LOS ANGELES — The San Diego County Water Authority announced plans to raise rates 3.7% in 2018, citing rate increases from the Metropolitan Water District of Southern California.

The San Diego water authority and MWD have been involved in a series of court battles over rates since 2010.

MWD is a Los Angeles-based water wholesaler that provides water to 26 water agencies in southern California. The San Diego authority, one of its customers, distributes water to 24 local water districts and cities.

San Diego County Water Authority is buying water from the $1 billion Carlsbad Desalination Plant in part to lessen dependence on the Metropolitan Water District.
San Diego County Water Authority is buying water from the $1 billion Carlsbad Desalination Plant in part to lessen dependence on the Metropolitan Water District. Bloomberg

The San Diego authority filed another lawsuit in April over MWD’s rates.

In its complaint filed in Superior Court in Los Angeles, the water authority contends that the rate structure approved by the MWD board for 2017 and 2018 used the same methodology as costs from 2011-14 that a Superior Court judge previously ruled were illegal.

MWD was ordered to pay $243 million in damages to the county water authority, but is appealing the ruling.

MWD has posted a response on its web site to the water authority's rate allegations.

The water authority board will discuss the proposed rate changes at its May 25 meeting. It would then hold a public hearing June 22 and vote on the rate increase.

The proposed rate increases are the smallest since 2014 and are in line with Water Authority projections, officials said.

San Diego authority officials said roughly 56% of the overall increase is driven by rising costs from MWD, which increased its base supply rates and also raised its costs for transporting the Water Authority’s independent supplies of Colorado River water.

The water authority’s rate increases, which impact untreated and treated water, are also being driven by a 30,000 acre-foot increase in deliveries of Colorado River supplies in a transfer agreement with the Imperial Irrigation District.

“Prudent investments in our own water supplies helped our region withstand the recent five-year drought and emerge from it with even greater water supply reliability, and we are continuing to strengthen that reliability to sustain our region’s $222 billion economy and 3.3 million people,” Maureen Stapleton, the water authority’s general manager, said in a statement.

MWD will supply more than 40% of the region’s water in 2017. In 2018, the base cost of treated and untreated water from MWD will increase 3.7% and 4.4%, respectively, according to the water authority.

Water sales are projected to increase by 4.3% in 2018 as county residents continue to embrace efficient water use methods established during the multi-year drought, the water authority said.

Stapleton cited prudential financial management and savings on debt refundings for not having to raise rates more.

The water authority plans to draw $5 million from the agency’s Rate Stabilization Fund, which moderated the proposed rate increase by approximately $13 per acre-foot. Debt refunding executed during the current budget cycle also helped keep proposed rate increases low by reducing debt service payments by $78.3 million on a present-day basis.

The Water Authority has senior lien credit ratings of AAA from Standard & Poor’s, AA-plus from Fitch ratings and Aa2 from Moody’s. All gave the water authority a stable outlook.

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