Public Utilities Code section 2705

Any corporation or association that is organized for the purposes of delivering water to its stockholders and members at cost, including use of works for conserving, treating, and reclaiming water, and that delivers water to no one except its stockholders or members, or to the state or any agency or department thereof, to any city, county, school district, or other public district, or any federal agency that provides fire protection or operates park facilities, or to any other mutual water company, at cost, is not a public utility, and is not subject to the jurisdiction, control or regulation of the commission. However, a mutual water company may perform the following acts without becoming a public utility and becoming subject to the jurisdiction, control or regulation of the commission:

(a)

May deliver water at cost to any lessee of its stock or shares or other evidence of membership where the lease is in writing signed by the owner of the stock or shares or other evidence of membership and the lessee thereof and approved by the mutual water company.

(b)

May deliver water at cost to any land leased by a stockholder, shareholder, or member of the mutual water company to a person not a stockholder, shareholder or member thereof, provided the lease is in writing signed by the stockholder, shareholder or member and the lessee of the land and approved by the mutual water company.

(c)

May transfer water or water rights to, or exchange water or water rights with, another entity pursuant to state or federal law, or both.

(d)

In a bona fide water emergency, but for no longer than the existence of the emergency, may deliver water at cost to any person owning or leasing real property located within or adjacent to the service area of the mutual water company, provided that the water is delivered pursuant to a written contract signed by the mutual water company and the person to whom the water is delivered.

(e)

May deliver water pursuant to any contract for water service made:

(1)

In settlement of litigation involving disputed water rights or any judgment in the litigation.

(2)

In consideration of the conveyance of a well, water right, or easement for water distribution purposes.
All of these leases and contracts shall be preserved for a period of 10 years by a mutual water company and shall be subject to inspection by the commission.
The term “cost” as used in this section shall be construed to mean without profit.

Source: Section 2705, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=PUC§ionNum=2705.­ (accessed Apr. 24, 2025).

Last Updated

Apr. 24, 2025

§ 2705’s source at ca​.gov