The Valencia Water Company, which serves 115,000 people in the Santa Clarita Valley, was purchased by the Castaic Lake Water Agency on December 21, 2012, effectively transferring ownership of the private company to a public agency.
But two area environmental groups challenged the deal, arguing that it went forward without required approval by the California Public Utilities Commission. Among other things, the groups argue that the Castaic Lake Water Agency is not authorized to provide water outside its area, which would occur since the Valencia Water Company serves customers throughout the Santa Clarita Valley, including portions of Newhall.
The efforts of the environmental groups are meeting with some success. According to a report in the Bakersfield Californian, “[a] PUC administrative law judge ordered Castaic to go through the application process, then denied Castaic's plea to reconsider that order and most recently denied Castaic's motion to dismiss the action entirely." The motion to dismiss was denied on February 24, 2013
The bigger issue of concern to the environmental groups, as expressed by Lynne Plambeck, president of one of the plaintiff organizations, is that “[t]he deal is structured so adversely for the public and slanted toward Newhall Land, that one has to wonder who the general manager was protecting." [ Suit challenges purchase by water agency to benefit Newhall Ranch project, LA Daily News (1/8/13)]
Newhall Land is land management company and developer of the controversial Newhall Ranch project, a development proposed for 12,000 acres along the Santa Clara River in northwest Los Angeles County that would create a city of more than 60,000.
Newhall Ranch has yet to become a reality. On October 15, 2012 “ a superior court judge confirmed a previous ruling that the California Department of Fish and Game's approvals for the enormous Newhall Ranch project in Los Angeles County violated state law in numerous, fundamental ways" dealing a severe blow to the project. [ Newhall Ranch Project Dealt A Major Setback, Friends of the Santa Clara River]
The latest complications related to the Castaic water deal are another complication for the Newhall Ranch developers to deal with.
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