World Bus. Acad. v. Cal. State Lands Comm'n

24 Cal.App.5th 476

234 Cal.Rptr.3d 277

WORLD BUSINESS ACADEMY, Petitioner and Appellant,

v.CALIFORNIA STATE LANDS COMMISSION, Defendant and Respondent;

Pacific Gas & Electric Company, Real Party in Interest and Respondent.

B284300

Court of Appeal, Second District, Division 4, California.

Filed June 13, 2018

As Modified on Denial of Rehearing July 10, 2018

Humphrey & Rist, Christina A. Humphrey, Thomas A. Rist ; Law Offices of J. Kirk Boyd, J. Kirk Boyd, San Francisco, for Petitioner and Appellant.

Xavier Becerra, Attorney General, Deborah M. Smith, and Christina Morkner Brown, Deputy Attorneys General for Defendant and Respondent California State Lands Commission.

Shute Mihaly & Weinberger, William J. White, San Francisco, as Amicus Curiae on behalf of Respondent California State Lands Commission.

Armbruster Goldsmith & Delvac, Damon P. Mamalakis, Los Angeles, for Real Party in Interest and Respondent Pacific Gas and Electric Company.

COLLINS, J.

Real party in interest and respondent Pacific Gas and Electric Company (PG&E) owns and operates the Diablo Canyon nuclear power plant in San Luis Obispo County. The plant uses water from the Pacific Ocean to operate its cooling systems. The water intake and discharge structures are situated on state-owned submerged and tidal lands overseen by defendant and respondent California State Lands Commission (Commission). PG&E and the Commission entered into two long-term leases, set to expire in August 2018 and May 2019, which authorized PG&E to build and operate the water intake and discharge structures. With those leases nearing expiration, PG&E applied for a consolidated replacement lease extension through 2025, when it plans to cease operating the plant.

The Commission held public hearings about the matter and eventually approved the application. It did not prepare an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) ( Pub. Resources Code, § 21000 et seq. )¹ prior to making its determination. Instead, the Commission concluded the lease replacement, which maintained the status quo at the plant, was subject to the "existing facilities" categorical exemption to CEQA ( Cal. Code Regs., tit. 14 (Guidelines) § 15301 ). The Commission further found inapplicable the "unusual circumstances" exception, which supersedes the existing facilities exemption "where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." (Guidelines § 15300.2, subd. (c).)

Petitioner and appellant World Business Academy sought an administrative writ and declaratory relief in Los Angeles County Superior Court. It contended that the lease replacement should not have been subject to the existing facilities exemption, and that even if it was, the unusual circumstances exception to the exemption should apply. Appellant further argued that the lease replacement violated the public trust doctrine. The trial court rejected these contentions and denied the writ and declaratory relief. We affirm.

BACKGROUND

The Diablo Canyon power plant is a two-unit nuclear power plant owned and operated by PG&E. It is adjacent to the Pacific Ocean, near Avila Beach in San Luis Obispo County, on approximately 750 acres of land owned by PG&E. The plant was completed in 1973 and began operations in 1985. Its two nuclear units still operate today and are licensed by the federal Nuclear Regulatory Commission (NRC) to operate until November 2, 2024 (unit 1) and August 26, 2025 (unit 2).

The plant uses a "once-through" cooling system to cool the nuclear units. Each day, the cooling system draws more than two billion gallons of seawater from a breakwater-protected intake cove on the coast. The water is pumped through "traveling water screens" to filter out "ocean debris." Debris larger than the screening mesh—including plants and fish—gathers or "impinges" on the screens and is subsequently washed off and sent through "[g]rinding and mincing equipment installed in the inlets of the refuse sump." "Entrained debris smaller than the 3/8-inch screening mesh passes through the cooling system" along with the seawater, which is heated by approximately 20 degrees Fahrenheit during its five-minute journey through the plant. The heated water is then returned to the Pacific Ocean via a discharge channel located in the coastal bluff.

The intake cove, breakwaters, intake structure, and discharge channel are located on state-owned tidal and submerged lands. The Commission authorized a 49-year lease in 1969, allowing PG&E to construct and operate the intake cove, intake structures and breakwaters on state-owned land. The Commission authorized a second 49-year lease in May 1970, for the cooling water discharge channel. The leases had expiration dates of August 27, 2018 and May 31, 2019, respectively, several years before the plant’s federal operating licenses are scheduled to expire.

The power plant cannot operate without the cooling system, however, and the cooling system cannot operate without the infrastructure located on the leased lands. PG&E accordingly submitted an application to the Commission in January 2015 to replace the expiring leases with a single new lease to run coterminously with its federal licensure.²

The Commission held a public meeting on the matter on December 18, 2015. During that meeting, then-Committee chairperson and Lieutenant Governor Gavin Newsom remarked that "every few years, another [seismic] fault is discovered" near the plant, raising "another question mark about its safety and its potential to survive an earthquake...." He further observed that the original leases, which predated the 1970 enactment of CEQA, never had been given "CEQA consideration." Newsom queried the extent of CEQA review that might be required in this case. Commission Executive Officer Jennifer Lucchesi assured Newsom that Commission staff would prepare an analysis "with potentially some recommendations on not only an approach and a framework for analyzing the CEQA considerations, but also a framework for looking at the public trust issues" associated with the lease replacement.

Commission staff subsequently prepared an "Informational Update" dated February 9, 2016. In that update, Commission staff reported that PG&E had taken the position that no environmental review of the lease replacement was necessary under the "existing facilities" categorical exemption to CEQA because the plant was "an existing facility with no change or expansion of an existing use." Commission staff further reported that the existing facilities exemption could be overridden by the unusual circumstances exception, which applies "where there is a ‘reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.’ ( Cal. Code Regs., tit. 14, § 15300.2, subd. (c).)"

The update then made several observations about the characteristics of the plant and its location. It first noted that the plant "is the only active nuclear power plant in California, supplying approximately 18,000 gigawatt-hours of electricity annually (nearly 10% of California’s electricity generation)." It further noted that the plant’s "nuclear fuel source and proximity to fault lines distinguish it from other power plants in California." The update also acknowledged the existence of "substantial disagreement" between PG&E and the United States Geological Survey about the risks associated with two fault lines, the Shoreline and the Hosgri, near the plant. PG&E believed the faults posed no hazard to the plant, which was built and retrofitted to withstand a magnitude 7.5 earthquake. In contrast, a seismologist with the U.S. Geological Survey, Jeanne Hardebeck, "believe[d] that a joint seismic event of the Hosgri and Shoreline faults could exceed [the plant]’s design capacity for safe operation, possibly reaching a magnitude of 7.7."

The update concluded this discussion without explicitly identifying any of these characteristics as unusual circumstances or assessing whether any of them would cause the lease replacement to have a significant effect on the environment. Indeed, the update made no recommendation to the Commission regarding application of the existing facilities exemption or the unusual circumstances exception. Instead, it noted that Commission staff "continue[d] to evaluate the appropriate environmental review pursuant to CEQA for this application." The update further advised the Commission that it would need to analyze the lease replacement under the public trust doctrine, pursuant to which the Commission is required to ensure that the tidal and submerged lands under its control are reserved for appropriate uses and the general benefit of the community. (See Citizensfor East Shore Parks v. California State Lands Com. (2011) 202 Cal.App.4th 549, 570-571, 136 Cal.Rptr.3d 162.)

In March 2016, representatives from appellant met with Commission staff and delivered a presentation, "On Public Health Issues and Proposed Diablo Canyon CEQA Review," which addressed adverse public health outcomes appellant attributed to the operation of the plant. Appellant’s presentation highlighted increased incidence of cancer in San Luis Obispo County, particularly cancers of the thyroid, breast, and skin; and increased incidence of low-birth weight babies and infant mortality "in the 10 zip code areas in Santa Barbara County closest to Diablo Canyon." The presentation also asserted that the incidence of childhood cancer in the vicinity of the Rancho Seco nuclear power plant had decreased "dramatically" after that plant was closed in 1989.

Appellant’s presentation was based on a research paper by Joseph Mangano, MPH, MBA, "Report on Health Status of Residents in San Luis Obispo and Santa Barbara Counties Living Near the Diablo Canyon Nuclear Reactors Located in Avila Beach, California." The Commission also received a report challenging Mangano’s research. That report, prepared...