Data Center Interest in the Imperial and Coachella Valleys: What You Need to Know

Like most utilities in the United States, the Imperial Irrigation District is receiving increased interest from data center developers seeking to locate in IID’s service territory. These inquiries represent both opportunities and challenges.

IID is committed to ensuring its ratepayers are fully informed about what these projects mean for our community, our energy system, and our focus on long-term reliability and affordability for our customers.

A data center is a facility that houses high-powered computer servers used for cloud computing, artificial intelligence, storage, and digital infrastructure. These facilities operate 24/7 and require stable, high-volume electricity and cooling.

Developers have expressed interest in the Imperial and Coachella Valleys because of:

• Available land
• Relatively low power and water costs
• Proximity to major metropolitan markets

Data centers typically require:

• Large electricity demand: often 100–300 MW per site — equivalent to powering a small city
• Cooling systems: which may require a significant amount of water
• Large footprint over many parcels of land: generally, 40–80+ acres
• Reliability guarantees: high redundancy, long-term interconnection arrangements, and customized grid infrastructure

• New job opportunities (mainly temporary construction jobs, as operations only require small number of workers)
• Increased private investment in the region
• Potential attraction of other technology-sector businesses
• Increased property tax base

• Energy cost impacts: major electric loads may require new substations, lines, transformers, and system upgrades and generally those are borne by the developer
• Water usage: significant volumes of cooling water
• Grid stress and reliability concerns: sudden or large load additions may pressure core system reliability. NERC has asked utilities a series of over 100 questions in an effort to hone in on potential reliability compliance efforts to ensure stability and reliability.
• Ratepayer burden: if infrastructure is underutilized or abandoned, the cost could fall on the community
• Stranded assets: substations or lines built for a project that fails or scales down would leave ratepayers exposed
• Environmental impacts: Large operations for construction may result in environmental impacts to natural resources close to their location, particularly if not appropriately mitigated through California’s Environmental Quality Act required compliance.
• Financial concentration risk with large loads that are disproportionate to the native customer base: For a utility with a relatively limited number of large industrial customers, a single data center can represent an unusually large share of total electricity sales. This can create a structural imbalance in which one customer becomes disproportionately important to the utility’s overall financial health.

IID evaluates these proposals on a non-discriminatory basis to:

• Ensure system reliability
• Protect existing customers from costs that wouldn’t exist but for these projects
• Confirm water and power demands are feasible and do not cost shift to other ratepayers
• Verify economic viability and cost recovery
• Establish interconnection, design, and operational requirements
• Serve as the interconnected utility

IID requires that:

• Developers pay fully for the infrastructure they trigger
• Projects demonstrate long-term financial feasibility
• Developers adhere to all environmental rules and regulations
• Cooling technologies align with water availability
• Interconnection and load commitments are firm and enforceable
• Infrastructure costs are not shifted to existing customers
• System upgrades support reliability and resilience
• Minimize the risk of stranded assets

IID will not expedite any project and will ensure appropriate analysis and treatments to ensure grid reliability and so that our customers do not shoulder undue risk, stranded-asset exposure, or inappropriate long-term costs.

Community Workshop

IID will host a workshop with Data Center experts for the public to learn more and ask questions:

• What: Data Center Public Workshop
  When: Tuesday, December 9
  Time:  6 – 7:30 p.m.
  Where: William R. Condit Auditorium, 1285 Broadway, El Centro

Related News

• Associated Press Article - Future data centers are driving up forecasts for energy demand. States want proof they’ll get built