Article 1. General Provisions of California Water Code >> Division 6. >> Part 3. >> Chapter 7. >> Article 1.

Any state agency, mutual water company, political subdivision, or other entity or organization may enter into contracts with the department for the purchase or for the use of water, water flow, water storage, electric power, or other resources and facilities made available by the project.

In entering into and awarding contracts, in case of equal or equivalent offers, including consideration of the cost of construction, operation, and maintenance of the necessary lines, plants, and other works to deliver the commodity or service which is to be delivered under the contracts, the department shall grant preference to state agencies or other organizations not organized or doing business for profit but primarily for the purpose of supplying water or electric power to their own citizens or members.

Every contract made by the department for the sale of water, use of water, water storage, electric power, or other service shall provide that, in the event of any default in the payment of any money specified in the contract to be paid to the department, the department may, upon such notice as it determines, cease to furnish or deliver water, use of water, water storage, electric power, or other service under the contract.

The act of the department in ceasing on any default to furnish or deliver water, use of water, water storage, electric power, or other service under a contract shall not deprive the department of or limit any remedy provided by the contract or by law for the recovery of money due or which may become due under the contract.