Lois Henry

Tuesday, Feb 26 2013 10:30 PM

LOIS HENRY: There goes more Kern River water, over the hill

By Lois Henry

Keeping track of Kern River water leads to all kinds of interesting little snarls.

For example, our river water has created what could become a major dustup for the Castaic Lake Water Agency.

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Lois Henry hosts "Californian Radio" every Wednesday on KERN 1180 AM from 9 to 10 a.m. You can get your two cents in by calling 842-KERN.

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The agency, just to Kern's south, is the state water contractor that supplies the Santa Clarita area. That includes Valencia and the controversial 21,000-home Newhall Ranch development.

The dust up involves whether the Castaic agency should have obtained permission from the California Public Utilities Commission before buying Valencia Water Co. for $73 million last December.

This is all in Los Angeles County so you may not think you care, but believe me, you should.

That's because the Castaic agency bought Valencia Water Co. in order to make sure Newhall Ranch taps and toilets get water -- Kern River water.

How'd that happen? Glad you asked.

The water was owned by the Nickel family here in Kern County. It was flood water on the lower river (also known as the Hacienda right) that only materializes in very high water years. The average is figured at 50,000 acre feet a year.

In reality, the Nickels had way too much water some years and didn't get a drop others.

In 2000, the Kern County Water Agency -- using public bond money that the agency had pledged to use for Kern River restoration -- paid the Nickel family $10 million for the Hacienda right.

As part of the deal, the Kern agency also promised to give the Nickels 10,000 acre feet of water every year. Hard and fast, drought or no drought, the Nickels get that water.

That gave the Nickel family a huge asset that could be divvied up and sold.

And they sell it they have, about 1,600 acre feet a year to Newhall Ranch and 8,400 acre feet a year to Development company DMB Associates.

DMB had grand plans to use the water, through a series of swaps, for a very controversial development in Redwood City, but those plans appear to be on hold.

Not so with the Newhall Ranch development down south.

Things had been moving along until the Castaic agency bought the Valencia Water Co. (owned by Newhall) in December and got smacked with a legal action by opponents of Newhall Ranch.

Valencia Water Co., is a water retailer governed by the PUC. Hence, the PUC needed to bless the union before the honeymoon. But someone forgot to make that call.

When I first started asking about the legal action against the purchase, Castaic agency General Manager Dan Masnada chalked it up to a paperwork issue that his agency would clear away momentarily.

Not quite.

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. (Incidentally, Castaic filed its dismissal motion on Friday and the judge zapped back his denial on Saturday. Yowser.)

There are a ton more details that raise questions about the Castaic/Valencia Water Co. purchase deal -- including a proposed 15 percent rate hike, after Valencia ratepayers just had their bills increased by 3 percent last November.

But I was most interested in the Nickel water.

Masnada said Castaic's acquisition of Valencia Water Co. wouldn't affect the Nickel water one way or another. Newhall Ranch owns that water (under a 30-plus-year contract) and it will ultimately be used for that development, he said.

Castaic's role in all this is simply to facilitate movement of the water, via the California aqueduct, Masnada said. Oh, and as part of its purchase deal with Valencia Water Co., Castaic will get whatever Nickel water is deemed surplus after Newhall Ranch is fully built out and all its needs are met.

Meanwhile, Newhall Ranch opponents aren't going away.

"We're hoping to get the District Attorney or Attorney General to look into this," said Lynne Plambeck, president of Santa Clarita Organization for Planning and the Environment.

Her contention is Newhall Ranch would never have been able to get the Nickel water without the help of Castaic and so they made a deal with Castaic that uses public facilities and public funds for one company's private gain.

"It's wealthy, well-funded hedge companies (Newhall Ranch owners) controlling our public agencies," Plambeck said.

I don't know about all that, but I have to wonder if our Kern River water had stayed where it belonged, if all this strife might be avoided.

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or e-mail lhenry@bakersfield.com

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