---------------------------------------------------------------------------------------------- Tracking Code: Standard (Asynchronous) "Retargeting" ----------------------------------------------------------------------------------------------

$90M+ in MWD Overcharges Paid to Local Water Agencies

May 26, 2022

In 2021, the San Diego County Water Authority’s Board of Directors approved distribution of more than $90 million to its 24 member agencies across the region after receiving funds from the Los Angeles-based Metropolitan Water District of Southern California to pay legal damages and interest.

The two parties are seeking to resolve the remaining issues outside of court as they partner on water supply reliability, conservation, affordability, and climate change issues challenging Southern California.

The Water Authority’s payments to its member agencies result from the Water Authority’s successful rate case litigation against MWD. The Water Authority won key issues in cases covering 2011-2014 and was deemed the prevailing party by the court, which means it is also owed legal fees and charges in addition to the recent damages and interest payment from MWD. In February, the Water Authority sent checks totaling $44.4 million to its member agencies after receiving that amount from MWD to remedy overcharges from 2011-2014. The Water Authority’s Board of Directors voted in May 2022 to distribute $10.4 million to its member agencies from attorneys’ fees paid by MWD to the Water Authority, bringing the total to more than $90 million.

Following another fund transfer from MWD, the Water Authority’s Board voted in October 2021 to return $35.9 million to its 24 member agencies in proportion to their overpayments between 2015-2017. The Water Authority does not have a say in how member agencies use the money.

The court rulings also help avoid future overcharges and thereby minimize future disputes over MWD’s rates charged to transport the Water Authority’s Colorado River water supplies through MWD facilities. Those 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.

In addition to damages and interest, the rate case lawsuits generated other substantial benefits, including 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.

Another outcome of the lawsuits affirmed the Water Authority’s access to MWD programs supporting development of local supplies and water-efficiency measures. Since the court ruled it was illegal for MWD to prohibit the Water Authority from accessing these programs, the Water Authority has secured almost $500 million in local project benefits for the San Diego region.

In 2021, the San Diego County Water Authority’s Board of Directors approved distribution of more than $90 million to its 24 member agencies across the region after receiving funds from the Los Angeles-based Metropolitan Water District of Southern California to pay legal damages and interest.

The two parties are seeking to resolve the remaining issues outside of court as they partner on water supply reliability, conservation, affordability, and climate change issues challenging Southern California.

The Water Authority’s payments to its member agencies result from the Water Authority’s successful rate case litigation against MWD. The Water Authority won key issues in cases covering 2011-2014 and was deemed the prevailing party by the court, which means it is also owed legal fees and charges in addition to the recent damages and interest payment from MWD. In February, the Water Authority sent checks totaling $44.4 million to its member agencies after receiving that amount from MWD to remedy overcharges from 2011-2014.

Following another fund transfer from MWD, the Water Authority’s Board voted in October 2021 to return $35.9 million to its 24 member agencies in proportion to their overpayments between 2015-2017. The Water Authority does not have a say in how member agencies use the money.

The court rulings also help avoid future overcharges and thereby minimize future disputes over MWD’s rates charged to transport the Water Authority’s Colorado River water supplies through MWD facilities. Those 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.

In addition to damages and interest, the rate case lawsuits generated other substantial benefits, including 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.

Another outcome of the lawsuits affirmed the Water Authority’s access to MWD programs supporting development of local supplies and water-efficiency measures. Since the court ruled it was illegal for MWD to prohibit the Water Authority from accessing these programs, the Water Authority has secured almost $500 million in local project benefits for the San Diego region.