San Diego Challenge to Metropolitan Water District Rates Headed to State Supreme Court

San Diego County Water Authority headquarters in Kearny Mesa. Photo courtesy of the authority

Damages awarded to the San Diego County Water Authority in a long-running legal dispute over rates need to be recalculated, a panel of state appellate justices ruled Wednesday.

The ruling by the three-judge panel of the 1st District Court of Appeal in San Francisco amounted to a split decision for the Water Authority, which sued the Metropolitan Water District of Southern California multiple times over the amount it charged the SDCWA to transport imported water from the Colorado River.

A San Francisco Superior Court judge has consistently issued rulings in favor of the San Diego water agency, which has been awarded a total of roughly $232 million. The MWD — the primary wholesaler of water in Southern California — appealed the rulings, leading to the justices’ decision.

“When we filed the first rate case lawsuit in 2010, we knew that this would not be a sprint,” said Mark Muir, chairman of the Water Authority’s Board of Directors.

“It’s a marathon that we are running on behalf of — and with the strong support of — our region’s ratepayers, business leaders and elected officials,” Muir said. “While today’s ruling secures several important victories for the Water Authority and its ratepayers, we are no less determined to see this case to a successful conclusion.”

The largest issue was how much the MWD was allowed to charge for transporting Colorado River water to San Diego.

The Water Authority contended it was not only billed for moving the water from one place to another, but also for the MWD’s costs of maintaining the California Aqueduct — a system not used for bringing the Colorado River water to San Diego.

Superior Court Judge Curtis E.A. Karnow ruled the charge was illegal, but he was overturned by the appellate justices.

Jeffrey Kightlinger, MWD general manager, called the ruling “a major legal and financial victory not only for Metropolitan, but for the district’s cooperative of member public agencies as well as the millions of consumers they serve.”

“The Water Authority’s years-long effort to shift costs relating to their own water supply onto ratepayers elsewhere in Southern California has failed,” Kightlinger said in a statement.

However, the SDCWA won when the appellate justices upheld lower court rulings that the MWD improperly added a water stewardship fee and that the MWD penalized the San Diego agency for seeking judicial relief from the charges.

It wasn’t immediately clear how the rulings could impact the amount of money the Water Authority would receive from the MWD.

Muir said he expects both sides to take the case to the state Supreme Court, a process that could take up to two years or more.

–City News Service