SAN FRANCISCO, CA – A Superior Court judge on Tuesday ruled that the San Diego County Water Authority can allege in a water rate lawsuit that Los Angeles-based Metropolitan Water District violated a 2010 ballot measure banning hidden taxes. The water authority, which buys 45 percent of its water from Metropolitan has filed two lawsuits arguing that the water giant subsidized water rates to some of its member agencies by overcharging San Diego for water transported through the water wholesaler’s pipes.
The water authority purchases water from the Imperial Irrigation District and other independent sources, making it the only member agency of Metropolitan to use the district’s pipelines to transport a large volume of third-party water each year. The water authority filed its first court complaint in June 2010, after Metropolitan set its 2011 and 2012 rates. The Water Authority filed a second complaint in June 2012, arguing that Metropolitan’s 2013 and 2014 rates were based on the same flawed formula as the first action.
On Tuesday, San Francisco Superior Court Judge Curtis E.A. Karnow ruled that the Water Authority is entitled to allege violations of Proposition 26 in its challenge of MWD’s 2011 and 2012 rates.
The water authority alleges that Metropolitan’s current rate structure overcharges San Diego customers by $57 million this year. By 2021, the overcharges could grow to more than $217 million annually, the water authority has argued. Both lawsuits could proceed to trial by November, said water officials, who said Karnow could issue a case schedule later this week.