A Court of Appeal ruled in favor of the San Diego County Water Authority (SDCWA) Wednesday in a key rate case against the Los Angeles-based Metropolitan Water District (MWD) of Southern California.
According to a statement released by the Water Authority, the court ruled MWD collected millions of dollars’ in illegal charges from ratepayers in San Diego. The Water Authority is also entitled to tens of thousands of acre-feet more water from the district than it had calculated.
The lawsuit against the district was filed in 2010. A judge ruled in favor of the Water Authority, saying MWD’s rates for 2011-2014 were illegal.
But MWD appealed the decision and did not change its rates, according to the Water Authority. A second lawsuit was filed in 2012.
The court did rule in favor of the district for one issue, the Water Authority said.
In their statement, the SDCWA said, in part:
“The court ruled against the Water Authority on one important issue with implications for ratepayers and taxpayers statewide – essentially, whether MWD must base its rates on the costs it actually incurs in providing its various services. We believe that the California Constitution, state law and voter-approved Proposition 26 compel MWD to do so – and the trial court agreed. MWD argued that it’s above the law, and convinced the Court of Appeal to reverse the lower court ruling on this key finding. We are also concerned about the chilling effect this ruling could have on water transfers and their benefits for the environment.”
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The Water Authority filed a third and fourth lawsuit against the district but both cases are currently pending. Both lawsuits challenge the district's rates—the third lawsuit for 2015-2016 and the fourth for 2017-2018.
In response to the court ruling, the district also released a statement, which read, in part:
“The Water Authority’s years-long effort to shift costs relating to their own water supply onto ratepayers elsewhere in Southern California has failed. We are equally pleased the court upheld Metropolitan’s full service rate—which represents the vast majority of Metropolitan’s revenues—including our ability to fund projects advancing conservation and local resource development through that rate.In the end, years of litigation brought by the Water Authority and tens of millions of dollars in related costs borne by ratepayers have fundamentally changed no major aspect of Southern California water management or financing. While Metropolitan has prevailed as to the overwhelming majority of costs under challenge in this litigation, nobody is a winner when water districts decide to fight in court rather than resolve their differences in a democratic and collaborative fashion.”
