The City of San Jose did not have to prepare a supplemental environmental impact report for the proposed expansion of a water recycling program because an earlier EIR adequately addressed the issues, the Sixth District Court of Appeal has ruled.

The ruling came in a lawsuit filed by a citizens group and the Great Oaks Water Company. They opposed a proposed nine-mile-long main that would carry up to 15 million gallons per day of treated wastewater to North Coyote Valley for use as recycled water. The court determined that there was no substantial evidence that the proposed project would have impacts other than those already identified.

During the 1980s, the San Francisco Bay Regional Water Quality Control Board told San Jose to redirect some of its treated wastewater away from the bay because the wastewater was interfering with saltwater habitat of endangered species. So the city created the South Bay Water Recycling Program, which sought to use treated wastewater for irrigation and other purposes. The project contemplated a treatment plant and pipeline system in the "Golden Triangle," which contains portions of San Jose, Milpitas and Santa Clara, and future expansions of the system. The city certified a Final EIR (FEIR) for the water recycling program in 1993. The FEIR evaluated "project level" impacts within the Golden Triangle and future expansion at the "program level."

In 1999, Calpine Corporation proposed building a 600-megawatt, gas-fired power plant in North Coyote Valley, several miles south of the Golden Triangle (see CP&DR, July 2001, March 2001). The California Energy Commission approved the power plant with the condition that the power plant — called the Metcalf Energy Center — use recycled water in its cooling system.

In mid-2000, the city completed a Phase 2 initial study of a proposed "Via del Oro extension" of the recycled water system that would reach the proposed Metcalf site. The city adopted a negative declaration based on the initial study.

In July 2001, the city considered an alternative route to the Metcalf site called the "Silver Creek alignment." This 30-inch pipeline could carry up to 15 million gallons per day. Because the Metcalf Energy Center’s peak usage was expected to be only one-third that amount, the pipeline would carry up to 10 million gallons daily for other, unidentified users. The city adopted a new initial study by addendum to the FEIR in September 2001. The city concluded the project "does not involve new significant environmental effects or a substantial increase in the severity of previously identified significant effects." The city then signed a recycled water contract with Calpine.

The Santa Teresa Citizen Action Group and the Great Oaks Water Company sued, contending the city had violated CEQA and the city general plan. Santa Clara County Superior Court Judge Leslie Nichols ruled for the city. The project opponents appealed, and a three-judge panel of the Sixth District upheld the lower court.

The opponents pressed two major allegations: The drinking water aquifer beneath the North Coyote Valley lacked the nearly impermeable clay layer that protects drinking water beneath the Golden Triangle from recycled wastewater, and the treated wastewater contains two contaminants in excess of drinking water standards. The opponents said the 2001 initial study was inadequate because it relied upon the FEIR, which, they said, did not consider the geologic differences or the presence of certain toxic substances. They also pointed to the fact that the Silver Creek alignment was not included in the Phase 2 initial study and negative declaration. Opponents said a subsequent or supplement EIR was necessary.

The court ruled that because an EIR had already been certified, the opponents had to pass the "substantial evidence standard," which was deferential to the city. The opponents had sought the more lenient "fair argument standard." The court ruled that opponents could not pass the substantial evidence test.

"We cannot discern any significant change in the project or its circumstances arising from the Silver Creek alignment," Justice Eugene Premo wrote for the court. "The location of the Silver Creek alignment is not significantly different from the Via del Oro alignment that was fully evaluated and subject to public review and comment in connection with the Phase 2 initial study and negative declaration. Both routes extend into North Coyote Valley and both routes terminate at or near the [Metcalf Energy Center] site. [Opponents] do not explain, nor does the record shed any light upon how, if at all, the Silver Creek route poses a different or greater threat to the aquifer than that posed by the Via del Oro route.

"Both the FEIR and the Phase 2 initial study determined that degradation of the groundwater was a potentially significant impact of a recycled water project but that the impact was reduced to insignificant by the implementation of various mitigation measures," Justice Premo wrote.

Opponents presented a letter from the water company chairman and a declaration from a company-hired expert. Both said that the project may degrade the source of Great Oaks’ water. But the court ruled that the letter and declaration were outside the administrative record and not admissible. Besides, the court said, the city had addressed the concerns.

The court rejected the general plan conflict argument, finding that there was evidence the project was consistent with the general plan policies regarding groundwater protection.

The court further rejected arguments that the project threatened to create a nuisance and violated the public trust. Those arguments were not ready for judicial review because no specific use for the recycled water had been identified. (The Sixth District could not consider the Metcalf Energy Center because under state law, only the Supreme Court is authorized the review California Energy Commission decision.) Moreover, the court held, the public trust doctrine relates to surface waters, not groundwater sources.

The Case:
Santa Teresa Citizen Action Group v. City of San Jose (Santa Clara Valley Water District), No. H024841, 03 C.D.O.S. 10997, 2003 DJDAR 13864. Filed December 18, 2003.

The Lawyers:
For the citizens group: Stephan Volker, (510) 496-0600.
For the city: Joseph DiCiuccio, city attorney’s office, (408) 277-2407.
For Calpine: Anne Mudge, Stoel Rives, (415) 617-8900.