Coachella Valley Water District has lost the heart of two rate cases, and the money does not land as one check. Appellate courts held that its Coachella Canal delivery rates were unlawful, then found that certain groundwater replenishment charges were unconstitutional. Which customers get money back, and for which years, is where the rulings stop matching.
The canal case has the clearer receipt. On January 31, 2025, the California Court of Appeal held that the rates were unlawful and that a refund remedy was constitutionally required, according to the opinion. A Riverside County Superior Court had awarded Class 2 customers approximately $17.5 million in refunds and interest for invalid charges from March 2018 through June 2022. The appeals court affirmed that refund and struck the injunction against future canal water rates and charges.
The Canal Price, In Acre-Feet
For fiscal years 2020 through 2022, agricultural businesses paid $34.32 per acre-foot for canal water delivery. Non-agricultural customers, primarily single-family residences, paid $102.12, the Coachella Valley Independent reported. That was nearly three times the agricultural rate, a difference of $67.80 per acre-foot.
A 2018 class-action lawsuit challenged property taxes and alleged uses of project funds, while a separate lawsuit challenging rates followed in 2019. The Howard Jarvis Taxpayers Association became involved and raised Proposition 218 questions about the charges. The measure figured in the legal questions raised about the charges.
The remedy was narrower than a permanent freeze. Refund relief for Class 2 customers stayed in the judgment. The paragraph enjoining the district from imposing any future canal water rates and charges did not. CVWD could set the next canal rate. The award still covered the invalid charges from March 2018 through June 2022.
Nearly $18 Million, Fees Included
CVWD appealed the lower-court canal rulings. On April 30, 2025, the California Supreme Court declined to hear that appeal, The Desert Sun reported. The denial left the appellate ruling in place. It was not a new decision setting a lawful canal price.
After the loss, CVWD said it would refund past non-farming customers nearly $18 million for fees paid from March 1, 2018, through June 30, 2022. The reported figure included approximately $4 million in attorneys' fees.
The dates line up with the Class 2 award. The contents do not. The appellate opinion describes about $17.5 million in refunds and interest. The district's nearly $18 million is the amount it said it would pay, with those fees inside the reported total.
Before that pledge, an association attorney was estimating a larger canal reimbursement. The Independent reported a figure of up to $22 million for fiscal years 2020, 2021, and 2022, and at least $9 million more potentially owed for fiscal years 2023 through 2025. Estimates are not the judgment. They also cover fiscal years outside a refund period ending June 30, 2022.
Replenishment, One Step Removed
The replenishment appeal is a separate case, not a sequel with the same charges. On November 26, 2025, the Court of Appeal affirmed rulings that CVWD's groundwater replenishment charges were unconstitutional, in Howard Jarvis Taxpayers Association v. Coachella Valley Water District. The district had not shown that the allocation of replenishment costs bore a fair or reasonable relationship to the burdens or benefits received by each area of benefit.
Heavy pumping was the trigger. Domestic bills were still in the path. CVWD imposed replenishment charges on customers pumping more than 25 acre-feet from the aquifer in a year. Domestic customers paid those charges indirectly, through the district's domestic water enterprise fund. A household can remain under 25 acre-feet and still be paying toward replenishment through that fund.
The appellate court found no error in the trial court's grant of refund and injunctive relief. The canal appeal had stripped out a future-rate injunction. This one did not. Validation statutes applied to the replenishment charges and barred untimely claims for earlier years. Unconstitutional, in this opinion, was not the same thing as refundable back to the first bill.
A Board, Not A Utility Commission
CVWD has a five-member board and sets water rates. The constraints in these cases are constitutional.
Proposition 218 figured in the legal challenges to the charges.
Walter Clark, a legal expert with the Walter Clark Legal Group, joined NBC Palm Springs' The Roggin Report to discuss the litigation.
The litigation also includes whether residential overcharges primarily benefited agricultural users. Court language in the canal case is sterner than a fairness gloss: the rates were unlawful, and the refund remedy was constitutionally mandated. The replenishment opinion turned on areas of benefit, burdens, and cost.
Estimates And Two Injunctions
The largest public estimate was conditional. The Desert Sun reported that CVWD could owe current and former residential customers well over $100 million if all of the association's cases survived appeals. The estimate belonged to Howard Jarvis Taxpayers Association attorney Jeffrey Costell, and the report was published May 1, 2025. The replenishment opinion, filed November 26, 2025, later affirmed the constitutional ruling and barred untimely claims for earlier years.
CVWD's canal rates used a different design: agricultural customers paid $34.32 per acre-foot, while non-agricultural customers paid $102.12.
Clark discussed the legal fight.
The two appeals already point different directions on future charges. The canal court removed an injunction against future canal rates and charges. The replenishment court left injunctive relief standing.
