San Diego Water Authority settles 15-year rate dispute with Metropolitan

Yahoo

2 days ago

SAN DIEGO (FOX 5/KUSI) — A years-long legal battle between the Metropolitan Water District of Southern California and the San Diego County Water Authority is finally over. For over a decade, the two water agencies have been in a dispute over rates and the price term exchange agreement.
In an announcement on Monday, officials with the Water Authority said — under the new settlement — it will pay a fixed price to Metropolitan for delivery of the exchange water. This will be adjusted annually to keep up with changing inflation.
Now that an agreement has been reached between the two water agencies, the price will no longer be tied to Metropolitan's rates, which was a key factor in the dispute and litigation. Additionally, the Water Authority will be able to provide water to other agencies in Metropolitan's service area and also offer conserved Colorado River water to Metropolitan.
'This agreement will allow San Diego to take advantage of our past investments in diverse water supplies to benefit regional ratepayers while addressing water reliability challenges more broadly,' said Water Authority General Manager Dan Denham. 'We look forward to building on the foundation of collaboration laid today.'
California Senate advances AI regulation bills despite federal pushback
Here's a breakdown of the key settlement agreements, as noted by officials with the Water Authority:
Pending appeals are dismissed, all previous final judicial decisions remain in placeand parties retain already decided attorneys' fees and costs awarded.
Water Authority to pay Metropolitan an agreed upon fixed price for the delivery ofexchange water, instead of the past price that was based on Metropolitan's rates. Thefixed price will start at $671 per acre-foot in 2026, and increase annually based on aspecified consumer price index escalator.
Water Authority to pay Metropolitan a fixed payment for 227,000 acre-feet ofexchange water a year, rather than making payments based on volume of waterexchanged. If more than 227,000 acre-feet of water is exchanged, then the WaterAuthority will pay the unit price based on volumetric deliveries.
Provides Water Authority potential new revenue. The Water Authority can first offer toMetropolitan member agencies the right to receive exchange water, and then canoffer to Metropolitan the right to purchase conserved water.
Metropolitan and Water Authority will meet every five years to discuss ongoingimplementation of the Exchange Agreement.
Water Authority Board Chair Nick Serrano, also commented on the agreement, stating, 'Ratepayers and water users across Southern California are the winners in this settlement. It provides a new revenue opportunity for San Diego, a new water supply opportunity for othercommunities, and greater budget certainty for the entire region.'Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.