JUDGE ORDERS WATER FIRM RATE REVIEW\PUC says revenues don't seem to 'mesh' with expenditures.

Byline: Sherry Joe Crosby Daily News Staff Writer

For the first time in 15 years, customers of the Santa Clarita Water Co. might see their rates change following a judge's order to review the company's financial structure.

But don't expect a rebate - the state Public Utilities Commission doesn't offer retroactive rate changes, even though records show the company, currently for sale, is making more than allowed under PUC regulations.

"We want to make rates that are in line (with current policies)," said PUC spokeswoman Kyle DeVine. That means "rates might increase or rates might decrease," she said.

This week, a San Francisco administrative law judge recommended a review and possible overhaul of the water company's rates following a complaint from Newhall residents Warren and Vera Johnson.

DeVine said the PUC is worried about the company's rates because they've remained static since 1982, providing the lowest local rates.

"We're very concerned about how much customers are being charged and how much the water company is spending for water," DeVine said. "They don't seem to be meshing."

Since 1982, the company's net operating revenues indicate that returns are substantially above the last PUC-authorized rate returns.

For example, from 1982 to 1994, the company's operating revenue increased by nearly 219 percent, while operating costs increased 130 percent.

Santa Clarita Water Co. President William Manetta declined to comment, saying he hasn't had a chance to look at the judge's order.

In an 18-page brief, Judge John Weiss ruled that the valley's largest water retailer must file a rate proceeding by June 1. The ruling faces approval today by the state Public Utilities Commission.

The Johnsons, in an April 6, 1995, complaint signed by 61 customers, charged that they paid for state water - at a rate of $145 per acre foot - but received well water, which costs $95 per acre foot.

The customers said because of the 1991 drought and 1994 Northridge Earthquake, their water supplies had been interrupted or reduced several times.

The judge's recommendation verifies their complaints, the Johnsons said Tuesday.

"We're elated," Warren Johnson said. "It justifies our original contention that the company overcharged customers. We feel we have an unofficial victory."

Added his wife, Vera Johnson: "We were delighted. There's so few things the public wins."

Santa Clarita Water serves about 21,000 connections and obtains its water from the Castaic Lake Water Agency, the Saugus aquifer and the Santa Clara River.