Imperial Valley Press: IID scores initial win in legal battle with Riverside County

Riverside County Slammed by Judge Granting a Preliminary Injunction Requested by the Imperial Irrigation District…..In granting the injunction, the Judge found that the county’s ordinance conflicts with state law and, if enacted, would cause irreparable harm to the district, said Frank Oswalt, IID general counsel. 

IID Also Believes Riverside Violated Brown Act 

IID scores initial win in legal battle with Riverside County

By IMPERIAL VALLEY PRESS STAFF

https://www.ivpressonline.com/news/local/iid-scores-initial-win-in-legal-battle-with-riverside-county/article_201256da-e248-11e8-a656-574c5f5502d2.html

Nov. 7, 2018

 LOS ANGELES — A County Superior Court judge here on Tuesday granted a preliminary injunction preventing the county of Riverside from implementing an ordinance that, if enacted, would bypass the authority of the Imperial Irrigation District to set electric rates for its customers, according to an IID press release.

In granting the injunction, Judge Mary Strobel found that the county’s ordinance conflicts with state law and, if enacted, would cause irreparable harm to the district, Frank Oswalt, IID general counsel, reported.

Although no final rulings were made, Oswalt said the court determined that there was a likely probability that IID would prevail if the matter were fully contested, according to IID. Further, should the ordinance be enacted, the IID board and staff would be irreparably harmed by the prescribed criminal penalties in the ordinance, and the district harmed by the millions of dollars in unrecoverable costs to implement it, according to the district release.

In June, the Riverside County Board of Supervisors approved Ordinance No. 943, which would have required IID to scrap its publicly vetted and board-adopted solar tariff, net-energy billing and create a new solar tariff that closely resembles that of a privately owned utility, Southern California Edison.

All this came at the request of a private business owner whose business is located in Riverside County and stands to directly benefit financially from the impacts of this ordinance, according to the IID. The district is referring to Renova Energy owner Vincent Battaglia.

“The notion that Riverside County would usurp IID’s ratemaking authority and adopt an ordinance that violates state law is inherently unreasonable and unprecedented,” said James Hanks, IID board president. “Today’s action by the court is a win for the district and its ratepayers.”

In making her ruling, Judge Strobel also noted several potential areas in which the county’s ordinance may conflict with the Public Utilities Act.

Among those areas are:

“First and most critically, section 2827 (of the Public Utilities Act) provides that a [public owned utility], such as the petitioner (IID), is not required to offer NEM (net-energy metering) programs beyond its 5 percent participation cap provided for under that statute,” the judge wrote. “The ordinance directly conflicts with this general law because it imposes NEM requirement on [IID] ‘as expansive’ as NEM 2.0, which does not have this participation cap.”

Second, the same section defines the ratemaking authority of a publicly owned utility as the board of that utility. “That board has the authority to determine when … the utility is not obligated to provide NEM to additional customer-generators. … The ordinance, in contrast, grants [Riverside County] the authority to regulate [IID’s] rates for NEM credits, and it purports to regulate [IID’s] NEM activities as if it were an [investor-owned utility] under the ratemaking authority of the [California Public Utilities Commission],” the judge wrote in her decision.

Riverside County officials did not comment when contacted by the Imperial Valley Press.

Recently, IID alleged Riverside County was in violation of California’s open meetings law, the Brown Act, when Riverside officials “lined up votes” outside of the public’s purview on Ordinance 943.

What’s more, due to the alleged Brown Act violations, the district sent a letter from one of its attorneys demanding that the ordinance in question be rescinded or that Riverside County face additional legal challenges from the district. From the date of the letter, Oct. 12, the IID has given Riverside County 30 days to respond or be subject to legal action.

Backdoor politics: IID alleges Riverside County violated Brown Act in passing ordinance

From the Imperial Valley Press:

Backdoor politics

IID alleges Riverside County violated Brown Act in passing ordinance

By IMPERIAL VALLEY PRESS STAFF

 LA QUINTA — The Imperial Irrigation District is alleging Riverside County was in violation of California’s open meetings law, the Brown Act, when Riverside officials “lined up votes” outside of the public’s purview on an ordinance the district is now suing over.

What’s more, due to the alleged Brown Act violations, the district sent a letter from one of its attorneys demanding that the ordinance in question be rescinded or that Riverside County face additional legal challenges from the district.

The allegations were made public Tuesday at the district’s monthly meeting in La Quinta during a presentation by attorneys for Aguirre and Severson LLP, an outside law firm hired by the district to make a California public records request on its behalf.

The district is currently embroiled in a lawsuit with Riverside County over the approval of Ordinance 943, a law passed by the Riverside County Board of Supervisors in June compelling the IID to provide additional incentives to electrical customers who have installed solar panels on their properties.

IID officials are opposed to the ordinance, saying that at stake is the district’s authority to set its own rates and that the district is already in compliance with California state law.

“IID’s business model allows the district to offer its customers some of the lowest residential electric rates in California — rates that are as much as 50 percent lower than that of neighboring investor-owned utilities. The ordinance, should it be implemented, jeopardizes these rates and sets a bad public policy that has the potential to impact other public power providers across the state,” IID communications specialist Robert Schettler said in a statement.

The ordinance passed by Riverside County — which is not in effect, but in a court-ordered stay while the suit makes its way through legal proceedings — establishes new regulations and procedures for irrigation districts like IID that are operating net-energy metering programs. Net-energy metering is a program designed to benefit customers who generate their own electricity, usually via rooftop solar panels.

The Brown Act violation allegations are believed to be contained in a series of correspondence Aguirre and Severson requested between Riverside County officials and staff and principals in Renova Energy, a private solar installation company based in Palm Desert that appears to have pushed for the ordinance according to a series of emails.

“Because of the rather troubling aspects of the way this thing was passed, we asked outside counsel to make a public records request,” IID General Counsel Frank Oswalt said.

Oswalt said Riverside County responded to the records request Oct. 2 and within a series of email correspondence attorneys believed they found two emails, or examples, in which the Brown Act was violated.

The Brown Act states, Oswalt said, that a legislative body such as the Riverside County Board of Supervisors “shall not outside a meeting, use a series of communications to discuss, deliberate or take action” on a subject within its jurisdiction.

In a letter to the Riverside County board from IID Deputy County Counsel Joanna Smith Hoff:

“Email correspondence produced by [Riverside] County reveal extensive, non-public solicitation and collection of votes by Supervisor V. Manuel Perez at the insistence of [Renova Energy owner Vincent] Battaglia. For example, by email dated May 5, 2018, Supervisor Perez urged Thomas S. Freeman, a senior Perez staff member:

‘Tom, let’s count the votes. Use this information and the fact that Renova will indemnify. If votes still not there, we will need Vince (Battagalia) to knock on those doors to get us there.’”

Smith Hoff’s letter goes on to cite a second email where Perez lobbies Riverside County Deputy Chief Executive Officer Brian Nestande on May 1:

“Hey Brian, what are we waiting on now? Let’s move this forward. Let’s count the votes. V. Manuel Perez”

Smith Hoff writes: “It is clear from the above emails that Supervisor Perez worked through intermediaries to develop concurrence on Ordinance 943 out of public view and prior to any public consideration of the matter by the board.”

Further, IID alleges in Smith Hoff’s letter that the email correspondence also shows “a secretly negotiated indemnity agreement between Mr. Battaglia and his companies (Renova and ERA) on the one hand, and the county of Riverside on the other, that preceded any public board consideration or action in connection with the adoption of Ordinance 943.”

“We see this letter,” Smith Hoff writes, “as providing you [Riverside] an opportunity to rectify an illegal action avoiding the need for further litigation.” From the date of the letter, Oct. 12, the IID has given Riverside County 30 days to respond or be subject to legal action.

Riverside County officials deny any wrongdoing.

“The Riverside County Board of Supervisors has and will continue to adhere to the requirements of the Ralph M. Brown Act. The allegations by the Imperial Irrigation District have no merit. Board members did not engage in any serial meetings in advance of the ordinance’s introduction and adoption. The recent disclosure of emails in response to IID’s public records request does not change the fact that there were no serial meetings,” Riverside County spokesman Ray Smith wrote in an email Wednesday afternoon.

Aguirre and Severson partner Maria Severson took the IID Board of Directors and those assembled at Tuesday’s meeting through a history of the “behind-the-scenes” development of the ordinance by way of a chain of emails outlining negotiations between Battaglia, Perez and others. There was a specific call to arms against the IID from Battaglia, according to the emails. Battaglia makes references to going to “war” with IID and in another instance calling the IID Board of Directors “rogue, corrupt and environmentally tone-deaf” through the development of the ordinance and the alleged negotiation of the indemnity agreement.

IID is “wasting rate payer money challenging a law they know they have no right to challenge,” Battaglia said Wednesday. “We addressed this Brown Act business. They are throwing anything at the wall to try to make it stick.”

Battaglia said the IID is trying to “paint it as if this greedy solar guy is trying to bring net-metering back. … It’s a just a game they are playing now trying to smear me. … It’s a cartel down there. I understand that mentality; I’m just not going to put up with that.”

He added that any dealings he had with Riverside County officials was above board and legal.

No action was taken on the Brown Act issue by the IID board, as the issue was placed on the meeting agenda as an information-only item. None of the board members nor IID General Manager Kevin Kelley commented on the issue; Oswalt advised, “In fact, it would probably be inappropriate for the board to comment on it.”

Meanwhile, IID filed suit against Riverside over the ordinance back on July 13 in Riverside County Superior Court. The ordinance in question has not gone into effect, as the IID won a stay pending further consideration of the merits of the case. The parties are next due in court Nov. 6 in Los Angeles, seen as a neutral site by the court.

First page of letter written to the Riverside County Board of Supervisors