Cal. Water Code § 11626

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.