What Are We Doing?
Opposing the hostile takeover of Liberty Apple Valley
The Town of Apple Valley and Liberty Utilities have been at odds ever since Liberty acquired Apple Valley Ranchos Water Company from its previous owner, Park Water Co., about a year ago.
And of course before that the town and Park found themselves similarly at odds.
At odds actually doesn’t do justice to the bitterness of this conflict. The Town Council wants to take over Liberty Utilities through eminent domain and make the water system the property of the town. Liberty Utilities, part of Algonquin Power & Utilities Corp., a public company based in Oakville, Ontario, Canada, is fighting the takeover attempt for all it is worth, as one would expect.
The reason for the conflict is simple: water rates. The Town Council and many of Liberty’s customers believe they are too high and have been increasing too much and too rapidly. They can point to doubledigit increases for several years, making water rates in Apple Valley significantly higher than those in neighboring Hesperia or Victorville.
The Town Council isn’t promising Liberty customers that rates will decline if it successfully takes over the company, but believes that rates could be stabilized quickly. That is music to the ears of many customers.
However, there is an element of risk in the Town Council’s plan. Recently, a judge declined to allow the city of Claremont to take over Golden State Water Company’s Claremont assets, a ruling that will cost the city millions of dollars. It should be noted that the same attorney who represented Golden State in that case is working for Liberty, and the same legal firm that represented Claremont — Best, Best and Krieger — is representing the Town of Apple Valley.
So the question is, should the town continue down this all-or-nothing path to potential Liberty takeover, a path that will require a vote of residents to continue, or would it be prudent to engage Liberty in negotiations now?
Liberty recently asked the California Public Utilities Commission for — and was granted — a two-year rate freeze. So water rates in Apple Valley will remain unchanged for two years.
Could the town convince Liberty to extend that freeze for 10, 15 or 20 more years in exchange for ending its takeover bid? Could the town also convince Liberty to reduce the bimonthly service charge for a ¾-inch meter (which is higher than currently charged in both Hesperia and Victorville) in exchange for ending its takeover bid?
As it stands, attorneys are primarily profiting from this water war between Liberty and the town. We think it would make sense for both sides to come to the table to see if common ground might be found.
Our sense is that Apple Valley customers of Liberty Utilities mainly are concerned about unfettered rate increases. If a deal could be reached that stabilized or even reduced rates for a significant period of time, we would expect customers to be very happy.
We encourage Liberty and the Town of Apple Valley to come together. After all, it doesn’t cost anything to talk.
Source: Daily Press