On March 22, 2022, the Second District Court of Appeal published its Opinion in Buena Vista Water Storage District v. Kern Water Bank Authority, upholding the Environmental Impact Report (EIR) for the Kern Water Bank Authority’s Conservation and Storage Project (“Project”) and reversing the trial court’s ruling. The Project proposes to divert up to 500,000 acre-feet-per-year (AFY) from the Kern River for recharge, storage, and later recovery within the Kern Water Bank. Buena Vista Water Storage District (“Buena Vista”) filed a Petition for Writ of Mandate attacking the EIR on several grounds focused on the allegation that the Kern Water Bank Authority (KWBA) was required to calculate and quantify existing water rights on the Kern River in order for the EIR’s analysis to pass muster under the California Environmental Quality Act (CEQA). The Ventura County Superior Court agreed, holding that quantifying water rights—beyond assessment of historical physical diversions—was necessary to the EIR’s project description, environmental baseline, and analysis of the Project’s impacts on water supply. The Second Appellate District reversed, holding that CEQA does not require a quantification of existing water rights—it need only address actual historical diversions of water.
The Kern Water Bank is one of several groundwater banking projects in Kern County designed to recharge the groundwater basin during wet years and recover that water in drought years. Along the Kern River, there are several more senior water rights holders who hold pre-1914 appropriative water rights. While the State Water Resources Control Board (“State Board”) had for years deemed the Kern River “fully appropriated,” the State Board in 2010 removed the fully appropriated stream designation for several reasons, including the fact that in some high flow years the amount of water on the Kern River has exceeded total diversions by senior rights holders. That action by the State Board allowed KWBA and other water users to apply for new rights to Kern River water in high flow years. KWBA filed its water rights application, and in support of that application and in order to comply with CEQA, KWBA prepared and certified an EIR in 2018. The EIR relied on decades of data on actual physical and historical diversions of Kern River water in high water years (as opposed to quantification of individual water rights on the system).
Buena Vista, a competing applicant and water rights holder, filed a Petition for Writ of Mandate challenging the EIR. The trial court granted the Petition on three discrete issues—all tied to the EIR’s description and analysis of the Project’s water supply. Specifically, the trial court found that, even though it had adequately described historical water diversions, the EIR failed to expressly quantify all competing water rights on the Kern River. Had the trial court’s ruling been upheld on appeal, applicants for new water rights would have been required to conduct the equivalent of a streamwide adjudication, quantifying both actual physical diversions as well as any other water under a claim of right. Such quantification is a complex procedure that can take several years or even decades to complete, particularly on systems such as the Kern River where water rights are unquantified.
The Court of Appeal reversed, upholding the EIR’s analysis in full. In its Opinion, the Court of Appeal provided three critical rulings. First, the Opinion upheld the EIR’s project description, holding the EIR’s descriptions of Project water and existing water rights satisfied CEQA. The EIR described the Project as including diversion of surface water up to 500,000 acre-feet per year, and only after senior water rights are satisfied. Specifically, a project description may embody some flexibility when the project itself is subject to future changing conditions–here, the natural fluctuation of water in the system. Applying the rule that CEQA does not require an exhaustive analysis, the Court of Appeal also held that nothing in CEQA requires a specific quantification of competing water rights in the description of the lead agency’s own project.
Second, the Opinion held that the EIR, in describing and evaluating historical water availability and diversions from the Kern River, adequately described the Project’s baseline and environmental setting. CEQA requires that an EIR include a description of the project vicinity’s physical environmental conditions, which will constitute the baseline for analysis. (Guidelines, § 15125(a).) The Opinion overturned the trial court’s ruling that the baseline environmental setting in a water rights proceeding must include both (1) “quantified measurements of water used by existing Kern River water rights holders,” and (2) “quantified measurements of the water those rights holders have the right to divert from the Kern River.” Rather, KWBA had discretion to rely upon the former—the quantified measurements of water actually diverted and used by competing water right holders over the relevant historical period. Again, a quantification of existing water rights was unnecessary to the EIR’s description of the baseline setting.
Third, the Opinion upheld the environmental impact analysis of water rights and recovery operations. The Opinion held that the EIR properly determined that existing water rights would not be impacted because the Water Board is prohibited from issuing new permits for water that is already subject to existing water rights and because the Water Board determined that water diverted in excess of senior diversions constituted unappropriated water. Additionally, substantial evidence supported the EIR’s conclusion that the Project would not cause significant impacts to long-term recovery operations because KWBA’s preexisting operational commitments would not allow KWBA to extract more water than was banked. (See Citizens for Environmental Responsibility v. State ex rel. 14th Dist. Ag. Assn. (2015) 242 Cal.App.4th 555, 570-571 [pre-existing manure management plan for rodeo grounds appropriately considered as part of baseline operations, and did not constitute mitigation for new use].) In particular, the EIR relied on binding commitments contained in previously approved memoranda of understanding and long-term operations plans, to conclude that the Project would not result in a deficit in aquifer volume. The Court approved this approach, holding that pre-existing operations were part of “ongoing baseline operations” and not needed as mitigation to reduce project-specific impacts.
This Opinion marks the first CEQA decision to review the sufficiency of an EIR’s water supply in the context of a water availability analysis prepared pursuant to the California Water Code. As the State plunges into another year of severe drought, there is perhaps no other natural resource and environmental issue of greater public interest than water. This is particularly true in the CEQA context, where lead and responsible agencies across California continue to struggle to evaluate available water supplies in the context of an EIR and an ever more complex web of laws governing water supply and water rights. Here, by emphasizing the historical physical conditions on the water system, as well as actual, as opposed to simply claimed, water rights, the Court of Appeal’s decision restores some certainty in the approach and analysis needed to prove up water supplies in the context of CEQA.