DA’s of­fice look­ing into IID/ZGlobal al­le­ga­tions

Imperial Valley Press - - FRONT PAGE - BY ED­WIN DEL­GADO Staff Writer

EL CEN­TRO — Po­ten­tial con­flict of in­ter­ests and con­cerns re­gard­ing the bid­ding process for the Im­pe­rial Ir­ri­ga­tion District’s Bat­tery Stor­age fa­cil­ity are be­ing in­ves­ti­gated by Im­pe­rial County District At­tor­ney’s of­fice.

In Au­gust, the Palm Springs-based news­pa­per, The Desert Sun pub­lished a three-part se­ries re­gard­ing the po­ten­tial con­flict of in­ter­est re­gard­ing ZGlobal, an en­gi­neer­ing firm that works ex­ten­sively with the IID.

As part of the re­port­ing, the pub­li­ca­tion out­lined sev­eral in­stances in which ZGlobal had a con­sult­ing role with the IID in as­sess­ing so­lar projects that would con­nect to the IID’s grid while also main­tain­ing a close re­la­tion­ship with some of those de­vel­op­ers.

Otero on Thurs­day told the Im­pe­rial Val­ley Press his of­fice will be­gin look­ing into the al­le­ga­tions fol­low­ing a com­plaint reg­is­tered at his of­fice re­gard­ing the po­ten­tial con­flict of in­ter­est is­sues per­tain­ing to the news ar­ti­cle.

How­ever, he em­pha­sized his of­fice only just started to look into the mat­ter and stated that at the mo­ment there is noth­ing spe­cific they’re look­ing into.

“I don’t have any­thing con­crete at the mo­ment ex­cept that we’re look­ing into it,” Otero said, re­fer­ring to the for­mal com­plaint re­ceived by his of­fice. “We’re re­view­ing it to find out if the al­le­ga­tions have any merit to them.”

Although the IID is aware of the de­vel­op­ment, Gen­eral Coun­sel Frank Oswalt said they have yet to be con­tacted by Otero’s of­fice.

“At this time, IID has not re­ceived any for­mal no­ti­fi­ca­tion from, nor have we been asked to pro­vide any doc­u­men­ta­tion to, the district at­tor­ney or his of­fice,” Oswalt said in a state­ment. “It is our in­tent to co­op­er­ate fully with District At­tor­ney Otero and ex­pect that his of­fice will con­duct a thor­ough and im­par­tial in­ves­ti­ga­tion.”

A re­quest for com­ment to ZGlobal on Thurs­day was not re­turned.

Bat­tery Stor­age Fa­cil­ity

IID’s $38 mil­lion lithium-ion bat­tery stor­age sys­tem has a ca­pac­ity to store 30 megawatts of elec­tric­ity. Since its com­ple­tion, the fa­cil­ity has helped the IID in dif­fer­ent ar­eas such as grid flex­i­bil­ity, area con­trol, black start and spin­ning re­serve.

New con­flict of in­ter­est pol­icy

Ear­lier this year, when the IID was seek­ing to ap­prove a con­tract for a com­mu­nity so­lar project lo­cated in western Im­pe­rial County, is­sues emerged with the pro­posed lo­ca­tion of the project.

The Al­le­gretti Ranch, near Bor­rego Springs, was owned by ZGlobal pres­i­dent Ziad Alay­wan. The po­ten­tial con­flicts re­gard­ing the firm led to the IID board adopt­ing a new pro­to­col in the hopes of avoid­ing any ad­di­tional is­sues in the fu­ture.

The main points of the pro­to­col adopted in March stated, “con­sul­tants work­ing for IID can’t pro­vide ser­vices to any per­son or en­tity seek­ing any dis­cre­tionary en­ti­tle­ment from IID; con­sul­tants should be 100 per­cent ded­i­cated to IID as long as they are em­bed­ded in the agency and scope of work may be changed at any point in time. No con­sul­tant should at­tempt to in­flu­ence a gov­ern­men­tal de­ci­sion by IID in which con­sul­tants have a fi­nan­cial in­ter­est, and should no­tify a depart­ment if a for­mer client of the con­sul­tant seeks any en­ti­tle­ment or con­tract from IID.”

De­spite the new pol­icy, and the fact that the firm sold the prop­erty to Solana En­ergy Farms ac­cord­ing to the Desert Sun, the district found it­self in an­other com­pli­cated sit­u­a­tion, when re­ports emerged that the com­pany which now owns the prop­erty still has very close ties to Alay­wan.

The ar­ti­cle from the Palm Springs area stated some of the reg­is­tered agents for Solana also work for com­pa­nies owned or man­aged by Alay­wan. De­spite the new poli­cies ap­proved March 28, the Im­pe­rial Val­ley Press ob­tained doc­u­ments from the Im­pe­rial County Plan­ning and De­vel­op­ment Ser­vices which show that Alay­wan wrote two checks to­tal­ing $14,500 for fees as­so­ci­ated with the Seville IV project, also re­ferred to as Ti­tan, lo­cated at the Al­le­gretti Ranch af­ter the pol­icy was adopted.

One of the two checks signed by Alay­wan was made for $13,000 on March 31 and a sec­ond for $1,500 dated May 25, both pay­ments were made af­ter the new pol­icy was ap­proved and be­fore a $75 mil­lion con­tract to pur­chase so­lar power from that so­lar farm was con­sid­ered by IID in July. The IID board ini­tially ap­proved the Com­mu­nity So­lar project to be de­vel­oped by Re­gen­er­ate Power on July 18, af­ter Alay­wan sold the prop­erty and, even­tu­ally, the con­tract for the project was re­scinded a few weeks later for rise in costs.

In a let­ter ad­dressed to IID, Ti­tan So­lar 1 Chief Ex­ec­u­tive Of­fi­cer Reyad Fez­zani cited an in­crease in the price of so­lar pan­els from the seller of 60 per­cent due to the un­cer­tainty sur­round­ing tar­iffs for im­ported so­lar pan­els, as one of the causes it could no longer ful­fill the Power Pur­chase Agree­ment. “We un­der­stand that IID does not wish to ne­go­ti­ate any price in­crease or any sched­ule de­lay in the PPA,” Fez­zani wrote in the Aug. 29 let­ter to IID. “The seller, there­fore, re­quests that IID en­ter into good faith dis­cus­sions to re­scind the PPA and set­tle any out­stand­ing li­a­bil­i­ties on terms and con­di­tions mu­tu­ally agree­able to the par­ties.”

In the let­ter, Fez­zani also sug­gested the in­creased cost of fi­nanc­ing was due to “un­sub­stan­ti­ated press cov­er­age.”

Af­ter the agree­ment for the com­mu­nity so­lar project was re­scinded, IID Gen­eral Man­ager Kevin Kelley told the board staff would work ex­pe­di­tiously to give the board an al­ter­na­tive in the near fu­ture.


Guest in at­ten­dance had the op­por­tu­nity to tour and have a closer look at how the fa­cil­ity op­er­ates af­ter the rib­bon-cut­ting cer­e­mony of the Bat­tery En­ergy Stor­age Sys­tem.


FROM LEFT: Emilio Ca­ma­cho from CEC, Fabrice Hudry from Sam­sung, State Sen. Ben Hueso, Mike Abatti from CESP, IID Di­rec­tor, District 1 Matt Dessert and Chair­man of the Im­pe­rial County Board of Su­per­vi­sors Jack Ter­razas per­form the tra­di­tional rib­bon cut­ting af­ter the com­ple­tion of the Bat­tery En­ergy Stor­age Sys­tem.

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