A power struggle between the Imperial Irrigation District and the Coachella Valley Water District that dragged on for a half-century ended with the Imperial County agency relenting.

That provided almost $27 million for maintenance and upgrades to the Coachella Canal and more than 500 miles of aging irrigation system in the Coachella Valley, local water district officials said.

The state Court of Appeals in October 2007 upheld a Superior Court decision granting the Coachella Valley Water District about 50 years' worth of underpaid hydroelectric power revenues from IID.

IID officials at the time indicated they weren't sure if they'd appeal to the state Supreme Court.

But IID officials dropped appeals and by the end of 2007 paid $26.8 million to the Coachella Valley agency

The dispute between the two agencies went back to 1934, when the All-American Canal was in planning.

In order to obtain federal funding for the canal, IID and Coachella Valley Water District entered into a compromise, agreeing that once the canal started producing hydroelectric power, IID could sell it in the Coachella Valley and the water district would not.

In return, IID each year would pay the water district 8 percent of its net power proceeds. The agreement anticipated a lease being struck between the two agencies, but it never happened.

Through the years, water district officials began to dispute how IID calculated their cut. Among the issues: IID would remove interest earned on revenues, provide itself internal loans for capital projects and set aside reserve funds before figuring Coachella's 8 percent.

IID in the 1990s also began deducting a “falling water” charge from its calculation of the net proceeds, arguing that its water customers should recoup from power operations the money they could earn if the generated power was sold on the open market, rather than to Imperial and Coachella customers.

A San Bernardino County Superior Court judge in 2004 largely sided with the Coachella Valley Water District's positions in the lawsuit, awarding them more than 50 years of back underpayments totaling nearly $17 million. IID then appealed the case to the California Fourth District Court of Appeals.

The additional costs in the final settlement were from increased underpayments during the appeal and interest.

IID spokesman Kevin Kelley said the agency had set aside $22 million in reserve for the lawsuit. IID now follows a new formula for sharing net power proceeds with the Coachella Valley agency, as outlined by the court, Kelley said.

CVWD spokeswoman Heather Engel said the back payments replenished the district's canal irrigation fund “that was in deficit for several years.”