A California court has ruled in favor of Ontario in the city’s legal challenge to the Inland Empire Utilities Agency claiming the Chino Basin Program violated state environmental law, officials announced Tuesday.
According to the San Bernardino Superior Court’s Sept. 4 ruling, the IEUA in May 2022 violated the California Environmental Quality Act. The court found that the agency:
— “‘piecemealed’ the evaluation of the effects of the CBP by failing to evaluate the effects of the CBP and the Feather River Exchange outside of the Chino Basin”;
— “Used an unstable and inconsistent project description that evaluates the effects of a project life of 25 years, but then justifies the CBP based on purported water supply benefits over 50 years”; and
— “Adopted a biased and determinative project objective to justify a refusal to evaluate reasonable alternatives to the CBP.”
The IEUA must now set aside its certification of the Chino Basin environmental impact report and the agency’s other CPB approvals.
“This is a major victory for the City of Ontario and every community in the Chino Basin that depends on a secure, local water supply,” Ontario City Councilwoman Debra Porada said in a statement. “IEUA tried to push through a massive water deal that sent our water elsewhere without telling the full story of the adverse environmental and water supply effects of the CBP or evaluating reasonable alternatives to sending a reliable local water supply to Northern California. The court saw through it. We fought back because our future depends on protecting the resources our residents already paid for and rely on.”
Superior Court Judge Donald Alvarez denied several of the city’s claims — that the utility allegedly provided misleading information about the amount of water in annual Santa Ana River flows, the CBP failed to evaluate an “Ontario Alternative” project plan and the CBP provided a misleading evaluation of its effects on the water supply of Chino Basin communities, according to court documents.
“While the court is requiring that a few additional areas of the Chino Basin Program be further examined and/or refined, IEUA extends its appreciation to the court for denying several Petitioner claims on key aspects of the program,” IEUA General Manager Shivaji Deshmukh said in a statement to HeySoCal.com. “We are evaluating the statements made by the court and will continue to make the CBP a priority. Ensuring safe and adequate water supplies will allow for the continued economic growth of our region. The benefits of CBP are far-reaching, helping ensure that property owners, as well as hospitals, schools, public safety facilities, and our community will have the water needed for their health, safety, and operations for generations to come.”
Deshmukh said the utility remains committed to “making sound and prudent investments that serve the long-term interests of our region and ratepayers. The CBP represents a critical infrastructure initiative designed to maximize water supply reliability while ensuring full compliance with recycled water and wastewater permit requirements. Our commitment to responsible water management and regulatory compliance remains unwavering as we continue to pursue this vital program for our communities and the region.”
According to city officials, the Chino Basin Program would have transferred reliable, locally developed water paid in part by Ontario residents and surrounding communities to the state, “leaving Ontario and neighboring communities more dependent on imported water.”
The IEUA described the program as “the first of its kind to deliver benefits to both Northern and Southern California “through an innovative water exchange, new recycled water supply and valuable new infrastructure and upgrades.”
The CPB calls for sending groundwater via “a state contractor to facilitate a water exchange over 25 years,” according to the IEUA. “During this time, the state could request pulse flows of water from Oroville Reservoir in Butte County to the Feather River, benefitting ecosystems and Chinook salmon.”
The court ruling noted that the utility violated the California Environmental Quality Act when it failed to analyze the impacts of transferring 375,000 acre-feet of water to Northern California.
The court also found that “the agency adopted biased objectives for the CBP to support IEUA’s refusal to evaluate a reasonable range of alternatives,” officials said.
Attorneys for the city argued that the CEQA violation resulted in the utility’s “failure to evaluate reasonable and feasible alternatives to the CBP that would retain locally generated water for use by the residents of Ontario and other communities in the Chino Basin.”
Culminating with the lawsuit, the city had repeatedly raised concerns via letters, public meetings and direct outreach with the IEUA about what officials called the “the lack of transparency and analysis” surrounding the program.
“By defining the controversial Feather River Exchange as the cornerstone of the project while avoiding legal scrutiny of its impacts, IEUA undermined both environmental integrity and public trust,” according to the city. “The court’s ruling validates those concerns and underscores that IEUA committed multiple prejudicial CEQA violations.”
Ontario officials said they would continue to advocate for transparent and responsible regional water planning that prioritizes the needs of the communities who live here.
“We remain committed to work in partnership with IEUA and surrounding agencies to develop regional water resource programs that meet our collective objectives,” Porada said.
The IEUA serves 935,000 residents over 242 square miles and is situated on the Chino Basin, the largest groundwater storage basin in Southern California, according to the utility.
In 2018, the Chino Basin Program received a $215 million conditional funding grant from the state’s Proposition 1 Water Supply Investment Program.
More information on the local water supply is available on the Ontario Municipal Utility Company’s website via ontarioca.gov.
Updated Sept. 18, 2025, 9:43 a.m.
