Posts

Z-Global and the IID: Who Is Really Blocking Imperial Valley’s Energy Future?

In a region where the utility controls the grid and the grid controls who can develop, access to that grid is not just an engineering question. It is a power question in both senses of the word.

The Imperial Irrigation District operates an independent utility — a significant competitive advantage for Imperial Valley’s economic development. IID is not constrained by CAISO’s transmission grid. It manages its own generation, transmission, and distribution infrastructure. For a developer trying to build a 330-megawatt data center, this independence is attractive: one utility, one interconnection agreement, one set of relationships to manage.

But the federal lawsuit filed by IVCM alleges that IID’s independence is being used against the project, not for it — and that the mechanism is a consultancy named Z-Global with deep institutional ties to IID leadership.

What the Complaint Alleges

The IVCM federal complaint alleges that Z-Global — a firm with established consulting relationships within IID — has a competing financial interest in the transmission capacity and renewable energy development opportunities that the IVDC would utilize. By occupying IID capacity with a 330-megawatt industrial load, the data center would reduce the transmission headroom available for Z-Global’s own renewable energy projects.

The alleged motive is not complicated: a consultancy that wants to develop renewable projects using IID infrastructure has a financial interest in preventing a large industrial customer from taking up the capacity those projects would need. The alleged mechanism is also not complicated: use institutional relationships within IID to make the utility’s engagement with the IVDC difficult, slow, or nonexistent.

Whether these allegations can be proven will be determined in federal court. But the structural conflict of interest they describe — a consultancy with insider access to a utility decision-making apparatus that also has a direct financial stake in the utility’s capacity allocation decisions — is not a far-fetched scenario. It is a well-documented pattern in regulated utility environments across the country.

What IID Owes Its Ratepayers

IID is a public utility. Its rates are set to serve its customers. Its capacity allocation decisions should be governed by what is best for the service territory and its ratepayers — not by what is most profitable for connected consultants.

A $30 million annual net revenue contribution from a single large industrial customer is a material benefit to IID’s financial position. That revenue spreads the utility’s fixed costs across a larger demand base, putting downward pressure on the per-unit rates that residential and small commercial customers pay. Blocking that customer — or allowing institutional relationships to impede its interconnection — imposes a direct cost on every IID ratepayer.

The IID board is elected by those ratepayers. They have a fiduciary obligation to manage the utility in the interests of the people who pay the bills. That obligation requires investigating the allegation that Z-Global’s relationships have influenced IID’s posture toward the IVDC — and providing public answers, not internal assurances.

The Broader Pattern

The IVDC case is not the first time that connected insiders in a regulated utility environment have been accused of using institutional access to advance private interests at the expense of ratepayers. It is a pattern familiar enough that federal and state regulators have developed specific frameworks for identifying and remedying it.

What makes this instance significant is the scale: $10 billion in private investment, 1,688 union jobs, $30 million in annual utility revenue — all potentially affected by the decisions of a consultancy whose institutional access is not visible to the ratepayers bearing the cost. The federal lawsuit has put those allegations into a public record where they can be investigated, challenged, and adjudicated. That process is exactly what the legal system is designed to do with claims of this kind.

The IID ratepayers of Imperial Valley deserve to know what happened. The federal courts will help answer that question.

Your IID Electric Bill and the Data Center Someone Is Trying to Block

If your IID electric bill goes up next year, there is a specific reason to pay attention to what has been happening in the courts and the boardrooms around the Imperial Valley Data Center project.

The IVDC would generate an estimated $30 million per year in net revenue to the Imperial Irrigation District. In utility economics, that number matters beyond its face value. IID operates a regulated utility — its costs are spread across its ratepayer base, and its rates are set to recover those costs plus a reasonable return. When a large, stable industrial customer joins the rate base, the fixed costs of generation, transmission, and distribution infrastructure get spread across a larger total demand. The per-unit cost for every other customer — including every household paying an IID residential bill — decreases.

This is not a speculative model. It is how regulated utility economics work. High-volume, stable industrial loads subsidize residential rates. Always have.

The Z-Global Problem

So why has IID’s institutional posture toward the IVDC been, at best, ambiguous — and at worst, according to the federal lawsuit filed by IVCM, actively obstructive?

The federal complaint filed in Case No. 3:26-cv-00128 alleges that IID’s resistance to the project is not driven by legitimate utility planning concerns. It alleges that Z-Global — a consultancy with deep ties to IID’s leadership — has a competing interest in the transmission capacity and renewable energy development opportunities that the IVDC would occupy.

Z-Global, according to the complaint, wants to develop its own renewable energy projects using the same IID infrastructure that the data center would utilize. An industrial customer consuming 330 megawatts of IID capacity is a direct competitor for the transmission and generation assets that Z-Global’s projects would need. The alleged motivation for IID’s resistance is not protecting ratepayers. It is protecting a consultant’s market position.

What Ratepayers Are Owed

IID ratepayers have a direct stake in how their utility allocates its capacity and serves its largest potential customers. A $30 million annual net revenue contribution from a single industrial customer is not a rounding error in IID’s budget. It is a material improvement in the utility’s financial position — money that can offset rate increases, fund infrastructure maintenance, or retire debt that is otherwise serviced through ratepayer bills.

The suggestion that IID leadership may be making capacity allocation decisions based on the interests of a connected consultancy — rather than the financial interests of the ratepayers the utility exists to serve — is a governance question of the first order. It is the kind of allegation that utility regulators and elected IID board members should be demanding to investigate, not dismissing.

If the allegation in the federal lawsuit is accurate, IID ratepayers are being asked to pay higher rates so that a consultancy with insider access to IID decision-making can protect its business interests. That is a serious claim. It deserves serious scrutiny.

The Independent Grid Advantage

IID’s position as an independent utility — not subject to CAISO’s grid management, operating its own generation and transmission infrastructure — is one of Imperial Valley’s competitive advantages for attracting data center investment. A data center operator that connects directly to IID’s grid gets predictable, stable power from an entity that controls its own supply stack, without the transmission congestion and pricing volatility that affect utilities tied to the broader California grid.

That advantage only holds value if IID is actively trying to attract major industrial customers. An IID that protects incumbent consultants at the expense of large new ratepayers is squandering a genuine competitive asset — and charging its residential customers more than they would otherwise pay for the privilege.

The $30 million question deserves a public answer. IID board members are elected officials. The ratepayers who elect them are entitled to know whether the utility’s decisions about the IVDC are being made in the interests of the people who pay the bills, or in the interests of the people who have the utility’s ear.