EMWD seals 21-year Colorado River water exchange deal with San Diego

EMWD seals 21-year Colorado River water exchange deal with San DiegoCapitalizing on recent regional settlements, Eastern Municipal Water District will receive up to 10,000 acre-feet of water annually from the San Diego County Water Authority, marking a new era of inter-agency collaboration in Southern California.

The 21-year agreement provides a baseline supply ramping up to 10,000 acre-feet per year by 2030, delivered through existing Metropolitan Water District infrastructure.

EMWD will pre-purchase an additional 30,000 acre-feet of water for $19 million to serve as a drought buffer, funded through the district's rate stabilization reserves.

Initial pricing is set at $1,344 per acre-foot for the current year, with EMWD projecting $9.9 million in net savings over the 21-year term.

The agreement includes a 2035 price reset cap, limiting increases to 15% or 90% of the prevailing Metropolitan rate, with an option for EMWD to exit the deal.

The Eastern Municipal Water District (EMWD) Board of Directors unanimously approved a historic 21-year exchange water delivery agreement with the San Diego County Water Authority (SDCWA) on April 1, 2026. The deal secures a highly reliable, long-term supply of Colorado River water for EMWD's growing service area and establishes a significant buffer against future drought allocations. The agreement, which runs through December 2047, leverages existing Metropolitan Water District (MET) infrastructure to deliver conserved Colorado River water that SDCWA receives through the Imperial Irrigation District. EMWD will receive an annual baseline supply that will ramp up to 10,000 acre-feet per year by 2030. Crucially, this water will be classified as a local supply and will not be subject to MET drought allocation conditions. In addition to the baseline supply, the deal includes a provision for EMWD to pre-purchase an additional 30,000 acre-feet of water for approximately $19 million, or $633 per acre-foot. EMWD General Manager Joe Mouawad noted that this pre-purchased water can be called upon during drought allocation years at a maximum operational limit of 10,000 acre-feet per year. The district plans to fund the initial pre-purchase payments using its rate stabilization reserves, which are projected to reach $25 million by June. The initial price for the baseline water is set at $1,344 per acre-foot for the current year. While this introduces a short-term cost premium—equating to an approximate $2.2 million addition to EMWD's operating budget this year—financial models indicate a long-term benefit. Mouawad presented projections showing an inflection point around 2035, after which EMWD expects to realize cost savings. Over the 21-year term, the district anticipates approximately $9.9 million in savings compared to projected MET system rates. To mitigate long-term financial risk, EMWD negotiated a price reset mechanism for 2035. The agreement includes a price cap ensuring that any increase will not exceed 15%, or 90% of the then-in-effect MET rate. If the price increase exceeds 15%, EMWD retains the sole discretion to exit the agreement. The landmark deal was made possible by the June 2025 settlement between MET and SDCWA, which resolved long-standing litigation and opened the door for intra-regional water transfers. The April 1 board meeting served as a rare gathering of top regional water executives, with SDCWA General Manager Dan Denham and MET General Manager Shivaji Deshmukh both in attendance to support the agreement. "This is not just a transaction, it's a reflection on what we can accomplish when we choose to be collaborative," said SDCWA Vice Chair Frank Hiliker. Deshmukh echoed the sentiment, calling the agreement a model for the future of the region. "We're celebrating water management the way it should be done, not constrained by political boundaries, but by doing the right thing and really exhibiting the true meaning of collaboration and partnership," he told the EMWD board.