The Imperial Valley’s water and power agency has approved new pricing rules that put data centers first in line to have their power cut when demand surges.
The Imperial Irrigation District, or IID, supplies electricity to over 160,000 customers across the Imperial and Coachella Valleys. The public utility’s board of directors voted unanimously Tuesday to approve the new rules, known as a “Large Load Tariff.”
The new pricing rules require major energy users to cover necessary infrastructure upgrades, pay a certain monthly minimum charge and commit to 15 years of energy service. They also give the agency the power to shut those users off first when energy demand soars, like during the summer months.
Utilities in over a dozen other states already have their own large load tariffs in place, according to the Smart Electric Power Alliance — although the exact terms of those rates can vary widely.
The decision comes as IID has become a focal point in the heated debate over whether data centers should be built in Southern California. Residents, local officials and environmental groups have raised fears that a rush of new power-hungry facilities brought on by the AI boom could strain the region’s aging power grid and raise energy costs.
On Tuesday, IID Chair Karin Eugenio said other local elected officials had failed to put the public first. She said the utility was fulfilling their duty to the environment and the health of residents.
“As a public utility, we must provide power to applicants who meet the established requirements,” Eugenio said during the meeting. “But we have an equally important duty to protect the public.”
Several residents attended the meeting Tuesday to voice their support for the new pricing rules and thank IID for standing up for the public.
“I know it’s been a tough summer,” said Peter Rodriguez, an El Centro resident and frequent critic of data center development. “I’m very proud of you looking out for us, the ratepayers.”
An effort years in the making
IID officials have been exploring the new pricing rules aimed at big power users for several years now.
The public utility is one the most influential government bodies in the Imperial Valley. In addition to power delivery, it also oversees the generations-old claims of Imperial Valley farmers to water from the Colorado River.
In recent years, the agency said it’s been receiving “increased interest” from large-scale customers.
Paul Rodriguez, the utility’s deputy power manager, said they were particularly motivated to look closer at new rules for those users after data centers destabilized Virginia’s power grid in 2024.
In 2024, lightning hit a high-voltage transmission line, causing 60 data centers to suddenly drop off the system and switch to their own backup power.
Local energy officials had to scramble to prevent blackouts, regulators found.
The data center projects that developers are proposing in Imperial County would certainly draw giant amounts of energy. One high-profile project planned in the city of Imperial could need more power than the entire county used in 2024.
IID Director J.B. Hamby said their goal was to protect their existing customers and ensure that they didn’t end up on the hook for new projects.
“This is an evolving, complicated set of issues that we're trying to grapple with in real time,” Hamby said Tuesday.
New rules for large customers
IID’s new pricing rules would apply to all large customers that need more than 20 megawatts of power per month — not just data centers.
A megawatt is a measurement of how much energy a facility can receive at any given moment. Around 100 megawatts of electric power could support electricity for 80,000 households in the United States, according to the U.S. Congressional Research Service.
The tariff would require those customers to cover the costs of building and maintaining infrastructure that IID needs to deliver electricity, including substations, distribution facilities and transmission lines.
The new rules also establish minimum monthly charges for each customer. They don't set an exact dollar figure. Instead, the fees would be set at least 85% of the customer’s contracted energy usage.
The facility would also be on the hook for a range of other costs, including providing a cash deposit and covering the price of purchasing renewable energy to keep up with state environmental standards.
And if energy demand surges rapidly, the pricing rules give IID the right to cut off power to those large users first.
The language in the tariff drew support from other members of the board and public speakers. Gilberto Manzanarez, founder of the environmental justice watchdog group Valle Imperial Resiste, called it a step toward economic justice.
“If these corporations can afford to build facilities that consume hundreds of megawatts of electricity, they can also afford to pay for the infrastructure necessary to operate them,” Manzanarez said.
IID faces multiple lawsuits
These new rules come as IID has found itself at odds with one developer in particular.
Huntington Beach-based lawyer and businessperson Sebastian Rucci has been trying to build a massive data center complex in the city of Imperial for close to two years now. He has taken multiple local governments to court over their efforts to slow his project.
In court filings, Rucci has accused IID of treating his company unfairly. Last December, he pointed out, IID made the abrupt announcement that it would hold a public forum on data center development. Less than two weeks later, Eugenio penned an editorial in the Calexico Chronicle opposing Rucci’s project.
This summer, Rucci sued IID in Imperial County Superior Court seeking access to 260 million gallons of Colorado River water per year. He said in legal filings that IID had rejected his water application earlier in the year.
Late last month, Rucci filed a separate lawsuit against the agency in Riverside Superior Court, challenging its recent rate increases in the Coachella Valley.
Rucci’s law office is based in Huntington Beach, but he lives in the Coachella Valley. Over email, he said his second lawsuit hinges on the fact that Coachella Valley ratepayers don’t get to vote for IID’s board of directors.
“This is a question of accountability to the people paying IID’s rates,” Rucci wrote KPBS this week.
Eugenio has previously raised concerns about Rucci’s activities in Imperial County, including his unsuccessful bid to oust her colleague Alex Cardenas earlier this year, calling them “dangerous.”
This week though, the IID chair leveled sharp criticism instead at Imperial County leaders — who earlier this year cleared the way for Rucci’s project before eventually backtracking.
“We are here because of failed leadership,” Eugenio said. “We are protecting our water, our air, our land, our agriculture economy and our children's future.”
“This is our home,” she added. “Not a dumping ground.”
