In Sonoma County Water Coalition v. Sonoma County Water Agency (Oct. 8, 2010, A124556), the First District Court of Appeal held that the Sonoma County Water Agency (SCWA) appropriately adopted an urban water management plan. On appeal, SCWA argued that the trial court failed to grant deference to the expertise and discretion of SCWA, improperly made de novo determinations, and imposed requirements not found in the Urban Water Management Planning Act (Act). The First District agreed with all of these arguments in overturning the trial court’s decision and upholding the plan.

SCWA, a water wholesaler to public water agencies contractors and other retail water suppliers in Sonoma and Marin counties, adopted its Urban Water Management Plan (Plan) in December 2006. SCWA’s source of supply is the Russian River watershed. Under the Act, local urban water suppliers are required to develop water management plans to ensure adequate water supplies to serve existing and future water demands. Among other elements, a plan must provide information on a supplier’s water usage, resources, reliability planning, demand management measures, and shortage contingency planning. Water suppliers must prepare and/or update the plans every five years.

In the Plan, SCWA anticipated an increase in future water supply and rested its future supply projection on four assumptions: 1) the listing of three salmonid species as threatened or endangered under the Endangered Species Act (ESA) would not reduce water supplies; 2) PG&E’s license for a power plant would not be modified to reduce available water supplies for diversion by SCWA; 3) SCWA would construct the transmission and diversion facilities described in its Water Supply, Transmission, and Reliability Project; and 4) SCWA would obtain water rights to increase diversions from the Russian River. SCWA concluded in the Plan that these assumptions were reasonable.

The trial court agreed with the Sonoma County Water Coalition’s (petitioner’s) position that the Plan was invalid because the Plan relied on the mere possibility that future water supplies would be secured. The court of appeal, however, disagreed with the Coalition and noted that some level of uncertainty in water management is inherent due to unpredictable climatic changes, competing water demands, environmental constraints, and overlapping regulatory regimes. According to the First District, the lower court required a level of certainty not factually attainable and not required by statue by rejecting SCWA’s conclusion that the assumptions about future water supply were reasonable. Thus, the trial court improperly substituted its own judgment regarding the reasonableness of SCWA’s assumptions.

With respect to SCWA’s assumptions, the court first addressed whether it was appropriate for SCWA to conclude that the ESA constraints would not impair future water supplies. As the Plan acknowledged, the Russian River is home to two endangered species, Chinook salmon and steelhead, and one threatened species, Coho salmon. The Plan also concluded that while it was uncertain what flow modifications the National Marine Fisheries Service (NMFS) might require in the watershed, it was reasonable to assume that any restrictions would not affect SCWA’s ability to supply water. The Biological Assessment submitted to NMFS, which evaluated potential impacts of various activities in the Russian River watershed on listed salmonid species and their habitats and proposed mitigation measures, concluded that SCWA’s Water Supply, Transmission, and Reliability Project would provide a reliable future water supply. Based on the Biological Assessment and SCWA’s ongoing communications with NMFS, the court held that substantial evidence supported SCWA’s conclusion that ESA constraints would not impair the agency’s water supply availability.

Second, the court addressed the Coalition’s contention that because the Federal Energy Regulatory Commission (FERC) could further reduce diversions from PG&E’s power plant on the Eel River, known as the Potter Valley Plant, the potential reduction in SCWA’s future water supply required SCWA to discuss alternatives under the Plan. In supporting its conclusion that FERC would be unlikely to further reduce diversions, the Plan noted that diversions had been ongoing for approximately 100 years and many sectors developed during that time had come to depend on those diversions. Additionally, the Plan pointed to FERC’s express recognition in previous orders and an environmental impact report that diversions were important to nearby Mendocino and Sonoma Counties. Based on this information, the court concluded there was substantial evidence to support SCWA’s conclusion. The court stated the trial court had improperly substituted its own judgment for that of SCWA in its holding, and thus, failed to give appropriate deference to SCWA’s expertise.

The court then addressed SCWA’s proposal to increase diversions from the Russian River by constructing the transmission and diversion facilities described in its Water Supply, Transmission, and Reliability Project. The Coalition argued that because SCWA acknowledged the uncertainty of its ability to construct these facilities, the Plan essentially relied on “paper water,” or an illusory supply of water. The Coalition also argued the Plan failed to discuss the potential that further environmental review for the facilities may change the scope of the facilities or cause SCWA to deny them altogether. In the Coalition’s favor, the trial court found that SCWA could not rely on the assumed approval of the facilities because regulatory agencies could impose requirements that would change the project. The First District, however, disagreed with the Coalition and the trial court. The court reasoned the Act implicitly recognized that long-term water planning involves expectations, not certainties. The court further noted that if substantial evidence supported SCWA’s water supply assumptions, it would be wasteful of SCWA’s resources for it to develop detailed plans for alternatives that its experts viewed as improbable.

Next, the court addressed the issue of water quality. The Act requires that a plan must include information on the quality of existing water sources and if the plan indicates water quality problems will adversely affect reliability, the plan must identify alternatives. The Coalition argued the Plan failed to support with substantial evidence the conclusion that there would no water quality impacts to potable water supplies, considering SCWA knew of the City of Santa Rosa’s plans to discharge treated wastewater in the Russian River watershed. The court disagreed with the Coalition and held that any threat posed by the proposed discharge of wastewater was speculative at the time the Plan was prepared; thus, the Plan was not required to address this threat to water supply. The trial court had erroneously substituted its judgment for that of SCWA by holding that the Plan should have addressed the hypothetical threats.

The Coalition next contended the Plan was invalid because it failed to quantify expected water savings with implementation of SCWA’s water conservation programs. The trial court found that the Plan failed to include supporting data to demonstrate water savings from participation in the California Urban Water Conservation Council and to identify dates by which other measures would be in place. Section 10631(f) of the Act requires a plan to include an estimate of the water savings attributed to implementation of conservation measures. The First District looked to the plain meaning of former section 10631(j) of the Act, which allowed SCWA, as a member of the California Urban Water Conservation Council, to submit annual reports identifying current or scheduled water demand management measures to satisfy section 10631(f). The Plan attached these annual reports prepared by SCWA to the Plan. Based on the Act’s plain language, SCWA had met the requirements of the Act.

Lastly, the court addressed the Coalition’s contention that SCWA violated the Act by failing to coordinate with “other appropriate agencies in the area, including other water suppliers that share a common source,” namely, the U.S. Army Corps of Engineers, the State Water Resources Control Board (SWRCB), FERC, and NMFS. The court concluded that none of the four agencies fell within the meaning of the Act because these agencies were not considered water suppliers. The court further concluded that because the Act did not specify which agencies would be appropriate to coordinate with, the Act gave water suppliers considerable discretion to determine which agencies to include in the process. The record did not reveal that SCWA abused its discretion in determining the appropriate agencies to coordinate with, and the court declined to substitute its own judgment for that of SCWA.