California’s “Voluntary Agreements” with Water Agencies and Irrigation Districts Are an Attack on the State Water Board and Foundational Environmental Law

Published 11/30/2020  |  California Sportfishing Protection Alliance

Summary

Both Yuba Water Agency (YWA) and the Turlock and Modesto Irrigation Districts (Districts) allege that the State Water Resources Control Board (State Water Board) has unlawfully delayed decisions concerning their respective hydroelectric projects.  Both YWA and the Districts have mounted aggressive legal attacks on the State Water Board and on the laws that give the Board its legal authority, in order to avoid regulation by the Board.

At the same time, YWA and the Districts want the State Water Board to grant them discretionary delay to complete “Voluntary Agreements” about flow requirements in the Yuba and Tuolumne rivers.  This delay prevents the Board from setting mandatory flow requirements in the legally required and long overdue update of the Bay-Delta Plan.

Negotiations of Voluntary Agreements have been ongoing for about 4 years for the Yuba and 8 years for the Tuolumne.  Ignoring the legal attacks of YWA and the Districts (among others), the Newsom administration continues to tie the hands of the State Water Board and leave the door open for Voluntary Agreements.  It’s long past time to slam the door shut. 

The Attacks of Yuba Water Agency and Turlock and Modesto Irrigation Districts on Section 401 of the Clean Water Act

California Attorney General Xavier Becerra is suing the US Environmental Protection Agency to overturn rollbacks of the Clean Water Act (CWA).  One area of focus is Clean Water Act Section 401, which requires an applicant for a federal permit or license obtain a certification from the state or tribe in whose land the facility in question is located.[1]  That certification must affirm that the issuance of the new license or permit will be consistent with applicable state or tribal law concerning water quality.  Mr. Becerra’s lawsuit challenges the Trump administration’s new rule about Section 401 that became effective in September 2020.[2]  The new rule narrowed the scope of Section 401 in opposition to major decisions by the US Supreme Court and imposed multiple procedural roadblocks.

Simultaneously, the fight is playing out in battle after battle over the exercise of Section 401 of the Clean Water Act in the context of the Federal Energy Regulatory Commission’s (FERC or Commission) licensing of hydropower projects.  Many of those battles are in California, where Section 401 requires that an applicant for a new hydropower license must obtain from the California State Water Resources Control Board (State Water Board) a certification that the license will be consistent with California law concerning water quality.  The State Water Board may place mandatory conditions in the license to assure such consistency.  It may also deny certification.  Without such a water quality certification, FERC cannot issue a new hydropower license for a project in California, unless FERC can show that the State Water Board has “waived” its authority to issue a certification.

In the past two years, numerous California applicants for new or renewed FERC licenses have asked FERC to waive CWA Section 401 in regard to the issuance of their new FERC licenses.  In response, FERC has expansively interpreted the 2019 decision of a panel of the D.C. Circuit of the Federal Court of Appeals in Hoopa Valley Tribe v. FERC (Hoopa Valley)[3] to declare that the State Water Board waived its authority in almost every case where the applicant asked FERC to do so.  In the broadest terms, FERC has interpreted a one-year deadline within the Clean Water Act for a state or tribe to issue a water quality certification to disallow a decision by the applicant to withdraw and resubmit its application for a certification.  Based on apparently routine procedural correspondence with by the State Water Board to applicants, FERC has found that the State has had a “functional” agreement with the applicant to delay and has thus waived certification.

The State Water Board, as well as CSPA and allied organizations, have opposed many of these waivers, and have filed suit seeking to overturn three of these waivers.  This has been the subject of several previous posts on this website.[4]

Yuba Water Agency (YWA) on the Yuba River has sought and been granted waiver of a water quality certification for its Yuba River Development (hydropower) Project (YRDP) based on alleged delay by the State Water Board.  Joint FERC licensees Turlock Irrigation District and Modesto Irrigation District (Districts) on the Tuolumne River are now seeking waiver of water quality certification for its Don Pedro and La Grange hydropower projects, based on the as yet untested notion that denial of certification by the State Water Board is yet another “functional” agreement by the State Water Board to collude in delay.[5]

At the same time these applicants for new hydropower licenses that have sought (and in Yuba’s case received) waivers of their water quality certifications continue to lobby the State to use its discretion to substitute sweetheart “Voluntary Agreements” for flows in rivers they control.[6]  The Voluntary Agreements have been under discussion in the San Joaquin River watershed for 8 years and in the Sacramento River watershed for about 4 years.  As this author has argued elsewhere, these Voluntary Agreements are not the solution to the deferral of difficult decisions by the State.  They are today the center of that deferral.[7]     

Clearly, the issue for YWA and the Districts is not how long the State Water Board is taking to act: in flagrant disregard of State regulations, both YWA and the Districts failed to even start required state environmental review (CEQA) to support the water quality certifications for their respective hydropower projects.  In both cases, YWA and the Districts explicitly chose to be the lead agency for CEQA, and thus to be the entities responsible for initiating and completing the CEQA process.  According to California regulation, they are supposed to have completed this review such that “the certifying agency shall be provided with and have ample time to properly review a final copy of valid CEQA documentation before taking a certification action.”

What’s really at stake here is that both YWA and the Districts have used delay of their own making as a springboard to make a full court press on the State Water Board to avoid regulation.

Exhibit A (for Closing the Door on a Yuba River Voluntary Agreement): Yuba Water Agency’s Petition for Reconsideration of the Water Quality Certification for the Yuba River Development Project 

In spite of FERC’s waiver of certification for YWA’s Yuba River Development Project (YRDP, FERC Project no. 2246), the State Water Board proceeded to issue a water quality certification (YRDP Certification) for the YRDP on July 17, 2020.[8]  The State Water Board apparently felt it appropriate to move forward with certification in the event that FERC changed its mind on waiver or was reversed in court.  Indeed, Condition 23 of the certification specified that the certification would take effect and become a final agency action only on reversal by FERC or a court.

For all the legal fighting, the YRDP Certification isn’t much to get excited about.  It proposes to implement the flow regime that YWA and FERC propose, with a requirement that YWA issue a report within ten years on the effect of the flow regime on fish.  Following issuance of YWA’s (not even State Water Board staff’s) report, the State Water Board proposes to consider changes to flow requirements.  My colleagues and I could only conclude that kicking the can down the road in this way was to allow the State to preserve the opportunity for a Yuba River Voluntary Agreement.  This is particularly myopic because YWA in several recent documents, the new EPA rule on CWA Section 401, and the hydropower industry before and since oppose the right of a state agency to modify a water quality certification once issued.

Equally, the YRDP Certification defers decisions on physical habitat improvements on the lower Yuba River and on fish passage to the upper Yuba River watershed.  Instead, the YRDP Certification requires reports from YWA about what YWA might propose to do on these issues. This is after YWA has spent the last eight years arguing that no regulator can require YWA to do anything at all that YWA hasn’t already proposed.

Notwithstanding Condition 23 of the YRDP certification, YWA petitioned the State Water Board for reconsideration of the certification on August 14, 2020.[9]  Though YWA’s petition for reconsideration had on its face no legal effect, it was structured as a full-fledged legal assault on the State Water Board and a lavish advertisement for YWA’s view of the purportedly technical merits of its proposed outcome for the next 50 years of Yuba River operations.  It featured:

  • Four lines of legal argument and 22 legal attachments
  • A series of hypothetical outcomes that in the worst case the State Water Board might but had not yet required
  • Computer modeling and a “report” on that modeling of what the State Water Board might but had not yet required
  • Six additional appendices

On November 17, 2020, CSPA and the three other organizations that are litigating waiver of the YRDP certification (Friends of the River, South Yuba River Citizens League and the Sierra Club Mother Lode Chapter) filed a Response in Opposition to YWA’s petition with the State Water Board and with FERC.  The CSPA et al. Response in Opposition starts by restating why Condition 23 makes YWA’s petition for reconsideration, and two lawsuits that followed that petition, procedurally premature.  Much of the Response in Opposition seeks to part the seas of YWA’s crocodile tears over the hypothetical conditions that the State Water Board might sometime in the future require.  It also recommends that the State Water Board reevaluate the decision to defer specific protective measures, and instead revise the Certification to require defined flow, physical habitat, and limited fish passage improvements immediately.

Finally, the Response in Opposition argues that the State Water Board needs to move past the option for a Yuba River Voluntary Agreement in order to defend its own authority, stating in part:

YWA’s attack on the Clean Water Act and the State’s authority under it was an escalating series of choices.  The fact that YWA has company in the hydropower industry in this assault on foundational environmental law does not excuse it; it makes it worse.  Nothing compelled YWA to extend and deepen its argument at each step.  It chose to.

The State Water Board must respond in kind to YWA’s choices to attack the State Water Board’s authority.  The State Water Board should therefore cease any procedural deference or accommodation of YWA beyond that required by law.  That will require the State Water Board to make a major change in direction.

The State Water Board needs to disallow further consideration of a proposed “Voluntary Agreement” for the Yuba River.  The Certification not only subordinates itself to a potential but not yet completed such agreement explicitly in Condition 30, but more importantly postpones difficult decisions regarding flow in Condition 1 so that the State Water Board may ultimately accept such an agreement.  Though the State Water Board diluted its own Certification document with equivocation in order to accommodate YWA, YWA has rewarded the State Water Board with a scorched earth attack on the State Water Board’s certification authority.  No good deed goes unpunished. …

The State Water Board and the Attorney General’s office have, at least, petitioned for review of FERC’s findings that the State Water Board waived its Section 401 authority to condition both the Yuba-Bear Hydroelectric Project and the YRDP.  The State Attorney General’s office has also stepped up and filed suit to overturn the EPA Final Rule on Section 401.  The State Water Board needs to impress on the California Natural Resources Agency, California Environmental Protection Agency and the Governor’s cabinet the seriousness of YWA’s no-holds-barred attack on State authority.  State agencies across the board need to get on the same page as the Attorney General’s office and stop returning punches with patty cakes.

Exhibit B: The State Water Board’s Forthcoming Water Quality Certification for the Don Pedro and La Grange Projects, which Faces the Choice of Closing the Door on a Tuolumne River Voluntary Agreement or Undercutting the Board’s Authority on both the Bay-Delta Plan and Certification

There is a reasonable chance FERC will deny the Districts’ petition for waiver of certification on the Don Pedro and La Grange projects.  In our view, the Districts’ petition marks an unprecedented level of overreach in the application of Hoopa Valley in a landscape where overreach has become the norm.  If FERC waives certification on Don Pedro and La Grange and upholds waiver on rehearing, such waiver would almost certainly be litigated.

In any case, the State Water Board will likely issue a least a draft certification in the next few months, notwithstanding the Districts’ effort to forestall such issuance by withdrawing their application for certification on November 19.  This places the State Water Board at an immediate crossroads: will the draft certification for Don Pedro and La Grange follow the trajectory of the combined certification for the Merced River Project and the Merced Falls Project and require consistency with the flow requirements in Phase 1 of the Bay-Delta Plan that the State Water Board adopted on December 12, 2018?  Or will the draft certification for Don Pedro and La Grange follow the trajectory of the certification for the Yuba River Development Project, and kick the can down the road on Tuolumne River flow requirements and other key elements?

The FERC licensee for the Merced River and Merced Falls projects did not have a Voluntary Agreement proposed or even a discussion actively underway.  In contrast, in the final Environmental Impact Statement for the Don Pedro and La Grange projects, FERC staff has already included most of the elements of the proposed Tuolumne River Voluntary Agreement as part of the proposed FERC license conditions.

The answer to the direction of the draft certification for Don Pedro and La Grange appears to lie somewhere in the Newsom administration.

The Newsom administration needs to understand that deferring further decisions on Tuolumne River flow in order to preserve the possibility of a Tuolumne River Voluntary Agreement (after 8 years and counting) rewards bad actors for attacking the State Water Board’s authority.

Even further, such deferral would also open another legal front on CWA Section 401, beyond the litigation arising from the new EPA rule on Section 401 and the litigation arising from Hoopa Valley.  It is clear that the Districts (and likely YWA and a host of other California water agencies) are prepared to litigate whether, to what degree, and under what conditions a state agency can modify a condition in a water quality certification.  In considering its counsel to the State Water Board on the certification for Don Pedro and La Grange, the Newsom administration must at the same time consider whether it is prepared to have the State Water Board and the Attorney General take on this legal battle and finish the job.

Conclusion

CSPA and allied conservation and fishing groups understand that defending the authority of the State Water Board under the Clean Water Act and other foundational environmental laws does not mean and should not mean that the State Water Board is going to accept our proposed outcomes on the merits.  But it ought to mean at least a fair evaluation of proposed outcomes and a decision, not deferral to future decisions by the State Water Board for the sake of political considerations.

When water agencies and irrigation districts make aggressive attacks on the authority of the State Water Board, the State Water Board needs to withdraw discretionary procedural accommodation of the attacking entities.  And the State of California owes the State Water Board its support on that basic level.

[1] See Attorney General Becerra Files Multistate Lawsuit Challenging Trump Administration Rule Curtailing States’ Clean Water Act Authority (July 21, 2020).  Available (with link to a copy of the lawsuit) at: https://oag.ca.gov/news/press-releases/attorney-general-becerra-files-multistate-lawsuit-challenging-trump.

[2] For a description of the new rule, see previous posts on this website: https://calsport.org/news/hydropower-reform-coalition-opposes-another-trump-administration-attack-on-the-clean-water-act/; see also comments of the Hydropower Reform Coalition on the new rule at: http://calsport.org/news/wp-content/uploads/2019-10-21.HRC_.401_Comments.pdf.

[3]Hoopa Valley Tribe v. FERC, 913 F.3d 1099, 1104 (D.C. Cir. Apr. 26, 2019), reh’g denied, No. 14-1271, 2019 WL 3928669 (D.C. Cir. Apr. 26, 2019), and cert. denied sub nom. California Trout v. Hoopa Valley Tribe, 140 S. Ct. 650, 205 L. Ed. 2d 410 (2019).

[4] See previous posts: https://calsport.org/news/cspa-sues-ferc-over-waiver-of-clean-water-act/; https://calsport.org/news/wp-content/uploads/CSPA-Newsletter_-Turbulent-Waters-fall-2020.pdf; https://calsport.org/news/innews/ferc-declaratory-order-finding-waiver-of-california-section-401-authority-challenged-in-ninth-circuit-3/

[5] For discussion and link to supporting analysis, see “CSPA Opposes Turlock and Modesto Irrigation Districts’ Petition for Waiver of Clean Water Act,” available at  https://calsport.org/news/cspa-opposes-turlock-and-modesto-irrigation-districts-petition-for-waiver-of-clean-water-act/

[6] The proponents of these and other Voluntary Agreements intend them to substitute for adoption by the State Water Board of an update of the Bay-Delta Plan.  This substitution would purport to satisfy their obligations to provide increased flow into and through California’s Bay-Delta estuary.  See discussion in previous post, What the Water Deals Mean, Part 2: Voluntary Settlements Privatize the Public Trust (Jan. 7, 2019), available at: https://calsport.org/news/what-the-water-deals-mean-part-2-voluntary-settlements-privatize-the-public-trust/.

[7] SeeWater board must establish a state water budget that California can afford” (Sep. 17, 2020). (“For at least five years, the state and various water users have postponed balancing the state’s water budget by promising a grand bargain.  This promised new grand bargain is not the solution to the aptly named ‘culture of deferral.’  The grand bargain is the current center of deferral.”) Available at: https://calmatters.org/commentary/my-turn/2020/09/water-board-must-establish-a-state-water-budget-that-california-can-afford/.

[8] The certification is available at https://www.waterboards.ca.gov/waterrights/water_issues/programs/water_quality_cert/docs/ferc2246/yrdp_certification1.pdf.  The issuance of this certification was enabled by a legislative change to State Water Board regulations in Assembly Bill 92, signed by the Governor on June 29, 2020; this change allowed the State Water Board to issue a certification prior to completing CEQA, with the opportunity to revise the certification once CEQA is complete.

[9] YWA’s petition and associated documents are available at: https://www.yubawater.org/338/State-Water-Board-Certification-2020

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