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Water Authority files new suit for 2015-16 rates

The San Diego County Water Authority has filed a third lawsuit against the Metropolitan Water District of Southern California, this time over water rates set by MWD for 2015 and 2016.

Such an action had been expected for more than a month, as the Water Authority’s Board of Directors voted unanimously April 24 to authorize another lawsuit against the large Southern California water wholesaler, since its adopted rates for the years 2015 and 2016 used the same formula as in four prior years, which the other two lawsuits covered.

San Francisco County Superior Court Judge Curtis E. A. Karnow on April 24 issued a final decision that said MWD had violated cost-of-service requirements in California’s Constitution, statutes and common law when setting rates for 2011, 2012, 2013 and 2014.

The court said MWD’s rates violate California’s wheeling statute, Government Code section 54999.7(a), and common law that apply to ratemaking. He also said MWD’s 2013 and 2014 rates violate Proposition 26, which obligates public agencies to prove they are not charging more than the actual cost of the services.

“Even after a major legal defeat, MWD continues clinging to its belief that it can set rates however it wants,” Maureen Stapleton, general manager of the Water Authority, said in a release.

“That’s bad for water ratepayers across Southern California. They will have to pay millions more dollars for MWD to defend decisions that the court has already ruled are illegal.”

A case management conference is set for July 2 to schedule the second phase of the prior trials, and address the Water Authority’s claims based on breach of contract and preferential rights.

Phase two of the trial is expected to determine the disposition of tens of millions of dollars in disputed payments the Water Authority has made since 2011.

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