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Water Unit Ordered to Halt Retail Sales

June 15, 2002|RICHARD FAUSSET | TIMES STAFF WRITER

A Los Angeles Superior Court judge on Friday ruled that a Santa Clarita water wholesaler's arrangement for selling water on the retail market violates state law and must stop.

The decision comes three years after the Castaic Lake Water Agency, a public entity that sells imported water, paid $63 million for the Santa Clarita Water Co., a private company that sold water to customers in parts of northern Los Angeles County. After the purchase, Castaic Lake Water began selling water directly to households and businesses in the Saugus and Canyon Country neighborhoods.

Some residents strongly opposed the purchase, saying it drove water rates up and gave too much power to a single entity. They filed a lawsuit, saying the sale was illegal.

In his ruling, Judge David Yaffe said the arrangement as it currently exists violates the state law. He gave the agency until September to stop selling water on the retail market.

The ruling will eventually lead to lower water bills for some residents, said Lynne Plambeck, one of the four residents who brought the lawsuit against the agency.

"This means there's less chance of a water monopoly in the Santa Clarita Valley, and that the water company's customers have more oversight over their company," Plambeck said.

Officials for Castaic Lake Water said in a statement that Yaffe "ignored the intent" of a state law, created last year, that they said broadens their ability to act as a retailer and allows them to sell water directly to some local households and businesses.

The agency and the plaintiffs disagreed, however, on whether the law allows the agency to continue selling water through Santa Clarita Water Co.

The plaintiffs originally lost their case in trial court, but an appeals court reinstated the suit last July.

Attorneys for the agency said they may appeal Friday's decision.

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