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, the U.S. District Court for the Eastern District of California (Judge Wanger) issued a decision in Tehama-Colusa Canal Authority v. U.S. Department of the Interior, Case No. 1:10-cv-0712 OWW DLB (August 2, 2011), holding that Central Valley Project (CVP) contractors in the Sacramento Valley are not entitled to an area of origin priority over contractors in the San Joaquin Valley (see general area map below). This decision is the latest in a long series of disputes between north-of-Delta and south-of-Delta contractors, with the U.S. Bureau of Reclamation (USBR) in the middle as owner of the CVP.
On January 26, 2011, the Georgia Department of Natural Resources (DNR) adopted new rules governing surface water withdrawal permits that involve interbasin transfers. The rules are the latest and perhaps, for the moment, final step in the development of state water policy regarding interbasin transfers. The new rules will be effective in February 2011 and will be found in the Rules and Regulations of the State of Georgia, Rule 391-3-6-.07.
In an earlier post, I discussed the errors contained in certain criticisms of the proposed California water bond to be voted on in November 2010. Those criticisms were centered on the provision that allowed investor-owned public water utilities to receive bond funding for projects to benefit their customers, who make up 20 percent of all Californians. Critics asserted (incorrectly) that the provision could lead to “privatization” of California’s water.