LAWSUIT AGAINST CASTAIC LAKE AGENCY REJECTED; JUDGE THROWS OUT SANTA CLARITA RESIDENTS' LEGAL CHALLENGE TO WATER PROVIDER PURCHASE.

Byline: Jason Takenouchi Staff Writer

A Los Angeles Superior Court judge rejected a legal challenge Wednesday to the purchase of the Santa Clarita Water Co., the Santa Clarita Valley's largest water retailer.

The decision was a major victory for the Castaic Lake Water Agency, the valley's sole wholesale provider of imported state water. The agency paid $63 million for Santa Clarita Water on Sept. 3, and it is unclear what would have happened if the judge ruled against the purchase.

Four Santa Clarita residents filed the suit in August, charging that the agency did not have the legal right to operate a retail water company. The group's lawyer said it will file an appeal.

Castaic Lake officials lauded the judge's ruling.

``The judge's action just confirmed everything we've stated all along,'' said Bill Cooper, president of the agency's board.

``We have the authority to operate at retail,'' he said. ``I absolutely think an appeal is a waste of time and a waste of the taxpayers' money.''

Cooper is one of three new directors of the Santa Clarita Water Co., which has been renamed the Santa Clarita Water Division.

Councilwoman Jill Klajic, one of the residents who is suing to invalidate the purchase, said Castaic Lake's control of the company will lead to more growth in the valley.

``They want the water to promote growth, and in a big way, because that's how they intend to pay their bills,'' she said. ``The more houses (that are built), the more money they make.''

The board of the Santa Clarita Water Division will hold a public reorganization workshop at 5:30 p.m. Monday at Castaic Lake's headquarters, 27234 Bouquet Canyon Road.