I have been asked several times in the past few weeks whether California mutual water companies are authorized to transfer water to non-shareholders at a profit. It appears some activists have begun arguing that California Public Utilities Code § 2705 prohibits mutual water companies from making money on water transfers. This challenge is part of a broader opposition to water transfers in the state, based on a public policy concern that some individuals are profiting from selling water, which is a public resource. As I explain below, § 2705 does not prohibit mutual water companies from transferring water to non-shareholders at a profit, and California law generally supports the right of any water rights holder, mutual or otherwise, to sell water for financial remuneration.
Last week, Georgia Governor Nathan Deal signed SB 122, which creates a new authority for private sector investors and water service companies to participate in water supply projects. Codified in new Georgia Code §§ 36-91-100 et seq., SB 122 does not overlap with existing statutes, but is a separate, independent authority that may prove useful at helping Georgia meet its future water supply needs, especially in light of the State Water Plan and ongoing restrictions on the use of Lake Lanier by metropolitan Atlanta.