IID sues Riverside County over ‘unprecedented’ solar power rule

Want more coverage of climate change, energy and the environment? Sign up for Climate Point, our weekly email newsletter.

The Imperial Irrigation District has sued Riverside County to block a new regulation that requires IID to bring back a popular solar program, starting a legal battle that will pit the public power agency against the Coachella Valley’s biggest rooftop solar company.

The county ordinance, approved Tuesday by the board of supervisors in a unanimous vote, orders IID to provide higher compensation rates to its customers with rooftop solar panels for the electricity they generate and sell into the grid. The ordinance applies to homes and businesses in unincorporated parts of Riverside County, including the Coachella Valley communities of Bermuda Dunes, Mecca, Thermal and Thousand Palms. The La Quinta city council planned to discuss a similar policy Tuesday night.

But if IID officials have their way, the county policy will never take effect. The public utility sued Riverside County last week after a preliminary vote by the supervisors on the solar policy, calling the new regulation “an unprecedented ordinance that conflicts with state law.” IID also slammed the board of supervisors for allowing Vincent Battaglia, founder of Palm Desert-based rooftop solar installer Renova Energy, to take the lead in defending the new ordinance. Riverside County’s legal counsel declined to comment publicly on the policy’s legality, instead deferring questions to Battaglia’s lawyers. Battaglia pushed the supervisors to approve the ordinance and has agreed to defend it in court on the county’s behalf, and to reimburse the county for all legal costs.

BACKGROUND: IID replaces net metering with less generous rooftop solar program

RELATED STORY: Why Coachella Valley residents can’t vote in IID elections

Antonio Ortega, IID’s government affairs officers, told the board of supervisors before Tuesday’s vote that the proposed ordinance “will directly benefit (Battaglia) and his business at the expense of all IID ratepayers.”

“We urge the Riverside County counsel to look closely at this ordinance and provide you, the board, with its own legal opinion, and not rely solely on the advice of the ordinance sponsor and their attorney,” Ortega said.

IID closed its net metering program for rooftop solar customers two years ago, replacing it with a less generous program that provides lower compensation rates to customers who sell their excess electricity to IID. Rooftop solar firms said the new program would dramatically reduce the financial incentive for homes and businesses to go solar. Rooftop solar installations in IID territory have fallen since 2016, although more than 800 IID customers in Imperial County and the Coachella Valley have signed up for the less generous compensation program, known as net billing, utility officials said last month.

Riverside County’s ordinance requires IID to bring back the more generous program, net metering, in unincorporated areas governed by the supervisors. The ordinance is based on a section of the California Water Code that says water districts that sell electricity outside of their water service boundaries, such as IID, can be regulated by cities and counties in those outside areas. IID provides water and electricity in Imperial County, and is also the electric utility for 95,000 homes and businesses in the Coachella Valley. Of those 95,000 IID customers, around 10,000 are in unincorporated communities.

Most of IID’s customers in the Coachella Valley live in the cities of Coachella, Indio and La Quinta, which would need to pass their own ordinances requiring net metering.

One of Battaglia’s attorneys, Robert Hanna with the law firm Best Best & Krieger, said Tuesday the county policy is “clearly consistent with California state law.”

“The statute couldn’t be clearer,” Hanna told the county supervisors. “What that statute provides is authority … for this board to have oversight with respect to electric energy that is provided outside the boundaries of the irrigation district.”

RELATED: Coachella Valley residents could save $74 per month from solar mandate 

CLIMATE POINT: Subscribe to USA TODAY’s climate change and energy newsletter

The Imperial Irrigation District disagrees. In a 12-page complaint filed in Riverside County Superior Court, the utility’s lawyers said the county ordinance “unlawfully erodes the regulatory authority of both the California Legislature and the California Public Utilities Commission.” They cited the California Public Utilities Code, which says electric utilities are “not obligated to provide net energy metering” for solar customers after a reaching a certain numerical threshold, a condition IID says it met in early 2016.

“While IID values its relationship with Riverside County, it will not sit idly by and allow the board to undermine the district’s responsibility to its customers in the Imperial and Coachella valleys,” IID board president Jim Hanks said in a statement.

Battaglia said the county ordinance solves a simple problem: People want rooftop solar.

Net metering “is happening all over our nation and in more than 3,000 utility territories, but it’s not happening in the Imperial Irrigation District’s territory,” Battaglia told the board of supervisors in June. “The will of the people is to be energy independent with solar.”

Riverside County spokesperson Ray Smith said it’s not uncommon for a third party to take responsibility for defending a proposed policy that’s likely to draw a lawsuit.

“An example might be a development project that could face opposition on any number of grounds,” Smith said in an email.

It isn’t unusual for solar firms and utility companies to clash over rooftop solar. Across the country, electric utilities have tried to reduce the payments they make to customers with solar panels, describing those payments as unfair subsidies that benefit wealthy homeowners at the expense of lower-income customers who can’t afford solar panels. That was the stance taken by IID officials, who worried low-income ratepayers would be forced to pay higher rates to maintain the electric grid. Rooftop solar advocates dispute that argument, saying utilities aren’t taking into account the benefits of solar to everyone on the grid, such as a reduced need for new power plants and other infrastructure.

But the animosity between IID and Battaglia, who runs the largest rooftop solar company in the Coachella Valley, has become unusually personal.

After IID ended net metering, Battaglia put up billboards and paid for TV and radio ads criticizing the utility, at times working through a nonprofit he founded, the Electric Ratepayers Alliance. Later, he criticized IID over alleged conflicts of interest involving a consultant. In response, the public agency paid private investigators to scrutinize Battaglia, in a move IID general manager Kevin Kelley later described as “opposition research.” IID’s investigators talked to at least two former employees of Battaglia’s solar company, including co-founder Thomas Hall, who is no longer with the company.

The latest skirmish between IID and Battaglia could also foreshadow future tension between the Imperial County-based utility and its customers in Riverside County.

As part of a 1934 agreement stemming from the construction of the Hoover Dam, the Imperial Irrigation District agreed to be the power provider for parts of Riverside County, mainly the eastern Coachella Valley. Under the terms of the agreement, only Imperial County residents in IID’s water service territory can vote in elections for IID’s board of directors. Instead of votes, the Coachella Valley got money: IID agreed to pay 8 percent of the net proceeds from its total energy sales to the Coachella Valley Water District.

But the 99-year power agreement expires in 2033. That means sometime between now and then, IID and the Coachella Valley Water District will need to extend the deal, or the cities of Coachella, Indio and La Quinta will need to find a new electricity provider. Utility companies plan their infrastructure investments years in advance, meaning the agencies will need to start discussing their options soon.

Some Coachella Valley officials have said they’re frustrated by the lack of voting representation. IID board members, though, are staunchly opposed to any political changes that could give outsiders a say over the Imperial Valley’s Colorado River water rights, which make possible the region’s multibillion-dollar agricultural economy.

Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.

Read or Share this story: https://desert.sn/2us7T7C