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State Appeals Court Hears San Diego Water Dispute

California water canal pictured in this undated photo.

Credit: Department of Water Resources

Above: California water canal pictured in this undated photo.

Water rate dispute has San Diego and Los Angeles water managers back in court, arguing over millions of dollars.

The California Courts of Appeal has 90 days to decide the fate of a water rate dispute between a Los Angeles-based water wholesaler and San Diego County water managers.

At issue is the cost of moving water through the Metropolitan Water District's delivery system.

San Diego water managers accused Metropolitan of charging too much to move water San Diego bought in Imperial Valley through MWD's delivery system.

A Superior Court judge agreed and awarded the San Diego County Water Authority $243 million.

Metropolitan officials say the lower court got it wrong.

"We worked that out in 2003. Eventually, they (San Diego) ended up suing us and seeking a different way in the way we calculate our rate. At the lower court they prevailed. And so now it’s on appeal and we will see what happens," said Jeffrey Kightlinger, general manager of the Metropolitan Water District.

Kightlinger said Metropolitan does not see the deal as transportation of water from the Imperial Valley. They argue that the water San Diego bought from Imperial Valley was added to their system and Metropolitan gave an equivalent amount back to San Diego from their Los Angeles supply. Metropolitan considers that a water exchange, not the movement of water from one location to another.

"San Diego knew the structure when they made the deal.They thought it was a fair deal. They actually went back to their board and said this is a huge win for us in terms of water supply and reliability. And coming back years later and trying to change the basis of the deal is in effect sour grapes," Kightlinger said.

San Diego officials maintain that the rate deal was designed to keep Metropolitan from losing money as San Diego bought less water from the Los Angeles supplier.

The dispute will likely not end soon.

"Courts of Appeal issue their decisions by law within 90 days of the hearing. So by August 10th or so, we should have a ruling by the Courts of Appeal and I would expect whichever party doesn't prevail will try to seek Supreme Court review, which might be granted and might not," said Dan Purcell, an attorney hired by San Diego water managers.

At stake are potentially billions of dollars in rate rebates. If the lower court ruling stands, Metropolitan could be forced to give back money, the water wholesaler already charged and lower water delivery rates in the future.

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