Metropolitan Water District v. Imperial Irrigation District

I. Introduction

State law mandates that the owner of a water conveyance system with unused capacity allow others to use the facility to transport water. The use of a water conveyance facility by someone other than the owner or operator to transport water is referred to as “wheeling.” In return for wheeling, the water conveyance system owner is entitled to “fair compensation.” (Wat. Code, 1 § 1810.) The question in this case is whether as a matter of law the “Wheeling Statutes” (§§ 1810-1814) prevent the Metropolitan Water District of Southern California from adopting a fixed wheeling rate applicable to its member agencies that is based on the volume of water transported without regard to the nature of a particular wheeling proposal, including the distance traveled, or the particular facilities used, and that includes in its calculation capital investment and other system-wide costs. We conclude the Metropolitan Water District could act as it did subject to defendants’ right to judicial review pursuant to section 1813. We reverse the judgment to the contrary *1408 and remand for further proceedings where the parties can litigate the appropriateness of the wheeling rate…