Imperial Valley vs. Coachella Valley: Why the Data Center Belongs Here

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Imperial Valley and Coachella Valley share a geography — the low desert east of the Peninsular Ranges — and share the Salton Sea as a common boundary. To an outsider, the two valleys can seem similar. To anyone who understands the economic, jurisdictional, and infrastructure differences between them, the IVDC’s location in Imperial Valley rather than Coachella Valley is not a coincidence. It is a function of the specific technical and economic characteristics that make Imperial Valley the correct location for this particular investment.

The Grid Difference

The Coachella Valley is served by Southern California Edison — an investor-owned utility operating within the CAISO interconnected grid. SCE is a large, sophisticated utility, but its territory is not independent of the broader California grid in the way that IID’s service area is. IID operates independently of CAISO, maintaining its own generation dispatch and transmission management, which provides a degree of grid stability and rate control that CAISO-connected utilities cannot replicate.

For a 330-megawatt data center that needs continuous, reliable power with maximum control over rate structure and grid conditions, the IID independent grid is a material advantage over the SCE alternative. The rate predictability that comes from a public utility not subject to CAISO market dynamics — and from a long-term power purchase agreement with an independent operator — is something the Coachella Valley cannot offer.

The Land Cost Difference

Industrial land in the Coachella Valley — Indio, Coachella, Mecca — has been bid up by the combination of residential growth pressure, the cannabis industry’s industrial space demand, and the general appreciation of Southern California real estate. Comparable I-2 industrial land in Imperial County is available at a fraction of the cost per acre. For a 75-acre project, that cost difference is significant in absolute terms and meaningful in the project’s financial model.

The Economic Need Difference

The Coachella Valley has a diversified economy anchored by hospitality, retail, second-home residential, and the agricultural industry of the eastern valley. It has economic challenges — the agricultural communities of eastern Coachella Valley have real poverty and limited employment diversity — but its median household income and economic output are substantially higher than Imperial County’s. Imperial County is one of the poorest counties in California. Imperial Valley is the community where the economic impact of a $10 billion data center investment is most transformative relative to the existing economic baseline.

The IVDC is in Imperial Valley because the technical fundamentals — IID grid, geothermal power, industrial land — are better there. And the community benefit is more significant there precisely because the community needs it more. Both facts point to the same location. This project is where it belongs.

Original Article: https://www.ourimperialvalley.com/imperial-valley-vs-coachella-valley-why-data-center-belongs-here/