The Sun is Shining on Solar: Deference to Lead Agency Given in Panoche Valley Solar Project CEQA/Williamson Act Decision

by Holland & Knight LLP
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In a recent California appellate decision addressing a challenge under the California Environmental Quality Act (CEQA) and the Williamson Act to the Panoche Valley Solar Project, a photovoltaic solar project on approximately 5,000 acres of former agricultural land, the court deferred across the board to the county's findings approving the project. Save Panoche Valley v. San Benito County (2013) H037599 (Sup. Ct. No. CU-10-00220).

The court held that under the Williamson Act, the public interest in renewable energy supported cancellation of the Williamson Act contracts despite the prior recommendation by the county's Agricultural Preserve Advisory Committee that cancellation be denied, and under CEQA, substantial evidence supported the biological analysis in the environmental impact report (EIR) — despite adverse resource agency comment letters.

A First Regarding the Williamson Act

Save Panoche Valley is the first published case in California to confirm that a Williamson Act contract can be cancelled to accommodate the state's renewable energy policies and requirements, despite the strong agricultural protections provided by the Act. In order to promote conservation of California's agricultural lands, the Williamson Act provides agricultural landowners preferential property tax treatment in exchange for a contractual promise to maintain the agricultural use of such land for a period of at least 10 years. Once executed, Williamson Act contracts may only be cancelled in limited circumstances, including if the local agency administering the contract determines that cancellation is in the public interest. Per the Williamson Act, contract cancellation is in the public interest only if the administering agency makes findings that:

  • other public concerns substantially outweigh the conservation purposes of the Williamson Act
  • there is no proximate noncontracted land that is both available and suitable for the use to which it is proposed the contracted land be put, or that development of the contracted land would provide more contiguous patterns of urban development than would development of proximate noncontracted land

Renewable Energy Deemed an Overriding Public Concern under the Williamson Act

The court's Williamson Act holding is significant because it clarifies that a local agency may properly determine that California's substantial interest in renewable energy development is a pubic concern that outweighs the conservation purpose of the Williamson Act. Noting the legislature's well-established interest in renewable energy development, the court deferred to the county's finding that contract cancellation outweighed the Williamson Act's conservation purpose because the project's solar farm would help achieve the state's targeted renewable energy development and greenhouse gas reduction goals. As stated by the court, "... each additional renewable energy project helps the state advance toward meeting the requirements of the [renewable portfolio standard]. ... Our review ends when we find substantial evidence, as exists in the record here, to support the Board's conclusion that other public concerns substantially outweigh the purposes of the Williamson Act."

Clarified Definition of "Proximate" Under the Williamson Act

This decision is also important because it clarifies that noncontracted land located in another county and 60 miles from the project site is not sufficiently "proximate" to the contracted land to defeat otherwise proper contract cancellation findings.

CEQA Trend Toward Deferring to Lead Agencies

On the EIR front, this decision continues the trend toward deferring to lead agencies (as discussed in our alert, "California Court of Appeal Affirms Deferential CEQA Substantial Evidence Standard," May 31, 2013), where the court in North Coast Rivers Alliance v. Marin Municipal Water District deferred to the lead agency on all counts, including in its biological analysis and its alternatives analysis. In that case, the court found that:

  • comprehensive biological surveys were not required for the EIR
  • substantial evidence supported the biology analytical approach despite the preferred protocols suggested by the expert resource agency
  • future biological monitoring and consultation did not constitute deferred mitigation
  • the alternatives analysis was sufficient

In Save Panoche Valley, the court similarly deferred to the lead agency on the biological analysis and alternatives findings.

Lead Agencies Need Not Bow to Resource Agency Opinions on Biology

On the biological analysis, the Save Panoche Valley court confirmed that exhaustive biological surveys were not necessary for the EIR, reminding petitioners that "[u]nder CEQA, an agency is not required to conduct all possible tests or exhaust all research methodologies to evaluate impacts." Rather, conducting protocol level surveys prior to construction was adequate, and because the mitigation measure included specific prescriptive standards to be met if a species were located, the mitigation was not unlawfully deferred.

It is noteworthy that the court found that the EIR mitigation measures were supported by substantial evidence notwithstanding the fact that the expert agency, the California Department of Fish and Wildlife (CDFW) has submitted a comment letter that did not support such measures. Specifically, CDFW opined that a 395-acre buffer should be used for the blunt-nosed leopard lizard instead of the 22-acre buffer proposed in the EIR. Additionally, CDFW questioned the sufficiency of the mitigation lands proposed in the EIR. Not only did the court find that the county had sufficient biological reports to support their decision, but it chided the petitioners for relying on unsupported opinion — even if it was an opinion of the expert agency, stating that petitioners "cannot simply rely upon conclusions made by the [CDFW] that are contrary to the Board's conclusions."

Court Confirms that Mitigation Does Not Equate to No Net Loss of Agricultural Land

Also with respect to mitigation, the court ruled that the mitigation requiring conservation easements, site restoration post project and on-site sheep grazing during the life of the project were sufficient to mitigate for the loss of prime agricultural land. The court clarified that CEQA does not require the creation of additional agricultural lands as mitigation, finding "[t]he goal of mitigation measures is not to net out the impact of a proposed project, but to reduce the impact to insignificant levels."

When Lead Agencies May Dismiss an Offsite Alternative

Finally, on the alternatives analysis, the court provided some useful instruction regarding grounds for dismissing an offsite environmentally superior alternative. In Save Panoche Valley, an alternative located off-site in a renewable energy zone was identified as environmentally superior. However, the county judged that alternative to be infeasible because, among other things, it was not located within the county's jurisdiction and it was not owned by the project proponent. While it is well established that an offsite alternative may not be deemed infeasible solely because it is located outside the lead agency's jurisdiction, the court affirmed that an alternative may be deemed infeasible if it is unable to be completed in a reasonable amount of time. The court agreed that the offsite alternative would not be able to be completed in a reasonable timeframe because it was located in two different counties and owned by a private investment group, not under the control of the project proponent.

Court Refused to Second-Guess Local Agencies in Renewable Project

On balance, the Save Panoche Valley court reaffirmed that it is not the judiciary's role to second-guess the CEQA and Williamson Act findings of a local agency when such findings are supported by substantial evidence in the administrative record. In so holding, the court has further clarified California's substantial public interest in promoting development of renewable energy resources, even if such development might come at the expense of other important state resources.

To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.

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