Court of Appeal No. E067679

IN THE COURT OF APPEAL, STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT, DIVISION TWO

CITY OF HESPERIA,

Plaintiff and Respondent,

v.

LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT ET AL.

Defendants and Appellants.

Appeal from the Judgment of the Superior Court

State of California, County of San Bernardino

The Honorable Donald Alvarez, Judge Presiding

San Bernardino County Superior Court Case No.

CIVDS1602017

APPELLANTS' OPENING BRIEF

*Howard B. Golds (State Bar No. 112626) howard.golds@bbklaw.coni

Lindsay D. Puckett (State Bar No. 233852) lindsay.puckett@bbklaw.com

BEST BEST & KRIEGER LLP 3390 University Avenue, 5th Floor

Riverside, CA 92501 Telephone: (951) 686-1450

Attorneys for Defendants and Appellants LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT, and

BOARD OF DIRECTORS OF LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT

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Court of Appeal No. E067679

CERTIFICATE OF INTERESTED ENTITIES OR PERSONS (Cal. Rules of Court, rule 8.208)

This is the initial certificate of interested entities or

persons submitted on behalf of Appellants Lake Arrowhead

Community Services District, and Board of Directors of Lake

Arrowhead Community Services District in the case number

listed above.

The undersigned certifies that there are no interested

entities or persons that must be listed in this certificate under

California Rules of Court, rule 8.208.

Date: March 20, 2018 BEST BEST & KRIEGER LLP

By: Howard B. Golds Lindsay D. Puckett Attorneys for Defendants and Appellants Lake Arrowhead Community Services District, and Board of Directors of Lake Arrowhead Community Services District

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TABLE OF CONTENTS

Page

I. INTRODUCTION 7

II. STATEMENT OF APPEALABILITY 9

III. STATEMENT OF FACTS 10

A. Purpose of District's Solar Project 10

B. State Program Authorizing Special District's Use of Raw Land for Solar 12

C. Applicability of City Zoning to Solar Project 15

D. Solar Project Approval 17

IV. STATEMENT OF THE CASE 19

V. STANDARD OF REVIEW 22

VI. LEGAL ANALYSIS 24

A. The Trial Court Failed to Apply the Plain Meaning of the Absolute Exemption From City Zoning For Local Agency Facilities Producing Electrical Energy 24

B. The Trial Court's Literal Interpretation of the Exception for "Transmission" Makes the Absolute Exemption Meaningless for Electrical Energy Producing Facilities 35

C. The Solar Project is Subject to the Qualified Exemption from City Zoning Because There is No Feasible Alternative 43

VII. CONCLUSION 51

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TABLE OF AUTHORITIES

State Cases

Cadiz v. Agricultural Labor Relations Board (1979)

Page(s)

92 Cal.App.3d 365 27

California Federal Savings & Loan Association v. City of Los Angeles (1995) 11 Ca1.4th 342 27, 34

Castaneda v. Holcomb (1981) 114 Cal.App.3d 939 28, 38

City of Lafayette v. East Bay Municipal Utility District (1993) 16 Cal.App.4th 1005 passim

Harbor Fumigation, Inc. v. County of San Diego Air Pollution Control District (1996) 43 Cal.App.4th 854 28, 38

Lawler v. City of Redding (1992) 7 Cal.App.4th 778 25

Mount Sutro Defense Committee v. Regents of the University of California (1978) 77 Ca1.App.3d 20 38

Rudd v. California Casualty General Insurance Company (1990) 219 Cal.App.3d 948 27

Save Tara v. City of West Hollywood (2008) 45 Ca1.4th 116 38

Sierra Club v. County of Napa (2004) 121 Cal.App.4th 1490 23, 51

Torres v. Parkhouse Tire Service, Inc. (2001) 26 Ca1.4th 995 27, 28, 38

Young v. Gannon (2002) 97 Cal.App.4th 209 23, 51

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TABLE OF AUTHORITIES (Continued)

Page(s)

State Statutes

Code Civ. Proc., § 904.1 9

Code Civ. Proc., § 1094.5 23

Code Civ. Proc., § 1858 8, 24, 26, 27, 33

Evid. Code, § 451 29

Gov. Code, § 4217.10 14

Gov. Code, § 4217.11 14

Gov. Code, § 53090 26

Gov. Code, §§ 53090-53095 25

Gov. Code, § 53091 passim

Gov. Code, § 53096 passim

Gov. Code, §§ 61000-61850 10

Gov. Code, § 61001 42

Gov. Code, § 61060 10, 15

Gov. Code, § 61100 10

Pub. Resources Code, § 25008 14

Pub. Utilities Code, § 2830 passim

I/

/I

I/

/I

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TABLE OF AUTHORITIES (Continued)

Page(s) Rules

California Rules of Court, Rule 8.104 9

Other Authorities

40 Ops.Cal.Atty.Gen. 243 (1962) 25

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I. INTRODUCTION

This appeal involves a solar energy project ("Solar Project")

properly approved by Appellant Lake Arrowhead Community

Services District ("District") that was blocked by the trial court

herein despite there being no legal justification. As shown below

and pursuant to State law, electrical generation facilities such as

the Solar Project have both an absolute and a qualified

exemption from local agency zoning requirements. Nonetheless,

because the Solar Project was to have been located on six acres of

a 350-acre property the District owns on the eastern edge of

Appellee City of Hesperia ("City"), the City sued the District

claiming that the Solar Project was prohibited because of the

requirements of the City's zoning ordinance. When the trial court

erroneously agreed, this appeal ensued.

The trial court's decision should be reversed because it

disregards the plain language of two directly applicable statutory

exemptions. First, there is an "Absolute Exemption" from local

zoning for local agency facilities producing electrical energy in

Government Code section 53091, subdivision (e). Second, there is

a "Qualified Exemption" for the production of electrical energy

when there is no feasible alternative to the proposal set forth in

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Government Code section 53096. The Absolute Exemption and

the Qualified Exemption (collectively, "Exemptions") strike a

balance between local control of land use decisions and the need

to place facilities directly related to the generation of electricity

at the discretion of the local agency.

Under Code of Civil Procedure section 1858 and well-

established rules of statutory construction, courts are required to

first look to the plain language of a statute. Only when that

language is ambiguous or a literal interpretation would result in

absurd consequences, may courts look to extrinsic evidence such

as legislative history or public policy. The City did not refute the

plain meaning of the language in the Exemptions or that the

Solar Project would directly and immediately produce energy

under the State's Local Government Renewable Energy Self-

Generation Bill Credit Transfer ("RES-BCT") Program in Public

Utilities Code section 2830.1 Nonetheless, the trial court

substituted its own judgment for that of the Legislature by re-

writing the Exemptions to require the Solar Project to also be

1 The program allows special districts to use raw land for generation facilities and then apply a credit for the energy created by those facilities to other locations where the district uses the energy.

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"indispensable" to the water and wastewater treatment services

provided by the District under the Community Services District

Law. There is no legal authority requiring the District to sell

electricity to its customers in order to rely on the Exemptions. As

long as the local agency facility directly produces electrical

energy, the Exemptions apply. The trial court's decision should

be reversed.

II. STATEMENT OF APPEALABILITY

This appeal is brought pursuant to Code of Civil Procedure

section 904.1 from a Judgment dated December 9, 2016 (after a

ruling from the trial court dated October 6, 2016) granting the

City's Petition for Writ of Mandate and Complaint for

Declaratory and Injunctive Relief ("Petition"). (1 AA 13-672.) On

January 26, 2017, the District timely filed a Notice of Appeal

under California Rules of Court, rule 8.104. (4 AA 792-803.)

2 Citations to Appellants' Appendix are in the following format: [Volume] AA [Page] : [Line].

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III. STATEMENT OF FACTS

A. Purpose of District's Solar Project

The District was established in 1978 under the State of

California's Community Services District Law, Government Code

sections 61000-61850 ("CSDL") and serves approximately 8,000

water customers and 10,500 wastewater customers within the

Lake Arrowhead community. (Administrative Record ("AR") 18

AR 492, 77 AR 23173.) The District is authorized to provide

water and wastewater treatment services within its boundaries

under the CSDL and the Local Agency Formation Commission

("LAFCO") for San Bernardino County Policy & Procedure

Manual. (Gov. Code, § 61100, subds. (a), (b); 77 AR 2317, 78 AR

2540.) The District also has all rights and powers necessary to

carry out the purposes and intent of the CSDL, including

entering into contracts and taking actions incidental to the

powers expressed or implied by the statute. (Gov. Code, § 61060,

subds. (h), (n).) LAFCO's Service Review for the Lake Arrowhead

Community states the District "was envisioned to provide more

3 Citations to the Administrative Record are in the following format: [tab number] AR [bates page number].

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than water and sewer service. It was intended to become the

focal government organization for the community." (77 AR 2347.)

Because of the mountainous area the District occupies, as

well as the occasional need to pay for water to be transported

through pipes up the mountain, the District spends significant

funds on electricity costs to provide power for pumping such

water. The Solar Project would reduce these costs incurred by

the District's ratepayers.

The District spent over 18 months considering alternative

locations, designs, and financial options for a solar project to

offset its significant energy costs, as well as conducting extensive

environmental review. (6 AR 132-133, 72 AR 2260-2262.) In

June 2014, the District appointed an Ad Hoc Committee,

including two Board of Directors, to review proposals submitted

by three solar power providers to design, construct and install a

solar system at its Hesperia Farms Property located at 6727

Arrowhead Lake Road. (6 AR 132-133.) The District has been

using the Hesperia Farms Property for decades to discharge and

percolate treated effluent from its wastewater treatment plants

in Lake Arrowhead back into the Mojave River groundwater

basin. (69 AR 2014-2015, 77 AR 2331.)

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B. State Program Authorizing Special District's

Use of Raw Land for Solar

The District's use of the Hesperia Farms Property for the

Solar Project is authorized under the State's RES-BCT Program,

which allows "local governments," including special districts, to

use raw land for generation facilities and then apply a bill credit

for the energy created by those facilities to other locations

operated by the local government agency within its geographical

boundaries. (Pub. Utilities Code, § 2830.) The RES-BCT

Program is intended to address the fact there is often not enough

usable land where a local government uses electricity for an

economically viable solar system. (Pub. Utilities Code, § 2830; 11

AR 215-216 [solar provider presentation on benefits of tariff].)

The LAFCO recognizes that development in the San Bernardino

Mountains, where the District's water and wastewater treatment

facilities are located, is constrained by rugged terrain and other

barriers. (77 AR 2318.)

In August 2015, the District entered into a standard Rule

21 Generator Interconnection Agreement for Exporting

Generating Facilities ("Interconnection Agreement") with

Southern California Edison ("SCE") to interconnect its solar

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facilities to the electrical grid distribution system under the RES-

BCT Program. (45 AR 1632.) The Solar Project would generate

renewable energy for the District's own use and benefit at its

water and wastewater treatment related facilities located in Lake

Arrowhead pursuant to the RES-BCT Program. (69 AR 1952.)

Thus, the Solar Project site would continue to benefit the

District's water and wastewater treatment operations by

offsetting electricity demands and lowering costs for ratepayers.

(69 AR 2015.) There is a statewide program limit of 250

megawatts (MW), and utilities are only required to offer service

under the tariff until they reach their proportionate share of the

program (SCE limit is 123.8 MW). (3 AR 80.) As the Solar

Project would generate no more than 0.96 MW, it fell within

these parameters. (71 AR 2245.)

The Ad Hoc Committee held four meetings before awarding

an Energy Services Agreement and related contracts to real party

SunPower Corporation, Systems ("SunPower") in October 2015,

conditioned upon the completion of environmental review. (10

AR 202-203, 16 AR 414-416, 20 AR 1238-1241, 36 AR 1509-1510,

53 AR 1819.) The District approved the Energy Services

Agreement for SunPower to design, construct, and install the

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Solar Project on terms that serve the District's best interests

under Government Code section 4217.10 et seq.4 (10 AR 202-203.)

Section 4217.10 extends the policy in Public Resources Code

section 25008 for state facilities to local government facilities "to

promote all feasible means of energy and water conservation and

all feasible uses of alternative energy and water supply sources,"

in recognition of increasing energy costs from traditional

sources.5 (Pub. Resources Code, § 25008.) The Solar Project would

result in a net return to the District of approximately $4,481,000

over 25 years with a positive cash flow in year one. (52 AR 1736,

55 AR 1837-1838.) The Project would also reduce fossil fuel

consumption and improve efficiency under Public Resources Code

section 25008 by resulting in a net greenhouse gas benefit of 720

metric tons of carbon dioxide equivalent per year or more given

' "Energy service contract" means a contract entered into by a public agency with any person, pursuant to which the person will provide electrical or thermal energy or conservation services to a public agency from an energy conservation facility." (Gov. Code, § 4217.11, subd. (f).) "Energy conservation facility" means alternate energy equipment, cogeneration equipment, or conservation measures located in public buildings or on land owned by public agencies." (Gov. Code, § 4217.11, subd. (e).) 5 The criteria that should be analyzed for proposed actions includes lifecycle cost evaluation, benefit to taxpayers, reduced fossil fuel, and improved efficiency. (Pub. Resources Code, § 25008.)

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that the displaced generation reduction would likely occur at

fossil-fueled plants with higher emission rates. (69 AR 2006.)

The District would own and derive all benefits from the Solar

Project. (3 AR 66-67.)6

The District and SunPower intended to complete the Solar

Project by June 1, 2016, but the Solar Project has been

significantly delayed by the City's lawsuit. (55 AR 1834.)

Completion by summer 2016, when the tariff and corresponding

bill credits under the RES-BCT program are the highest, would

have offered the most economic value. (3 AR 82.)

C. Applicability of City Zoning to Solar Project

In May 2015, the City submitted comments on the original

draft Mitigated Negative Declaration ("MND"), prepared by the

District as the lead agency for the Solar Project under the

California Environmental Quality Act ("CEQA"), stating the

6 The CSDL's basic corporate powers authorize the District to enter into the Energy Services Agreement with SunPower to design and construct the Solar Project and the Interconnection Agreement with SCE to connect the Project to the electrical grid distribution. (Gov. Code, § 61060, subd. (h).) These actions are also incidental to the District's water and wastewater treatment services powers. (Gov. Code, § 61060, subd. (n).)

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Solar Project requires a General Plan and zoning amendment

from the City and relocation to comply with its zoning ordinance.

(31 AR 1469-1470.) The City's Ordinance No. 2012-07 regulates

the location of solar systems. (79 AR 2808-2810.) Development

Code Section 16.16.063(B) of the City's Municipal Code provides

that solar systems exceeding 15% of the lot area, such as the

Solar Project, are considered a "solar farm." (79 AR 2810.) Solar

farms are only allowed on nonresidential and nonagricultural

designated properties with approval of a conditional use permit

and are not permitted within 660 feet of any agricultural or

residentially designated property. (79 AR 2808-2810.) The Solar

Project site is designated Rural Residential 0-0.4 units per acre

under the General Plan and zoned Rural Residential. (69 AR

1976.)

In the interest of cooperation between local agencies, the

District held discussions with the City on the viability of a

General Plan amendment and zone change. (69 AR 1974.) But

given the City's push to relocate the Solar Project 660 feet from

the property to the south, despite having no significant land use

impacts, the District exercised its authority under State law in

determining that the Solar Project fell under the Absolute

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Exemption from City zoning for facilities producing electrical

energy (Government Code section 53091). (69 AR 1974, 2014-

2015.) In the event the Solar Project was viewed as involving

transmission, which is excluded from the Absolute Exemption, in

the abundance of caution the District also determined the Solar

Project fell under the Qualified Exemption under Government

Code 53096 because there was no feasible alternative to the Solar

Project. (69 AR 1952, 2014-2015.)

D. Solar Project Approval

The District revised the MND in response to comments

from the City and others on the original draft MND. (31 AR

1469-1470, 69 AR 1974, 1980 [e.g., mitigation measure requiring

compliance with City lighting requirements].) Both the public

and the City received notice of the District's intent to find the

Solar Project exempt from City zoning, adopt the MND, and

approve the Project. The District recirculated a revised MND for

public review for 30 days, including filing notice with the San

Bernardino County Clerk and placing notice in a newspaper of

general circulation. (71 AR 2247.) The District also hand

delivered notice of the public hearing to the one property owner

within 300 feet of the Solar Project site (who signed the notice)

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and posted notice in a conspicuous place at the Project site under

Government Code section 53096. (61 AR 1931, 64 AR 1934-1939,

71 AR 2246.) The property owner did not oppose the Solar

Project. (11 AR 324-325, 73 AR 2270-2273.)

The City received direct notice on November 9, 2015, and

on November 20 the District Engineer e-mailed the City's

Principal Planner requesting a conference call on the Solar

Project changes. (60 AR 1929, 62 AR 1932.) The day before the

hearing on the Solar Project, the City responded that the Solar

Project is subject to a General Plan amendment, conditional use

permit, and 660-foot relocation despite offering no evidence the

Solar Project would have a significant land use impact. (67 AR

1944-1945.)

On December 15, 2015 at a special meeting of the Board of

Directors, the District adopted Resolution No. 2015-14 finding

the Solar Project to be electrical generation facilities exempt from

the City's zoning ordinance under the Absolute Exemption or, in

the alternative, the Qualified Exemption because there is no

feasible alternative to the Solar Project location, and adopted the

revised MND. (69 AR 1949-1954, 71 AR 2245-2251.) The

purpose of the special meeting was to complete the CEQA process

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and approve the Solar Project by the end of 2015 to meet the

Project schedule and deadlines required to finance the Project

using Clean Renewable Energy Bonds (CREBS). (55 AR 1832-

1836, 68 AR 1946-1948.) The only Solar Project opponent at the

hearing was a Hesperia resident who criticized the District for

locating the Project in a rural "community which has a record

opposed to such development . . . ." (73 AR 2270-2271.)

The District has incurred approximately $800,000 in costs

related to RES-BCT Program fees, SCE's System Impact Study,

interconnection facilities, design, financial advisors, and

environmental review to pursue the Solar Project. (41 AR 1546-

1547, 48 AR 1699-1700, 53 AR 1819, 57 AR 1876-1877.)

W. STATEMENT OF THE CASE

In February 2016, the City filed the Petition challenging

the District's December 2015 approval of the Solar Project. (1 AA

13-67.) The Petition alleged three causes of action against the

District and named SunPower as a real party in interest.? The

' The Petition also names SCE and Stifel, Nicolaus & Company, Inc. as real parties, but the City dismissed them in May 2016 conditioned upon their disclaimers of interest. (1 AA 119-128; 3 AA 715.)

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first cause of action alleged the District lacks authority to have a

solar project. (1 AA 20-21.) The second cause of action alleged

the District cannot rely on the Exemptions for the Solar Project.

(1 AA 21-22.) And the third cause of action was for declaratory

relief. (1 AA 22-23.)

The Petition sought relief in the form of a "writ of mandate

directing that [the District] not proceed with the Solar Farm

Project, or alternatively, that Respondents must comply with the

City's zoning ordinances in connection with the siting,

development and construction of the Solar Farm." (1 AA 23:19-

22.) The first sentence of the City's opening brief made clear that

its goal is to prohibit the District "from locating a solar farm

within the City's limits." (1 AA 153:3.)

After briefing, the trial court heard the matter on August

26, 2016 and issued its Ruling on Petition for Writ of Mandate on

October 6, 2016 ("Ruling"). (3 AA 714-741.) The Ruling denied

the Petition on the first cause of action because the District is

authorized to carry out the Solar Project under the State's RES-

BCT Program in Public Resources Code section 2830. (3 AA 718-

720.) The Ruling granted the Petition on the second cause of

action, finding the Solar Project is subject to the City's zoning

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ordinance. (3 AA 720-738.)8 The Ruling also granted the City's

request to take judicial notice of portions of its Municipal Code

and the District's request to take judicial notice of a California

Public Utilities Commission ("CPUC") document on electric

transmission siting and two documents related to the legislative

history for the Absolute Exemption and the CSDL. (3 AA 717-

718.)

Judgment was entered on December 9, 2016, followed by a

Judgment Nunc Pro Tune on February 9, 2017 to correct a

missing attachment with the Ruling. (3 AA 749-755; 4 AA 827-

859; 4 AA 788.) The City served a Notice of Entry of Judgment

on January 6, 2017. (3 AA 762-772.) In accordance with the

Judgment, a Writ of Mandate ordering the District to comply

with the City's zoning ordinance prior to implementing the Solar

Project, or alternatively, not to proceed with the Solar Project

was entered on December 21, 2016. The District appealed on

January 26, 2017. (4 AA 792-803.) The District filed a Return to

the Writ of Mandate on March 7, 2017 notifying the trial court of

its appeal. (4 AA 792-803.) The City did not appeal.

8 The City dismissed the third cause of action for declaratory relief on November 10, 2016. (3 AA 750; 3 AA 744-745.)

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This appeal was stayed from April 14, 2017 to February 2,

2018 to allow for settlement discussions between the parties,

which were unsuccessful. (Court of Appeal Stay Orders filed in

this appeal on April 14, 2017, May 23, 2017, July 12, 2017,

September 5, 2017, October 18, 2017, December 27, 2017 and

February 2, 2018.)

V. STANDARD OF REVIEW

The Court's interpretation of whether the Solar Project is

exempt from City zoning requirements under (1) the Absolute

Exemption in Government Code section 53091, subdivision (e) for

local agency facilities for the production or generation of electrical

energy and (2) the Qualified Exemption in Government Code

section 53096, subdivision (a) for local agency facilities related to

the storage or transmission of electrical energy are questions of

law determined independently from the trial court's decision.

(City of Lafayette v. East Bay Municipal Utility District (1993) 16

Cal.App.4th 1005, 1013 (Lafayette), citations omitted.)

The District's determination there is no feasible alternative

to the Solar Project under Government section 53096, subdivision

(a) must be upheld if it is supported by substantial evidence.

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(Gov. Code, § 53096, subd. (b); Code Civ. Proc. 1094.5, subds. (b),

(c).) "Substantial evidence" has been defined as evidence of

"ponderable legal significance ... reasonable in nature, credible,

and of solid value[, and]' . . . 'relevant evidence that a reasonable

mind might accept as adequate to support a conclusion.' " (Young

v. Gannon (2002) 97 Cal.App.4th 209, 225 (Young), citations

omitted.)

Under the substantial evidence standard, "[a] reviewing

court may neither substitute its views for those of the agency

whose determination is being reviewed, nor reweigh conflicting

evidence presented to that body." (Sierra Club v. County of Napa

(2004) 121 Cal.App.4th 1490, 1497 (Sierra Club), citations

omitted.) Further, "the decisions of the agency are given

substantial deference and are presumed correct." (Ibid.) It is the

City's burden to prove the District's findings are not supported by

substantial evidence, and any reasonable doubts are revolved in

favor of the District's findings. (Ibid; Young, supra, 97

Cal.App.4th at p. 225.)

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VI. LEGAL ANALYSIS

A. The Trial Court Failed to Apply the Plain

Meaning of the Absolute Exemption From City

Zoning For Local Agency Facilities Producing

Electrical Energy

The Solar Project is exempt from City zoning under the

plain meaning of the Absolute Exemption because it would

directly produce electrical energy. The trial court violated Code

of Civil Procedure section 1858 by, in effect, inserting language

into the Absolute Exemption to require the Solar Project to also

be indispensable to the water and wastewater services provided

by the District under the CSDL. The nature of the community

services provided by the District are irrelevant to the

applicability of the Absolute Exemption. The purpose of the

statute is to allow for the District to select the optimal site for the

energy producing Solar Project without City interference.

Government Code section 53091, subdivision (a) generally

requires that local agencies must comply with building and

zoning ordinances of a city or county in which the territory of the

agency is situated. But subdivision (e) of section 53091 contains

an Absolute Exemption from city zoning for facilities producing

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energy (and water), as follows:

(e) Zoning ordinances of a county or city shall not apply to the location or construction of facilities for the production, generation, storage, treatment, or transmission of water, or for the production or generation of electrical energy, facilities that are subject to Section 12808.5 of the Public Utilities Code, or electrical substations in an electrical transmission system that receives electricity at less than 100,000 volts. Zoning ordinances of a county or city shall apply to the location or construction of facilities for the storage or transmission of electrical energy by a local agency, if the zoning ordinances make provision for those facilities.

(Gov. Code, § 53091, subd. (e), underscoring added; Lafayette,

supra, 16 Cal.App.4th at pp. 1013-14.) Thus, when it comes to

local regulation, the "obvious intent" of the Legislature was to

treat facilities that produce electricity or water differently. (Id.

at p. 1014.)9

9 The Attorney General concluded the Legislature intended Government Code sections 53090 through 53095 to cover the whole field of intergovernmental regulation with respect to zoning ordinances. (Lawler v. City of Redding (1992) 7 Cal.App.4th 778, 783 [citing 40 Ops.Cal.Atty.Gen. 243, 245-246 (1962)1.)

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There was no dispute in the trial court that the District is a

"local agency"1° and the Solar Project involves "facilities" and the

"production or generation of electrical energy" within the

meaning of the Absolute Exemption. (69 AR 1951; 1 AA 164;

3 AA 720, 726.) Instead, the City made a policy argument that

because the District can provide water and wastewater services

to its ratepayers without the Solar Project, the Absolute

Exemption should not apply. (2 AA 463:12-17.) Assuming, or

perhaps desiring this to be the case, the trial court's Ruling starts

with the premise that City zoning applies to the Solar Project and

then works backwards to support that result. The trial court

failed to start with the plain language of the statute, which

clearly states local agency facilities producing electrical energy

are exempt from City zoning.

"The guiding principle of interpretation [for a statute] was

laid down by the Legislature in Code of Civil Procedure section

1858 [which reads]:

10 "Local agency" is defined in Government Code section 53090, subdivision (a) as "an agency of the state for the local performance of governmental or proprietary function within limited boundaries" and does not include the state, a city, or a county.

24148.00049\29630166.3 -26-

In the construction of a statute or instrument, the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.

(Cadiz v. Agricultural Labor Relations Board (1979) 92

Cal.App.3d 365, 372.) 'Courts do not sit as super-legislatures to

determine the wisdom, desirability or propriety of statutes

enacted by the Legislature.' (Ibid.)

Case law also reflects the rules of interpretation set forth in

Code of Civil Procedure section 1858. "In interpreting a statute

where the language is clear, courts must follow its plain

meaning." (Torres v. Parkhouse Tire Service, Inc. (2001) 26

Ca1.4th 995, 1003 (Torres), citations omitted; Rudd v. California

Casualty General Insurance Company (1990) 219 Cal.App.3d 948,

952; California Federal Savings & Loan Association v. City of Los

Angeles (1995) 11 Ca1.4th 342, 349 (California Federal).) Only

where "the statutory language permits more than one reasonable

interpretation, courts may consider various extrinsic aids,

including the purpose of the statute, the evils to be remedied, the

legislative history, public policy, and the statutory scheme

24148.00049\29630166.3 -27-

encompassing the statute." (Torres, supra, at p. 1003; Lafayette,

supra, 16 Cal.App.4th at p. 1012.) In other words, "[i]f the

language of the provision is free of ambiguity, it must be given its

plain meaning; rules of statutory construction are applied only

where there is ambiguity or conflict in the provisions of the

charter or statute, or a literal interpretation would lead to absurd

consequences." (Castaneda v. Holcomb (1981) 114 Cal.App.3d

939, 942 (Castaneda), citations omitted; Harbor Fumigation, Inc.

v. County of San Diego Air Pollution Control District (1996) 43

Cal.App.4th 854, 860 (Harbor Fumigation).

There is nothing ambiguous nor uncertain about the

wording of the Absolute Exemption: "Zoning ordinances of a

county or city shall not apply to the location or construction of

facilities . . . for the production or generation of electrical energy.

. . ." (Gov. Code, § 53091, subd. (e).) For that reason, there was

no dispute in the trial court regarding the "significance to every

word, phrase, sentence and part of an act in furtherance of the

legislative purpose." (Lafayette, supra, 16 Cal.App.4th at

24148.00049\29630166.3 -28-

p. 1012.) The Absolute Exemption must be given its plain

meaning."

To apply the plain meaning of the Absolute Exemption to

the Solar Project, Lafayette, supra, 16 Cal.App.4th 1005, is

instructive. There a water district claimed that it was exempt

from city zoning regarding the construction of a service center for

the storage of materials and equipment necessary for

maintenance and repair of aqueducts, pipelines, fitter plants, and

reservoirs and an appurtenant warehouse and vehicle

maintenance bay. Interpreting the Absolute Exemption with

respect to water, the court "first examine [d] the language of the

statutes, giving significance to every word, phrase, sentence and

part of an act in furtherance of the legislative purpose." (Id. at p.

1012.) The plain language of the Absolute Exemption with

respect to water states "[z] oning ordinances of a county or city

shall not apply to the location or construction of facilities for the

production, generation, storage, treatment, or transmission of

ii Evidence Code section 451, subdivision (e) requires the court to judicially notice "Mlle true signification of all English words and phrases and of all legal expressions."

24148.00049\29630166.3 -29-

water . . . ." (Id. at pp. 1012-1014.) In holding the Absolute

Exemption did not apply, the court found the service center:

[S]erves as a support facility; it does not actually perform the function of generating, transmitting, or storing water. We think the absolute exemption of section 53091 was intended to be limited to facilities directly and immediately used to produce, generate, store, or transmit water. Only those indispensable facilities must be geographically located at the unfettered discretion of a water district - - that is, without the burden of city and county zoning regulations - - in order to assure the imperative of efficient and economical delivery of water to customers. In section 53091 we perceive an intention to distinguish between the essential components of a water storage and transmission system, and those support facilities proposed in the [service center] project, with only the former granted absolute immunity from local control. Whatever the wisdom of such a dichotomy, we conclude that the District cannot claim an exemption under section 53091 from the City's zoning regulations.

(Lafayette, supra, 16 Cal.App.4th at p. 1014, underscoring added.)

The court in Lafayette did not specifically address the

applicability of the Absolute Exemption to facilities that produce

or generate electrical energy, such as the Solar Project. Applying

the rules of statutory interpretation discussed above and the

Lafayette holding, however, the Solar Project falls under the

Absolute Exemption. Unlike the service center, there is no

dispute that the Solar Project would be "directly and

24148.00049\29630166.3 -30-

immediately" used to produce and generate electricity to

significantly reduce energy costs in providing water and

wastewater treatment services consistent with the RES-BCT

Program. (Lafayette, supra, 16 Cal.App.4th at p. 1014.) The

intention of the Legislature to exclude energy producing facilities

of local agencies from City zoning is clear from the plain language

of the Absolute Exemption.

This interpretation is also consistent with the legislative

intent of the Absolute Exemption explained in Lafayette because

the geographic location of the Solar Project is significant to

assure the production of energy in an efficient and cost effective

manner. (Lafayette, supra, 16 Cal.App.4th at p. 1014.) In fact,

the RES-BCT Program recognizes there is often not enough

usable land where an agency uses electricity for an economically

viable solar system. (Pub. Utilities Code, § 2830; 11 AR 215-216

[solar provider presentation on benefits of tariff].)12 The purpose

12 All three solar providers that submitted proposals to the District's Ad Hoc Committee agreed the Hesperia Farms Property is ideal for the RES-BCT Program, as opposed to the more developed and mountainous area of Lake Arrowhead where other District-owned property and facilities are more expensive to build, or areas with more extreme temperatures. (11 AR 215-216 [HelioPower], 246-247 [Martifer]; 283 [SunPower].) A consultant the District interviewed to assist in the evaluation of the

24148.00049\29630166.3 -31-

of the Absolute Exemption is to allow local agencies "unfettered

discretion" in selecting optimal locations for facilities that

"directly and immediately" produce electrical energy (or water)

without city or county interference. (Lafayette, supra, 16

Cal.App.4th at p. 1014.)

In its resolve to uphold the City's authority, the trial court

twisted the interpretation of the Absolute Exemption in Lafayette

to also require the Solar Project to be "indispensable" to the

District's authorized water and sewer operations under the

CSDL. (3 AA 726:1-10.) But the word "indispensable" is only

used in Lafayette in reference to "facilities directly and

immediately used to produce . . . water," not with respect to the

nature of the services performed by the local agency. (Lafayette,

supra, 16 Cal.App.4th at p. 1014.) According to Lafayette, the

Absolute Exemption only requires that the facilities at issue

directly and immediately produce or generate electrical energy

(or water), as opposed to being ancillary to those functions (like

an administrative building). Neither the plain language of the

Absolute Exemption nor Lafayette require the District to also sell

proposals (TerraVerde Renewable Partners) also surmised the District's facilities in Lake Arrowhead are not suitable for a solar project. (17 AR 431-432.)

24148.00049\29630166.3 -32-

electricity to ratepayers in order to rely on the Absolute

Exemption. It was not for the trial court to question the

"wisdom" of such legislative intent by reading words into the

statute to support an alternative meaning. The trial court's

actions violated Code of Civil Procedure section 1858 and the

principles of statutory interpretation reinstated through case

law. Because the solar panels would be indispensable to

producing solar energy, the Solar Project qualifies for the

Absolute Exemption under Lafayette.

Government Code section 53091 has been amended five

times since its original enactment in 1959. (Gov. Code, § 53091

(added by Stats.1959, c. 2110, p. 4907, § 1. Amended by

Stats.1977, c. 435, p. 1467, § 1; Stats.1984, c. 976, § 1; Stats.1997,

c. 580 (S.B.320), § 2; Stats.2001, c. 396 (A.B.1367), § 1;

Stats.2002, c. 267 (S.B.1711), § 1.).) And yet the Legislature did

not change the plain language of the Absolute Exemption stating

that local agency facilities that produce or generate electrical

energy are exempt from city zoning. The focus of the language

remains whether the facility ultimately produces electrical

energy. While exceptions to the general rule of a statute are to be

strictly constructed, as recognized by the California Supreme

24148.00049\29630166.3 -33-

Court, courts "must assume that the Legislature knew how to

create an exception if it wished to do so . . . ." (California Federal,

supra, 11 Ca1.4th at p. 349; Lafayette, supra, 16 Cal.App.4th at p.

1017.) In fact, as further discussed below in Section VI.B., in

1977 the Legislature added an exception to the Absolute

Exemption for energy producing facilities that involve storage or

transmission if a zoning ordinance makes provision for those

facilities. (Gov. Code, § 53091, subd. (e).) No such exception

requires facilities to also be indispensable to the services

provided by the local agency to qualify for the Absolute

Exemption. It is for the Legislature, not the courts, to create

such an exception.

Accordingly, the District is not required to comply with the

City's zoning ordinance by applying for a conditional use permit

or a General Plan amendment for the Solar Project under the

Absolute Exemption.

24148.00049\29630166.3 -34-

B. The Trial Court's Literal Interpretation of the

Exception for "Transmission" Makes the

Absolute Exemption Meaningless for Electrical

Energy Producing Facilities

There is an exception to the Absolute Exemption for

facilities producing electrical energy. Specifically, "[z] oning

ordinances of a county or city shall apply to the location or

construction of facilities for the storage or transmission of

electrical energy by a local agency, if the zoning ordinances make

provision for those facilities." (Gov. Code, § 53091, subd. (e).)

There is no dispute that the City's zoning ordinance makes

provision for the Solar Project. (3 AA 722:20-21.) There is also

no dispute the Solar Project would not include a "storage"

component because the electricity generated by the Solar Project

would flow directly through the meter and would not be able to be

stored for later use. (69 AR 1952-1953.) The issue on appeal is

whether the Solar Project involves the transmission of electrical

energy within the exception to the Absolute Exemption. The trial

court interpreted the word "transmission" so literally that the

Ruling disqualified any local agency facility producing electrical

energy from the Absolute Exemption in violation of the rules of

24148.00049\29630166.3 -35-

statutory construction.

The Solar Project would generate electricity for the benefit

of the District's water and wastewater treatment related facilities

by connecting to the utility at the generating meter account in

order to minimize overall energy demand and greenhouse gas

emissions. (69 AR 1952.) The Solar Project would not include a

"transmission" component as the energy generated by the Solar

Project would flow through the meter at the interconnection

facilities to the existing SCE distribution system under the

Interconnection Agreement and the RES-BCT Program approved

by the CPUC. (69 AR 1953.) This energy would be measured at

the meter and would result in a credit with SCE that would be

directly applied as an offset to the energy consumed at

designated District facilities. (69 AR 1953.)

In the trial court, the City's reply brief did not refute

evidence submitted by the District showing the Solar Project does

not involve "transmission" within the context of the exception to

the Absolute Exemption, conceding that point. (1 AA 164; 1 AA

193-195; 2 AA 459-472.) Nevertheless, in its resolve to uphold

the City's zoning authority over the Solar Project, the trial court

looked to the dictionary to determine the plain meaning of the

24148.00049\29630166.3 -36-

words "transmission" and "export" as it is used under Public

Utilities Code section 2830, subdivision (b) with respect to the

export of electricity to SCE's grid. (3 AA 727-728.) The court

deemed the words synonymous, concluding the Solar Project

"involves the transmission of electrical energy by a local agency,

because its purpose is to transmit electricity to Edison under its

RES-BCT Program." (3 AA 727:6-8.)

The trial court's overly broad interpretation of the

exception to the Absolute Exemption would prohibit any

electrical energy facility from qualifying for the Absolute

Exemption, as there must always be some mechanism to convey

the electrical energy produced or generated for use. It is

impossible to make use of energy without some limited

conveyance of the electrical energy from the equipment which

generates it to the point of use, even where the use is on the same

property. In this case, the point of use is the SCE meter on the

boundary of the property as this is where SCE takes delivery of

the energy pursuant to the RES-BCT program. Any subsequent

transmission of the energy is by SCE, not the District. The trial

court's literal interpretation of the word "transmission" would

therefore lead to "absurd consequences," rendering the Absolute

24148.00049\29630166.3 -37-

Exemption for electrical energy producing facilities meaningless

in violation of the rules of statutory construction. (Castaneda,

supra, 114 Cal.App.3d at p. 942; Harbor Fumigation, supra, 43

Cal.App.4th at p. 860.) "A statute should be interpreted so as to

produce a result that is reasonable. . . . If two constructions are

possible that which leads to the more reasonable result should be

adopted. . . . The courts must look to the context of the law, and

where uncertainty exists, consideration should be given to the

consequences that will flow from a particular interpretation."

(Mount Sutro Defense Committee v. Regents of the University of

California (1978) 77 Cal.App.3d 20, 34-35, citations omitted,

disapproved on other grounds in Save Tara v. City of West

Hollywood (2008) 45 Cal.4th 116, 131, n. 10.)

Thus, it is necessary to look beyond the plain meaning of

the statutory language in the exception to the Absolute

Exemption and apply the principles of statutory construction to

determine the legislative intent. (Torres, supra, 26 Ca1.4th at p.

1003; Lafayette, supra, 16 Cal.App.4th at p. 1012.) This includes

consideration of "extrinsic aids" such as "the purpose of the

statute, the evils to be remedied, the legislative history, public

24148.00049\29630166.3 -38-

policy, and the statutory scheme encompassing the statute."

(Ibid.)

The Interconnection Agreement states that it "shall be used

for an interconnection [under SCE's RES-BCT Program] for the

export of electrical energy to the grid." (45 AR 1632.)

"Interconnection" is defined as "the facilities necessary to

physically connect the energy source of and the point of use by a

[eligible renewable generating facility] with the existing

transmission facilities of a public utility, and shall include any

necessary transformation, compression or other facilities

necessary to make such interconnection effective." (Pub. Utilities

Code, § 2803, underscore added.) The RES-BCT Program defines

"interconnection" to have the same meaning as that in Public

Utilities Code section 2803, except that it applies to the

interconnection of an eligible renewable generating facility rather

than the energy source of a private energy producer. (Pub.

Utilities Code, § 2830, subd. (b)(6).)

The Solar Project only requires the installation of

approximately 250 feet of underground cable for interconnection

to SCE's facilities. (30 AR 1461-1462.) The interconnection

facilities, which would be owned by SCE, would connect to the

24148.00049\29630166.3 -39-

existing 12 kilovolt (kV) distribution line owned and operated by

SCE. (30 AR 1457, 1460.) The 2009 overview of the CPUC's

process for the siting of electric transmission lines provides that

"[p]rojects below 50kV are considered to be distribution projects,

rather than transmission projects, and in general do not require

Commission approval." (1 AA 213.) Therefore, even if the SCE

distribution line could somehow be attributed to the Solar

Project, this line does not involve transmission as defined by the

CPUC.

The trial court dismissed the CPUC's definition of

transmission in favor of the plain meaning of the word in

Webster's dictionary. (3 AA 727:2-5.) The court then dissected

the definition of "Interconnection Facilities" in the

Interconnection Agreement before concluding the Solar Project

"as a whole includes 'facilities' for the transmission of electrical

energy, given the Project's particular function or end is to export,

i.e., transmit, electrical energy generated by the solar panels to

Edison for bill credits pursuant to the RES-BCT program and

includes the District's interconnection facilities." (3 AA 729:23-

730:16.)

24148.00049\29630166.3 -40-

Both the RES-BCT Program's definition of interconnection

and the CPUC's definition of transmission recognize there must

be some mechanism to convey electrical energy to the utility's

grid for even small energy projects. But only transmission

projects involving the bulk transfer of energy, as opposed to the

local distribution network run by the utility, fall within the

jurisdiction of the CPUC and the local land use authority. (38 AR

1532; Gov. Code, § 53091, subd. (e).)

This conclusion is consistent with the purpose of the

statutory scheme and legislative history. Assembly Bill 242

(Gualco, 1977) removed from Government Code section 53091 a

previous exemption from zoning ordinances for facilities that

store or transmit energy in response to complaints over the

placement of "large transmission poles in residential

neighborhoods" in 1976 by the Sacramento Municipal Utility

District. (1 AA 220.) In recommending approval of the legislative

change, the Enrolled Bill Report of the Governor's Office of

Planning and Research stated:

AB 242 would properly require electrical transmission lines to be placed in accordance with a local government's zoning ordinance. The bill would ensure that public concerns are considered in connection with the placement of large transmission

24148.00049\29630166.3 -41-

towers, which can often be unsightly. Although special districts must presently advise local governments of their construction projects, the districts can place transmission towers wherever they choose.

(Id. at 1 AA 221, underscoring added.) Accordingly, the exception

to the Absolute Exemption for facilities generating electrical

energy that involve "transmission" was intended to cover large

transmission lines or poles transmitting energy to customers, not

any form of transmitting electrical energy to the grid. The trial

court's literal interpretation of "transmission" would

consequently require any solar project carried out by the

approximately 300 community services districts in California,

and potentially other special districts, to be subject to local

zoning. (Gov. Code, § 61001, subd. (a)(4); 3 AR 71-73 [SunPower

example projects], 21 AR 1254.)

The Solar Project not only lacks a "transmission"

component as defined by the CPUC and intended by the

Legislature in enacting the Absolute Exemption, but the Solar

Project would also not have any impacts or require any upgrades

to SCE's local distribution system. Both the System Impact

Study prepared by SCE in May 2015 and the Interconnection

Agreement state no transmission network or distribution

24148.00049\29630166.3 -42-

upgrades are necessary for the interconnection of the Solar

Project to SCE's existing transmission facilities. (30 AR 1461, 45

AR 1688.)13

Accordingly, the Solar Project is not subject to City zoning

under the Absolute Exemption, and the exception for

transmission does not apply.

C. The Solar Project is Subject to the Qualified

Exemption from City Zoning Because There is

No Feasible Alternative

In addition to falling under the Absolute Exemption, the

Solar Project is not subject to City zoning under the Qualified

Exemption in Government Code section 53096, subdivision (a),

which reads:

Notwithstanding any other provision of this article, the governing board of a local agency, by vote of four-fifths of its members, may render a city or county zoning ordinance inapplicable to a proposed use of property if the local agency at a noticed public hearing determines by resolution that there is no feasible alternative to its proposal. The governing

13 "Distribution Upgrades" are defined in the agreement as "Mlle additions, modifications, and upgrades to the Distribution Provider's Distribution System at or beyond the Pont of Interconnection to facilitate interconnection of the Generating Facility. Distribution Upgrades do not include Interconnection Facilities." (45 AR 1656.)

24148.00049\29630166.3 -43-

board may not render a zoning ordinance inapplicable to a proposed use of property when the proposed use of the property by the local agency is for facilities not related to storage or transmission of water or electrical energy, including, but not limited to, warehouses, administrative buildings or automotive storage and repair buildings.

In other words, in the event this Court were to determine the

Solar Project is not subject to the Absolute Exemption because it

involves the "transmission" of electrical energy, the Solar Project

is still subject to the Qualified Exemption for facilities

transmitting electrical energy. The City failed to satisfy its

burden to show the District's determination there is no feasible

alternative to the Solar Project was not supported by substantial

evidence. The administrative record excerpts from the City's

reply brief, which are cited in the trial court's Ruling,

misconstrue the suitability of relocating the Solar Project on the

Hesperia Farms Property.

In 2015, at a noticed public hearing, the District's Board of

Directors unanimously adopted Resolution No. 2015-14

concluding that all Solar Project facilities of consequence are

related to energy and therefore exempt under the Qualified

Exemption. (71 AR 2245-2249; Lafayette, supra, 16 Cal.App.4th

at pp. 1017-1018.) The Court "must construe [Government Code]

24148.00049\29630166.3 -44-

section 53096 in the context of the entire statutory scheme of

which it is a part, in order to achieve harmony among the parts."

(Id. at p. 1015, citations omitted.) Thus, the Absolute Exemption

and the Qualified Exemption "should be interpreted in such a

way as to make them consistent with each other, rather than

obviate one another." (Ibid.)

As established in Section VI.A. above, there is no dispute

that the Solar Project would directly and immediately produce

electrical energy. Therefore, the Solar Project is exempt from

City zoning under the Absolute Exemption as a matter of law.

Likewise, under the plain meaning of the language in the

Qualified Exemption, the Solar Project consists of facilities

related to "transmission" in as much as some form of

transmission is necessary to feed the electrical energy generated

to the grid (see Section VLB. above).

The Solar Project is distinguishable from the service center

in Lafayette that was determined to fall outside the Qualified

Exemption because not "all or substantially all of [its] proposed

facilities of consequence" were related to the storage or

transmission of water. (Lafayette, supra, 16 Cal.App.4th at p.

1017, emphasis original.) Unlike the listed examples of "ancillary

24148.00049\29630166.3 -45-

structures" excluded from the Qualified Exemption in

Government Code section 53096, subdivision (a) (warehouses,

administrative buildings or automotive storage and repair

buildings), the Solar Project has a connection with, is integral,

and directly facilitates the transmission of energy. (Id. at p.

1016.). The Legislature intended for the District to maintain

discretion as to the optimal location of the Solar Project. (Ibid.).

The criteria for the Qualified Exemption is further satisfied

by substantial evidence supporting the District's determination

there was no feasible alternative to locating the Solar Project on

the Hesperia Farms Property. "Feasible" is defined as "capable of

being accomplished in a successful manner within a reasonable

period of time, taking into account economic, environmental,

social, and technological factors." (Gov. Code, § 53096, subd. (c).)

In September 2014, the United States Department of the

Interior Bureau of Reclamation issued a draft Water Supply,

Wastewater, and Alternative Energy Supply Study for Lake

Arrowhead, which SunPower provided input on prior to being

contacted by the District to submit a proposal for the Solar

Project. (17 AR 425-426, 18 AR 484-487.) The study included a

report from SunPower determining "the District's [Hesperia

24148.00049\29630166.3 -46-

Farms] property is a prime location for solar development"

related to capital costs, utility inflation, and photovoltaic

degradation. (18 AR 507-508.) SunPower's June 2015 proposal

to the District identified the Solar Project site "as located within

a solar region categorized as "Excellent" by the National

Renewable Energy Laboratory" and "within the heart of the best

solar in the United States." (3 AR 77.)

The District worked with SunPower to select the

appropriate and crucial site for the Solar Project. (71 AR 2246.)

Project site conditions are critical to SunPower as well as the

District because SunPower agreed to a performance guarantee,

which is impacted by the location of the site. (3 AR 98-99; 59 AR

1917-1918.) The District found that it does not own any property,

other than the Hesperia Farm Property, with the acreage and

necessary components for a solar project due to terrain, trees, and

weather conditions. (71 AR 2247.) All three solar providers that

submitted proposals to the District's Ad Hoc Committee, and an

outside consultant considered by the District to assist in

assessing such proposals, agreed the Hesperia Farms Property is

crucial for the RES-BCT Program, as opposed to the more

developed and mountainous area of Lake Arrowhead. (11 AR

24148.00049\29630166.3 -47-

215-216 [HelioPower], 246-247 [Martifer]; 283 [SunPower]; 17 AR

431-432.)

The District selected the southern portion of the Hesperia

Farms Property, as opposed to the northern portion initially

suggested by one solar provider (Martifer), because of the closer

proximity to the required infrastructure and meter onsite for

interconnection to SCE; the need to avoid the District's

percolation ponds; and the relatively flat ground requiring

minimal grading. (3 AR 78 [SunPower Site Plan at southern

portion], 45 AR 1673 [SCE diagram showing interconnection

facilities and metering equipment], 11 AR 249-250 [discussion of

northern portion], 324-326 [existing meter location].) The June

2014 Ad Hoc Committee meeting revealed concerns that location

of the Solar Project in the northern portion of the Hesperia

Farms Property would require an electrical meter or line upgrade

and could have geotechnical issues related to soil conditions.

(11 AR 249-252.)

Contrary to the trial court's Ruling, the administrative

record shows that District staff and two Board of Directors on the

Ad Hoc Committee confirmed the northern portion of the

Hesperia Farms Property would require a new meter, whereas

24148.00049\29630166.3 -48-

the southern portion already contains a meter. (3 AA 734-735; 11

AR 324-326 [discussion between former District General

Manager Leo Havener and Board of Directors Ralph Wagner and

Ryan Gross confirming existing meter at "south end" of Hesperia

Farms Property].) Thus, the Ad Hoc Committee determined that

the preliminary conclusions made in Martifer's presentation

regarding preference for the northern portion of the property due

to a "three phase electrical line" were incorrect, and the

Committee ultimately chose SunPower to construct the Solar

Project. (Ibid.) In fact, a renewable energy consultant with

significant experience analyzing public sector solar project

proposals even questioned Martifer's knowledge of the RES-BCT

Program. (17 AR 421, 423 434-435.)

In 2015 the District also confirmed that no transmission

network or distribution upgrades are necessary for

interconnection of the Project to SCE's existing transmission

facilities in the southern portion, further reducing costs. (30 AR

1461, 45 AR 1688.)

Additionally, the District determined that locating the

Solar Project in the southern portion of the Hesperia Farms

Property would not result in negative land use impacts, despite

24148.00049\29630166.3 -49-

some initial concerns expressed by the Ad Hoc Committee. (11

AR 324-325.) The southern portion is relatively isolated with no

residences located within one-quarter mile to the west, north, and

east. (69 AR 2015, 2039 [Project street view photo], 71 AR 2251

[Project aerial photo].) The District adopted a mitigation

measure under CEQA requiring views of the Solar Project to be

shielded by a low vegetative barrier installed prior to

construction, still allowing for scenic views north of the Solar

Project site. (69 AR 1963, 1980, 71 AR 2248.) The nearest

residence located approximately 200 feet south of the Project site,

which also has solar panels, did not oppose the Solar Project. (11

AR 324-325, 73 AR 2270-2273.) Lastly, the Solar Project site

would not otherwise generate development revenue for the City

because it is currently used for the District's wastewater

treatment operations.

Compliance with City zoning in 2015 when the Solar

Project was approved by the District would have required the

District to redesign and relocate the Solar Project away from the

nearest residentially designated property, including installation

of additional alternating current conductor between the solar

array and the interconnection point. (71 AR 2247.) This would

24148.00049\29630166.3 -50-

have resulted in a significant cost increase and project delay and

diminished financial return on the Solar Project for District

ratepayers. (Ibid.)

Accordingly, substantial evidence supports the District's

selection of the Solar Project site under the Qualified Exemption;

any reasonable doubts are resolved in favor of the District's

findings. (Sierra Club, supra, 121 Cal.App.4th at p. 1497; Young,

supra, 97 Cal.App.4th at p. 225.)

VII. CONCLUSION

The District's Solar Project is exempt from City zoning

under the Absolute Exemption because it would directly and

immediately produce electrical energy under the plain meaning

of the statute. Alternatively, the Solar Project falls under the

Qualified Exemption for facilities related to the transmission of

electrical energy because there is no feasible alternative to the

-51- 24148.00049\29630166.3

Solar Project. The trial court's judgment on the City's second

cause of action should be reversed.

Dated: March 20, 2018 BEST BEST & KRIEGER LLP

By: HOWARD B. GOLDS LINDSAY D. PUCKETT Attorneys for Defendants and Appellants LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT and BOARD OF DIRECTORS OF LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT

24148.00049\29630166.3 -52-

CERTIFICATE OF COMPLIANCE

Counsel of Record hereby certifies that pursuant to Rule

8.204(c)(1) or 8.360(b)(1) of the California Rules of Court, the

attached APPELLANTS' OPENING BRIEF is produced using 13-

point Roman type, including footnotes, and contains

approximately 10,105 words, which is less than the total words

permitted by the rules of court. Counsel relies on the word count

of the computer program used to prepare this brief.

Dated: March 20, 2018 BEST BEST & KRIEGER LLP

By: HOWARD B. GOLDS LINDSAY D. PUCKETT Attorneys for Defendants and Appellants LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT and BOARD OF DIRECTORS OF LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT

-53- 24148.00049\29630166.3

CERTIFICATE OF SERVICE

At the time of service I was over 18 years of age and not a party to this action. My business address is 3390 University Avenue, 5th Floor, P.O. Box 1028, Riverside, California 92502. On March 20, 2018, I served the following document(s):

APPELLANTS' OPENING BRIEF

By fax transmission. Based on an agreement of the parties to accept service by fax transmission, I faxed the documents to the persons at the fax numbers listed below. No error was reported by the fax machine that I used. A copy of the record of the fax transmission, which I printed out, is attached.

x

By United States mail. I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses listed below (specify one):

Deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid.

x Placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid.

I am a resident or employed in the county where the mailing occurred. The envelope or package was placed in the mail at Riverside, California.

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By personal service. I personally delivered the documents to the persons at the addresses listed below. (1) For a party represented by an attorney, delivery was made to the attorney or at the attorney's office by leaving the documents in an envelope or package clearly labeled to identify the attorney being served with a receptionist or an Individual in charge of the office. (2) For a party, delivery was made to the party or by leaving the documents at the party's residence with some person not less than 18 years of age between the hours of eight in the morning and six in the evening.

By messenger service. I served the documents by placing them in an envelope or package addressed to the persons at the addresses listed below and providing them to a professional messenger service for service. A Declaration of Messenger is attached.

By overnight delivery. I enclosed the documents in an envelope or package provided by an overnight delivery carrier and addressed to the persons at the addresses listed below. I placed the envelope or package for collection and overnight delivery at an office or a regularly utilized drop box of the overnight delivery carrier. By e-mail or electronic transmission. Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the documents to be sent to the persons at the e-mail addresses listed below. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.

See Mailing List Below

I declare under penalty of perjury under the laws of the State of California that the above is true and correct.

Executed on March 20, 2018, at Riverside, California.

/s/Cheryl Seaman

24148.00049\29630166.3

Cheryl Seaman

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MAILING LIST FOR CASE: E067679

City of Hesperia v. Lake Arrowhead Community Services District et al.

Eric L. Dunn, Esq. San Bernardino County

June S. Ailin, Esq. Superior Court Nicholas P. Dwyer, Esq. Attn: Judge Donald Alvarez

Aleshire & Wynder, LLP 247 West Third Street, Dept.

2361 Rosecrans Avenue, Suite 475 S23

El Segundo, CA 90245 San Bernardino, CA 92415- 0210

Attorneys for Petitioner/Plaintiff/ Respondent City of Hesperia

Emily L. Murray, Esq. Attorney General Allen Matkins Leck Gamble Mallory & Office of the Attorney Natsis LLP General 515 South Figueroa Street, 9th Floor 300 South Spring Street Los Angeles, CA 90071-3309 Los Angeles, CA 90013 Attorneys for Real Party in Interest SunPower Corporation Systems Office of the Attorney General

The Supreme Court of California 350 McAllister Street San Francisco, CA 94102

(Via electronic submission only)

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