IID refutes claim of leaving ‘millions on the table’
EL CENTRO — Imperial Irrigation District’s outside counsel presented another report to refute a report made by The Desert Sun last month suggesting the district “left millions on the table” following the sale of farmland in 2011.
The latest article follows a series of reports which began in August which have raised concerns about the bidding process surrounding IID’s battery storage project and the potential conflicts of interest related to the district’s former close partnership with engineering ZGlobal.
At the end of November, The Desert Sun reported that in 2011, the IID sold 1,400 acres of farmland to Green Light Energy — which is closely tied with ZGlobal — for $5.77 million, and that just a few weeks later, the company sold that property to First Solar for $14.2 million, suggesting the IID “left millions on the table.”
The latest allegations were the dominant topic of discussion during this week’s IID Board of Directors meeting. Outside Counsel Mike Aguirre, who has been looking into the articles, presented his findings regarding the 2011 sale of the property as part of his third interim report.
“The premise of the allegations … is not correct,” the reports states. “The financial details of the land sale, achievement of IID’s overarching goal of facilitating transmission connections to the CAISO (California Independent System Operator) grid and the realization of water transfer saving all support the conclusion that the Solar Gen 2 transaction was sound and prudent exercise of the IID board’s business judgement.”
The biggest point of emphasis made by the members of the board was the fact that the IID sold the farmland for $4,000 per acre, which is $2,200 more per acre than what the IID initially bought it for.
And they stated that since the developer made improvements on the property to make it shovel-ready for any potential immediate projects it increased the value of that property.
“When it was sold, it was as farm ground, the company that bought it went through the permitting process which costs hundreds of thousands of dollars to get a shovel ready project. Only a fool would think that the value wouldn’t have increased,” said board president Bruce Kuhn.
General Manager Kevin Kelley said the realization of the Solar Gen 2 project has resulted in a great benefit for the district, as the IID retained the water rights for the land, is expected to save approximately $50 million over the course of the 25year power purchase agreement for water, and added the money that came from the sale enabled the IID to pay for three switchyards.
“The record is replete of examples of how that project added value to IID, it was probably the most successful project in terms to value for both water and energy and the stage that it set for the things that we’ve done ever since …” Kelley said.
“I don’t begrudge any newspaper from covering the news, that is their job but they do need to correct the record ... if there were ever a need for a correction I think this story cries out for it.”
ZGlobal
Although the entire discussion was focused on the land sale for the Solar Gen 2, Aguirre’s report hints at important findings to come in an ensuing report.
Previously, Aguirre made two reports in which he found no wrongdoing by the IID regarding the Battery Storage bidding process, but is still in the process of finalizing a report that will touch on the conflicts of interest allegations surrounding the district’s relationship with ZGlobal, which is expected to be presented to the board at its next meeting.
“There have been legitimate issues raised regarding the issue of 1090 which is government code (regarding conflicts of interest), there are legitimate issues and we will be addressing those issues and suggesting remediation of those issues on the Dec. 18 meeting,” Aguirre said during the board meeting.
“We’ll be issuing a report to the board with factual details and with the folks that are involved with their point of view on it, and make a recommendation to the board on how to remediate and correct any problems that we have.”