The Imperial Irrigation District Board of Directors on Tuesday, April 1, approved the first-quarter amendment to the 2025-2026 biennial budget, significantly increasing the Energy Department’s capital spending from the original allocation of $813 million in 2025 to approximately $970 million. The 2026 Energy budget was similarly raised to around $1.2 billion.
“This is the first amendment of the ’25 and ’26 budget, which is basically — it’s driven by the multi-year power rate adjustment that happened on Jan. 21,” said IID Chief Financial Officer Belen Valenzuela. “To support the Energy Department’s Power Department infrastructure modernization, progressive advancement and capital transformation initiative, or short, IMPACT Capital plan.”
The amended budget introduces more than $150 million in additional capital investment in 2025 alone. Valenzuela said the expansion is being supported through new revenue generated by the January rate increase, as well as an estimated $600 million in debt financing planned over the next four to five years.
Projects newly funded or accelerated through the amendment include $93 million in substation infrastructure replacements, $90 million for El Centro Generation Station and Yucca repowering, $45 million for the R-Line transmission upgrade, and $27 million for the Grapefruit Switching Station. Additional funds cover previously deferred wastewater mitigation efforts and a new substation at Victoria Ranch to support residential development.
Smaller adjustments include a $10.5 million increase to the Support Services capital budget for facilities, IT, safety and administrative infrastructure, as well as an added $1.4 million for the Water Department, which Valenzuela said remained mostly unchanged.
Valenzuela also said that the Public Benefits Fund will support additional community-facing projects, while $8.5 million will go toward the Energy Imbalance Market and $7.5 million for construction services contracts. Reserve levels, she said, will also be restored over time with the new revenue.
“Reserves got down pretty low as we were using those to kind of get us through,” Valenzuela said. “What’s also nice about this rate adjustment — it’s also gonna get the levels back to where they were … five or six years ago.”
IID board Chair Gina Dockstader asked whether any of the newly funded projects would have an impact in the near term, particularly during the upcoming summer season.
“Will any of these projects help with our summertime power needs that we see coming?” Dockstader asked.
Smelser responded that while most projects involve long-term procurement, staff are still working to address immediate needs.
“So the majority of these are ordering long lead-time items to get them in place,” Smelser said. “That’s a major component of this capital investment. Anything that we can do before the summer, we’re already preparing for the summer and we’re ready.”
He added, “Any low-hanging fruit that we can do, we will obviously do, but a lot of these are longer lead-time purchases,” clarifying that while the amendment authorizes major long-term investments, customers should not expect substantial new power capacity this summer, aside from select small-scale measures already in progress.
The board voted unanimously to approve the amended budget.
The board also approved a new forbearance agreement with the state of California, pledging not to use water conserved by neighboring water districts, an action aimed at addressing ongoing water shortages in the region.
The 2025 California Forbearance Agreement commits IID to forego using or diverting water conserved under agreements with Metropolitan Water District and Coachella Valley Water District, according to Tina Shields, IID Water Department manager.
“The essence of this agreement is we’re promising not to take the conserved water on an annual basis that’s generated by these agencies or put forth in exchange for the funding,” Shields said. “That water is contributing to the Lower Basin plan and part of California’s commitment to create 1.6 million acre-feet of water.”
The 2025 agreement builds on a similar one approved last year, covering supplemental contracts with the other districts. Some of those contracts either extend existing agreements or fund new conservation projects.
“This is for some supplemental contracts to Metropolitan and Coachella Valley Water District to either extend for an additional year agreements that were initially authorized for a three-year period,” Shields said.
The conserved water in question is generated by MWD and CVWD through local conservation projects, with funding provided by the state of California in exchange for leaving that water in the river. By signing the agreement, IID commits not to use or divert that water, even if it would otherwise count toward their entitlement.
Shields noted that the board had already approved an initial forbearance agreement for earlier contracts under the State of California System Conservation Implementation Agreements, or SCIA, and that Tuesday’s action extended those commitments.
IID Vice Chair JB Hamby moved to approve the agreement without opposition.
“I was gonna do an April Fool’s joke and say no for people out there who are listening,” Dockstader said. Hamby quickly responded, “That would be very bad.”
The board also reviewed the IID’s own water conservation efforts through the On-Farm Efficiency Conservation program, which provides financial incentives to growers who implement water-saving practices on their fields. Shields presented a status update as part of a routine policy monitoring report for Board Policy BL-12, which covers water-related transactions and conservation contracts.
“In the 2023 program, we started off with over 4,000 applications,” Shields said. “About 40 percent of those applications had no measurable water conservation. Those were the fields that had applications that were reviewed and we just had no savings that we could quantify.”
Shields said the district executed about 1,000 contracts for 2023 and had already completed over 800 payments to growers who had successfully conserved water.
The district has faced delays due to contract processing and signature collection. Shields said they are still working to close out the remaining 2023 agreements.
“We’re trying to get all those finalized so that we can put a bow on 2023 and move on to 2024,” she said. “We’ll be looking at probably end of next month close out date. Get the signatures in, get it back to us, or we’re gonna move on and have to rescind any outstanding contracts.”
Shields added that the 2024 program had already received over 2,000 applications by the time of the meeting, and that staff were working through review and verification.
Director Alex Cardenas raised concerns about inconsistencies in how conservation savings are calculated for growers enrolled in the on-farm efficiency program. He said he had heard from participants who were frustrated to see neighboring fields credited with significantly different amounts of conserved water, despite employing the same conditions and practices for conservation.
“What I can tell you is the disparity in difference from a 0.7 acre-feet to two acre-feet in fields that are right next to each other is an area of concern,” Cardenas said.
The discrepancy in reported savings would affect how much a grower is paid under the program, and Cardenas said such differences had become a frequent point of contention among participants.
In response, IID General Manager Jamie Asbury explained that the district handles these types of disputes through a stepped internal process. She said that staff first attempt to resolve issues informally in the field and escalate the matter only if it remains unresolved. She acknowledged that these discrepancies do occur but said they are addressed on a case-by-case basis and typically involve site-specific conditions.
“We’re a public agency,” Asbury said. “Of course, we’re going to provide due process rights to any stakeholder that comes to us with a dispute about how things have been handled. But again, when there’s data and evidence — it’s an evidence-based program or at least a data-driven program — and they can only go on what they’ve got.”
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This article was written by The Calexico Chronicle.
