II. Factual Background Regarding Valencia's Water Supplies

Valencia is a Class A water utility offering public utility water service for a mix of residential and commercial land uses in portions of the Santa Clarita Valley of Northern Los Angeles County. It is one of the four retail water purveyors serving the Santa Clarita Valley, the others being Newhall County Water District, Santa Clarita Water Company, and Los Angeles County Waterworks District 36. The Castaic Lake Water Agency (CLWA) performs a wholesale function, contracting for water supplies from the State Water Project (SWP) and potentially other sources, treating those supplies in its Rio Vista and Earl Schmidt Treatment Plants, and delivering them to the four retail purveyors for service to end-use customers. Since CLWA's acquisition of Santa Clarita Water Company in 1999, Valencia is the only one of these entities subject to regulation by the Commission.

The primary source of water supplies for the Santa Clarita Valley historically has been groundwater pumped from the Alluvial Acquifer and the underlying Saugus Formation. Beginning in 1980, CLWA has delivered imported water from the SWP into the Valley, supplementing these groundwater supplies, and more recently CLWA has undertaken plans to deliver highly treated recycled water from existing water reclamation plants operated by the County Sanitation Districts of Los Angeles County.

Valencia's own water system includes 18 wells in the Alluvial Aquifer, five wells in the Saugus Formation, and six connections, called turnouts, to CLWA's system by which Valencia receives SWP water from CLWA. Valencia generally produces water using a mix of about 50% groundwater and 50% imported water, with some variation in the mix depending on peak demands and weather conditions.

The groundwater basin in the Santa Clarita Valley is unadjudicated, meaning that neither Valencia nor the other purveyors have adjudicated water rights that dictate their water supply. The total supply available to all purveyors in the basin and the ability of Valencia to access those supplies determines the amount available to Valencia to meet its long-term supply needs.