The Morning Report
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The San Diego County Water Authority has lost a major legal battle to reduce the price of San Diego’s water.
For years, San Diego water officials 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 judge agreed with San Diego.
But over the summer, the 1st District Court of Appeal sided with Metropolitan, saying it was, by and large, charging a fair price.
The Water Authority appealed that decision to the state Supreme Court. The high court on Wednesday declined to hear the appeal. That means the case is over.
The Water Authority picked up smaller savings, amounting to an estimated $1.1 billion in the next several decades. But that’s about $6 billion less than it had hoped.
Both sides have spent millions litigating the case.
Metropolitan gets water from Northern California and the Colorado River and sells it to other water agencies across Southern California, including the Water Authority. The Water Authority buys Metropolitan’s water then resells it to San Diego water agencies, like the city of San Diego’s water department.
The big court case was about a side deal the Water Authority made to buy more Colorado River water from a water agency in Imperial County, the Imperial Irrigation District. That deal was the largest water purchase of its kind in the United States. But the Water Authority had no way of getting the water to San Diego without using a Metropolitan-owned aqueduct. The two agencies were unable to agree on how much Metropolitan could charge to deliver the water to San Diego.
The Water Authority and Metropolitan have been at odds for years. In court, the dispute involved esoteric fights over water law. But the relationship is also full of baggage from the regional rivalry between San Diego and Los Angeles, where Metropolitan is based: The Water Authority views Metropolitan as a creature of Los Angeles out to smother San Diego and as a capricious monopoly, lording unchecked over the livelihood of 19 million people who depend on its water. Metropolitan views itself as monopoly but of a more benevolent sort, one that uses economies of scale to try to quench the thirst of a massive desert civilization that would have been impossible if not for its existence.
Whatever one makes of that debate, Wednesday’s decision by the court deflates a long-standing Water Authority talking point, which is that Metropolitan charges enormous and illegal rates merely to punish San Diego. That line has been the centerpiece of a public relations campaign the Water Authority is waging against Metropolitan.
Metropolitan’s general manager, Jeffrey Kightlinger, said in statement that he hoped the Water Authority’s “aggressive public relations campaign” would now end.
“Metropolitan hopes Water Authority officials will finally realize that throwing mud and endlessly fighting in the courts are losing strategies, with millions of rate payer funds spent on legal costs,” he said.
Others California water agencies are hoping for the same thing.
“This has been a long, exhausting and unproductive endeavor, coming at great public expense,” Larry Dick, a representative of a big water district in Orange County, said in a statement.
The Water Authority’s next moves will be closely watched.
Mark Muir, the chairman of the Water Authority’s board, alluded to these.
“As we look to the future, our Board will assess how best to protect the interests of San Diego County ratepayers,” he said.
Knowing that Metropolitan can continue to charge the rates it does, San Diego is faced with two big decisions.
First is whether to support Gov. Jerry Brown’s $17 billion plan to build underground tunnels in Northern California. The tunnels are meant to ensure water keeps coming into Southern California. The Water Authority had hoped to avoid some of those costs, if it had won the court case. Instead, some of those expenses will be heaped on top of the already high price San Diego pays to get the Colorado River water from Imperial County.
Second is whether to cancel the whole water deal with Imperial or find some other way to get water from there without relying on Metropolitan. The Water Authority is so unhappy with Metropolitan’s rates that it has recently examined whether it should build its own pipeline into Imperial County to get water from the Colorado River. The pipeline could cost about $3 billion, plus interest.