agreement addressing stakeholders’ concerns that effectively functions as a first draft of the FERC license. The Counties of Butte and Plumas are the only two stakeholders that did not sign the agreement.

FERC subsequently prepared an Environmental Impact Statement pursuant to NEPA, and DWR prepared an EIR under CEQA. DWR certified the EIR and approved the settlement agreement in 2008.

Several counties—Butte County, Plumas County, and the Plumas County Flood Control and Water Conservation District—filed writ petitions challenging the sufficiency of DWR’s EIR in 2008. The trial court ruled in favor of DWR. On appeal, the Third District found that the CEQA claims were largely preempted by the Federal Powers Act. The California Supreme Court vacated the Third District’s decision, and instead asked it to reconsider the claims in light of the holding in Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677.

On remand, the Court of Appeal reaffirmed its previous decision, concluding—once again—that the Counties’ CEQA claims were preempted by the Federal Power Act. The California Supreme Court again granted the Counties’ petition for review on the preemption issue in County of Butte v. Department of Water Resources (2022) 13 Cal.5th 612. The Court ultimately reversed the Third District’s decision in part, and remanded it so that the appellate court could consider several challenges to the sufficiency of DWR’s EIR.

The Third District’s Decision

Climate Change Analysis & Impacts

The Third District rejected all challenges to the EIR’s discussion of climate change. It explained that the EIR sufficiently acknowledged climate change and its potential impacts on project operations, and that it was reasonable for DWR to conclude that the impacts were too speculative to analyze in more detail. In reaching this conclusion, the court rejected the Counties’ argument that DWR failed to disclose scientific authorities contrary to its findings, as none of the Counties’ cited authorities that undermined the EIR’s finding of uncertainty. Moreover, the EIR generally acknowledged the potential impacts of climate change. The court took issue with the fact that the Counties did not refute DWR’s stated inability to offer more specific predictions on climate change, or show that DWR overlooked other available information.

Historic Hydrologic Conditions

The court also rejected the Counties’ arguments that DWR failed to model project operations using the full range of 20th-century hydrologic conditions by omitting data from 1907 and 1977.

The court explained that consideration of the whole EIR shows that DWR’s actual modeling results covered all hydrological data from 1922 to 1994—including historic low flow data from 1977. The court agreed with the Counties that DWR did not account for the historical high flow data in 1907 in its modeling, but concluded that the Counties failed to explain why that was a fatal flaw when considering the totality of the EIR’s findings. Lastly, the court held that the Counties’ argument that the project’s operations were improperly modeled using hypothetical flow data lacked merit, as the record showed that DWR’s modeling was based on historical, not hypothetical, data.

Fiscal Impacts

The court rejected the Counties’ claim that DWR failed to properly evaluate and mitigate fiscal impacts to Butte County that would result from increased demand for public services. The court explained that, under CEQA, a lead agency is not required to discuss economic effects that do not cause, or are unrelated to, a physical change in the environment. The Counties’ two arguments that attempted to establish this connection—including a vague assertion that the fiscal impacts are tied to “the project’s environmental impacts,” and that the project would trigger the need for new or expanded government facilities to provide public services—did not persuade the court.

Public Health Impacts

The court rejected the Counties’ argument that the EIR failed to adequately evaluate the public health impacts to those who consume fish with high mercury levels, which would result from an increase in sportfishing opportunities created by the project. The court held that it was not necessary for DWR to survey everyone who fishes in the area to understand their diets, nor quantify the amount of mercury in their diets, as the Counties contended DWR should have done. The court pointed to evidence in the record that showed the Office of Environmental Health Hazards Assessment (OEHHA) found no recorded incidences of mercury-related health effects from consuming sport fish in California. OEHHA evidence also established that there is a consuming California sport fish that are subject to advisories carries a low potential risk, unless consumption exceeds recommended rates. Nevertheless, the proposed project still included measures to educate and notify the public of safe consumption limits.

The court also found that the EIR properly concluded that potential impacts from fecal coliform bacteria resulting from recreational uses and waterfowl would be less than significant because a project condition would develop a monitoring and public education program related to bacteria. The court dismissed the Counties’ remaining arguments challenging the EIR’s bacteria impact analysis as flawed for a myriad of reasons, including its failure to adequately describe alleged inconsistencies, its failure to cite supporting evidence, and its misreading record evidence.

Water Quality & Beneficial Use

The court was unpersuaded by the Counties’ challenge to the EIR’s discussion of water quality and designated beneficial uses within the Project area.

First, the Counties claimed that the project objective to continue the operation and maintenance of the Oroville Facilities for electric power generation wrongly excluded any serious consideration of how the project might operate differently in the next half century. The Counties maintained that the objective wrongly assumed that project conditions are sufficiently rigorous to meet existing environmental protection commitments. The court rejected these claims outright, finding them unexplained and unsubstantiated.

Second, the court found that the EIR’s discussion of the environmental setting was appropriate and did not, as the Counties asserted, wrongly assume that current operations comply with water quality standards. The court explained that, despite the EIR’s occasional use of unnecessary qualifiers in describing the Basin Plan’s objectives, it was clear that compliance with the Plan was necessary and the EIR explicitly disclosed that temperature exceedances do occur. The court also found that the project does not show exceedances of Basin Plan objectives for phosphorous, and that the Counties failed to reveal where alleged exceedances for metals other than mercury occurred. Lastly, the court explained that the EIR did not fail to discuss potential impacts to beneficial uses; the Counties failed to identify any alleged failures that affect beneficial uses, and premised their argument on a misreading of the record by claiming that high temperatures in two distinct areas will somehow cause high temperatures in the separate fish hatchery area.

Third, the court concluded that the Counties again misrepresented the record and failed to explain their argument in alleging that the EIR’s “No Project Alternative” wrongly assumed future compliance with water quality standards and beneficial use requirements. The court held that DWR directly responded to comments concerning potentially conflicting findings regarding water temperature under the No Project Alternative. The responses explained that it is not inconsistent to conclude that the water temperatures generally comply with established criteria and that pre-spawning adult salmonids further downstream may be exposed to elevated water temperatures because the water temperature compliance point is located upstream of that portion of the river. Moreover, the court disregarded the Counties’ allegation that DWR failed to address its own prediction that water demand would rise, as they failed to cite supporting record evidence.

Fourth, the court rejected the Counties’ argument that the EIR’s wrongful assertion of existing compliance allowed DWR to evade proof that future Project operations will protect water quality and beneficial uses, as the Counties failed to establish the premise that the EIR assumed compliance. The court reiterated that the EIR expressly disclosed that exceedances of Basin Plan standards have occurred.

Finally, the Counties’ assertion that the EIR should have considered mitigation measures and alternatives to address certain impacts also failed. The court explained that the Counties did not describe the alleged “formidable challenges” to meeting beneficial use objectives in the future that the EIR should have acknowledged. Assuming that these challenges alluded to climate change, the court reiterated prior reasoning on the subject.

The court also found that the Counties did not provide evidence to support their argument that the EIR failed to acknowledge that DWR might need to increase its water releases to protect the Delta smelt, thus reducing reservoir levels below those needed to maintain cold water for salmon in the reservoirs. Finally, the court determined that the Counties mischaracterized the record in arguing that DWR offered conflicting comments about a future biological opinion that could affect State Water Project operations, as DWR was discussing two distinct biological opinions and it properly addressed both.

State Water Project

The court rejected the Counties’ claim that the EIR failed to account for potential changes to the State Water Project that could affect project operations.

The court concluded that DWR sufficiently responded to comments that the EIR should account for future changes in regulatory requirements, including any changes pursuant to the forthcoming new biological opinions prepared for the State Water Project by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. The EIR specifically recounted each of the release requirements that would be unaffected by the new biological opinions. The court concluded that DWR could not—and thus was not required to—predict the content of the forthcoming biological opinions and resolve potential issues with unknown terms.

The court also rejected the Counties’ argument that the undefined term “normal operation” in the settlement agreement would cause issues regarding what version of “normal” would govern release reductions. The court presumed that it was an attempt to unwind the settlement agreement, which must fail under the Supreme Court’s previous ruling that the Counties cannot challenge the environmental sufficiency of the settlement agreement nor seek to unwind it.

Lastly, the court found that DWR adequately responded to comments regarding the impact of the State Water Project on operations of the Project, and that the EIR did not—as the Counties asserted—find that the Project and the State Water Project are analytically distinct. Rather, the court determined that the EIR confirmed that the Project and the State Water Project are not analytically distinct, and that the response appropriately concluded that unforeseeable changes to State Water Project operations could not be studied in the EIR and that future material changes to State Water Project operations would be subject to a separate environmental review if outside current authorizations.

Record Costs

Separately, the court determined that the trial court did not abuse its discretion in directing the Counties to pay $675,087 to DWR to prepare the 327,2610-page administrative record. The court found that the cost was reasonable given the complexity of this case compared to typical CEQA cases. The court therefore refused to indulge the Counties’ numerous arguments that purported to demonstrate that the cost was too high—including an assertion that CEQA Guidelines section 15094 requires an agency to prepare the record and bear the costs, to a claim that DWR purposefully ran up the costs because it “disliked” the Counties. The court found no support for any of these arguments.