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Calif. PUC looking into Valencia Water Company purchase

Posted: May 9, 2013 7:03 p.m.
Updated: May 9, 2013 7:03 p.m.

The California Public Utilities Commission has opened an investigation into Castaic Lake Water Agency’s purchase of the Valencia Water Company.

Newhall County Water District officials, who have opposed the sale of Valencia Water to Castaic Lake, said in a news release Thursday they’re confident the probe will find the transaction illegal,

“This is the monopolization of the public’s water,” Newhall County Water District Board President Maria Gutzeit said in the release.

“When any organization has a monopoly, the customer loses. This simply isn’t right and we believe the law is on the side of the ratepayers.”

Castaic Lake Water officials, however, have a very different take on the outcome of the investigation.

“The bottom line is that we believe the stakeholders have done a completely legal job,” General Manager Dan Masnada said of the Valencia Water shareholders who agreed to the sale.

“Thankfully, it will be a Los Angeles Superior Court decision that’s made, and not one made by the Newhall County Water District,” he said, referring to civil challenges to the deal.

The Castaic Lake Water Agency is one of 28 water wholesalers contracted with the state to purchase water from Northern California through the State Water Project.

It sells that water to four local water retailers: Newhall County Water District, Valencia Water Company, Los Angeles Waterworks District No. 36, and its own Santa Clarita Water Division, which it purchased in 1999. Except for District No. 36, the retailers also draw from groundwater supplies for their customers.

So when a Santa Clarita resident turns on the tap and fills a glass of water, half the glass is typically filled with water that has traveled from Northern California, while the other half comes from local groundwater.

Castaic Lake’s board of directors voted in December to buy all stock in Valencia Water Company for $60 million. That would leave only Newhall County — which serves parts of Newhall, Castaic, Canyon Country and Saugus — and the much smaller District No. 36, to market water in the Santa Clarita Valley independent of Castaic Lake’s governance.

Newhall County has filed suit against Castaic Lake Water over a revised rate plan the wholesaler has approved that Newhall says would unfairly increase its wholesale water rate.

In their news release issued Thursday, district officials cite an order issued by the Public Utilities Commission April 10 that states in part: “Investigation is needed in order to fully examine the factual and legal issues raised in the apparent transfer of control of Valencia Water Company to the Castaic Lake Water Agency.”
on Twitter @jamesarthurholt



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