An environmental organization appealed a county judge’s ruling over whether the Santa Clarita Valley’s water wholesaler can purchase another water retailer.
The ruling stems from Castaic Lake Water Agency’s purchase of the Valencia Water Company in 2012.
Judge Robert H. O’Brien denied the petition in March, which favored the CLWA on all four claims in the 2013 lawsuit brought by SCOPE that alleged the purchase of the Valencia Water Company from The Newhall Land and Farming Co. violated state law.
In April, L.A. Superior Court made “several unusual rulings,” which included “limiting the administrative record to not admit relevant facts, an incorrect finding that a Public Utilities Commission Decision was not final and ignoring state laws that say Castaic Lake Water Agency may not serve water at retail or own stock in another corporation,” said Lynne Plambeck, president of SCOPE, in a May news release.
“This purchase was not only legal,” said CLWA President Tom Campbell, in a previous interview, “but also it was just a good water management decision.”
Campbell added that Santa Clarita Valley residents will benefit from “more cohesive water supply planning” and economies of scale as a result of the acquisition.
SCOPE officials also claim Valencia ratepayers are charged for stock dividends of some $200,000 a year which is paid to the CLWA, and their rates were increased by 14.32 percent earlier this year without approval of the PUC, Plambeck said, in the news release.
“Our community is now left to deal with a water company that does not exist in state law and therefore has no public oversight or checks and balances,” Plambeck said.
The CLWA, who is the Santa Clarita Valley’s wholesaler of water and owns the Santa Clarita Water District, purchased the Valencia Water Co. in 2013 for $73.8 million. Not long after, SCOPE officials sued the CLWA, alleging the acquisition was illegal under state law.
“The bottom line is the court ruled that the (CLWA) has the right to own Valencia Water Company. I don’t think there’s any question about that,” said CLWA General Manager Dan Masnada. “The court saw it our way.
“The goal here is to acquire Valencia Water Company, make it public, combine with Santa Clarita Water Division and apply some economics. The benefit is long term to the Santa Clarita and Valencia ratepayers. The sad part about it is SCOPE continues to sue — they filed an appeal and it keeps costing Santa Clarita residents.”
The Valencia Water Company was founded by Newhall Land, and serves approximately 30,000 connections and 116,000 people.