FPUD to use MWD refund for CUP loan repayment

Joe Naiman

Village News Reporter

The San Diego County Water Authority has filed multiple rate lawsuits against the Metropolitan Water District of Southern California and has been awarded legal damages and interest payments. The SDCWA refunds the lawsuit awards to its member agencies for those agencies’ share of the settlement. Each CWA member agency can choose how to use the money, and the Fallbrook Public Utility District board voted Jan. 24 to use the refund to reduce FPUD’s loan amount for the Santa Margarita Conjunctive Use Project.

FPUD’s board voted 5-0 to select the option to reduce the CUP loan amount. FPUD will receive a refund of $1,534,663.30.

The lawsuits involve the rate MWD has been charging the CWA to transport water obtained from Imperial County in the Quantification Settlement Agreement. MWD had been charging a Water Stewardship Rate, and the courts ruled that that rate should not have been charged for QSA deliveries. The rate case for the MWD charge from 2011 to 2014 provided FPUD with $909,412.67, and the settlement with MWD for water delivered from 2015 to 2017 brought an additional $625,250.63 to FPUD. The CWA calculated each member agency's share based on the agency's percentage of total municipal and industrial purchases during those years.

FPUD’s Fiscal Policy and Insurance Committee reviewed three potential uses for the refund. One was to reduce the calendar year 2023 rate and charge increase, one was to add money to FPUD’s reserves, and one was to reduce the CUP loan amount. The committee recommended the reduction of the CUP loan.

The state Department of Water Resources provided a State Revolving Fund loan for the CUP. In January 2020, the State Water Resources Control Board approved a State Revolving Fund loan of $62,935,885 which included a contingency of $5,440,000 as well as the construction, design, and construction management costs.