Utility Watchdog in San Diego

City Sewer Department Settlement Brings Long Overdue Refunds to Residents

In March, 2004, UCAN's (The Utility Consumers' Action Network) executive director learned that the City of San Diego had been systematically overcharging residential customers (and undercharging large commercial customers) for sewer bills. When confronted, the city admitted that it had applied the wrong rates, in violation of state law. In June, 2004, the City Council revised sewer rates -- boosting those of commercial users and lowering those of residents to eliminate the overcharges to residents. But the city did not offer to reimburse residential ratepayers for years of overpayment.

After more than two years of litigation, the City agreed to a settlement that would return about $40 million to overcharged residential customers and would allow for the creation of independent oversight of City water and sewer operations. The latter may be the most valuable part of this settlement, as it gives City utility customers the ability to effectively question future rate increases.


In the coming months, a notice will be sent in your sewer bill, which informs you that you will be entitled to share in a FORTY MILLION DOLLAR ($40,000,000.00) settlement fund if you choose to be a member of a Settlement Class provisionally certified by the Superior Court of California, for the County of San Diego.

If you are CURRENT single family residential sewer customer and you reside at an address that had a water meter in existence as of September 30, 2004, your monthly sewer bill will be credited automatically for the next four years. YOU DO NOT NEED TO DO ANYTHING ELSE TO PARTICIPATE.If you are NOT a CURRENT single family residential sewer customer, you still be may be entitled to a cash payment. However, you MUST submit a Proof of Claim Form within a period of time that will be discussed in the notice.
The San Diego Superior Court will schedule a Fairness Hearing to be held before the Hon. Ronald M. Prager in Department 71 of the San Diego Superior Court, 330 West Broadway, San Diego, CA 92101 to (1) consider and determine the fairness, reasonableness, and adequacy of the Settlement described above; (2) consider whether to certify the Settlement Class and (3) consider Class Counsels’ application for attorneys fees for 12.5% of the settlement fund , and reimbursement of reasonable expenses and costs.

UCAN will conduct an application process for qualified non-profits to use the access to utility bills to solicit money for the independent oversight of the City Water and Sewer departments. Details of that application process will be forthcoming. Groups interested in taking advantage of the process will need to meet minimum requirements, that include:

  • $250K initial budget for staffing and inserts
  • 501(c)(3) status
  • Experience with rate case or financial review of utility operations
  • An identified staff person who will oversee consultants/experts hired with the solicitation monies
  • An adequate accounting system to confirm intake and expenditures of money raised by the solicitation
  • Some public track record so as to have sufficient credibility
  • No conflicts of interest with the City e.g. truly independent status
  • The UCAN Water Project began formally on May 1, 2010 after UCAN had raised enough money from inserts placed into City Water bills.


10 News San Diego, Mon, 20 Nov 2006 8:11 PM PST
Tentative Settlement Reached In City Wastewater Suit A tentative settlement deal is reached in a lawsuit alleging the city of San Diego unfairly charged homeowners sewer rates that should have been paid by industrial users.