Rival Retailer Questions Recent Water Agency's Expansion Plans
Officials with a local water retailer said they’re looking for community feedback on Castaic Lake Water Agency’s plan to purchase Valencia Water Co., a buy that would give CLWA officials control of approximately 84 percent of water retailers.
“We think a single entity would be best for all water-resource management in (the Santa Clarita Valley),” said Dan Masnada, general manager of the CLWA.
Naturally, the other major water retailer in the Santa Clarita Valley had something to say about this.
“From our district’s perspective, we think that a difference of opinions, and debate and discussion over complex water issues, are important to have,” said Steve Cole, general manager of the Newhall County Water District. “And when you move toward a single agency-controlled system, it doesn’t lend itself to having a real robust debate, as far as what the community may have on this issue.”
Cole acknowledged that NCWD officials have a financial interest in the matter, as the water retailer also would like to purchase the Valencia Water Co. The NCWD currently serves approximately 10,000 customers.
“I think that from our standpoint, a retailer does exactly that, and we would think that it would be better for a retailer to continue that operation,” he said.
However, negotiations between Newhall Land & Farming and the CLWA took place confidentially, because that was in the best interests of both parties, Masnada said.
“They wouldn’t negotiate unless we were absolutely committed to doing an exclusive, confidential negotiation with them,” said Thomas Campbell, CLWA board president, at last week’s meeting, where a resolution to purchase the VWC’s controlling stock was approved.
While it was initially established as a water wholesaler, CLWA has a legal right to own Valencia Water Co., a water retailer, according to Masnada.
However, AB 134, which was legislation created to allow the CLWA to own and operate the Santa Clarita Water District and its 29,000 customers -- or 41 percent of the retail market -- with certain provisions that limited retail operations to SCWD customers. AB 134 cites that CLWA “may not exercise retail water authority outside the boundaries (prescribed for the SCWD).”
This means that as the state law stands now, the CLWA has the authority to own the water retailer, but it will be operated as a Public Utilities Commission-regulated entity.
However, CLWA officials were confident a plan would be in place that would change that -- they just aren’t saying what it is.
Masnada said for the sake of the deal, he couldn’t reveal how CLWA officials planned to secure permission for VWC operations, noting there were other interested parties.
The secrecy led many to speculate that the water agency may be looking for another legislative solution to its operating problem.
Neither former Assemblyman Cameron Smyth nor his recently elected replacement, Assemblyman Scott Wilk, have been approached regarding new water legislation, although both spoke with CLWA officials recently.
“I received a heads up call prior to the agenda coming out,” Wilk said. “I asked if this would entail enabling legislation coming out, and I was told it would not.” However, he added that that was the extent of his conversation.
Cameron Smyth spoke with CLWA officials, but it was in the course of his involvment with a regulatory water group.
“I can’t say that I was ever formally asked for legislation,” Smyth said. “I did have meetings in the capitol with representatives with our local water agency about the purchase of Valencia Water Co.”
Smyth said he would have been wary about any involvement in any such legislation, because his past experience has taught him to stay out of some fights.
The former assemblyman was a district director for state Sen. Pete Knight, who was Santa Clarita Valley’s representative during the 2001-02 legislative session, when AB 134 initially was introduced.
Smyth described the “interesting dynamic that unfolded before him, as his father, Clyde Smyth, who was mayor at the time, was actively lobbying against a bill being proposed by his boss, Knight.
“I learned long ago to stay out of any local water fights,” Smyth said.