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Developer Bill Gallaher sues Santa Rosa over natural gas ban as city doubles down on climate goal

Santa Rosa has a new goal of drastically reducing or offsetting its carbon emissions by 2030, a target set by city leaders this week hours after discussing one of many fronts in Santa Rosa’s fight to shrink its climate footprint: a lawsuit over the city’s pending natural gas ban for new homes.

The City Council in November, seeking to curb future use of fossil fuels in houses, unanimously approved the ban over the objections of home builders, who fear higher prices for all-electric homes will deter buyers. Some concerned residents also pointed to the recent reliance on natural gas during the series of prolonged power outages imposed last fall by PG&E to prevent its equipment from starting wildfires.

The city’s prohibition, which needs approval from state regulators, requires most new homes three stories or less to use appliances - stoves, water heaters, dryers - that run on electricity instead of natural gas.

But the ban now faces a lawsuit from local developer Bill Gallaher, owner of a Windsor-based home building company and a chain of senior living facilities located across California and Nevada. He and a group of developers also lodged separate lawsuits against Windsor last year over its natural gas ban, which is similar to the measure advanced in Santa Rosa. Dozens of municipalities in the state have considered or adopted a similar ban.

All three suits are pending in Sonoma County Superior Court. At least one mandatory settlement conference on the litigation against Windsor has taken place, and another such meeting with Santa Rosa is set for early February.

Careful consideration

Santa Rosa council members discussed Gallaher’s lawsuit Tuesday in closed session, directing City Attorney Sue Gallagher to defend the city’s ordinance. In the open portion of the same meeting, the council unanimously adopted a resolution declaring a climate emergency and setting the citywide goal of carbon-neutrality by 2030 through a combination of reducing emissions and removing carbon dioxide from the atmosphere.

“I do think it would be a dereliction of duty if we did not take individual and systemic actions to curb our greenhouse gas emissions,” said Councilman Chris Rogers.

At his direction, city staff will develop a public tracker so residents - many of whom urged the council to take action Tuesday - can follow the city’s progress toward achieving its climate goals. In an interview Friday, Rogers noted that city officials were aware of the potential threat of litigation when they voted unanimously to adopt the natural gas ban and that the city might have to fight a lawsuit as a result.

“We knew at the time that the lawsuit was possible if not likely,” Rogers said. “If we have to fight the lawsuit and come out on the other side, great.”

Though the bulk of pollution in Santa Rosa and most places in the North Bay is generated by automobiles, energy use for buildings amounted to about 29% of the city’s greenhouse gas emissions in 2015, according to the Sonoma County Regional Climate Protection Authority. That share, and the overall level of emissions from buildings, is expected to drop gradually under the all-electric mandate imposed by the city.

Suit questions review

The 16-page lawsuit filed in December by Gallaher against Santa Rosa claims the city violated the state’s bedrock environmental law by adopting a natural gas ban without undertaking the proper review.

The complaint notes that Gallaher lives near Santa Rosa - he is rebuilding in the fire-scarred hills north of Rincon Valley - and that he “regularly does business” in the city, including development projects that could be subject to the natural gas ban.

The lawsuit did not name any affected projects involving his development companies, which include Gallaher Homes and Oakmont Senior Living. Oakmont Senior Living has submitted plans for Emerald Isle, an 80-unit condominium project in Fountaingrove, and Gallaher Homes currently is developing the Sendero Townhomes community near the intersection of Sebastopol and Stony Point roads, neither of which appear to be affected by the natural gas ban. Neither company has anything imminent coming down the pipeline in Santa Rosa, according to an official with Oakmont Senior Living.

Gallaher’s lawsuit alludes to the Kincade fire and echoes a complaint from Gallaher’s Windsor lawsuit: that Santa Rosa allegedly failed to analyze how limiting new homes to electric-only appliances could exacerbate the impacts of “prolonged electricity blackouts and wildfires which may have been caused by electrical infrastructure,” according to the suit, which also questions the sufficiency of the existing electrical grid.

“Given PG&E’s warnings about potential blackouts, the grid’s ability to handle this new demand is questionable at best,” the lawsuit says.

City to defend rule

The city plans to “fully defend” its all-electric rule, said Sue Gallagher, the Santa Rosa city attorney, but it will listen to “any of the proposals presented” by the plaintiffs at a Feb. 3 settlement conference, which is required by the California Environmental Quality Act, the law cited in the developer’s suit.

Windsor Town Attorney Jose Sanchez said he could not share any updates on the case at this point, including whether there had been any definitive outcome of the town’s recent settlement conference.

An attorney for Gallaher, Matt Henderson, said he was “still unable to comment on the pending litigation” in an email Friday afternoon.

In adopting its ordinance declaring a climate emergency, Santa Rosa joins Cloverdale, Cotati, Healdsburg, Petaluma, Sebastopol, Windsor and Sonoma County.

The city’s resolution calls for Santa Rosa to reduce and offset emissions to bring its carbon footprint to a net zero by 2030. The city’s 2030 target is more aggressive than the agenda set for the state by former Gov. Jerry Brown, who in 2018 put California on course for carbon-neutrality by 2045.

The California Energy Commission has yet to affirm the all-electric policies of Santa Rosa and Windsor, both of which tried to provide required evidence of cost-effectiveness by relying on a commission-approved study funded by PG&E. California going all-electric could save PG&E money because the utility, which is working its way through bankruptcy proceedings, could avoid expanding its natural gas network, the study found.

The other lawsuit challenging Windsor’s natural gas ban is from a limited liability company that owns property near the town.

The Windsor-Jensen Land Company has proposed building more than 200 new homes on about 59 acres east of Windsor that would need to be annexed by the town. Its suit challenges the claim that the all-electric mandate will be cost effective.

Tom Micheletti, manging member of the Windsor-?Jensen Land Company, confirmed in November that his company was not working with Gallaher.

“We had to file our own lawsuit because, while we have many interests in alignment with Mr. Gallaher as to the all-electric code, they are not necessarily completely in alignment,” Micheletti said in a November email.

You can reach Staff Writer Will Schmitt at 707-521-5207 or will.schmitt@pressdemocrat.com. On Twitter @wsreports.

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