The Morning Report
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In 2012, the San Diego County Water Authority launched an unusual website to attack Southern California’s largest supplier of water, the Metropolitan Water District.
The website, “MWD Facts,” featured information that was often superficially accurate — it usually came from Metropolitan’s own documents — but presented in a slanted or incomplete way. While it made a splash when it was first posted, the campaign never picked up much steam: Only 253 people followed the MWD Facts Twitter account, if that’s any indication of its popularity.
But the website was the public relations piece of a larger battle, one that is still being waged in court.
The Water Authority buys water from Metropolitan and then resells it to local agencies, like the city of San Diego’s water department. If that sounds like a simple relationship, it’s not.
The Water Authority accused Metropolitan of charging about $7 billion too much to deliver water from the Colorado River. Last year, the courts, by and large, ruled against the Water Authority.
The ruling put the Water Authority at a crossroads. It could continue its legal battle or it could try to make peace with Metropolitan. The Water Authority entered into “peace talks” with Metropolitan and agreed to take down the MWD Facts website.
But those talks seem to have stalled and another public relations blitz and major lawsuit seem likely, despite concerns by local water agencies that the Water Authority’s approach is a waste of time, money and energy.
The issues range from the major to the petty.
The major issue is another $7 billion lawsuit the Water Authority seems to be planning.
Like the other lawsuit, this one involves the price of Colorado River water that the Water Authority buys from farmers in Imperial County. The Water Authority has no way of getting that water here without using Metropolitan’s aqueducts and canals.
In the case it largely lost, the Water Authority argued Metropolitan was charging too much to deliver the water. Now, the Water Authority is preparing to argue that Metropolitan actually owes the Water Authority about $7 billion because of indirect benefits the water has for Southern Californians. That argument could take years to resolve.
On the petty end of things, members of the Water Authority’s board said during a recent board retreat that they were upset Metropolitan has two representatives in San Diego who speak on Metropolitan’s behalf. Typically, this consists of showing up at events, including public meetings and trying to rebut anti-Metropolitan information from the Water Authority.
One of them, Meena Westford, is a former Water Authority staffer who now works at Metropolitan. The other, Lani Lutar, is a well-known San Diego lobbyist who Metropolitan recently hired.
Unless Metropolitan gets rid of them, the Water Authority is planning to restart its anti-Metropolitan public relations campaign, including the MWD Facts website. These campaigns can cost hundreds of thousands of dollars.
Chris Cate, a San Diego city councilman who sits on the Water Authority board, suggested at a recent board retreat that Mayor Kevin Faulconer has become frustrated with the Water Authority’s direction. Right now, for instance, the Water Authority is pursuing a legal argument that, if successful, could cut off the city’s access to more than $200 million in subsidies for its recycled water project — subsides that could lower the cost of water for San Diego ratepayers.
“I think like anybody else he wants to see resolution of these issues prior to his leaving office,” Cate said.
That resolution would seem likely to come sooner from a settlement than from a lawsuit.
Sempra Is ‘More of an Infrastructure Company,” Says CEO
Sempra Energy’s new CEO, Jeffrey Martin, said a draft ruling last week that denied the company’s bid to build a new $600 million gas pipeline was not yet a major setback. “It’s relatively early,” Martin told stock analysts during a call Monday morning to talk about the company’s quarterly financial statement.
A California Public Utilities Commission judge said the pipeline project makes little sense in an era of declining gas use. But the five-member commission must vote on the decision to make it final, something that won’t happen for another month or more. The project would be built by two Sempra subsidiaries, Southern California Gas Company and San Diego Gas & Electric. The two subsidiaries have been asking to build the new pipeline since fall 2015.
One analyst asked Martin how he would describe Sempra as a company. Martin, who joined the company in 2004 and became CEO on May 1, said it should not be thought of as a gas company but as “more of an infrastructure company.”
To that end, he touted expensive projects that return profits to investors, including a $600 million project meant to protect San Diego’s backcountry from fires by, among other things, replacing wood poles with steel poles. He also mentioned the potential for SDG&E to acquire a gas-fired power plant in Otay Mesa. While the company could be forced to buy the plant, it’s not clear it is opposed to doing so. In a separate regulatory filing last week, the company asked the CPUC not to consider arguments that being forced to purchase the plant is unwise.
(Disclosure: Mitch Mitchell, SDG&E’s vice president for government affairs, sits on Voice of San Diego’s board of directors.)
In Other News
• The amount of climate change-causing carbon dioxide in the earth’s atmosphere is the highest it’s been since the start of human history, according to data from the Scripps Institution of Oceanography.
• The California Energy Commission is prepared to vote this week on a plant that would require new homes to come with solar rooftops. (Orange County Register)
• The Union-Tribune reports that the Navy is worried about offshore wind farms interfering with its operations. The Navy is also worried about offshore oil platforms, as we reported recently.