A Los Angeles Superior Court Judge ruled Thursday that Castaic Lake Water Agency must revoke their wholesale water structure rate put in place last July, Newhall County Water District officials said in a statement Friday.

“Newhall County Water District challenged the tax in court after warning CLWA it violated state law and concluding it would almost double imported water costs for NCWD’s 45,000 customers,” according to a NCWD press release. “If left in place, CLWA’s special tax had the potential to cost NCWD’s customers approximately $1 million – or $75 per customer – every year.”

The judge determined that the CLWA must also refund approximately $61,000 in taxes paid by the NCWD.

“This is not a tax, the CLWA changed the structure of wholesale water rate, not on general public, but on the four water retailers in Santa Clarita,” said Tom Campbell, board president of Castaic Lake Water Agency.

Dan Masnada, general manager of Castaic Lake Water Agency explained that the agency changed the wholesale water rate to be more cost effective and that three of the other Santa Clarita water retailers rallied behind the change.

The wholesale water rate structure is designed to alternate between imported water and groundwater, said Masnada.

“The NCWD wants to pump as much groundwater as they can, the old rate structure works better for them than the new rate structure,” Masnada said.

The structure was approved by the CLWA Board of Directors in a 10-1 vote in January of last year and went into effect a couple months later.

“This is an outstanding victory for our customers,” said B.J. Atkins, NCWD’s Board President. “Simply put, this was an unfair tax and we are pleased the courts have required CLWA to return to a more equitable, lawful way of doing business.”

Calling the wholesale water structure a tax is “its truly an unfair and incorrect characterization,” Masnada said.

“They have won the battle, they haven’t won the war,” Masnada said. “We hope that ultimately we prevail in appeal, that we develop a structure that will fit all valley’s rate payer, not just for Newhall ratepayers.”

– Jessica Boyer