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October 12, 2015   
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MWD Owes Water Authority $232 Million, Judge Declares

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San Diego County Water Authority

MWD Owes Water Authority $232 Million, Judge Declares 
Court Orders MWD to Pay $43.4 Million in Rate Case Interest Charges
A San Francisco Superior Court judge ruled late Friday that the Metropolitan Water District of Southern California owes the Water Authority $43.4 million in prejudgment interest, in addition to the $188.3 million awarded on Aug. 28 as contract damages for illegal rates MWD charged from 2011 to 2014. The order brings the amount MWD owes the Water Authority to $231.7 million.

Judge Curtis E.A. Karnow ruled that the Water Authority is entitled to 10 percent interest annually on money that MWD overcollected, applying the mandatory prejudgment interest rate set by the state Legislature to encourage defendants to pay their debts on time. The post-judgment interest rate is 7 percent annually, meaning the total amount due to the Water Authority under the court's final judgment will continue to grow until MWD pays what it owes.

MWD argued it owed only $4.16 million in prejudgment interest; the Water Authority argued it was owed $43.4 million. Judge Karnow awarded $43,415,802. Added to the damages Judge Karnow awarded in August, this fixes the final judgment amount at $231,711,404. Under state law, this amount will accrue 7 percent interest annually until MWD pays the judgment.

Judge Karnow's ruling will be incorporated into the final judgment concluding the two cases, which is expected to be entered later this year. Once final judgment is entered, MWD will have 60 days to file an appeal. MWD already has said it will appeal the trial court's decision, a move that could significantly delay payment of the Water Authority's judgment.
The Water Authority's Board of Directors already has determined that the agency will deduct its litigation expenses and return the remaining money to its 24 member agencies in proportion to their payment of MWD's illegal overcharges over the four years in dispute.

For more information, go to www.sdcwa.org/mwdrate-challenge.

The San Diego County Water Authority works through its 24 member agencies to provide a safe and reliable water supply to support the region's $218 billion economy and quality of life of 3.2 million residents.