September 25, 1997
By Email and Personal Delivery
Bruce Kaneshiro, Project
Manager
c/o Environmental Science Associates
225 Bush Street, Ste. 1700
San Francisco, California 94104
Re: Comments on Mitigated Negative Declaration and Initial Study, CPUC, PG&E Application No. 96-11-020, Proposal for Divestiture
Dear Mr. Kaneshiro:
[Begin SAEJ-1]
The Southeast Alliance for Environmental Justice (SAEJ) submits
these comments on the proposed Mitigation Negative Declaration
for the divestiture of three PG&E power plants. Since Hunters
Point is no longer included in the current project, the members
of SAEJ may not be directly affected by the divestiture these
first three plants. However, SAEJ is concerned that the
Commission may adopt the faulty reasoning and analysis in the
Mitigated Negative Declaration. It may also lead to the failure
to address certain cumulative impacts which could directly impact
SAEJ upon the sale of the Hunters Point and Potrero facilities if
not property addressed. SAEJ also refers to and incorporates
herein its prior comments on the draft Initial Study, which seem
to have been substantially ignored.
It is important to note
at the outset that SAEJ's concerns with the proposed divestiture
of the Hunters Point power plant are not limited to those set
forth here. SAEJ will address further issues when the proposed
sale of Hunters Point undergoes CEQA review. SAEJ had previously
recommended that the Commission use a programmatic EIR to examine
the environmental impacts of divesting all the fossil-fueled
plants that PG&E has proposed to sell. A programmatic EIR
would avoid the unfortunate consequences of piecemealing found in
the proposed Mitigated Negative Declaration, especially the
underestimation of cumulative impacts. SAEJ also urges the
Commission to reconsider its approach to mitigation in the
Mitigated Negative Declaration, which seeks to defer
environmental review and mitigation to other agencies in the
future.
[End SAEJ-1]
[Begin SAEJ-2]
The Mitigated Negative Declaration may lead to a
"piecemealing" of the larger divestiture project
because the proposed additional sales under the second phase of
PG&E divestiture are not considered.
On November 15, 1996 PG&E filed an application to sell four of its fossil-fueled electric generation plants: Hunters Point, Morro Bay, Moss Landing, and Oakland. On June 25, 1997, PG&E amended its application to withdraw Hunters Point and announced its intention to file a second application to withdraw Hunters Point and announced its intention to file a second application in the fall to sell Hunter's Point along with most of its remaining fossil fuel power plants and one geothermal plant. PG&E thus intends to sell all but one of its fossil fuel electric generation plants and its geothermal plant. The Mitigated Negative Declaration examines only one portion of PG&E's divestiture project, and if certified would "piecemeal" the divestiture project.
CEQA Guidelines section 15165 states:
"Where individual projects are, or a phased project is, to be undertaken and where the total undertaking comprises a project with significant environmental effect, the Lead Agency shall prepare a single program EIR for the ultimate project . . . Where one project is one of several similar projects of a public agency, but is not deemed a part of a larger undertaking or a larger project, the agency may prepare one EIR for all projects, or one for each project, but shall in either case comment upon the cumulative effect."
"Piecemealing of a
project is inconsistent with the principles of CEQA. Bozung v.
Local Agency Formation Comm. (1975) 13 Cal.3d 263, 283-284; Citizens
Assoc. for Sensible Development of Bishop Area v. County of Inyo
(1985) 172 Cal.App.3d 151, 165-166. In Bozung, the
California Supreme Court stressed that CEQA "mandates . . .
that environmental considerations do not become submerged by
chopping a large project into many little ones, each with a
potential impact on the environment, which cumulatively may have
disastrous consequences." (13 Cal.3d. at 283-284). In that
case, a county commission approved a proposal to annex certain
properties without analyzing the environmental impacts of the
annexation, nor the anticipated development of those properties.
(Id. at 270, 284). The Court, however, required the environmental
analysis to address the annexation of the properties and the
anticipated development of those properties. (d. at 278, 284). In
County of Inyo, the court held that he county had
improperly described a proposed shopping center as two projects,
and thus, the two separate negative declarations prepared were
invalid.
[End SAEJ-2]
[Begin SAEJ-3]
CEQA Guidelines sections 15165, 15378 subd. (c) require, whenever
possible, that the lead agency fully analyze a
"project" in one environmental review. Project refers
to the activity which is being approved and which may be subject
to several discretionary approvals . . . "Project does not
mean each separate governmental approval." (Guidelines
section 15378, subd. (c)). PG&E's sale of almost all its
fossil-fuel electric generation plants and its geothermal plant
is the proper and accurate project description for divestiture.
CEQA requires
consideration of complex or phased projects in a single
environmental review. (see CEQA Guidelines section 15165, supra).
The project description must incorporate future phases that 1)
are reasonably foreseeable, and 2) change the scope or nature of
the initial project. Laurel Heights Improvement Association v.
Regents of the University of California (1988) 47 Cal.3d 376,
396. The sale of PG&E's remaining fossil fuel power plants is
certainly reasonably foreseeable, as noted in the Mitigated
Negative Declaration(1), and must be considered. See Bozung,
13 Cal.3d at 269, 284 (stressing that the owners' intent to
develop the properties was clear and must be included in the
analysis of the "project").
[End SAEJ-3]
[Begin SAEJ-4]
The second prong of the Laurel Heights test has also been
satisfied, since the scope of the project has changed. PG&E's
application filed in November, 1996 (A.96-11-020) requested
authority from the Commission to sell four of its eight
fossil-fueled power plants. In late June, 1997, PG&E withdrew
the Hunters Point power plant from the application and announced
its intention to auction it off with several other plants at a
later date, leaving only Morro Bay, Moss Landing, and Oakland in
the first phase of the divestiture. Since the proposed second
sale changed both the present and future scope of the project, a
single programmatic EIR was required. See Whitman v. Board of
Supervisors (1979) 88 Cal.App.3d 397, 410 n.6 (explaining
that the scope of the project, originally the drilling of one oil
well, should include the additional five oil wells subsequently
granted permits for drilling). The Commission should thus analyze
the entire divestiture in one environmental review.
[End SAEJ-4]
[Begin SAEJ-5]
Cumulative
impacts are not adequately addressed in the Mitigated Negative
Declaration as a result of "piecemealing."
As a result of the piecemealing, cumulative impacts from the entire divestiture project, such as global warming and federal ozone standard violations, are not adequately considered. Cumulative impacts are those that "are individually limited but cumulatively considerable." Whitman v. Board of Supervisors, (1979) 88 Cal.App.3d 397, 406. The "Potential Cumulative Impacts" section of the Mitigated Negative Declaration states:
"Although the issues and analysis for the PG&E power plants that are to be included in the second round application for divestiture may be similar to the issues and analysis for the current PG&E application, at this time the Proponent's Environmental Assessment (PEA) has not been completed or submitted to the Commission and, thus far, the project's potential impacts have not been analyzed." Mitigated Negative Declaration 4.16.3.(2)
This conclusion is
troubling since CEQA requires a cumulative impact analysis of all
reasonably foreseeable future projects. Public Resources Code
section 21000. This requirement was analyzed by the Court of
Appeal in Terminal Plaza Corp. v. City and County of San
Francisco (1986) 177 Cal.App.3d 892, 904-905. The court held
that the lack of specific detail in a future project is no basis
for the refusing to include it in a cumulative impacts analysis.
[End SAEJ-5]
[Begin SAEJ-6]
One glaring example of the Mitigated Negative Declaration's
piecemealing of the entire divestiture project resulting in a
failure to analyze cumulative impacts is the isolation of the
Oakland facility analysis for purposes of regional San Francisco
Bay Area air quality. The Initial Study ignores the cumulative
impact from the divesting of all the Bay Area power plants
because data from four of them is not presented. CEQA prohibits
agencies from treating one project as a progression of smaller
projects when cumulatively they may result in potentially adverse
impacts. An agency may not break "a larger project into
components in order to avoid analyzing it as a whole." Rural
Landowners Association v. Lodi City Council (1983). 143
Cal.App.3d 1013, 1024-1025. If several small projects may result
in cumulative impacts, an analysis must be done.
[End SAEJ-6]
[Begin SAEJ-7]
Although the Mitigated Negative Declaration recognizes that it is
reasonably foreseeable that new owners will have a tendency to
increase generation at all of these plants, it concludes that the
"impacts associated with the divestiture are primarily site
specific and would not result in synergies or impacts on a
cumulative basis" and that the cumulative impacts associated
with divestiture will therefore be "less than
significant." (4.16.4). This conclusion is unsupported by
fact. PG&E's proposed divestiture includes five Bay Area
power plants(3). The Initial Study concedes that it is
reasonably foreseeable that divestiture could result in increased
generation at individual plants ("With divestiture, a new
buyer of such a power plant could likely have an economic
incentive to operate the facility at higher levels . . . MND at
3.1). There is no assurance that these five facilities will not
all operate at increased levels and accompanying increased air
emissions. The cumulative impact on air quality of five plants
operating at increased levels in the same air quality district is
regional, not "site specific," and must be considered.
[End SAEJ-7]
[Begin SAEJ-8]
The cumulative impacts from air quality in the Bay Area are even
more important to analyze properly and require greater attention
because the region has recently been proposed to be classified by
the United States Environmental Protection Agency (EPA) Region IX
as a nonattainment area for ozone due to a number of year of
violation of the current federal 1 hour standard. See Attachment
1. Further, EPA on the national level has adopted new standards
for ozone that when in place will cause the region to be out of
attainment, requirement more stringent requirements. See Federal
Register, Vol. 62, No 138, page 38421 et seq., July 18, 1997.
Instead of analyzing the impacts of the Oakland plant in
isolation, the Commission should analyze the cumulative impacts
of divestiture of the Bay Area power plants cumulatively, and not
dismiss the results as "speculative."
[End SAEJ-8]
[Begin SAEJ-9]
Another cumulative impact not addressed in the Mitigated Negative
Declaration due to piecemealing and, perhaps, inattention is
global warming. The Draft Initial Study notes at 4.5.36 that
excess CO2 emission may impact global warming. This discussion
was deleted from the Mitigated Negative Declaration without
comment. It is certainly foreseeable that increased generation at
the plants could result in increased emissions of CO2, a known
greenhouse gas, especially since Selective Catalytic Reduction
systems ("SCR's") included as mitigation measures at
Moss Landing and Morro Bay actually increase emissions of CO2,
which is a byproduct of the catalytic reaction that breaks down
NOx. If all of these facilities are increasing their CO2
emissions the result could be significant if collectively
analyzed.
[End SAEJ-9]
[Begin SAEJ-10]
The Commission is now faced with two phases of one PG&E sale
process, which requires a single environmental review. The CPUC
should not analyze the sale of each and every power plant in
isolation, nor divide the environmental analysis of the sale into
segments. Dividing a project into segments and considering the
segments as mutually exclusive little projects would constitute
an abuse of discretion by the Commission as the CEQA Lead Agency.
County of Inyo, 172 Cal.App.3d at 167.
[End SAEJ-10]
[Begin SAEJ-11]
The Mitigated Negative Declaration inappropriately analyzes what
it calls "considerable uncertainty and countervailing
factors", although those factors raise a fair argument that
potentially significant impacts could occur.
The Mitigated Negative Declaration also states that here is "considerable uncertainty and countervailing factors that would make it infeasible to accurately predict the particular plants at which operation would increase as a result of divestiture or the amounts by which generation would increase at any particular plant." (4.16.3). This statement apparently rests on the assumption contained in the Mitigated Negative Declaration that increased generation will not necessarily result in increased emissions. Even if increased generation will not "necessarily" result in higher emissions, it still provides the basis for a "fair argument" standard.
The "fair argument
standard," states that an EIR is required whenever it can be
fairly argued on the basis of substantial evidence that
significant impacts may occur. No Oil, Inc. v. City of Los
Angeles ("No Oil I") (1975) 13 Cal.3d 68, 75, 188
Cal.Rptr. 34. Even if other substantial evidence supports the
opposite conclusion, the agency must still prepare an EIR. Long
Beach Savings and Loan Assn. v. Long Beach Redevelopment Agency
(1986) 188 Cal. App.3d 249, 264, 232 Cal.Rptr. 413. The rule was
succinctly explained in Sierra Club v. County of Sonoma
(1992) 6 Cal.App.4th 1307, 1381, 8 Cal.Rptr.2d 473. "An
agency's decision not to require an EIR can be upheld only when
there is no credible evidence to the contrary."
[End SAEJ-11]
[Begin SAEJ-12]
Although increased generation does not necessarily mean increased
emissions, the possibility remains that increased emissions may
result. Whether increased generation will result in higher
emissions, and whether the foreseeable levels of future emissions
will pose potentially significant impacts, are the types of
questions that should be addressed in an EIR. Determining the
foreseeable level of emissions from divested powerplants and the
cumulative impacts of these new levels is not possible based on
the information contained in the Mitigated Negative Declaration.
As noted above, the Mitigated Negative Declaration does not in
fact analyze the potential cumulative impacts associated with the
proposed sale of PG&E's four other Bay Area fossil fuel
plants. Since it has already been noted in the Draft Initial
Study that the Hunters Point plant alone contributes 7.26% of the
county's NOx emissions, the failure to consider air quality data
renders a conclusion that no potentially significant cumulative
effects will result from the project meaningless.
[End SAEJ-12]
[Begin SAEJ-13]
The Commission's approach to evaluating and mitigating
potentially adverse impacts is contrary to CEQA.
Rather than proposing concrete mitigation
measures to address specific potential adverse impacts, the
Commission has instead chosen to deem existing regulatory schemes
sufficient to render impacts less than significant. This is seen
in the Mitigated Negative Declaration's handling of water quality
(section 4.4), air quality (section 4.5), hazards (section 4.9),
and noise (section 4.10). Reliance on hoped for future action by
other agencies does not meet the requirements set forth in CEQA
for mitigated negative declarations. The Commission is unable to
ensure that mitigation measures will be implemented or that they
will actually mitigate against significant adverse environmental
impacts. Where the success of mitigation is uncertain, the
Commission can not reasonably determine that significant impacts
will not result.
[End SAEJ-13]
[Begin SAEJ-14]
This deferral of mitigation analysis until after project approval
violates CEQA's policy that impacts must be identified before
project momentum reduces or eliminates the agency's flexibility
to subsequently change its course of action. Sundstrom v.
County of Mendocino (1988) 202 Cal.App.3d 296. The Sundstrom
court specifically disapproved of a deferral of environmental
review. 202 Cal.App.3d at 306-309. See also Oro Fino Gold
Mining Corporation v. County of El Dorado (1990) 225
Cal.App.3d 872, 884-885 (There cannot be meaningful scrutiny of a
mitigated negative declaration when the mitigation measures are
not set forth at the time of project approval); Gentry v. City
of Murieta (1995) 36 Cal.App.4th 1359, 1393-94. It is
especially inappropriate to rely on existing BAAQMD rules and
permits based upon those rules to prevent potential adverse
effects on air quality posed by the project, since, as discussed
above, the Bay Area is now proposed to be a non-attainment area
under the current 1 hour ozone standard, a new 8 hour ozone
standard has been adopted, and new permits with unknown
requirements may need to be issued.
[End SAEJ-14]
Thank you for considering our comments.
Sincerely,
/s/
on behalf of
Alan Ramo Supervising Attorney under State Bar of California Student Certification Rules
Patrick Clifford, Certified law student under State Bar of California Student Certification Rules
Garth Ward, Certified law student under State Bar of California Student CertificationRules
Golden Gate University School of Law, Environmental Law and Justice Clinic
Anne Simon, Environmental Law Community Clinic
Attorneys for SAEJ
Enclosure
Footnotes: