The San Diego County Water Authority’s Board of Directors Thursday announced a plan to distribute a rebate of $44.4 million to its 24 member agencies across the region.
They did so after receiving a check for that amount from the Los Angeles-based Metropolitan Water District of Southern California to pay legal damages and interest after a long legal battle.
The money resulted from the water authority’s decade-long litigation in Superior Court seeking to compel MWD to set legal rates and repay overcharges.
The authority won several issues in cases covering the period from 2011 to 2014 and was deemed the prevailing party. That means the agency is also owed legal fees and charges in addition to the recent damages and interest payment from MWD.
The court rulings also will help avoid overcharges and thereby minimize future disputes over MWD’s water stewardship rate. The agency charges for transporting the water authority’s independent water supplies through MWD facilities.
The authority said that had those charges continued, it would have cost San Diego County residents more than $500 million over the life of the water authority’s contract with MWD.
“This day has been a long time coming,” said San Diego County Water Authority Board chair Gary Croucher. “We never wanted to litigate these issues – but if we had not had the courage to do so, MWD would still be collecting the illegal fees and we would not have money to give back to local retail water agencies across the region.”
The $44.4 million will be returned to member agencies in proportion to their overpayments between 2011-2014. The water authority does not have a say in how member agencies use the refunds.
The amount of legal fees and costs owed to the authority is yet to be determined.
In addition to damages and interest, the rate case lawsuits generated other substantial benefits. They include requiring an increase in the authority’s preferential rights to MWD water by approximately 100,000 acre-feet a year.
That’s equivalent to about twice the annual production of the $1 billion Carlsbad Desalination Project.