Also serving the communities of De Luz, Rainbow, Camp Pendleton, Pala and Pauma

$2.2 million in MWD overcharges returned to Fallbrook and Rainbow water agencies

SAN DIEGO – The San Diego County Water Authority has distributed $44.4 million to its 24 member agencies, including more than $900,000 to the Fallbrook Public Utility District and more than $1.3 million to the Rainbow Municipal Water District.

The money was returned to the Water Authority by the Los Angeles-based Metropolitan Water District of Southern California to pay legal damages and interest.

The $44.4 million has been returned to member agencies in proportion to their payments between 2011-2014. The Water Authority does not have a say in how member agencies use the refunds.

The money resulted from the Water Authority’s decadelong rate case litigation in state Superior Court seeking to compel MWD to set legal rates and repay overcharges. The litigation seeking refunds for San Diegans was actively opposed by MWD and the Eastern Municipal Water District in Riverside County – and it highlights the importance of regional coordination and cooperation to protect San Diego County ratepayers.

The Water Authority won several critical issues in cases covering 2011-2014 and was deemed the prevailing party, which means the agency is also owed legal fees and charges in addition to the recent damages and interest payment from MWD (MWD has appealed). In addition to damages and interest, the rate case lawsuits generated other substantial benefits for the San Diego region, 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.

The court rulings can also help avoid future overcharges of the unlawful Water Stewardship Rate for transporting the Water Authority’s independent 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 February 2020, the Water Authority’s board of directors voted to dismiss certain issues from the litigation after securing more than $350 million in local project benefits for the San Diego region. In doing so, the Water Authority acknowledged the MWD Board action to stop imposing its Water Stewardship Rate for transporting the Water Authority’s independent supplies, thus resolving for now that issue.

The landmark litigation initiated by the Water Authority in 2010 was designed to protect San Diego County ratepayers from rates and charges set by MWD. MWD owns the only large-scale conveyance facilities in Southern California for transporting water from the Colorado River, and the Water Authority pays MWD to transport its independent Colorado River supplies to San Diego County. The lawsuits are focused on the terms under which MWD moves that water. Eastern Municipal Water District, the Riverside County agency into which Fallbrook and Rainbow seek to annex, has – with MWD – opposed all refunds for San Diego County water ratepayers.

The Water Authority has additional cases challenging MWD’s rates from 2015-2020 that were stayed in Superior Court while the appellate proceedings were ongoing but are now proceeding. Read more about the MWD rate cases at http://www.sdcwa.org/projects-programs/programs/metropolitan-water-district/mwd-rate-case/.

Submitted by San Diego County Water Authority.

 

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