The San Diego County Water Authority is engaged in a major outreach campaign that mischaracterizes Metropolitan's financial practices. This is occurring as the Water Authority is pursuing a series of lawsuits against the District and spending millions of dollars of ratepayer money to attack Metropolitan's solid track record on:
Water conservation and sustainability accomplishments
Successful water management during the historic five-year drought
Strategic investments and comprehensive planning to meet future water needs for Southern California
Solid financial management, low debt load and high credit rating
Earlier this year, the Water Authority began writing letters to local officials outside of its own service area and making presentations to organizations that contain incorrect information and misrepresentations about Metropolitan's investments and financial practices. These letters also omit how the Water Authority lawsuits could shift significant costs to other ratepayers in our service area and limit Metropolitan's ability to advance conservation programs and develop local water supplies to meet future needs in the region.
The following materials respond to those inaccurate allegations about Metropolitan's financial practices.
The inclusion of Metropolitan’s system-wide transportation costs, including transportation charges paid to the State Water Project, in the calculation of its wheeling rate does not, as the trial court held, violate the wheeling statutes, Proposition 26 (Cal. Const., art. XIIIC, § 1, subd (e)), Government Code section 54999.7, subdivision (a), the common law, or the terms of the parties’ exchange agreement.1
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Metropolitan Water District General Manager Issues Statement on San Diego County Water Authority Litigation, June 21
Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California, issues the following statement on the decision by the California Court of Appeal on two lawsuits by the San Diego County Water Authority challenging Metropolitan's rate structure
"This ruling by the three-justice panel of the California Court of Appeal scores 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. We are gratified that the court sided with Metropolitan on the central issue in this case, finding "the California Aqueduct unquestionably is an integral part of the system by which Metropolitan transports water to its member agencies" and it is lawful for Metropolitan to recover its State Water Project conveyance costs in its wheeling rate and the transportation rates charged under its exchange agreement with San Diego County Water Authority.
"The Water Authority's years-long effort to shift costs relating to their own water supply onto ratepayers elsewhere in Southern California has failed. We are equally pleased the court upheld Metropolitan's full service rate—which represents the vast majority of Metropolitan's revenues—including our ability to fund projects advancing conservation and local resource development through that rate.
"In the end, years of litigation brought by the Water Authority and tens of millions of dollars in related costs borne by ratepayers have fundamentally changed no major aspect of Southern California water management or financing. While Metropolitan has prevailed as to the overwhelming majority of costs under challenge in this litigation, nobody is a winner when water districts decide to fight in court rather than resolve their differences in a democratic and collaborative fashion."
Court Ruling Throws a Wrench in Two Big Upcoming Water Decisions
The San Diego County Water Authority – and San Diego ratepayers – were dealt a major legal loss this week that could leave local water customers back on the hook for billions of dollars over the next several decades.
For years, San Diego water officials have argued the region's major supplier of water – the Metropolitan Water District of Southern California – charges too much to deliver water to San Diego from the Colorado River.
In 2015, a lower court judge sided with the Water Authority.
But, this week, an appellate court sided with Metropolitan: A three-judge panel from the 1st District Court of Appeal found San Diego water customers are, by and large, paying their fair share to use a statewide water delivery system.
Ry Rivard, Voice of San Diego
County Water Agency May Suffer Multibillion-Dollar Legal Blow
A legal ruling that San Diego County water officials said would save customers here up to $7 billion has been overturned.
A California appellate court on Wednesday partially reversed a 2015 trial court ruling that awarded the San Diego County Water Authority $234 million in alleged overcharges, interest and legal fees to be paid by longtime legal foes at the Los Angeles-based regional agency known as MWD, or the Metropolitan Water District of Southern California.
At issue is how much the county water agency pays to import Colorado River water over a MWD-owned aqueduct. Two years ago, San Francisco County Superior Court Judge Curtis E.A. Karnow found that MWD charged too much for that service and ordered the water importing giant to pay San Diego back and charge lower rates going forward. San Diego officials projected it would save billions over time.
Wednesday's decision from a three-judge appellate panel largely disagreed, reinstating MWD's right to tack water pumping and infrastructure maintenance fees onto San Diego's water importing bill and directing Judge Karnow to reconsider the amount of damages he ordered MWD to pay.
James DeHaven, San Diego Union Tribune