Changes at IID controversial; GM staunch in defense

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IID-Energy-pic

The major shakeup in the high levels of the Imperial Irrigation District Energy Department persisted into the new year with district General Manager Kevin E. Kelley announcing more restructuring.

General Manager of the Imperial Irrigation District, Kevin Kelley
General Manager of the Imperial Irrigation District, Kevin Kelley

The latest development came in a memorandum from Kelley to IID employees dated Dec. 30. Kelley’s office sent the memo to the Desert Review in an e-mail on Jan. 4. It states Vicken Kasarjian is now Energy manager and that Carl Stills, the previous manager, has been moved to head the Portfolio Management Office to work on major and special projects. It also describes other organizational changes.

The moves follow actions in October in which five veteran district employees were placed on paid administrative leave and Kasarjian was hired to co-manage Energy with Stills. Four of the five staff members have been served with termination notices.

While Kelley steadfastly defends the moves, critics allege they amount to mismanagement or lack of leadership that diminishes IID’s ability to meet customer needs and harms employee morale.

Asked in a Jan. 6 interview how the action will benefit IID customers, Kelley said, “The initial changes and the most recent organizational moves all have a piece. What it comes down to is the independence of IID.”

Pressed for specifics, Kelley said, “Kasarjian came in to address what I believe are gaps in the transmission planning function. If you look at some of our recent board agendas, (previously approved) projects are coming back to the board to be cancelled or suspended, huge transmission projects involving millions of dollars.”

As a public utility, IID is tasked with providing electric power to more than 150,000 customers in Imperial County, the Coachella Valley area of Riverside County and part of San Diego County. That work involves two major areas. One is generating electricity for its customers, or purchasing it from other providers. The second is transmission, specifically the construction and maintenance of electric power lines from local lines to large lines that help move power within the region and to other areas.

The demands on transmission are increasing for several reasons. First is the population growth of Imperial County and the entire western region, which means more electricity must be generated and delivered to customers. Second, older lines need repair and in some cases replacement. Finally, as Imperial County has become a hotbed of renewable energy generation—geothermal, solar and wind—over the past decade, the need for transmission lines to move that power, both within the IID service area and to out-of-area power providers, is increasing. IID generates income from having locally generated power moved on its lines to other areas.

New Energy manager at center of debate

Vicken Kasarjian
Vicken Kasarjian

Kelley said Kasarjian’s skill and experience will allow IID to better meet its demands. Also in October, the IID Board of Directors approved a three-year agreement with energy consulting firm ZGlobal, Inc., for transmission engineering, planning and related services. Kelley said in the recent interview hiring ZGlobal was done in conjunction with Kasarjian’s hiring to further improve transmission and ZGlobal consultants are the replacements for the five departed Energy staffers.

But Kasarjian to some is a controversial figure because he has previously worked with ZGlobal. Kelley confirmed that Kasarjian had done consulting for ZGlobal in the year prior to being hired by IID.

The Oct. 16 press release that announced his hiring and the five staffers being placed on leave detailed Kasarjian’s experience but did not mention his link to ZGlobal. It also did not mention the contract with ZGlobal.

Kelley praised Kasarjian in the recent interview and also spoke highly of him in the press release and at an Oct. 20 board meeting. The minutes of that meeting state the IID board approved Kasarjian’s and ZGlobal’s hiring during an Oct. 12 closed session meeting. The minutes add that the action was taken but the announcement delayed.

In the October press release Kelley stated Kasarjian’s “depth of experience and standing in the industry sends the right message – both internally and externally – at a time of fundamental change in the electric utility business in California and throughout the West.”

He called hiring Kasarjian “an important step forward in responding to the demands and expectations of an evolving energy landscape,” and stated that, “By adding Vicken Kasarjian to its energy management team, the district is better positioned to preserve both its public power business model and historically low rates.”

The Oct. 20 meeting minutes state Kelley said he had met Kasarjian about four years ago and was “rebuffed” in his initial attempts to get him to join IID, but that Kasarjian “was ready to come aboard this time” and “delighted” to do so.

However, sources who spoke on the condition they not be identified, complained that Kasarjian is still too closely tied to ZGlobal to run IID Energy independently and that his hiring violates district policy by either being a conflict of interest or creating the appearance of such.

“You have a consultant managing the Energy Department. I’ve never seen that,” said one source who has worked closely with the district on energy matters.

Kelley did state Kasarjian is a contract employee who does not have the same protections as regular employees, such as the five against whom action recently was taken.

Organizational changes detailed

Defending ZGlobal in the Jan. 6 interview, Kelley said, “I’ve relied on ZGlobal for some years and especially so in this last year when embroiled in this lawsuit with ISO (California Independent Systems Operators, or Cal ISO). I make no apologies for having turned to that firm when this issue came to a head.”

By “this issue,” Kelley was referring to the Energy Department reorganization and related personnel actions, and added that while he concedes using internal personnel to improve the department might have been better, that, in his view, was “not an option.”

He declined to elaborate further, citing restrictions on what he can say about personnel matters and the situation’s link to the lawsuit.

Kelley’s apparent frustration with the previous structure shows through in the Dec. 30 memo to employees about the latest reorganization. In it he states the Portfolio Management Office will be “revamped and streamlined” because “it has become clear to me that the current, highly centralized and bureaucratic PMO model must be restructured.”

The “portfolio” term refers to projects, not just in Energy, but in all departments. The previous head of that department, Eddie Lutz, retired, Kelley said.

Kelley explained the changes mean managers of projects will report to the heads of their respective departments instead of reporting directly to the head of the Portfolio Management, which is now Carl Stills, the former Energy manager.

In another change mentioned in the Dec. 30 memo, the Applications & Business Practices Section within Energy will now report to the Information Technology Department, a move Kelley states will allow “GIS” to be better shared between the Energy and Water departments. GIS commonly refers to geographic information systems, computerized satellite mapping that aids in a variety of tasks, including planning and development.

Carl Stills, IID Energy
Carl Stills, IID Energy

The new moves follow changes revealed in the Oct. 16 press release, which stated that Kasarjian and Stills were to split energy management duties with Kasarjian being the energy manager in charge of (electricity) transmission and planning and Stills leading energy operations. Prior to that move, Stills had headed Energy as its sole manager. Now Stills heads the much smaller Portfolio Management Office and when the IID board meets it is Kasarjian, not he, that sits on the dais with the board.

Employees given notice of termination

Stills, a long-time and highly regarded IID employee, is not alone in experiencing dramatic change.

The October release stated several employees in the transmission, planning and engineering sections were placed on paid administrative leave, but Kelley declined further comment at the time calling it a personnel matter.

Sources speaking on the condition of anonymity said the five included a deputy energy manager responsible for engineering and operations, a planning and engineering manager, a general superintendent of planning, a supervisor of planning and an assistant manager of energy transmission expansion. All are licensed engineers, sources said.

A sixth employee, an engineer who had been hired by IID within the last year to attend and monitor activity at meetings of out-of-town electric-power organizations, was released from IID employment at a later date, sources said.

Kelly confirmed on Dec. 29 that five staff members had been placed on administrative leave and that four had subsequently been given notices of termination. He declined to name them or provide detailed comment.

One of the employees received a termination notice hand-delivered to his home by another IID staff member on Dec. 28, a source said.

The Desert Review was able to confirm the names of two of the employees, but due to fairness has decided not to name them until they all can be identified.

Of the personnel actions, Kelley said in the Dec. 29 interview, “The action was for cause. They’re all long-time employees. They’ve got rights and IID has to respect them.”

Noting the affected employees have access to an appeals process, he added, “This is something that is going to play out over the next few months.”

Asked if he could specifically explain what precipitated the actions, Kelley said, “I don’t think I probably can. It’s no coincidence that action was taken simultaneous to the announcement of the new Energy (Department) structure.

“A lot of this is bound up in our litigation against the Cal ISO (California Independent Systems Operator). It’s probably a dimension that makes it even tougher since that lawsuit is still, in our view, alive.”

Kelley confirmed that the five employees placed on leave “worked in transmission and planning or were responsible for transmission and planning” at IID.

A source with knowledge of one of the termination notices said it alleges a number of violations of district policies including “insufficient, negligent or careless performance of duties,” “violation of state or federal laws or regulations applicable to the district” and “unprofessional conduct.”

Critics argue the terminations are not beneficial because those staff members have valuable experience and were making steady progress in addressing needed improvements to transmission.

“They just got it going in the right direction. They were behind Carl (Stills),” said one long-time observer who spoke on the condition of anonymity.

Sources also said the moves could harm the reliability of IID’s power, which prevents outages, because Stills as Energy head and the terminated staff members were making great strides in improving reliability.

According to documents obtained by the Desert Review outlining consultant recommendations to IID, and to sources with knowledge of the issue, efforts to improve the Energy Department have been on-going since at least 2013.

External issues play role

The turmoil comes at a time when IID is grappling with several vital issues, including expanding its electric-power generation and transmission capacity, meeting state requirements to get more electricity from renewable sources such as geothermal, solar and wind, and battling Cal ISO, California’s large electric power transmitters, in a lawsuit filed by IID. Kelley referred to the need to meet those challenges in the October press release announcing Kasarjian’s hiring.

The entire issue lapses into the complex and arcane world of generating electric power and transmitting it over power lines. All the vast majority of electric power customers know and care about is whether or not they have power. Outages are usually scattered and brief and that is not by luck.

Electric power utilities, fresh from being required by state law to achieve getting one third of their electricity from renewable sources, now face needing to get their so-called “renewable portfolio” to 50 percent by 2030.

Use of renewable energy resources reduces air pollution, but has traditionally been costlier than power from fossil-fuel plants, which long have made up the bulk of U.S. electric power supplies. Imperial Valley has had numerous renewable energy projects coming online in recent years and more in various stages of development. IID is relying on those sources to meet the state goal.

“Unlike any other utility, all of IID’s renewable energy (resources) are located right here in our service area,” Kelley said.

Amid the challenge of controlling electric rates while adding renewable resources to its portfolio, IID is embroiled in the Cal ISO lawsuit.

According to the Cal ISO website, “The ISO manages the flow of electricity across the high-voltage, long-distance power lines that make up 80 percent of California’s and a small part of Nevada’s power grid. The nonprofit public benefit corporation safeguards the economy and well-being of 30 million customers by keeping the lights on 24/7.”

Power utilities need to obtain enough electricity to keep the lights on, but not more than they need at any given time. They generate some of the power they use and purchase the rest from other sources, and IID is no different. But that electricity has to be transmitted, which is where an entity such as Cal ISO comes in. Such an organization makes it more efficient for utilities to move around electricity on the “grid,” improving reliability and controlling costs.

Though IID is not part of Cal ISO, it still must frequently coordinate with it. This has become more vital because of the renewable energy being generated in IID’s service area and that power needs to get out to other utilities. IID does not generate renewable power, that is left to the geothermal, solar and wind firms, but utilities such as IID must get involved in building the lines to transmit that power.

This requires an increased number of large transmission lines and IID is deeply involved in such projects.

One of those projects is Path 42. According to an IID press release on the district’s federal anti-trust lawsuit against Cal ISO, “The dispute between the agencies extends back to 2011, when CAISO approved IID’s upgrades to the Path 42 project that would send clean, renewable energy from Imperial and Riverside counties to the rest of California. IID subsequently expended nearly $35 million in completing its segment of the project.”

The release states the suit alleges that in, “the summer of 2014, CAISO used the loss of San Onofre Nuclear Generating Station,” a nuclear power plant near Oceanside that was closed, “as a pretext for reducing future deliverability from IID into the CAISO system to zero, stranding the district’s investment in the Path 42 project and leaving it with no practical means of recovering its costs, other than to join the CAISO as a participating transmission owner.”

Put plainly, IID is stating it invested in constructing power lines to deliver renewable energy generated in Imperial Valley to other areas and that Cal ISO is unlawfully impeding that. It speaks to Kelley’s comment about the recent changes in its Energy Department being necessary to maintain IID’s “independence.”

There is fear that if IID joins Cal ISO, or is in effect forced to join it as the suit alleges, the price its consumers pay for electricity will skyrocket. But critics allege the recent actions of Kelley and the IID Board cause what the press release on the suit states IID is trying to prevent. The lawsuit opened up IID to scrutiny it may not have otherwise received and the big personnel moves attract further attention, they say.

The district suit suffered a blow in November when a federal judge dismissed part of it at the request of Cal ISO attorneys, but the judge provided IID with the chance to re-do its filing, which Kelley stated it will do.

37 COMMENTS

  1. Benson told the IBEW attorney not to expect money for raises. Was this because of the all the hundreds of thousands (or millions) in settlements to the fired engineers? Is that fair since ZGlobal was the one that complained about their work, and is getting paid $20 million for the same work they’ve screwed up if anything? Ain’t fair!

  2. How can such buffoons properly protect our Water and Energy rights? Absent in this is the Human Resources Manager. Is there an ethics officer? Where is this person or persons if they aren’t one and the same? They should be protecting these processes and the rights of these and other employees. Federal and State laws were created to protect against and address abuses such as this. Do these buffoons believe they are above the law? Do your jobs.

  3. Thus, they have been the judge, jury, provide their trial and executed these employees. While doing so they have defamed staff, undermined their rights and have put the IID at huge financial risk and by showing poor judgment, leadership, management and legal understanding are putting the IID at risk in many other ways.

  4. California law says employees have a right to a Skelly hearing that “allows an employee to respond to the allegations prior of imposition of any action”. Yet Kevin Kelley, who will hear the charges, says in the article that the employees were terminated for cause & we learn already replaced by consultant. Why pretend to have an impartial hearing If they’ve been tried & fried in Kevin’s mind? This home team defeat was well planned and sentence passed solely on consultant accusations without allowance for rebuttal by team. Every layer of this whole onion smells of deceit and corruption. GOBS have brought back who you know – morale, honesty died with unenlightened GM, Atty and directors. Will we smell in next edition that consultant favored 2 directors by hire/promotion of several of their relatives.

  5. Hear GM,ZG are desperate enough to try using cancelled projects as way to save money to justify ZG takeover of energy. This is phony, and ludicrous for them to make mistakes then try to use own mistakes to justify dumping their clients, the energy managers. Remember, ZG was hired to prepare the transmission plan for energy management. By cancelling projects they are not only reducing their own cost recommendations, but lowering reliability and raising risk. Unlike energy managers who must live here with the results, ZG as an ambitious consultant is here to make the highest profit for ZG. Low energy rates and protection of public interest are not considerations.They hire, fire, set energy rates ,and control the future of a utility that was proudly independent for over 100 years. No wonder every energy employee is scared about their futures!

  6. IID used to represent the people and could talk to directors. Now only BKuhn. Others say they can’t talk, except MDessert who boils over on own employees, and watch while ZG buys control of energy company with the help of GM, attorney and auditor. Disregard energy management was stronger that ZG can hire off the street who have no knowledge of intrinsic IID operations.Off internet looks like ZG had less than 10 employees before hiring unvetted IID replacements. These decisions were unchristian, unfair political payoffs, not results driven. Shame to hear EMartinez voice his opinion by leaving for transmission job in Arizona. Hw many more?

    • “Supports not targeting and laying off IID employees, as he values employees contributions to all Imperial Valley.” This was the 3rd of five highlighted promises made by Director Matt Desert during the last election campaign. What other promises has he shattered for personal reasons? Used to be “a person’s word was his bond”. Can Dessert be believed at all?

  7. The termination of the four engineers at IID is surrounded in BS. In the past employees were given warnings and opportunity to improve. If that didn’t work out they were moved to positions were they could still positively contribute.

    Why not this time? Two sick reasons:

    1. The GM, the lawyer, and ZGlobal don’t want anyone at IID to know what they are doing. Hence no critics. As stated by others, there is money to be made.

    2. The medical costs that these “old” employees may impose on the IID could be substantial over their lifetime. By creating a list of things that they should have or should not have done and terminating them for cause results in them losing that coverage. Of course that includes coverage for their spouses and any dependents too. New employees don’t get coverage for their spouse when they retire. I know some people will say IID wouldn’t do that. That IID died when Brady was GM. This GM is even worse!

    As stated by others the rest of the employees better watch their backs!

  8. Need to throw out GM, General counsel, Auditor and ZG and director MD. Then bring back loyal energy managers and get the work done! ZG has no roots here and just wants to spread favors around to make fast money.Anyone taking favors, or having relatives work for ZG should resign immediately.

  9. The GM,Gen. Counsel, and Auditor should be fired and director MD should resign for bringing outsiders in to replace our successful energy managers who recently restructured energy dept. to pass the FERC audit, be compliant and save Balancing Authority (BA),only to be thrown under the bus for all their dedication.These managers have roots on the valley & must live with their accomplishments. I’ll take them anyday over outsiders with their head spinning gifts and favors. Outsiders want to make the most money, pad resumes and move on because they won’t live here. The sooner they leave, IID can begin healing and rebuild an even more successful energy department!

  10. Don’t think Abatti knowingly involved. ZG very ambitious and persuasive with hands in many companies. Meetings are often held up because ZG members representing other companies overlap in simultaneous meetings. How many ZG companies doing business with IID? Any other Tres Amigas $1.5B failures? Scars from throwing throwing loyal energy employees under the bus will be difficult to remove, but directors should try, sooner than later.

  11. FOLLOW THE MONEY….. general manager has no background in energy or engineering. why he is qualified to make these personnel decisions? simple,mike abatti and coachella energy storage partners, inc. ; zglobal; sovereign storage inc. who is paying the $38 million dollar storage project?
    PAY TO PLAY culture at IID
    IID Board Members are either dumb or somebody is getting paid…. end of story….

  12. The Watcher

    Employees of IID had best heed the words of MARTIN NIEMÖLLER: “FIRST THEY CAME FOR THE SOCIALISTS…”

    Martin Niemöller (1892–1984) was a prominent Protestant pastor who emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.

    Niemöller is best remembered for the quotation:
    “First they came for the Socialists, and I did not speak out—
    Because I was not a Socialist.
    Then they came for the Trade Unionists, and I did not speak out—
    Because I was not a Trade Unionist.
    Then they came for the Jews, and I did not speak out—
    Because I was not a Jew.
    Then they came for me—and there was no one left to speak for me.”

    IID Employees should substitute “Engineers” for “Socialists”, “Energy Traders” for “Trade Unionists” and their own job for “Jews”. The customers should put their name in place of ”me”. Once the employees are silenced or eliminated there will be no one left to speak for them.

    It’s obvious to me that the GM, the Chief Legal Counsel, the auditor and some of their cronies are working with ZGlobal to destroy a good organization.

    IID employees need to talk to their fellow employees, their families, their neighbors and friends to either get this Board of Directors of IID to stop this destruction of the employees’ jobs or to vote against the four directors that are allowing it.

    • The sad truth is that you are so right. The IID has those who will sell out their follow employees and IID customers to endear themselfs to the new conquers. Only to find out they will share the same once Jess M. & company are done with them.

  13. Independence? Why sell nerve center of IID energy to ZGlobal? All jobs are filled by ZGlobal without bid and firing of locals by ZGlobal. Careers for locals trashed to hire ZGlobal consultants who won’t live in valley.Consultants are in business to make a profit, not provide low water & power rates. Locals have nobody to complain to. Directors and GM have sold them out. IID managed water & energy for friends and family for 100 years. Those opportunities are gone, Hail ZGlobal! All hail ZGlobal! or be fired.

  14. continuation on mike abatti- PAY TO PLAY culture at IID. Mike Abatti campaign mgr and or contributor to Norma galindo, Matt desssert, and Bruce Kuhn. check the 460 financials statements.

    • Galindo seems incapable of playing either end. Hanks needs no handouts and I believe the NKOTB is still interested in the headlights. Like I said before, Dessert should have been let go when he went WWF on Menville and Mr. Generous to poor people Kuhn will end up coughing up the beans. Can’t wait for next chapter. Day’s of Calexico CC is very interesting, but, IID Today will be much more explosive. By the way, did you all like the way Kelly is trying to convince DR to join their side? What does DR have to say about that?

  15. CONNECT THE DOTS…. 1)former IID director mike abatti along with sibling sues the IID over different issues 2) mike abatti sitting as iid director approves sol orchard/jeff brothers.nrg energy for 25 yr solar subsidy on brawley sdsu project- above market rate kwh 3) iid gets large fine for iso blackout 4) iid approves $37 million project to newly formed abatti corp called coachella energy storage partners along with zglobal and jeff brothers corp. called sovereign storage. abatti corp had no track record and was out of a small office in corporate imperial business park. link abatti, zenergy and jeff brothers together. they are runnning iid energy with jess montano

  16. Tonyc – the employees were sent home with no charges made for several weeks and no previous disciplinary action. Not in compliance Skelly Process and California Fair Labor Practices.
    Timesup- Jesse M running around selling services to the directors and GM is illegal lobbying and is against Federal Law, and not in compliance with IID’S own procurement policies. An ethical consultant would never do this! IT give ZGlobal an unfair advantage.

    • Sounds like Kelley is using his expertise of wording his actions which are is the will of the ones controlling Kelley. Anyhow’s, how the tranation is Kelly still the IID leader. Good Old Boy’s or The New Kid’s on the Block…….who is the real Puppet Master?

  17. ZGlobal, a small energy consulting company, has taken over hiring and firing with Kelley ignoring Skelly procedural process & bid process! And, at the ECA meeting they said discussion was closed & further disciplinary action would be taken as necessary. What happened to the directors of gold? Have they become fools gold?

    • They were all certified professional engineers with lengthy careers in IID. They cared about their families and community. They stood in the way of ZG takeover. That’s all!
      Ask the 4 directors who were paid off, and GM, Attorney, and uncertified auditor who threw them out without explanation.

        • My hysteria? Nice try bobby, again I say ha ha ha …. the five were not crusaders on the castle walls fighting off the barbarian hoards, they knew nothing of the impending changes.
          If and when people are accountable for their actions, who ever they may be, then let that happen.
          Having a functional cost effective IID is the goal.

          • How can you be cost effective if key staff like the auditor are not certified to do their jobs as auditors or accountants – CPA’s? Political appointees should not hold key positions at IID, should they?

  18. The sad truth is that the GM is not being forthcoming to what is going on. We keep hearing of how qualified the new energy manager is but what about the rest of his team. Most of the are from the CalIso the same agency the GM is taking to court. Then you have Jesse M. no education, failed IID employee now in charge of all engineering, planning and distribution systems. His best ability being able to throw friends under the bus and work on board members and convincing them he and ZGlobal are better then knowledgeable and experienced IID staff

  19. Headline should have read… Newspaper reporter masquerading as General Manager throws long time employees under bus to reward Consultant that pays Directors and their families for jobs they don’t due… Rate payers kept in the dark while Valley is looted…

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