Government Code section 6525
(a)
Notwithstanding any other provision of this chapter, a mutual water company may enter into a joint powers agreement with any public agency for the purpose of jointly exercising any power common to the contracting parties.(b)
(1)Notwithstanding any other provisions of this chapter, a mutual water company and a public agency, or a water corporation, a mutual water company, and one or more public agencies, may enter into a joint powers agreement for the purpose of risk pooling in accordance with Section 990.8, provided that the agreement shall ensure that no participating public agency becomes responsible for the underlying debts or liabilities of the joint powers agency, and shall indemnify any participating public agency against those debts and liabilities.(2)
A joint powers agency established pursuant to this subdivision shall solely utilize any revenues it generates through the insurance provided to its members under this section for its necessary operating expenses, and to provide technical support, continuing education, safety engineering, and operational and managerial advisory assistance to its members for the purpose of reducing risk liabilities and furthering the technical managerial and financial capacity of those members.(3)
(A)A water corporation shall not enter into a joint powers agreement for the purpose of risk pooling in accordance with Section 990.8, unless a mutual water company is already a party to that agreement and the joint powers agency is eligible, pursuant to subparagraph (B).(B)
An eligible joint powers agency shall be 100 percent reinsured with no joint and several liability, no assessments, and no financial liability attributable to the participating members irrespective of whether they are public, nonprofit, or for-profit agencies.(4)
A joint powers agency created pursuant to this subdivision that includes a water corporation shall not join any other joint powers agencies or public agencies or exercise any powers, except as described in this subdivision.(5)
(A)Before a water corporation can enter into a joint powers agreement pursuant to this subdivision, the water corporation shall submit an information filing to the Public Utilities Commission that includes three years of historical insurance costs and current-year estimated insurance costs.(B)
The Public Utilities Commission shall not allow a water corporation to join a joint powers agency for insurance coverage if there are no greater benefits to the customers of the water corporation than are provided by the water corporation’s current insurance policy.(6)
If a water corporation enters into a joint powers agreement pursuant to this subdivision, the water corporation shall ensure any cost savings or expansion of insurance coverage attributable to its membership in the joint powers agency shall be used solely to reduce rates, improve service, or both, for California customers of the water corporation.(7)
If a water corporation enters into a joint powers agreement pursuant to this subdivision, the water corporation shall submit an annual information filing to the Public Utilities Commission and the joint powers agency that reports both of the following:(A)
The estimated level of savings resulting from its membership in the joint powers agency, including three years of historical insurance costs, estimated current-year insurance costs resulting from membership in the joint powers agency, and estimated current-year costs for obtaining comparable coverage on the private insurance market, if available.(B)
How the savings described in subparagraph (A) was used to benefit customers of the water corporation.(c)
For purposes of this section:(1)
“Mutual water company” has the same meaning as defined in Section 14300 of the Corporations Code.(2)
“Water corporation” has the same meaning as defined in Section 241 of the Public Utilities Code.
Source:
Section 6525, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV§ionNum=6525. (updated Jan. 1, 2026; accessed Dec. 22, 2025).
