In a partially published opinion filed June 21, 2016, the Court of Appeal for the First Appellate District reversed in part the Mendocino County Superior Court’s judgment denying a writ petition challenging the City of Ukiah’s approvals of a Costco warehouse/gas station project on CEQA and zoning law grounds.  Ukiah Citizens for Safety First v. City of Ukiah (1st Dist., Div. 3, 2016) _____ Cal.App.4th _____, 2016 WL ____________.  The 10-page published portion of the Court’s 27-page opinion held the City’s EIR and project approvals must be set aside and the EIR’s energy analysis brought into compliance with CEQA; the remaining unpublished portion of the opinion (not discussed in detail in this post) agreed with and affirmed the trial court’s rulings that the EIR’s transportation/traffic and noise analyses were adequate and that the project was not inconsistent with applicable zoning requirements.

The crux of the published opinion is its holding that the EIR – for Costco’s 15.33-acre, 148,000-square-foot retail facility with a bakery, pharmacy, optical center, hearing aid testing center, food court, photo center, tire center, 16-pump gas station, and 608 parking spots – inadequately analyzed the project’s energy impacts under Appendix F of the CEQA Guidelines and the Third District’s controlling decision in California Clean Energy Committee v. City of Woodland (2014) 225 Cal.App.4th 173 (“CCEC”).  (My prior post on the CCEC case can be found here; my posts on proposed CEQA Guidelines amendments analyzing, inter alia, proposed changes related to Appendix F energy issues can be found here, and here.)  Moreover, the Court held that an Addendum adopted by the City almost a year after the challenged EIR was certified – to “clarify” its deficient energy analysis – was not properly part of the record and could not retroactively cure the defective EIR.

Per the Court, CEQA requires an EIR to discuss mitigation measures for significant environmental impacts, including “measures to reduce the wasteful, inefficient, and unnecessary consumption of energy.”  (Citing Tracy First v. City of Tracy (2009) 177 Cal.App.4th 912, 930, quoting Pub. Resources Code, § 21100(b)(3).)  The Guidelines require discussion of energy conservation measures when relevant, and provide examples in Appendix F.  (14 Cal. Code Regs., § 15126.4(a)(1)(C).)

As observed by the Court in a lengthy footnote, Appendix F lists in considerable detail numerous environmental impacts and mitigation measures that an EIR may include.  Potential impactsrequiring EIR discussion include:  “1.  The project’s energy requirements and its energy use efficiencies by amount and fuel type for each stage of the project including construction, operation, maintenance and/or removal.  If appropriate, the energy intensiveness of materials may be discussed.  [¶] 2.  The effects of the project on local and regional energy supplies and on requirements for additional capacity.  [¶]  3.  The effects of the project on peak and base period demands for electricity and other forms of energy.  [¶]  4.  The degree to which the project complies with existing energy standards.  [¶]  5.  The effects of the project on energy resources.  [¶]  6.  The project’s projected transportation energy use requirements and its overall use of efficient transportation alternatives.”

Appendix F’s listing of possible EIR mitigation measures includes:  “1.  Potential measures to reduce wasteful, inefficient and unnecessary consumption of energy during construction, operation, maintenance and/or removal [including] . . . why certain measures were incorporated in the project and why other measures were dismissed.  [¶]  2.  The potential of siting, orientation, and design to minimize energy consumption, including transportation energy, increase water conservation and reduce solid-waste.  [¶]  3.  The potential for reducing peak energy demand.  [¶]  4.  Alternate fuels (particularly renewable ones) or energy systems.  [¶]  5.  Energy conservation which could result from recycling efforts.”

The Costco project EIR did not contain a separate section analyzing energy impacts, but mentioned such impacts in its sections discussing impacts to public utilities, air quality/GHGs, and climate change.  It concluded the project would not exceed existing gas and electric supply or result in wasteful, inefficient or unnecessary energy consumption; would conform to Title 24 energy conservation standards; would incorporate in its design “several sustainable features” (listing “typical sustainable building features incorporated into new Costco warehouses to conserve energy and natural resources”); and would (as GHG mitigations) implement a carpool/vanpool program, increase transit accessibility and improve the pedestrian network.

The Court agreed with Citizens’ arguments that such analysis “failed to calculate the energy use attributable to vehicle trips generated by the project and failed to calculate the operational and construction energy use of the project” and thus “does not comply with Appendix F of the CEQA Guidelines.”  Citing to CCEC, the Court noted that “court held that the analysis of energy impacts in an EIR, which was in all material respects the same as that undertaken by the city in this case, was not adequate.”  A key defect in the EIR invalidated in CCEC was its failure to “assess any transportation energy impacts of the[ ] [40,051 new daily] vehicle trips” caused by the project.  This deficiency in energy use quantification led the CCEC court to criticize reliance on vehicle trip reduction measures as a proxy to reduce energy impacts, explaining the city “cannot say how much less transportation energy is needed for the project as approved because this issue has never been assessed in an EIR.  CEQA EIR requirements are not satisfied by saying an environmental impact is something less than some previously unknown amount.”  Further, reliance on Title 24 and California green building code compliance does not satisfy Appendix F’s requirements for adequate analysis of a project’s operational and construction energy use because such compliance does not address numerous relevant factors such as “whether a building should be constructed at all, how large it should be, where it should be located, whether it should incorporate renewable energy resources, or anything else external to the building’s envelope.”  (Citing CCEC at p. 211.)  Finally, reliance on GHG mitigation measures’ “likely … collateral effect of substantial energy-saving effects” was also misplaced; notwithstanding a likely high correlation, courts cannot assume such overlap equates to sufficient analysis.  (Citing CCEC at p. 208, fn. 6 [“Air quality mitigation is not a substitute for an energy analysis.”])

Per the First District:

“The [Ukiah Costco] EIR … clearly fails to meet the standards set forth in CCEC … [T]he Costco EIR concludes that the project will generate 11,204 new vehicle trips per weekday, but fails to calculate the resulting energy impacts of those trips.  The EIR also improperly relies on compliance with the building code to mitigate operational and construction energy impacts, without further discussion of the Appendix F criteria.  Finally, as in CCEC, the city’s reliance on mitigation measures designed to reduce greenhouse gas emissions is misplaced.”

As indicated above, the Court also rejected the City’s belated attempt to “shore up” its deficient energy analysis with a 10-page Addendum on that topic adopted in connection with approval of minor project changes almost a year after certification of the challenged final EIR.  While Guidelines § 15164 authorizes an addendum under certain circumstances and where none of the conditions specified in § 15162 require a subsequent EIR, its application “assumes that the EIR previously certified was properly certified” and “does not authorize the retroactive correction of an inadequate EIR … by providing the additional necessary information about the environmental effects of the project after the project has been approved.”  (Citing Guidelines § 15164(d) [“The decision-making body shall consider the addendum with the final EIR … prior to making a decision on the project.”].)  The Court offered no opinion on whether the belated Addendum would satisfy CEQA’s requirements for a valid energy impacts analysis, but noted that “[b]ecause the EIR certified in this case was inadequate …, recirculation and consideration of public comments concerning the energy analysis will be necessary before the EIR may be certified and the project approved.”  (Citing Laurel Heights Improvement Assn. v. Regents of Univ. of California (1994) 6 Cal.4th 1112, 1128.)

While this case’s summertime CEQA message to big-box retailers is no “Field of Dreams,” this much of it seems clear:  “If you build it, they will come – so your EIR had better include a robust Appendix F energy analysis taking that into account.”