URS Corporation 4225 Executive Square, Suite 1600 La Jolla, CA 92037 Tel: 858.812.9292 Fax: 858.812.9293 www.urscorp.com February 24, 2012

Eric Porter Unites States Fish and Wildlife Service Carlsbad Fish and Wildlife Office 6010 Hidden Valley Road Carlsbad, CA 92011

Subject: Pio Pico Energy Center Response to USFWS Letter Re: FWS-SDG-10B0661-12TA0160 Consultation Project No.: FWS-SDG-2010-B-0611

Dear Mr. Porter:

Introduction

The above-referenced United States Fish and Wild life Service (USFWS) letter dated February 1, 2012 to U.S. Environmental Protection Ag ency, Region IX (EPA) acknowledged USFWS receipt on December 27, 2011 of EPA’s request to initiate formal Section 7 Consultation under the Endangered Species Act for the Pio Pico Energy Center (“PPEC” or “Project”) located in San Diego County, California. Specifically, the USFWS letter stated: “The c onsultation will address the proposed construction and ope ration of the Pio Pico Ener gy Center ... and the potential effects of these actions on the federally enda ngered quino checkerspot butterfly, federally threatened California gnatcatcher and Otay tarp lant and their respecti ve designated critical habitats.” The USFWS letter c ontinues with this request of the Applicant: “We understand the applicant’s commitment to minimize impacts to threatened or endangered species and their critical habitat through habita t preservation and/or active ha bitat management; however, the biological assessment did not provided sufficient detail for us to determine the effectiveness of the proposed measures. Although we have sufficient information to initiate formal consultation, we request that the applicant prov ide more specific details regarding how specific properties will be identified for preservatio n and/or habitat management as discussed at our January 11 th meeting. This information is needed for our an alysis of project impacts and the associated avoidance and minimization m easures.“ [Emphasis added.]

As requested by USFWS, Applicant herein desc ribes the process by which Applicant would identify specific properties for preservation and/or habitat management, aimed at offsetting potential impacts from the PPEC on the quino checkerspot butterfly, gnatcatcher and Otay tarplant, and their respective designated critical habitats. Descriptions of the process steps also
contain information that identifies the current 1 availability and viability of these options based on recent discussions with habitat manageme nt companies, conservation agencies and fund/endowment entities. This information in cludes a habitat map, private lands map, public lands map, local habitat c ontractors list, and conser vation agency/entity list.

1 Current as of February 17, 2012.Mr. Eric Porter United States Fish and Wildlife Services February 24, 2012 Page 2

Identification Process

To determine how specific properties (or parcels) will be identified, the Applicant will follow the following steps:

Step 1. Compile biological survey reports, lite rature source databases and other resources to determine where the protected species have been sighted and/or known to thrive. Then present these sighting locations and inha bited areas on an aerial map.

Step 2. Using the habitat map produced in Step 1, overlay parcel lines of private properties that are located wholly or in part in the suitable hab itat areas. This will reveal many, if not most, of the plausible parcels that might be acquirable. This is illustra ted on Figure 1, Mitigation Parcel Search.

Step 3. This step can be done concurrent with Step 2. Using the habitat map produced in Step 1, overlay various conservation agen cy, city and county jurisdicti onal lines, Mult iple Species Conservation Program (MSCP) lines, California De partment of Fish and Game (CDFG) refuge areas, USFWS refuge areas, and Bureau of La nd Management (BLM) la nds. This is also illustrated on Figure 1, Mitigation Parcel Search.

Step 4. Since the map produced in Steps 2 and 3 contain the habitat information shown on the map from Step 1, the Applicant ha s a map from which to build op tions: that shows both privately held lands having suitable habitat and public la nds having suitable habitat. There are three distinct options 2 , as presented below, that A pplicant has investigated:

A. Acquisition and deed transfer of 20-acres 3 of local habitat-suitable land to a local conservation agency. This would create new conserved land through perpetuity.

B. Weed abatement of non-native plant species on 50 acres for the 20-year life of the PPEC project of local, habitat-suitable land that is already in habi tat conservation.

C. Funding of an existing, or creation of a new conservation f und or trust that would either be used to purchase land or be used for weed management to meet PPEC’s mitigation requirements over the 20-year life of the PPEC project.

2 On August 1, 2011 and October 31, 2011, Applicant provided details regarding Options B and
C to CEC Staff.

3 As discussed with FWS staff on January 11, 2012Mr. Eric Porter United States Fish and Wildlife Services February 24, 2012 Page 3

Tier A Option Development:

Tier A Options assume the that private land to taling 20-acres and having suitable habitat would be acquired and transferred to a local conservation agency or entity. This would create new conserved land through perpetuity . If a Tier A Option is ultimat ely pursued by the Applicant, then PPEC would either purchase 20 acres of privat e land and deed it to an agency or entity, or would provide funds to an agency/entity for the e xpressed purpose of purchase of private land. Either way, Figure 1, Mitigation Parcel Search fr om Step 2 would provide a suite of potential parcels.

Refer to the attached figure, Mitigation Parcel Search , which shows privately-owned parcels that are believed by the Applicant to meet the obj ectives of this mitigation process.

Tier B Option Development:

Tier B Options are based on weed abatement of non-native plant species on 50 acres for the 20- year life of the PPEC project of lo cal, habitat-suitable land that is already in habitat conservation. Such weed abatement would remove non-native plan t species in suitable habitat areas for the life of the PPEC project. Removal of non-native pl ant species would promote further growth of plants that support the quino check erspot butterfly, California gnatcat cher and the Otay tarplant.

Options within this tier can be executed either by the Applicant contracting directly with a habitat management company, or by funding an ex isting conservation agency or entity for the expressed use toward a weeding program for speci fic areas. By using the Public Lands Map from Step 2, the Applicant would engage agencies/entit ies responsible for habitat conservation for the areas shown on this map.

There are several companies that perform habitat management services, specifically weeding programs, in the San Diego County. These include:

 D&D Wildlife Habitat Restorations, Inc.

 Habitat Restoration Sciences

 Habitat West, Inc.

 Recon Native Plants, Inc.

Presently, there are several agencies that control public lands that contain suitable habitat in the close proximity to the PPEC project. These agencies include:

 USFWS

 CDFG

 City of San Diego (MSCP)

 County of San Diego (MSCP)Mr. Eric Porter United States Fish and Wildlife Services February 24, 2012 Page 4

 City of Chula Vista

 BLM

Lands that these agencies control are shown on the attached figure ( Mitigation Parcel Search)

. The Applicant has contacted each of these agencies to verify habitat suitability and land control for the targeted areas show n on the attached figure.

Tier C Option Development:

Tier C Options are based PPEC funding of an ex isting, or creation of a new conservation fund or trust that would either be used to purchase land or be used for weed management to meet PPEC’s mitigation requirements over the 20-year life of the Project. The options in this tier are considered to generally be th e least favored, mainly because known conservation areas are not located in close proximity to the PPEC site. However, a new conservation trust with suitable habitat could be established th at target areas in close prox imity. The following conservation trusts in San Diego County include:

 San Diego National Wildlife Refuge (Coastal sage and chaparral habitats. Adjacent to the Project site.). USFWS Foundation has accepted f unds in the past for land acquisitions and weeding programs.

 Crestridge Conservation Bank (N on-native annual grassland and southern-mixed chaparral, coastal sage scrub. (Approximately 25 m iles from the Project site.)

 Deer Canyon Conservation Bank (Service area: Ce ntral coast, within MSCP. Southern maritime chaparral, coastal sage scrub and chamise chaparral habitats. (Approximately 30 miles from the Project site)

 The Center for Natural Lands Management

Options Matrix

Based on the process set forth herein, Applicant compiled examples of op tions available as of February 17, 2012 under each Tier. To summarize such examples, Applicant created an “Options Matrix,” which is set forth below. Applicant notes that the opti ons contained in the Matrix are not an exhaustive list, but are in tended to demonstrate that viab le options currently exist for PPEC to meet any forthcoming mitigation requireme nts. The Options Matrix is presented on the following pages.Mr. Eric Porter United States Fish and Wildlife Services February 24, 2012 Page 5

Options Matrix

Option Summary Description Assumptions/Details/Notes

Tier 1 LAND ACQUISITION and DEED TRANSFER to conservation agency PPEC would purchase offset land that has the correct habitat for Quino Checkerspot butterfly, and to a lesser degree for the CA Gnatcatcher and Otay Tar Plant. Land acquired would be deeded to a suitable habitat conservation agency or foundation 20 acre offset area would suffice per FWS. FWS emphasized proximity to the project, but is amenable to something regionally. This land purchase/dedication option assumes that there are no additional demands on PPEC regarding potential N deposition mitigation.

1A Purchase offset land that is adjacent to BLM lands Deed to BLM. BLM would be responsible for conservation of the deeded lands

1B Purchase offset land that is adjacent to City of San Diego MSCP conserved lands. Deed to the City of San Diego. The City would be responsible for conservation of the deeded lands

1C Purchase offset land that is adjacent to City of Chula Vista MSCP conserved lands Deed to the City of Chula Vista. The City would be responsible for conservation of the deeded lands

1D Purchase offset land that is adjacent to local FWS refuge lands. Deed to FWS. FWS would be responsible for conservation of the deeded lands

1E Purchase offset land that is adjacent to County of San Diego MSCP conserved lands. Deed to San Diego County. The County would be responsible for conservation of the deeded lands

Tier 2 WEED ABATEMENT on existing conservation land; funded by PPEC but managed by conservation agency PPEC would fund weed abatement on 50 acres on land currently owned and conserved by a governmental agency, and that has the correct habitat for Quino Checkerspot butterfly, and to a lesser degree for the CA Gnatcatcher and Otay Tar Plant. [This is what was proposed to CEC.] PPEC, LLC would make a one-time payment to a conservation agency prior to commissioning of PPEC. This funding would support non-native species weeding on 50 acres throughout the 20-year operations of the project. 2A PPEC would hire a consultant to perform weed abatement mitigation. Location of lands to be weeded to be determined. Potential consultants include: RECON Native Plant, Inc.; Habitat Restoration Sciences; Habitat West, Inc.; and D&D Wildlife Habitat Restoration, Inc. Competitive cost estimates to be obtained to determine actual cost to weed 50 acres. 2B PPEC would fund a local agency willing to implement a weeding program on their conserved lands if provided the necessary funds to conduct the weeding. Potential agencies include Cities of San Diego, Chula Vista, County of San Diego, BLM, FWS, and a local conservancy [e.g., The Center for Natural Lands Management]. Tier 3 PPEC would FUND an established or new conservation fund Establish a foundation or otherwise fund an existing foundation that conserves the three potentially impacted species. Assume that funding would mitigate potential N deposition impacts for the 20-year life of PPEC, not through perpetuity.Mr. Eric Porter United States Fish and Wildlife Services February 24, 2012 Page 6

Option Summary Description Assumptions/Details/Notes

3A San Diego National Wildlife Refuge (Coastal sage and chaparral habitats. Adjacent to the Project site.). FWS Foundation has accepted funds in the past for land acquisitions and weeding programs. Eric Porter noted that FWS does not want to be a “contractor” in these arrangements, that is, they don’t want to manage the funds and be responsible for results.

3B Crestridge Conservation Bank (Non-native annual grassland and southern-mixed chaparral, coastal sage scrub. Approximately 25 miles from the Project site.)

3C Deer Canyon Conservation Bank (Service area: Central coast, within MSCP. Southern maritime chaparral, coastal sage scrub and chamise chaparral habitats. Approximately 30 miles from the Project site.)

3D The Center for Natural Lands Management

Summary

In summary, Applicant has provid ed a detailed process for the identification of properties for preservation and/or habitat management . Applicant believes that there are numerous plausible mitigation options available to meet any obligations related to the potential for nitrogen deposition impacts on the federally endangered quino checkerspot but terfly, federally threatened California gnatcatcher and Otay tarp lant and their respective designa ted critical habitats from the Project.

Please contact me at ( 858) 812-9292 extension 1535 with questions. We ap preciate your attention to this matter.

Sincerely, URS CORPORATION

Patrick J. Mock, PhD, CSE, CWB ® Principal Scientist 4225 Executive Square, Suite 1600 La Jolla, CA 92037

cc: Gerardo Rios, EPA Region 9 David Jenkins, PPEC Gary Chandler, PPEC Maggie Fitzgerald, URS

# ! C Project SitePath: G:\gis\projects\1577\29874827\map_docs\mxd\Parcel Search Bio Mitigation_Esize.mxd, paul_moreno, 2/22/2012, 2:58:12 PM

Portions of this DERIVED PRODUCT contains geographic information copyrighted by SanGIS. All Rights Reserved. CNDDB and USFWS data points shown here are derived from a polygonal dataset, and are intended only as a guide to depict general presence of the identified species within the specified area. Contact CNDDB and USFWS for further information. 

# Legend

Otay tarplant

$ 1 

## coastal California gnatcatcher

" ) 

## quino checkerspot butterfly
Diegan Coastal Sage Scrub

BLM Wilderness
USFWS National Wildlife Refuge
Privately Owned Parcels

SOURCES: Sensitive Species (CNDDB, USFWS, MSCP, 2011) Parcels, Vegetation (SanGIS, 2011) Wildlife Refuge (BLM, USFWS, 2010) Aerials (ESRI, 2011) 

# MITIGATION PARCEL SEARCH

CHECKED BY PM

PM: PM PROJ. NO: 29874827.07000 FIG. NO:

1 SCALE: 1" = 2000' (1:24,000) 1000 0 1000 2000 3000 Feet 

# O

SCALE CORRECT WHEN PRINTED AT 48X36 

## DATE: 2/22/2012