A judge ordered the Metropolitan Water District of Southern California to pay the San Diego County Water Authority $43.4 million in prejudgment interest Friday. This is in addition to the $188.3 million awarded in August as contract damages.
According to the Court the MWD charged the Water Authority illegal rates from 2011 to 2014. The judge ruled the Water Authority is entitled to 10% interest annually on the funds that MWD over-collected. Under state law the amount owed will accrue 7% annually so the total amount MWD owes will increase until all the money is paid.
MWD argued it owed only $4.16 million and contended the Water Authority consented to being overcharged by the Los Angeles-based wholesaler.
MWD has already said it will appeal the court’s decision, which could significantly delay payment to the Water Authority.
“MWD has dragged out this case for years, and the price tag for its illegal rates and failed litigation strategy continues to grow,” said Mark Weston, chair of the Water Authority’s Board of Directors. “This ruling should serve as another strong signal to MWD that its current rate structure is illegal and should be immediately reformed to comply with state law and the California Constitution. The rulings have been clear and decisive. It is time to fix the rate structure and avoid more unnecessary litigation costs to water ratepayers.”
The Water authority plans to deduct its legal expenses and distribute the remaining money among its 24 member agencies.
If the court had not interceded the Water Authority would have been overcharged more than $2 billion over 45 years. The Water Authority also plans to file a motion to recover its attorney’s fees and costs from MWD.