California Supreme Court Issues Decision On Moss Landing Powerplant Expansion

On August 15, 2011, the California Supreme Court issued its decision in Voices of the Wetlands v. State Water Resources Control Board, et al., resolving a decade-long dispute over expansion of the Moss Landing Powerplant near Monterey Bay, California.

Dynegy Moss Landing LLC (Dynegy), the current owner of the facility, sought approval from the State Energy Commission to expand the plant and modify the cooling intake.  This expansion also required issuance or renewal of a cooling water intake permit from the Regional Water Quality Control Board.  An environmental group, Voices of the Wetlands, sued to challenge the Regional Board's issuance of the intake permit on the primary ground that it did not require the "the best technology available for minimizing adverse environmental impact" as required by federal Clean Water Act section 316(b).  The debate over technological and environmental standards, and the procedures for judicial and administrative review of the action in the trial and appellate courts, finally found its way to the California Supreme Court.

In a lengthy and detailed ruling, the Court addressed several important procedural and jurisdictional issues affecting such projects, including the following.  First, the Court rejected an argument raised by Dynegy and the Energy Commission as amicus curiae that the Warren-Alquist Act granted the Energy Commission and the Court exclusive jurisdiction over powerplant permitting decisions and any matters that could be raised in such proceedings, including water permitting deficiencies.  The Court held that the Warren-Alquist Act did not preclude the superior court from exercising jurisdiction over challenges to the Regional Board's decision to renew the power facility's cooling water intake permit.

Second, the Court upheld the superior court’s decision to order an interlocutory remand, in lieu of issuing the writ of mandate sought by petitioner.  On finding deficiencies in the Regional Board’s findings, the superior court had retained jurisdiction and ordered an interlocutory remand, allowing the Regional Board to receive new evidence and make new findings, after which the court entered judgment in favor of the Regional Board.  Despite protests that this procedure had improperly denied petitioner a meritorious judgment on the writ and prevented a challenge to the new findings, the Supreme Court ruled that the trial court was within its discretion under Code of Civil Procedure section 1094.5.

Third, the Court also ruled that the Regional Board properly utilized a cost-benefit analysis, and in particular a "wholly disproportionate" cost-benefit standard, to conclude that the existing cooling intake design, as upgraded to accommodate plant expansion, reflected "the best technology available for minimizing adverse environmental impact" under Clean Water Act section 316(b).

A complete copy of the decision can be found here.

If you have any questions regarding this decision, please contact Hanspeter Walter or the KMTG attorney with whom you normally consult.