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UPDATE: Judge calls for water company paperwork

State PUC must review Castaic Lake's takeover of Valencia Water, judge rules

Posted: February 1, 2013 11:40 a.m.
Updated: February 1, 2013 5:20 p.m.

Valencia Water Co.’s takeover by another water company is on hold at least temporarily because the right paperwork wasn’t filed, a state official ruled this week.

The California Public Utilities Commission must approve the transfer of control of Valencia Water to the Castaic Lake Water Agency, and paperwork for that approval was not filed, a judge said.

In a ruling dated Thursday, Administrative Law Judge Douglas M. Long ruled Valencia Water must file all necessary documents related to the transfer of control by Feb. 14.

Any official transfer from Valencia Water to the Castaic Lake Water Agency prior to approval from the Public Utilities Commission may be void.

In a surprise move just before Christmas, Castaic Lake Water Agency announced its intention to buy Valencia Water Co., a property of Newhall Land Development Inc., and quickly moved to do so.

Though the deal currently involves a stock purchase, Castaic Lake officials have signaled they intend to operate Valencia Water, as well.

Dan Masnada, general manager for Castaic Lake, said Friday the agency is continuing to review Long’s ruling.
“We believe we are on good legal ground,” he said.

Masnada also said the PUC was notified of the takeover of Valencia Water shortly after it was agreed to.

Two local environmental groups, the Santa Clarita Organization for Planning and the Environment and the Friends of the Santa Clara River, have filed a complaint with the Public Utilities Commission alleging a variety of negative effects would occur if Castaic Lake — a water wholesaler — assumes control of Valencia Water.

While Long did not address the allegations from those groups, he ruled that Valencia Water and Castaic Lake will both need to respond to their claims by Feb. 14.

“It is foreseeable that the transfer of control of a public utility could have significant financial and safety implications for the customers served by Valencia,” Long wrote in the ruling. “A delay in addressing the complaint could lead to serious and irreparable harm to ratepayers and to the state of California generally.”

Masnada said the agency is still reviewing the complaints.
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