The Castaic Lake Water Agency is facing another lawsuit, filed by the Newhall County Water District on Thursday.
Amid ongoing litigation from the Santa Clarita Organization for Planning and the Environment, the Castaic Lake Water Agency is now facing another lawsuit, this time from the Newhall County Water District.
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The NCWD officials filed a lawsuit Thursday concerning the CLWA’s December 2012 acquisition of the Valencia Water Company, contending the water agency acquired the VWC in violation of Assembly Bill 134.
AB 134, passed in April 2001, “provides statutory authority to the Castaic Lake Water Agency to sell water received from the State Water Project,” according to a state website.
Dan Masnada, general manager of the CLWA, disputed the NCWD’s claim that the CLWA was trying to build a monopoly, calling the claim “beyond ludicrous.”
“AB 134 was enacted to ensure that CLWA delivers on it’s promise to the community, and that’s basically not to use their money to build an empire,” said Steve Cole, NCWD general manager.
The bill “permits CLWA to sell (state water) at retail in accordance with the County Water District Law,” according to state documents, and “provides that the area in which the CLWA may sell water at retail is the franchise area held by the Santa Clarita Water Company when it was sold to CLWA.” The law also states that any changes to the service area in which CLWA may sell water at retail will be considered a special district boundary change subject to LAFCO approval.
“The reason they’re suing has nothing to do with looking out for the ratepayers,” Masnada said, adding the NCWD was using ratepayer money to pursue litigation that ultimately would not benefit those ratepayers.
Masnada also maintained that AB 134 did not prevent the CLWA from acquiring Valencia Water. “Assembly Bill 143 addresses retail operations,” he said. “It doesn’t address ownership.”
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The CLWA’s deal with Valencia Water would also threaten the public’s water supply, according to the NCWD.
“In taking over Valencia Water Co., CLWA violated state law and threatened the fiscal integrity of the region’s water service,” said NCWD Board President B.J. Atkins in a press release. “We can’t sit idly by as CLWA compromises the public’s resources. We took action to protect the interests of our customers.”
But, the CLWA paid cash for the VWC, Masnada said.
“The acquisition took a privately-owned utility and brought it into local public ownership,” he said. “You really can’t do much better than that.”
Masnada believes that the new NCWD lawsuit is trying to accomplish what the SCOPE suit failed to do: unwind the transaction between the CLWA and Valencia Water, he said.
The CLWA won on the three initial causes of action in SCOPE’s case against them.
Lynne Plambeck, who is the president of SCOPE, also sits on the NCWD’s Board of Directors.
For Cole, the issue is to prevent a water monopoly in the Santa Clarita Valley.
“For us, it’s more about maintaining the separation between wholesale and retail,” he said. “We don’t believe in having one main water monopoly in the valley.”
For more information about the Newhall County Water District, click here.
Visit the Castaic Lake Water Agency online, here.
Source: Santa Clarita News