The Palm Desert City Council Thursday approved a funding and reservation of capacity agreement for the Imperial Irrigation District’s (IID) Cook Street Substation project.
“I believe it’s imperative that we approve funding and approve the reservation agreement for the Cook Street Energy Substation with IID,” Councilmember Gina Nestande said at the January 8 meeting. “Without power, economic development is going to come to a halt.”
The project is estimated to cost roughly $42.6 million for the substation, distribution gateways, transmission lines and land and site improvements, with the costs split between seven parties. Palm Desert, Rancho Mirage and Riverside County will each pay roughly $5.61 million with the Berger Foundation set to pay about $10.1 million, Palm Creek Ranch set to pay about $3.3 million and IID set to pay the remaining roughly $7.6 million, according to the agreement.
“Originally, IID had taken the position that any new development would have to fund the construction of a whole substation, and depending on the size, one substation costs anywhere from $30 to $40 plus million, which made new development cost prohibitive,” City Manager Chris Escobedo said. “So with partnerships like this, it helps bring down the cost of that infrastructure cost to be able to provide a pathway for development.”
IID approved the agreement last November. The city of Rancho Mirage and Riverside County both approved the agreement in December. According to IID, the agency is still waiting for the developers to sign onto the agreement.
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According to the agreement, Palm Desert is set to advance the funds to cover its share of the project from former redevelopment agency bond proceeds and will be repaid over time through a new Community Facilities District. As part of the agreement, property owners will be guaranteed a will-serve letter and can start the city’s planning/entitlement process.
As part of the agreement, Palm Desert would receive 10 megavolt-amperes (MVA), as would Rancho Mirage and the county. The additional energy capacity would allow for increased development in the city’s north sphere, which is estimated to bring in between $1.3 million and $2 million in new general fund revenue, Escobedo said.
IID will own and operate the substation and serve as the lead agency for California Environmental Quality Act (CEQA). The agreement also allows existing parties to purchase capacity from other parties to the agreement and for new parties, such as future project developers, to purchase available capacity.
“We’re going to have to all work together if we’re going to get this done, and this effort is showing the best of everyone leaning in getting it done,” Councilmember Jan Harnik said. “I’m sure we can find flaws in it, we’re going to find the pluses in it, but what we are going to do is we’re going to build homes with power for people who need homes to live in.”
IID said the new substation is expected to power approximately 8,000 residential and commercial customers with construction set to start in 2027. The substation is expected to be fully operational by summer 2028.
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Energy from both IID and SCE need to be a priority for the Coachella region since there is a huge demand for future developments.
Great article.