San Diego water-rate lawsuit threatens desalination subsidy

The San Diego County Water Authority (SDCWA) board of directors on 10 June 2010 unanimously approved taking the Metropolitan Water District (MWD) of Southern California to court over the 2011 and 2012 water rates MWD adopted in April.

The board also authorized seeking a stay on the lawsuit so the two agencies can try to resolve the rate dispute through negotiations.

The lawsuit puts in jeopardy the subsidy of up to US$ 250 per acre-foot (US$ 0.20/m³) of water agreed by MWD with Poseidon Resources for its desalination plant at Huntington Beach. SDCWA is looking at replacing the subsidy from its own resources. It would be used to enable other agencies to buy water from the plant.

SDCWA alleges that MWD’s rate structure disguises the true price of imported water and impedes cost-efficient water conservation and long-term regional and statewide water supply reliability efforts. By charging an artificially low rate for its water supplies, MWD discourages water conservation and local agency investments in cost-effective water supply projects, says San Diego.