California’s state water board is warning that residents and water agencies are facing financial pressure from the coronavirus pandemic.
State officials estimate 1.6 million California households have delinquent water bills. They say that adds up to $1 billion in debt.
A San Francisco Superior Court judge ruled the San Diego County Water Authority is the prevailing party in the first of two lawsuits challenging rates and charges set by the Los Angeles-based Metropolitan Water District of Southern California. The order entitles the Water Authority to recover its attorneys’ fees and costs in those cases, in addition to a $44 million damage and interest award made earlier.
As the COVID-19 pandemic continues to worsen, it’s more important than ever that all Californians have reliable access to clean, safe water. At the most basic level, our health depends on it: water is essential for the handwashing and cleaning that helps eliminate the virus. Water also is indispensable for our food supply, jobs and economy.
The Metropolitan Water District’s board of directors voted Tuesday to spend another $58 million to support the study and design of an underground tunnel in the North Delta that would divert large amounts of fresh water and send it to municipalities and agribusinesses in southern California.
As my two-year term as the Water Authority Board chair winds down, it’s my pleasure to update you on two important efforts that are underway for the betterment of the San Diego region.
First of all, our Board voted unanimously last week to spend a few more months discussing and assessing a study of a new regional water conveyance system to deliver our high-priority Colorado River supplies from the Imperial Valley. The work we’ve done over the past year shows the project would produce billions of dollars in potential savings over several decades – and we plan to use the next few months to outreach to stakeholder communities about this study, address questions raised in recent weeks and seek Board direction in November.
Ultimately, the questions are bigger than a new aqueduct – they are about how we sustain our economy and quality of life at a reasonable cost. A new multi-benefits conveyance system is one potential solution – but if not that, then we must grapple with equal intensity over whether it makes sense to pay ever-increasing costs (over which we have no control) to the Los Angeles-based Metropolitan Water District of Southern California to deliver our water for generations, or whether a plan based mainly on local water generation is financially feasible.
The other big issue this month is related – my request that MWD adopt rate relief measures this fall that reduce our water costs. Put simply, despite the recession and the COVID-19 pandemic MWD has not enacted the same kind of rate relief as the Water Authority, which froze hiring, deferred non-essential projects and significantly reduced travel – among other steps. In the end, we limited rate increases to 4.8-4.9 % for 2021 – and more than 60% of that is directly attributable to MWD.
Now, we’re asking MWD to take a similar approach, recognizing that we’re all in this together. We aren’t prescribing the strategies for MWD. We’re just asking that the nation’s largest water agency help its customers, and we’re pledging that any rate relief MWD provides will be passed directly to our member agencies. You can view the letter I sent to MWD at www.sdcwa.org/support-rate-relief-mwd.
I invite you to help move this conversation forward by encouraging MWD to find meaningful cost savings this fall that are reflected in its budget. Please take a moment to do so at www.sdcwa.org/support-rate-relief-mwd by submitting a letter of support for rate relief.
A judge has awarded the San Diego County Water Authority $44.4 million in a final judgment of two lawsuits over rates paid to transport water supplies from 2011 to 2014.
The Water Authority had worked for more than a decade to resolve the dispute, which concerned San Diego’s independent supply of water from the river that was carried by Metropolitan Water’s aqueducts and pipelines.
As you know, the Water Authority has been working for years to conclude lawsuits over rates set by the Los Angeles-based Metropolitan Water District of Southern California – and this week, we have taken a big step forward with the entry of final judgment in two major cases.
Yesterday, a Superior Court judge has awarded the San Diego County Water Authority $44,373,872.29 for two cases covering rates paid by San Diego County ratepayers during 2011-2014. The award included $28,678.190.90 in damages for MWD’s breach of contract for the four years at issue, plus pre-and post-judgment interest. As these first two cases are finally concluded, the Water Authority is also working to narrow the scope of the remaining 2014, 2016 and 2018 cases (a 2017 case has already been dismissed).
Entry of final judgment caps a 10-year effort by the Water Authority Board of Directors on behalf of San Diego County ratepayers, proving once again our region is stronger together in charting our water future. While the damages and interest award is important, the entry of judgment will also help avoid future overcharges and thereby minimize future disputes based on rulings by the Court of Appeal. MWD’s improper charges – if they had continued – would have cost San Diego County residents more than $500 million over the life of the Water Authority’s water delivery contract with MWD.
The lawsuits generated other substantial benefits, such as requiring an increase in the Water Authority’s preferential rights to MWD water by approximately 100,000 acre-feet a year, equivalent to about twice the annual production of the $1 billion Carlsbad Desalination Project.
In February, the Water Authority’s Board of Directors voted to dismiss certain issues from the litigation after securing more than $350 million in local project subsidy benefits for the San Diego region, beginning late last year. In doing so, the Water Authority acknowledged the MWD Board action to stop imposing the district’s Water Stewardship Rate as a charge for transporting the Water Authority’s independent water supplies through MWD facilities, thus resolving for now that issue in future rate years. Consistent with the Water Authority Board’s direction, its attorneys are taking the steps necessary to narrow the litigation and have recently dismissed one case in its entirety.
As the lawsuits continue to wind down – which remains my personal goal – the Water Authority is working collaboratively with MWD member agencies across the district’s six-county service area to update MWD’s long-term water resource and financial planning. MWD’s Integrated Resources Plan, or IRP as it is called, will be its roadmap for the future, factoring in updated data and plans by many MWD member agencies who are working to develop their own local water supplies like the Water Authority and its member agencies have done over the past two decades and we will continue to do in the future.
A Superior Court judge has awarded the San Diego County Water Authority $44,373,872.29 in a final judgment for two cases covering rates paid by San Diego County ratepayers during calendar years 2011-2014. The award included $28,678,190.90 in damages for the Metropolitan Water District of Southern California’s breach of contract for the four years at issue, plus pre-and post-judgment interest.
The Water Authority has worked for more than a decade to resolve disputes with MWD in cases filed from 2010-2018. In February, the Water Authority’s Board of Directors voted to dismiss certain issues from the litigation after securing more than $350 million in local project subsidy benefits for the San Diego region, beginning late last year. In doing so, the Water Authority also acknowledged the MWD Board action to stop imposing the district’s Water Stewardship Rate as a charge for transporting the Water Authority’s independent water supplies through MWD facilities, thus resolving for now that issue in future rate years. Consistent with the Water Authority Board’s direction, its attorneys are taking the steps necessary to narrow the litigation and have recently dismissed one case in its entirety.
“Entry of final judgment caps a 10-year effort by the Water Authority Board of Directors on behalf of San Diego County ratepayers, proving once again our region is stronger together in charting our water future,” said Jim Madaffer, chair of the Water Authority’s Board of Directors. “While the damages and interest award is important, the entry of judgment will also help avoid future overcharges and thereby minimize future disputes based on rulings by the Court of Appeal.”
As the lawsuits continue to wind down, the Water Authority is working collaboratively with MWD member agencies across the district’s six-county service area to update MWD’s long-term water resource and financial planning. MWD’s Integrated Resources Plan, or IRP, will be its roadmap for the future, factoring in updated data and plans by many MWD member agencies to develop local water supplies such as the Water Authority and its member agencies have done over the past two decades and will continue to do in the future.
In its judgment, the San Francisco Superior Court:
The Court will retain continuing jurisdiction over the cases. A hearing will be held later this year to determine the prevailing party’s right to recover attorneys’ fees and costs.
With a judgment issued in the first two cases, the Water Authority is also working to narrow the scope of the remaining 2014, 2016 and 2018 cases (a 2017 case has already been dismissed).
“Like most court proceedings, it will take a little time to work through all the details,” said Water Authority Board Secretary Christy Guerin, who led the most recent litigation settlement efforts for the agency. “We recognize that MWD is at an important crossroads, and we look forward to working with the other MWD member agencies on charting a future course to ensure both a reliable Southern California water supply and MWD’s fiscal sustainability.”
Click here for more information about the rate case litigation, including the final judgment in the 2010 and 2012 cases.
The Metropolitan Water District of Southern California Friday applauded the dismissal of several legal claims stemming from lawsuits filed by the San Diego County Water Authority over water rates and charges, which could end a decade-long legal battle between the agencies.
The Water Authority voted Thursday to dismiss some claims in its lawsuits, which the Water Authority said would allow the parties to avoid a trial scheduled for June. The water authority filed several lawsuits regarding water rates and charges set by MWD and paid by water authority customers spanning from 2010 to 2018.
The resolution was at least partially brought on by the MWD Board of Directors’ approval of more than $350 million in “Water Stewardship Rate” benefits for the San Diego region late last year.
After securing more than $350 million in “Water Stewardship Rate” benefits for the San Diego region, the San Diego County Water Authority’s Board of Directors today voted to dismiss certain related claims against the Los Angeles-based Metropolitan Water District of Southern California.
The Water Authority Board’s decision represents a major step toward resolving the litigation, which has been pending for more than 10 years. The suits challenged water rates and charges imposed by MWD on San Diego County agencies and their ratepayers from 2010-2018. The Water Authority’s Board action will allow the parties to avoid a trial scheduled for June 2020 and clear the way for judgment to be entered in the older cases.
“Late last year, the MWD Board of Directors approved more than $350 million for water supply projects in San Diego County,” said Jim Madaffer, chair of the Water Authority’s Board of Directors. “That was a major development, and today’s action by our Board recognizes that fact, along with other actions the MWD Board has taken recently in response to the Water Authority’s claims and prior court rulings.”
The Water Authority Board has worked for more than three years to try to settle the litigation. In the past few months, those efforts gained momentum as the two wholesale water agencies traded settlement offers. When those proposals didn’t produce an agreement, the Water Authority Board decided to take unilateral action consistent with its settlement offer.
“Our Board carefully weighed the options before them, including whether more settlement negotiations would be productive at this time,” said Water Authority Board Secretary Christy Guerin, who is leading settlement efforts for the Board.
“While we had hoped for a comprehensive settlement, our Board ultimately decided that the most efficient path forward was to unilaterally implement major elements of our last settlement offer, including dismissal of our Water Stewardship Rate on supply claims,” Guerin said. “We wanted to acknowledge MWD’s recent board actions, both approving funding for San Diego County and stating it will no longer impose its Water Stewardship Rate on the Water Authority’s Exchange Agreement.”
Judgment in the 2010-2012 cases may now be entered promptly. In prior proceedings, the court ordered MWD to increase the Water Authority’s right to MWD water by approximately 100,000 acre-feet a year, equivalent to about twice the annual production of the $1 billion Carlsbad Desalination Project. MWD has already complied with this ruling and adjusted its records accordingly.
The court also determined that MWD must repay the Water Authority for illegal charges MWD imposed on delivery of the Water Authority’s water under the Exchange Agreement. This ruling is expected to ultimately result in recovery of about $80 million. In addition, San Diego ratepayers have avoided paying more than $80 million from 2018-2022 (when MWD suspended these charges), for a total recovery on this claim of more than $160 million. The improper charges on the Exchange Agreement would have cost local residents more than $500 million over the life of the Water Authority’s water delivery contract.
In addition, the court ruled that MWD had illegally barred the Water Authority from receiving money from MWD’s local water supply program, even though the Water Authority was forced to pay for it. MWD lifted the ban in response to the court’s order, and ultimately approved funding for three water supply projects in San Diego County:
“While today’s Water Authority Board action does not resolve all of the issues, it is a major step forward toward that objective,” said Water Authority Board Vice Chair Gary Croucher. “This action positions us to resolve all cases as quickly as possible on terms that will continue to protect the long-term interests of San Diego County ratepayers.”
The Water Authority remains committed to work with MWD on important issues, including planned updates to MWD’s water resource and financing plans, as well as advancing other policies and programs to promote long-term water supply reliability for San Diego County and the rest of Southern California.
Click here for more information about the rate case litigation, including today’s letter from the Water Authority to MWD.
The Water News Network is San Diego County’s source for water news and information.
