The Imperial Irrigation District Perry Substation in Calexico. Lack of electric-power capacity in some areas of the city is impeding development of facilities needed by the fledgling local cannabis industry. | Corissa Ibarra photo
CALEXICO — Several potentially high-revenue cannabis cultivation and manufacturing projects proposed in Calexico are on hold due to the unavailability of electricity from the Imperial Irrigation District, city officials said recently.
No immediate long-term
solution was in sight.
“We’ve got all of the
projects lined up but can’t get ‘will serve’ letters (for two to three of the
projects) because of (a lack of power transmission) capacity,” Calexico City
Manager David Dale said Feb. 7. “So, the projects are stymied at the moment.”
Talks are ongoing between
Calexico and the district, IID spokesman Robert Schettler said Feb. 7.
Discussions focus on ways to provide power to projects and build a new
substation in the area, Schettler said, adding he “can’t provide further info
at this time.”
Calexico Mayor Bill Hodge
called the stalled projects “high-power moneymakers” for the city during an
interview Feb. 6, referring to the potential cannabis revenue the city has
continued to expect out of the industry.
In recent years the
Calexico City Council has sought to create a major cannabis industry in the
city through a series of votes to attract and establish growers, manufacturers
and distributors of the drug and related products.
With no retail shops
opened and none of the cultivation projects yet underway, Calexico has lowered
its cannabis-revenue projections for the last two years. The city has collected
around $80,000 in revenue, but it has largely been in permitting and building fees, and some activity tied to
distribution and manufacturing.
Recently, the city
lowered its projected cannabis revenue for the current 2019-20 fiscal year ending
June 30 from $250,000 to $150,000. In total, cannabis revenues for fiscal years
2018-19 and 2019-20 could be less than a quarter of the $900,000 initially
projected, city officials reported.
Up to three large-scale
cultivation and manufacturing projects have been stalled. This is because they
cannot get the required “will serve” letter from IID to bring power to the
location, Dale explained.
The stalled projects
include including the 220,000-square-foot indoor Orchid Ventures project. It
broke ground with much fanfare during a late September press event. Names of
the other projects delayed were not immediately available from city planning
The overriding issue is that
the capacity of the IID’s substation serving Calexico’s north end is “maxed out”
with no immediate solution on the horizon on how to overcome the problem, Dale
$11 Million Needed
The short answer, Dale
said, is the IID needs to build a new substation for the area at a cost of
around $11 million. However, not any one entity is prepared to foot that bill,
including the district, the city nor the developers in need of the power.
are also affected, including the proposed commercial/light industrial Calexico
Mega Park at Jasper Road and Highway 111.
Even though the Orchid
project plans to power its operations with an on-site solar farm and battery
storage, it still cannot move ahead without the IID “will serve” letter, Dale
added. The project would be a “massive” power consumer of more than 5,000 amps.
Reportedly anything over 300 amps is currently difficult to secure from the
district, Dale said.
Dale said he did not have
an assessment of the status of discussions with IID. While the district has
some one- to two-year remedies, projects cannot move forward without assurances
of a long-term fix, meaning a new substation, he explained.
About three months ago,
Dale called an informational meeting in city council chambers with several
prospective developers (in and outside the cannabis industry), IID Energy
officials and others to discuss how to fund a new substation.
Some of the talk included
establishing a special-financing district that could sell 30-year bonds to
build a substation. That would be paid back by developers or landowners within
Other alternatives were a
“micro grid” for localized energy generation and storage, or buying power
directly from geothermal plants near Heber.
However, all those ideas
would require widespread commitments, upfront money and some degree of
transmission from one point to another. Calexico, in the midst of recovering
from budget deficits, has no such funds, Dale added.
So far, no one has committed
to much of anything and there have not been any similar meetings held, the city
Calexico has projects in
the pipeline now that need power, both cannabis and non-cannabis-related, and
there is no time to wait, Dale said.
Even if there was $11
million available today and the district was ready to build a new substation
tomorrow, it would take two to four years before power was moving through that
“We’ve come to a holding pattern,” he said.
“We’ve got ideas, but it falls on the IID; it’s their utility.”
Cannabis Zone Addition
Meanwhile, as a potential
stopgap measure for moving smaller cultivation and manufacturing projects
forward, a parcel previously left out of the city’s Cannabis Overlay Zone was
reintroduced and approved 3-0 on Feb. 5. Among other advantages, the site at
120 W. Cole Blvd. already has power on its premises, Dale and Hodge confirmed.
Previously, the city
Planning Commission rejected including the parcel in July 2019. The decision
was appealed to the council and upheld that same month. However, parcel owner
and longtime Calexico businessman, Alex Campillo, and his family, pressed the
city to reconsider.
Including the new parcel
gives the city more than 79,000 square feet of warehousing space available for
cannabis operations, a city planning official said. That means prospective
businesses can rehabilitate warehouse space through tenant improvements instead
of the lengthier and costlier process of building from the ground up.