MWD ordered to repay millions

Last week, a San Francisco Superior Court judge made a ruling in favor of the San Diego County Water Authority (SDCWA). According to Judge Curtis Karnow, Metropolitan Water District of Southern California (MWD) must repay SDCWA $188.3 million plus interest for illegal water rates MWD charged from 2011 to 2014.

MWD argued that SDCWA consented to being overcharged by the water provider. The judge, however, did not buy the argument.

“After five years in court, we have prevailed on the two main points of our lawsuit – that MWD has systematically overcharged the San Diego region’s ratepayers while shorting our rights to MWD water,” said Mark Weston, chair of the San Diego County Water Authority’s Board of Directors. “Today’s final ruling affirms our efforts to protect San Diego County ratepayers. We will continue to need support from civic and business groups as we fight MWD’s expected appeals and new strategies to overcharge this region.”

Based on calculations, if the judge would have ruled in favor of Metropolitan Water District, MWD’s overcharges would have exceed $2 billion over a 45 year period.

The ruling comes after Judge Karnow ruled against MWD’s rates in April 2014. During the initial ruling, Karnow said MWD’s rates violated a California law that limited public utilities from charging more than it costs to provide their service. He also said their water rates violated Prop 26, which limits hidden fees.

As part of its calculations, MWD excluded payments from the water authority made to MWD throughout history. By law, each of MWD’s member agencies is entitled to a percentage of available water supplies. SDCWA was being charged from water that they had a right to access.

The SDCWA lawsuit stems from an agreement signed in 2003 with the goal of securing independent sources of water from the Colorado River to reduce the San Diego region’s dependence on MWD. The region relies on pipelines MWD controls.

According to SDCWA, MWD has a monopoly on imported water throughout Southern California.

“MWD’s current rates were expressly designed to protect its monopoly and to discriminate against the Water Agency by shifting unrelated water supply costs onto transportation rates, while illegally subsidizing MWD’s water supply rate to the benefit of its other 25 member agencies,” SDCWA said in a statement entailing the decision.

Once the SDCWA has its money returned to them from MWD, the water agency plans to distribute the money among its member agencies.