IID to power Coachella Valley JPAs?

April 03, 2002|By RUDY YNIGUEZ, Staff Writer

LA QUINTA — A coalition of entities in the Coachella Valley has undertaken a feasibility study of the municipalization of the Southern California Edison electrical distribution system in the Coachella Valley.

The group will consider taking the system through eminent domain proceedings if necessary.

If successful the group, operating under two joint powers authorities, would seek new sources of electricity. One of those sources could be the Imperial Irrigation District.

Indian Wells City Councilman Percy Byrd told the IID Board of Directors about the study Tuesday. He said a report estimates the communities could save an estimated 15 percent in power bills, with an additional 2-3 percent in savings in the long term.

"Savings result from the financing with 100 percent debt, tax-exempt status and future use of tax-exempt financing," the study says. "Major risks include system valuation determination in eminent domain litigation, future power supply costs and interest rates."


The group includes the cities of Indian Wells, Desert Hot Springs, Cathedral City and Palm Desert; the Coachella Valley Water District; the Mission Springs Water District; the county of Riverside; the Desert Water Agency; and the Agua Caliente Band of Cahuilla Indians.

Byrd said the group retained a consultant who estimated the value of Edison's local system at $120 million to $140 million. He said Edison is reportedly not interested in selling the system, and has estimated its value in the range of $450 million.

The report states Edison supplies about 120,000 customers in the area, with a peak demand of about 535 megawatts, or 2,100 gigawatt-hours per year.

Byrd said the consultant's report will be independently reviewed for accuracy.

IID Division 1 Director Andy Horne made the point of saying the IID board did not approach or solicit such an arrangement, and that no discussions between IID and the entities in the Coachella Valley have taken place.

Steven Conroy, Edison media relations manager, said Edison continues to reiterate the group's study lacks depth and has significant omission in the actual costs of operating the distribution system and in the cost of what it would cost under eminent domain proceedings.

He also said based on the expertise IID has in the power business, the IID board can see the study doesn't make sense and certainly doesn't add up to the true costs of operating such a system.

Byrd said the actual formation of a JPA is months away. He said the group is preparing the language for a November ballot measure through which to gauge public support. Sometime after each public entity would have to agree to form the JPAs.

One JPA, consisting of the cities, would have authority to make the required purchases of power, while the second JPA, consisting of the water districts and other public agencies, would provide the needed services. Joint power authorities have eminent domain authority, and the eminent domain process would be used to determine if the property could be acquired and the level of just compensation, the report states.

Byrd said eminent domain proceedings could take several years in court.

>> Staff Writer Rudy Yniguez can be reached at 337-3440.

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