DA’s office looking into IID/ZGlobal allegations
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.