The Fourth District Court of Appeal Rejects Community Service District’s Attempt to Exempt Itself from City’s Zoning Ordinance

In City of Hesperia v. Lake Arrowhead Community Services District (2019) ___Cal.App.5th___, the Fourth District Court of Appeal upheld the trial court’s conclusion that the Lake Arrowhead Community Services District’s (“District”) Solar Project is not exempt from – and must comply with – the City of Hesperia’s (“City”) zoning ordinances.

The District, which is only authorized to provide water and wastewater treatment services within its boundaries, planned to develop a solar energy project on property zoned as “Rural Residential” that it owns within the City. The City’s Municipal Code dictates that solar farms are only permitted in nonresidential and nonagricultural areas with the approval of a conditional use permit by the City’s planning commission.

Pursuant to CEQA, the District prepared and circulated an Initial Study and Mitigated Negative Declaration for comments on the Solar Project in May 2015. The City commented that the Project required a general plan amendment and zone change to be filed with the City and that the Project would violate the City’s Municipal Code, which prohibits solar farms within 660 feet of agriculturally designated property. Government Code section 53091 requires that local agencies comply with the building and zoning ordinances of the county or city in which they are located.

On December 15, 2015, the District’s Board adopted a resolution that purported to render the City’s zoning ordinances inapplicable to the Solar Project. In passing this resolution, the District relied on Government Code section 53091, subdivision (e), an absolute zoning exemption for electrical energy generation facilities, and Government Code section 53096, a qualified zoning exemption for projects with no feasible alternative location.

The City subsequently filed a lawsuit contending that the Solar Project is beyond the scope of the District’s authority and is subject to the City’s zoning ordinances. The court agreed with the City and held that the Project was not exempt under either of these sections.

Section 53091, subdivision (e)

Section 53091, subdivision (e), of the Government Code states that the “[z]oning ordinances of a county or city shall not apply to the location or construction of facilities . . . for the production or generation of electrical energy.” The court explained that while the section 53091, subdivision (e), exemption does apply to the Project, the same section also includes an exception to the exemption that applies to the Project and negates the exemption. The exception to the exemption provides that “[z]oning ordinances of a county or city shall apply to the location or construction of facilities for storage or transmission of electrical energy by a local agency, if the zoning ordinances make provision for those facilities.” Here, the court agreed with the City that the Solar Project involves the transmission of electrical energy and is therefore not exempt from the City’s zoning ordinances under section 53091, subdivision (e).

In reaching this conclusion, the court was influenced by the fact that the District had earlier entered into an agreement with Southern California Edison Company, which stated that the District “will export electrical energy to the grid” and be responsible for “delivery of electricity.” The dictionary definitions for “export” and “delivery” are consistent with the “transmit” terminology in the exception. The court rejected the District’s argument that using the plain meaning of the word “transmission” would prohibit any electrical energy facility from qualifying for a zoning exemption because section 53096, subdivision (a) (discussed below), provides a qualified exemption for energy facilities under certain conditions.

Section 53096, subdivision (a)

Government Code section 53096, subdivision (a), provides a qualified exemption from zoning ordinances for facilities related to the transmission of electrical energy upon a four-fifths vote by the agency’s board that there is no feasible alternative to the proposed use. Here, the District’s Board determined that it was not feasible to install the Solar Project at any alternative locations, as doing so “would result in a significant cost increase, measurable power loss, and project delay.”

The court concluded that while the Board followed the proper procedural requirements of the qualified exemption, the administrative record did not contain substantial evidence to support the District’s findings. The City successfully demonstrated to the court that the administrative record did not include evidence of “economic, environmental, social, or technological factors associated with an alternative location.” The court was persuaded by the fact that the Board failed to consider any alternative location for the Solar Project in reaching its discretionary determination under section 53096, subdivision (a).

In determining the definition of “feasible” for purposes of this exemption, the court relied on case law related to CEQA’s definition for feasible alternatives and mitigation measures. The court cited Citizens of Goleta Valley v. Board of Supervisors (1988) 197 Cal.App.3d 1167, which dictates that the consideration of feasible alternatives is governed by the “rule of reason” – where alternatives must be analyzed if doing so is “necessary to permit a reasoned choice.” Here, the court concluded that the “any ‘rule of reason’ requires consideration of alternatives.” (Italics original.) The District therefore needed to provide evidence that it considered an alternative location and “economic, environmental, social, and technological factors” related to the alternative, but it merely provided evidence that the site was a “good location” for the Project. Thus, the court held that the section 53096, subdivision (a), exemption also does not apply to the Solar Project.