NOTICE OF PREPARATION OF AN ENVIRONMENTAL IMPACT REPORT

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1 Date: September 18, 2017 NOTICE OF PREPARATION OF AN ENVIRONMENTAL IMPACT REPORT To: Agencies and Interested Parties Lead Agency: Sacramento Municipal Utility District 6201 S Street, MS H201 Sacramento, CA Contact: Emily Bacchini at (916) Subject: Notice of Preparation of a Draft Environmental Impact Report for the Proposed Rancho Seco Solar II Project Review Period: September 18, 2017 to October 17, 2017 Sacramento Municipal Utility District (SMUD) is proposing the Rancho Seco Solar II Project, which would include installation, operation, and maintenance of an alternating current (AC) photovoltaic (PV) solar power facility in southeastern Sacramento County. SMUD plans to prepare an environmental impact report (EIR) for the project to satisfy the requirements of the California Environmental Quality Act (CEQA) (Public Resources Code [PRC] Section et seq.), and will serve as the lead agency for CEQA compliance. Purpose of Notice: In accordance with the State CEQA Guidelines (14 California Code of Regulations [CCR] Section 15082), SMUD has prepared this notice of preparation (NOP) to inform agencies and interested parties that an EIR will be prepared for the above-referenced project. The purpose of an NOP is to provide sufficient information about the project and its potential environmental impacts to allow agencies and interested parties the opportunity to provide a meaningful response related to the scope and content of the EIR, including mitigation measures that should be considered and alternatives that should be addressed (State CEQA Guidelines 14 CCR Section 15082[b]). Project Location: The project would be located on up to 554 acres of SMUD-owned property in southeastern Sacramento County, approximately 12 miles east of State Route (SR) 99, south of Twin Cities Road (also known as SR 104), and adjacent to the decommissioned Rancho Seco Nuclear Generating Station (Exhibits 1 and 2). Primary access to the project site is provided by an existing entry road from Twin Cities Road and Clay East Road. Surrounding land uses include vineyards to the north, the SMUD Nature Preserve Mitigation Bank to the east, and rolling hills vegetated with naturalized non-native annual grasses and vineyards to the south and west. Seasonal wetlands, swales, and intermittent drainages are present throughout much of this surrounding area. Other SMUD facilities near the project site include the remaining industrial park associated with the Rancho Seco Nuclear Generating Station, the existing megawatt (MW) Rancho Seco PV Solar Project, and the Cosumnes Power Plant.

2 Exhibit 1 Regional Location

3 Exhibit 2 Project Location and Surrounding Land Uses

4 Project Objectives: SMUD s objectives for the project include the following: support California s renewable energy and greenhouse gas emission goals and SMUD Board Strategic Directive 9, requiring that 50 percent of energy provided to customers be supplied by renewable energy resources by December 31, 2030, by constructing and operating a PV solar facility. In acquiring renewable resources, SMUD shall emphasize local and regional environmental benefits; provide long-term supply to allow SMUD to expand its Solar Shares program, a communitybased solar program that gives SMUD customers the opportunity to receive solar power without upfront costs or equipment installation; capitalize on the existing solar energy investment tax credit, which provides for a 30 percent tax credit for eligible costs associated with solar projects that begin construction by December 31, 2019, by developing a project that begins construction prior to December 31, 2019 (26 U.S. Code 48) to keep costs low for SMUD s customers; locate the project to best avoid wetlands and other sensitive habitat areas within the available SMUD-owned property outside of the adjacent mitigation bank; optimize the delivery of solar-produced energy by locating the facility as near as possible to existing electrical infrastructure with anticipated capacity; design a flexible PV solar energy facility that is capable of utilizing the best available, efficient, cost-effective, and proven PV solar technology; construct the facility in a location that is readily accessible from existing roads and that would not require the construction of major new roadway improvements; and construct the facility adjacent to industrial property to minimize environmental impacts and promote consolidation of energy infrastructure. Project Description: SMUD proposes to lease SMUD-owned land to a third party to build and operate a PV solar power facility that would provide up to 100 MW of power. SMUD plans to purchase the solar power generated from the PV facility through a contract with the third party. The project includes installation of PV solar panels, a substation, switchgear, battery storage, and interconnection to the existing subtransmission or transmission system. An existing 8.5- acre solar site (PV5) would be decommissioned and the site would be reused as part of the project. Additional project details are provided below. Solar Modules, Collections Systems, and Inverters The project would include PV modules mounted on a single-axis horizontal tracking system or a fixed tilt system, or a combination of both. An underground network of AC power cables would connect the array transformers to a medium voltage combining switchgear. This switchgear would connect, via an overhead or underground collection system, to the on-site substation. The on-site substation would then step up the final voltage to connect the project power to the existing SMUD subtransmission or transmission system.

5 Substation and Switch Gear An on-site substation would convert the electricity generated from the PV panels, and would include various electrical infrastructure, including one or more step-up transformers, breakers, buswork, protective relaying, meters, Site Control Center building, backup power, associated substation equipment, and a dedicated perimeter fence. The substation structures would range in height from approximately 20 to 60 feet. Security fencing would be placed around the perimeter of the new substation. Emergency generators may be installed for operations. In addition, the project could require the expansion of the existing 230-kilovolt (kv) substation at the Rancho Seco Nuclear Generation Station. Interconnection Lines Several options are still being considered for interconnection of the project to SMUD s grid, depending on the ultimate size of the project. The options include connecting to SMUD s existing subtransmission line or connecting to an expanded Rancho Seco 230-kV switchyard. Existing SMUD-owned overhead distribution lines adjacent to the project site may be used to provide support to project infrastructure and personnel during both construction and operation. Other Structures and Improvements Improved (earthen or gravel) roads, approximately 12 to 20 feet wide, would be constructed throughout the site and between arrays to accommodate maintenance and emergency vehicle access. The entire project site would be fenced and external safety lighting would be provided. Also, a battery energy storage system (BESS), meteorological stations, and telecommunications infrastructure would be installed. Construction Project construction would take approximately one year, and is proposed to begin in 2019 and conclude in Operations and Maintenance The project would operate seven days per week. One regular on-site employee may be required and some personnel may visit the site to monitor, maintain, and if needed, repair, the system. PV panels would be washed approximately once per year during project operation or as needed. The project may also require occasional repair or replacement of project components. Other operational activities would include interconnection equipment maintenance, production reporting, equipment inspecting and testing, and similar activities. General site maintenance would include vegetation management, road maintenance, and general upkeep of the facility. Decommissioning At the end of the project s useful life (anticipated to be 20 years or more), the site would be decommissioned. Potential Environmental Effects: The EIR will describe the significant direct and indirect environmental impacts of the project. The EIR also will evaluate the cumulative impacts of the project, defined as impacts that could be exacerbated when considered in conjunction with other related past, present, and reasonably foreseeable future projects. SMUD anticipates that the

6 project could result in potentially significant environmental impacts in the following resource areas, which will be further evaluated in the EIR: Aesthetics: Temporary and long-term changes in scenic views or visual character of the project site, as viewed by motorists on Twin Cities Road and Clay East Road as well as recreationists. Air Quality: Temporary increases in air pollutant emissions associated with construction. Biological Resources: Temporary disturbances or permanent losses of habitats and wildlife corridors; temporary disturbances or permanent losses of special-status plant species; and construction disturbances or take of special-status terrestrial and aquatic species. Cultural Resources: Temporary or permanent disturbances of known and unknown historic, archaeological, or tribal cultural resources. Geology and Soils: Potential soil erosion or loss of topsoil during construction; and potential impacts related to unstable soils and expansive soils at the project site. Greenhouse Gas Emissions: Temporary increases in greenhouse gas emissions associated with mobile-source exhaust from construction worker commute trips, truck haul trips, and equipment (e.g., excavators, graders). Hazards and Hazardous Materials: Potential spills of hazardous materials during construction; potential exposure of workers to hazardous materials during construction; and increased exposure to wildland fire risk during construction. Hydrology and Water Quality: Potential temporary and permanent alterations of local drainage patterns and runoff effects; and temporary effects on water quality during construction, including spills of fuel or other hazardous materials. Noise: Temporary increases in noise (including off-site, truck traffic noise) and vibration levels during construction. Transportation/Traffic: Temporary and long-term increases in traffic and traffic hazards on local roadways (including Twin Cities Road and Clay East Road) during construction and project operation and maintenance. These potential impacts will be assessed and discussed in detail in the EIR, and feasible and practicable mitigation measures will be recommended to reduce any identified significant or potentially significant impacts. SMUD anticipates that the project will not result in significant environmental impacts in the following resource areas, which will not be further evaluated in the EIR: agriculture and forest resources, land use and planning, mineral resources, population and housing, public services, recreation, and utilities. An Initial Study will be included as an appendix to the EIR, which will include brief explanations as to why significant impacts to these resources are not anticipated. Potential Approvals and Permits Required: Elements of the project could be subject to permitting and/or approval authority of other agencies. As the lead agency pursuant to CEQA,

7 SMUD is responsible for considering the adequacy of the EIR and determining if the project should be approved. Other potential permits required from other agencies could include: Federal U.S. Army Corps of Engineers: Compliance with Section 404 of the Clean Water Act for discharge of fill to Waters of the U.S. U.S. Environmental Protection Agency: Concurrence with Clean Water Act Section 404 permit. U.S. Fish and Wildlife Service: Compliance with Section 7 of the federal Endangered Species Act (ESA). State California Department of Fish and Wildlife, Region 2: Compliance with the California ESA, potential permits under Section 2081 of the Fish and Game Code if take of listed species is likely to occur, and Section 1602 streambed alteration agreement if any construction activities occur within the bed or bank of adjacent waterways. California Department of Transportation, District 3: Encroachment permit and/or transportation management plan. California State Office of Historic Preservation: Compliance with Section 106 of National Historic Preservation Act (in coordination with USACE). Central Valley Regional Water Quality Control Board: National Pollutant Discharge Elimination System (NPDES) construction stormwater permit (Notice of Intent to proceed under General Construction Permit) for disturbance of more than 1 acre, discharge permit for stormwater, and Clean Water Act Section 401 water quality certification or waste discharge requirements. Local Sacramento County: Board Review of the 230-kV interconnection line for consistency with the General Plan. Sacramento Metropolitan Air Quality Management District: Authority to Construct/Permit to Operate pursuant to SMAQMD Regulation 2 (Rule 201 et seq.), and Air Quality Management Plan consistency determination. Document Availability: The NOP is available for public review on SMUD s website: Printed copies of the NOP are also available for public review at the following locations: Sacramento Municipal Utility District Customer Service Center 6301 S Street Sacramento, CA 95817

8 Sacramento Municipal Utility District East Campus Operations Center 4401 Bradshaw Road Sacramento, CA Public Scoping Meeting: A public scoping meeting will be conducted by SMUD to inform interested parties about the project, and to provide agencies and the public with an opportunity to provide comments on the scope and content of the EIR. The meeting time and location are as follows: October 5, 2017 Time: 7:00 8:30 p.m. Location: Hendrickson Training Center (formerly Hendrickson Hall) Address: Ivie Road, Herald CA Comment Period: Agencies and interested parties may provide SMUD with written comments on topics to be addressed in the EIR for the project. Comments can be provided anytime during the NOP review period, but must be received by 5:00 p.m. on October 17, Please send all comments, with appropriate contact information, to the following address: Emily Bacchini Sacramento Municipal Utility District Environmental Management 6201 S Street, MS H201 Sacramento, CA emily.bacchini@smud.org All comments on environmental issues received during the public comment period will be considered and addressed in the Draft EIR, which is anticipated to be available for public review in spring 2018.