How an IID consultant tried to tap the agency's solar program as ratepayers were shut out

A solar farm developed by ZGlobal was so big that it helped prompt the sudden end of the imperial irrigation district's popular net metering program.

By Sammy Roth, The Desert Sun

The Imperial Irrigation District infuriated customers last year when it abruptly closed a popular solar program to new applicants, putting rooftop solar out of reach for many families who could no longer afford it — and leaving more than 1,000 homes and businesses that had already decided to go solar in financial limbo for months.

But a solar project developed by an IID consultant, ZGlobal Inc., applied for the publicly funded solar program, known as net metering, just in time. ZGlobal's solar project was so large that it helped prompt the sudden end of net metering and at least temporarily kept hundreds of regular IID customers from enrolling, newly obtained documents show.

ZGlobal led the development of that solar project, at Imperial Valley College, while the consulting firm also helped run IID's energy department. ZGlobal's project was three times larger than the size limit for the utility's net metering program — and 600 times the size of an average rooftop solar system. That means it would have taken up 600 times more of the limited space in IID's solar program than the typical home solar installation.

Less than a month after getting net metering applications for the Imperial Valley College project, IID suddenly closed the program to new applicants, saying it had inadvertently accepted too many applications and might not be able to enroll everyone who had applied. That was stunning news for the thousand-plus IID customers — many of them in the Coachella Valley cities of Indio, La Quinta and Coachella — who had applied for net metering but hadn't yet been approved. Many of those homes and businesses had already paid for rooftop solar systems based on the expectation of net metering.

Without net metering, which pays solar generators for the electricity they produce, those customers weren't sure whether solar would save them money or raise their energy bills.

Indio resident Paul Nelson was stuck in limbo for several months in 2016, after the Imperial Irrigation District abruptly closed NEM to new customers, making it unclear whether Nelson and many others would be able to afford their newly installed solar panels.
(Photo: Jay Calderon/The Desert Sun)

After six months of growing political pressure, IID finally let most of the stranded solar customers enroll in net metering. But the utility provided little information to those customers in the interim, leaving many of them anxious that the tens of thousands of dollars they had agreed to pay rooftop solar installers would turn out to be a losing investment. In some cases, IID encouraged its stranded customers to sign up for a new, less generous solar program known as net billing, creating more confusion and anxiety.

"I've already paid for the system. I've got my investment just sitting there, doing nothing," Indio resident Paul Nelson, who had solar installed in early 2016, told The Desert Sun as he waited for word from IID last year. "I figured my return on my investment would be the reduction in my monthly bills. Well, guess what? I'm still getting monthly bills."

ZGlobal disputed the idea that the college solar project had anything to do with net metering's abrupt closure.

Kassy Perry, a Sacramento-based public relations consultant working for ZGlobal, said Imperial Valley College never actually received net metering benefits. She said the college ultimately agreed to switch to IID's new, less generous net billing program before its solar project came online, so that more homeowners could enroll in net metering.

Perry also suggested IID staff had caused the over-enrollment problem by continuing to accept net metering applications even when they knew the program was nearing capacity. The suggestion that ZGlobal's Imperial Valley College project helped prompt the end of net metering "is based on erroneous facts," Perry said in a written statement.

After net metering ended, a ZGlobal client stood to benefit from a new solar initiative that IID staff framed as a response to public anger over the closure of net metering.

La Quinta residents Bob and Arlene Livon talk about the problems they’ve had trying to go solar as customers of the IID on May 9, 2016.
(Photo: Jay Calderon/The Desert Sun)

As more than 1,000 IID customers waited months to find out whether they'd get net metering, utility staff told IID's board of directors they were working on a plan that would allow ratepayers to keep accessing solar power. ZGlobal employee Jesse Montaño worked on that plan, which would involve IID buying power from a large-scale "community solar" farm. IID gave a ZGlobal client a $75-million contract for that solar farm, to be built on land owned by a limited liability company with close ties to ZGlobal.

"I've done business with a lot of government agencies, and I haven't seen one that's operated in that manner," said Kirk Weiss, regional sales manager for Planet Solar, a Palm Desert-based rooftop installer. "If you're an insider, you get special treatment."

ZGlobal terminated its $9.1-million consulting contract with IID in October, a year ahead of schedule, in the midst of an investigation by Imperial County's district attorney into the relationship between the consulting firm and the utility. That investigation was sparked by a series of articles in The Desert Sun focused on potential conflicts of interest at IID.

IID launched an internal investigation in response to The Desert Sun's reporting, which so far has led to the cancellation of two energy contracts, collectively worth $82 million. Utility officials had said they would release a report this week outlining other potentially problematic contracts, but IID's board of directors blocked the report's release until after the completion of a planned mediation between IID and ZGlobal.

IID didn't respond to detailed questions from The Desert Sun for this story. But in an emailed statement, the utility's general manager, Kevin Kelley, said: "To the extent there are issues, including the one you are asking about involving (Imperial Valley College), IID will address them in the mediation process by availing itself of the potential remedies under Government Code Section 1092."

Government Code Section 1092 allows public agencies to void any contracts that were made in violation of California's conflict-of-interest law. The law says elected officials, public employees and private contractors working for government agencies "shall not be financially interested in any contract made by them in their official capacity."

ZGlobal founder and president Ziad Alaywan has denied that he or ZGlobal ever acted improperly, saying the consulting firm has boosted the Imperial Valley's economy by bringing solar developers to the area and helping IID keep electricity rates low.

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