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Tentative ruling in water rates litigation favors Water Authority

A California Superior Court judge issued a tentative ruling Tuesday in favor of the San Diego County Water Authority in its rate-setting lawsuit against the Metropolitan Water District of Southern California.

Judge Curtis E. A. Karnow ruled that rates MWD has adopted and imposed in recent years violate Proposition 26, the Wheeling statute, as well as common law, according to a release from the Water Authority.

The Water Authority first sued MWD in June 2010. It later filed another lawsuit in 2012, as the original case had not yet been resolved through MWD's 2012 adoption of its 2013-2014 rates, which were based on the same methodology as those rates being sued over.

Both lawsuits alleged that MWD illegally assigned unrelated water supply costs -- including its costs of obtaining water from the state of California and its costs of subsidizing local water supply projects -- to MWD’s water transportation rates. The Water Authority has said the alleged misallocation would amount to a more than $2 billion overcharge for San Diego County residents over the course of 45 years.

The trial was held through five days in December 2013. Both parties have 15 days to file objections to the court’s order, after which the court will issue a final statement of decision. A second phase of the trial will be scheduled on the Water Authority’s claims based on breach of contract and preferential rights.

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