Judge Tentatively Rules For San Diego In Water Rate Lawsuit

MAUREEN CAVANAUGH: Our top story on Midday Edition, a call for San Diego County Water Authority has been claiming for years that is been overcharged and Metropolitan water District in Los Angeles in this become the first time a judge has agreed in a tentative ruling that San Francisco's superior sort court judge says yes you the MWD is violating state law by charging San Diego more than the actual cost of the services it provides. This is only the first round in what could be a very long legal process and it is possible that there could be a refund of the road for San Diego. I would like to welcome my guest Mike Lee. The lawsuit dropped by San Diego County water Authority was not exactly for the cost of water for the Metropolitan water District at the cost of transporting water, isn't that right? MIKE LEE: That is right, if we go back to 2003 the County water Authority was part of a major agreement to bring independence applies to both Colorado and the water to our region and that meant we were buying less water from Metropolitan and the reformulated their rates so that they basically noted a bunch of extra charges onto the transportation rate that it charged San Diego County water Authority to bring our independence applies to this region. Our contention is supported by this tends that willing is that they could be square with straight love state law which requires the cost of the rates based on the cost of actually providing the services and indeed the judge said squarely that we are right. MAUREEN CAVANAUGH: All of the water that we buy from the Imperial Valley comes to us from the Colorado River and by the Metropolitan Water District, is that right? MIKE LEE: Metropolitan manages the regional system to import water in the Colorado River aqueduct being the primary example of that that is what we rely on to transport our water and independence applies to the San Diego region. MAUREEN CAVANAUGH: Do you feel it the fees they charge our expense are excessive? MIKE LEE: It was also much the issue of the excessive rates they were piling and related fees and to transportation and that is really what the law says that you cannot do, the fees must be based the actual cost of providing services and when he saw them doing that, our understanding in expectation of what they're trying to do is basically keeping the golden goose laying the gold makes if you will so that they would continue generating revenues even though we were not buying as much water from them as we had previously. MAUREEN CAVANAUGH: You explained that this tentative ruling comes within the background of a long-term dispute between San Diego County water Authority in a magician that apology water district overcharging and water transport fees was away for MWD to retaliate against San Diego, explain to us what they're retaliating for? MIKE LEE: To go to what I said earlier that as we developed other independent sources as part of our regional diversity played diversification and water will I be a bio reliability program that reduced rent revenues for Metropolitan and they saw that adding additional rates and fees onto the transportation rate was a way for it to get that money back or at least some of that money back then that is really at the core of artist. And it really goes to send you County were water Authority's core mission of the last 20+ years which is today for Sophia are water sources say that we are not dependent on Metropolitan a clue were in the drought that ended in 1992 and it that point we're at about 95% dependent on Metropolitan and that ended very badly with us with 31% reduction in supply for the 1991 year and so you can see the results of that diversification strategy AF today. Another route drought much like we were in the 1990s and because we have that in the Colorado River supply we are in a much better place and have much more water supply security than we did even just a few years ago and so that maybe another part of diversification program that is meant worth mentioning is that we have the desalinization plant that is coming online in 2016 and we expect that will provide 7 to 10% of verbiage regionals water supply again and password that we do not have to buy from the depositor import from anywhere and will be the produced locally and help us with pleasure outside we're facing right now. MAUREEN CAVANAUGH: We have taken that 95% of usage from water supply for the Metropolitan water District used to get 95% of San Diego's water from the MWD now we get 46% of it and that number is expected to go down. MAUREEN CAVANUGH: And in fairness, it is important to pull a point out that two points out that they deny that they have any retaliatory pricing in the charges that they charge San Diego County for that transport of water, there was also talk a couple of years ago but the Metropolitan Water District talking about this long-term dispute having a secret society Watergate of water agencies working against San Diego, to the County Water Authority still stand behind that claim? MIKE LEE: That is certainly public record certainly shows that to be the case and in 2009 in 2010 timeframe if I recall the dates correctly that did not end up being a central point in the litigation that the judge ruled on this week but he went to the big Metropolitan rates it is worth noting that this year alone our estimate and Duration is that Metropolitan is overcharging San Diego County ratepayers by no more than $50 million and you extrapolate that over forty-five years or so and looking at a $2 billion bill of the overcharge part of the bill hopefully this ruling will be not shipped up to LA but actually staying home here in our economy. MAUREEN CAVANAUGH: In announcing this decision the chairman of the San Diego County water Authority called this a great day for San Diego and also called it a great day for more than 18 million people that pay their rates and charges, how would this ruling be good for a ratepayer in LA? MIKE LEE: Certainly there's two parts of that, right now it is our contention that we are being overcharged effects effectively subsidizing ratepayers elsewhere in Southern California so your question is, is a counter into need intuitive to say that this is good for them, really what the chair was talking about is the fact that we all have a vested interest whether we're here or in Ventura County have a vested interest in metropolitan for that matter better all of our public agencies charging legal rates, so today it is the County water Authority and the San Diego region that is being unfairly and illegally charged that tomorrow that might be some other agency and to get these rates set solidly in state law and the wheeling statute and other things that apply are ultimately good for everybody. MAUREEN CAVANAUGH: The general manager of the Metropolitan water District issued a statement after the ruling said that judging all agencies the cheap set rates for the same services as both logical and legal he went on to say this is one initial step in a very long process, what is your reaction to that? MIKE LEE: A reaction is that we have one thing pretty solidly confirmed right now and Tuesday and that is this tentative decision that says that Metropolitan was not in compliance with the law and we anticipate that we will have additional steps in this process as you alluded to earlier and I don't feel like we're anywhere near the finish line but as far as we can go in today squarely favors the water authorities positions. MAUREEN CAVANAUGH: This is a tentative ruling, what is the next of the political process? MIKE LEE: Right, we have a couple of weeks here to file in the opposition papers to the tentative ruling and at that point anticipate that there will be a final ruling in what you might call the first phase of the lawsuit in the scheduling and the section second phase of the lawsuit where among other things Judge Cardell is going to deal with this question of whether the two politicians rates reached the contract that it had with us to set legal rates and of course we feel it did, but that is a course of law that will have to play out by early summer and at that point is probably going to be some months before we get what you might call a final ruling from Judge Cardell and our hope and expectation is that she will direct knowledge politics to go back to the drawing board on its rates and set minimum records for state law line hopefully we refund San Diego County water Authority some hundred $35 million put into a escrow account right now and that is the amount of money that essentially is the intended and out amounts since 2011. MAUREEN CAVANAUGH: We are headed into a stormy weather right now so that we ask questions about that, that we party heard that the water allocation may be zero this year I know that is San Diego is a pretty good position in spite of the drought because of some of the changes that we have made, but how will the zero allocation if it remains that that affect the amount of water that we get from other Metropolitan water District because we're still MWD's largest customer right? MIKE LEE: Right, what we're expecting and what they have said is that you can make up for the lack of State water Project water that 0% allocation that you're referring to with withdrawals from storage projects like diamond Valley Lake in Riverside County so the net effect to that we do not expect any supply reductions from Interpol to this year, we anticipate being able to fully service our member agencies were split requests for water but however it's important to note that we knowledge that this is severe and possibly unprecedented since position that the status and right now we're urging everyone in our region to you everything they can to conserve water and one of those things is a very proud of practical matter since you brought up the rest of today is turning the speakers off for a week or two weeks to take advantage of the rain from the sky and let it do your work for you and save some of the water that you would otherwise be using for the summer for next year if it remains dry and that is an example of the things if we all took those little steps to do we would be saving a substantial amount of water for the rest of the year. MAUREEN CAVANAUGH: My final question is the tentative ruling and San Diego County water Authority of this becomes a permanent ruling and how likely is it that this tentative ruling will stand and become a final ruling of the court? MIKE LEE: I cannot say that I've talked to worse attorneys specifically about that but it is certainly our hope and edit expectation that it will stand I think from the very beginning of this litigation people have speculated that the stakes are so high that at least some elements are likely to be appealed and I think that as police do a fair assessment so this will be a long road but we will be on that path that will be part of the process in court that the Metropolitan courtroom and then the same thing to we will be there with our civic and his partners the community that really supported this litigation and stood shoulder to shoulder with us for about 3 Ω years the point of this is to be smart. MAUREEN CAVANAUGH: I have been speaking with Mike Lee with San Diego County water Authority, thank you very much. MIKE LEE: Thank you Maureen.