Section 2.11 of the WWA is a representation and does not create a conditional obligation that undermines Natomas’ firm obligation to deliver to Golden State the amounts of surface water set forth in the WWA to the Settlement Agreement. We therefore conclude that DRA’s interpretation of Section 2.11 is not reasonable based on the language of the provision or any other facts in the record. Another term DRA objects to is Section 2.10 of the WWA. DRA contends that, Section 2.10 of the WWA, the “No Public Use Clause,” “would insulate Natomas from the responsibility of water supply interruptions and would allow it to terminate the agreement.” The Joint Parties and Golden State contend DRA’s argument is flawed because DRA has misinterpreted Section 2.10. Section 2.10 states: The Parties acknowledge and agree that Natomas is willing to supply water to [Golden State] as a corporation on a wholesale basis and not to [Golden State’s] customers other than as the water may be supplied by [Golden State] to its customers’ through [Golden State’s] own distribution system and under its own exclusive control, and that Natomas does not hereby dedicate its water supplies to public use. On this issue, the Golden State’s witness testified, “[n]othing about [Section 2.10 of the WWA] ‘insulates Natomas’ from failing to fulfill its contractual obligations under the WWA or allows Natomas to terminate the agreement; in either case it would be in breach and subject to paying damages.” The Golden State’s witness explained that (i) this language “is based on a similar clause that was approved by the California Supreme Court in Marin Water and Power Co. v. Town of Sausalito, 168 Cal. 587 (1914), as one factor in determining that the selling entity was not a public utility,” and (ii) “numerous other Commission-approved contracts include similar provisions, including SCE’s 2011 Pro Forma Renewable Power Purchase and Sale Agreement (see Section 10.12 “Nondedication”), and PG&E’s 2011 Renewable Portfolio
impact of its decisions. As such, the Commission’s obligation to serve the public interest does not equate to single-mindedly adopting those positions or policies that result in the lowest water rates possible for Golden State’s future SSCSA customers, irrespective of how those positions or policies impact housing prices and development more generally. Rather, the Commission must consider the broader ramifications of its decisions and, as U.S. Steel makes clear, it must issue a decision that adequately weighs all material issues, including the “economic effects of alternative approaches.” The Court in U.S. Steel explained that this duty is “inherent” in the requirement of [the Code] Section 1705 that a decision of the Commission “contain, separately stated, findings of fact and conclusions of law . . . on all issues material to the order or decision.” Moreover, DRA has agreed that the Commission should not ignore the effect of its decisions on housing prices. DRA has also concurred that the Commission has an obligation to act in the public interest and that, while the Commission’s “first obligation . . . is toward the customers,” the public interest also involves “the effect of various policies and proposals on housing prices”. And, here, the Commission’s obligation “toward the customers” is inextricably linked to the impact of its decisions on housing prices because Golden State’s future SSCSA customers will bear the burden of higher home prices—whether those increased housing costs result from including water infrastructure costs in home prices or from eventual housing shortages that result because the capital costs required to undertake a new development become oppressively high. Moreover, even if we were to decide that Rule 15 should apply here, the Joint Parties provide a persuasive argument that exception or deviation should be made in this instance. As Golden State’s witness explained, “the Commission has approved deviations from Rule 15 when appropriate, especially in the
River Air Quality Management District as well as SPSP EIR and will help reduce the short term NOx impacts to the extent feasible. 38. The unmitigable, remaining and temporary NOx impacts warrant a statement of overriding considerations in light of the temporary and already mitigated nature of the impacts, the critical local need for the Proposed Project as evidenced by the community support for the Proposed Project, and the important local and regional economic and community objectives that are promoted by the Proposed Project. 39. In light of the important regional and community benefits of this Proposed Project, the unmitigable impacts of permanently converting some of this community’s farm lands to non-agricultural use do warrant a statement of overriding considerations. 40. The Proposed Project is necessary to this region and will promote numerous local and regional economic and community benefits to promote the safety, health, comfort, and convenience of the public, and these benefits constitute overriding considerations which justify approval of the Proposed Project despite its unavoidable environmental effects. 41. In compliance with CEQA, we find that the economic, legal, social, technological and other benefits of the Propose Project outweigh and override the significant unavoidable environmental impacts.