A state administrative law judge has refused to throw out an environmental group’s complaint over a Santa Clarita Valley water district deal.

Santa Clarita Organization for Planning and the Environment, a long-standing local environmental group, filed a complaint alleging the Castaic Lake Water Agency’s purchase of Valencia Water Co. was an “illegal acquisition of (a) water company that is slated to serve the massive Newhall Ranch project.”

The group alleges that on Dec. 17, the Castaic Lake Water Agency entered into a contract to purchase Valencia Water that contained a plethora of promises favorable to Valencia’s parent company, Newhall Land Development Inc.

Castaic Lake Water Agency, a water wholesaler in the Santa Clarita Valley, challenged the complaint, asking the California Public Utilities Commission to dismiss it.

But a PUC administrative law judge denied its motion. A Saturday email reads: “To all parties: The motion of Castaic Lake Water Agency to dismiss Complaint 13-01-005 is denied. Judge Douglas M. Long.”

The complaint is expected to be heard by the commission.

Castaic Lake Water Agency officials have consistently said the purchase of Valencia Water Co. is legal.

“There is no question that the purchase is legal and there is no question that we can legally operate it under the (California) Public Utilities Commission,” Dan Masnada, the agency’s general manager, said two weeks after the PUC complaint had been filed.

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