IID Board Approves Large Load Tariff for High-Demand Power Customers

-Editorial 

The Imperial Irrigation District Board of Directors approved a new Large Load Tariff on Sept. 15, establishing requirements for customers seeking substantial amounts of electricity from the district’s power system.

The tariff comes as IID faces increased interest from prospective large-load customers seeking electric service within its territory. The policy establishes a standardized framework for evaluating, connecting, and serving projects with significant electricity demands.

IID staff first presented the proposed Large Load Tariff to the board on May 7. According to the district, the tariff is intended to prevent costs associated with large-load projects from being shifted to existing electricity customers while establishing guidelines for evaluating new service requests.

Under the approved tariff, large-load customers will be responsible for costs and financial risks associated with serving their projects. Requirements include minimum electricity demand and energy obligations, long-term service commitments, funding for technical studies, collateral and mechanisms for recovering infrastructure and other costs.

The tariff also provides a framework for IID to evaluate potential impacts on its electric system, including transmission limitations, infrastructure needs, resource adequacy requirements and long-term power supply considerations.

Projects will be subject to milestone-based funding and contractual requirements designed to reduce financial risks associated with developments that may not ultimately move forward.

IID conducted a 30-day stakeholder comment period from May 18 through June 17, receiving 243 comments. Of those, 239 came from members of the public and four from stakeholders.

Approximately 185 members of the public submitted substantially similar comments supporting the proposed tariff while calling for IID to reduce its proposed minimum load factor from 85% to 65%.

Following the public comment period, IID revised the minimum load factor to 80%, down from the originally proposed 85%.

District officials said the tariff is intended to allow IID to evaluate economic development opportunities while maintaining electric system reliability and protecting its existing customer base from costs generated by large-load projects.

IID staff said costs associated with serving qualifying large-load customers will be borne by the requesting customer. The district said it does not anticipate an adverse financial impact on existing IID customers as a result of the tariff.

IID Director Alex Cardenas asked the consultant about the proposed 80% load-factor threshold, comparing it with Arizona Public Service’s extra-high load-factor tariff, which has used a 92% threshold.

The consultant said the higher APS threshold was originally intended to encourage customers with exceptionally high and consistent electricity demand at a time when Arizona was experiencing declining baseload demand. She said IID’s proposed 80% threshold was selected to capture most computational loads, including data centers, without unintentionally applying the tariff to mineral extraction, manufacturing and other industrial operations.

She said some existing or potential industrial operations within IID’s service territory could operate near a 70% load factor. Setting the threshold too low, she said, could result in those customers being subject to a tariff primarily designed to address the financial and infrastructure risks associated with large computational loads.

Cardenas also asked whether IID’s approach complies with the federal Public Utility Regulatory Policies Act, commonly known as PURPA, and whether the district has appropriate authority to establish its own large-load tariff and ratepayer protections.

It was noted that PURPA primarily addresses certain electricity generation resources rather than customer load. She said IID would need to consider PURPA requirements if a future data center paired its demand with a qualifying generation resource, but the proposed large-load tariff generally addresses a separate issue involving electricity consumption.

Cardenas praised district staff and consultants for developing a tariff that she said provides transparency, protects ratepayers and seeks to prevent costs associated with new large loads from being shifted to existing customers.

Gilberto Manzanarez of Valle Imperial Resiste voiced support for the proposed large-load tariff, arguing that existing IID customers should not bear the costs of infrastructure needed to serve major corporations. “If a corporation wants to come into Imperial Valley and build a facility requiring hundreds of megawatts of electricity, then that corporation should be responsible for the costs necessary to meet that demand, not the ratepayers,” Manzanarez said. “Our families should come first, and making sure large customers pay their own way is the place where we can start.”

IID Board Chairperson Karin Eugenio said the board’s action was intended to protect Imperial Valley residents and natural resources while ensuring development serves the community’s interests.

“This is our home, not a dumping ground and not a colony for outside interests to exploit,” Eugenio said. “To those who want to build here, respect us, protect our resources and leave our community better than you found it.” Eugenio also thanked IID staff and community members who pushed for accountability, adding, “As a board, we promised to defend this community, and today we are keeping that promise.”