San Diego Water Authority wins rate dispute against California

A trial court in San Francisco, US has given out tentative rulings under which Metropolitan Water District (MWD) in southern California has been asked to pay $188.3m along with interest to San Diego County Water Authority as compensation for illegal rates it charged from 2011-2014.

San Francisco Superior Court judge Curtis EA Karnow said: "San Diego has proven by a preponderance of the evidence that it was in fact damaged by paying conveyance rates that were higher than Met could have set pursuant to applicable law and regulation."

The court rejected all of MWD’s defences to the Water Authority’s legal challenges.

Los Angeles-based wholesaler MWD claimed the county water authority consented to being overcharged.

The compensation claimed by San Diego County Water Authority accounts for four years of overpayments at $188m, plus interest.

According to a contract between the two parties, San Diego sources nearly 50% of its water from MWD, which includes buying large amounts of water from the Imperial County district and opening a desalination facility in Carlsbad.

The tentative ruling can save San Diego County Water Authority more than $2bn over 45 years of the contract term.

Final ruling from the contract is expected to be announced in a month.