Without a new power substation, Imperial Irrigation District officials said they will have trouble servicing new development planned for the city’s northern edge. (Photo: Shutterstock)
The Palm Desert City Council on Thursday approved an energy substation project that will pave the way for new development in the city’s northern sphere.
While most of Palm Desert is served by Southern California Edison (SCE), Imperial Irrigation District (IID) services two separate areas just south of Interstate 10. The substation project has been in the works since 2022, when the city worked with Imperial Irrigation District to get will serve letters for an affordable housing development and the city’s fourth fire station.
Through those discussions, the city learned of IID’s “energy infrastructure challenges” in the portion of Palm Desert served by the utility.
IID officials told the city that without a new substation and distribution lines, the utility would not issue any additional “will serve” letters for new developments in those two areas, according to the city’s staff report. Those letters are an important step in new developments, by demonstrating that a utility intends to provide service to the project.
During its regular meeting Thursday, the council unanimously approved a multi-partner collaboration to fund the new $42.6 million substation. Under the agreement, the Berger Foundation will pay the largest share of the cost at around $10 million, followed by $7.5 million from Imperial Irrigation District. Palm Desert, Rancho Mirage, and Riverside County will each chip in around $5.6 million, and two developers will pay the remainder.
This image shows where a new power substation will be constructed to help service new development in one section of Palm Desert.
The substation will serve undeveloped parcels in two zones along the city’s northern edge. The first zone is approximately 70 acres just west of Costco, and the second zone is a series of smaller parcels along Gerald Ford and Cook Street, where “property owners have had requests for hotel development and other commercial uses in that area, and they haven’t been able to move forward” due to a city requirement for a will serve letter before beginning the entitlement process, according to Escobedo.
The city estimates it will receive around $1.3 million to $2 million annually in tax revenue from the new development, and also plans on making back the initial $5.6 million investment through a community facilities district tax on the impacted parcels.
“Without power, economic development is going to come to a halt, and I compliment staff for being ahead of the curve, so we're not in the position of having developers wanting to build homes and they have no energy. . . We need power, and without it economic development will come to an end,” said city councilmember Gina Nestande.
The Cook Street Substation will be located just west of Cook Street and north of Interstate 10. Construction is set to begin in 2027, with the substation operational in the summer of 2028. Earlier this month, the city of Indio and Imperial Irrigation District broke ground on another new substation on Avenue 42.