IID vs. Edison: Why Electricity Rates Differ Across the Coachella Valley

The Coachella Valley is divided in half by Washington Street. To the west, places like Palm Springs and Rancho Mirage get power from Southern California Edison (SCE). To the east, communities such as Indio and Coachella are served by the Imperial Irrigation District (IID). Although the electrical wires look similar, the business models, rate structures and long‑term outlook are very different.

• IID is public power. It’s run by an elected board and operates as a not‑for‑profit. Revenues cover the costs of generating and delivering electricity, and any savings are reinvested or returned to the community. IID emphasizes local control and the ability to make decisions based on community values.

• SCE is investor‑owned. Shareholders expect a return, and regulators currently allow SCE a return on equity of approximately 10.75%. Revenue must cover dividends and wildfire liabilities before customer bills can be reduced.

The following chart shows base residential energy charges in cents per kilowatt‑hour (¢/kWh). IID’s rates are undergoing a multi‑year increase, but even with those hikes the rates remain far below SCE’s average rates. SCE’s 2024 average residential rate was about 34¢/kWh and is projected to climb to roughly 37–39¢/kWh after the CPUC‑approved rate hikes in late 2025.

• IID’s 2025 rate overhaul raised the residential energy charge from 11.69¢/kWh to 19.76¢, with further increases to 22.30¢ (2026) and 24.38¢ (2027).
• SCE’s average residential rate as of early 2025 was 31.4¢/kWh, dropping slightly to 31.2 ¢/kWh on June 1 sce.com. A CPUC decision later that year allows SCE to recover additional revenue, resulting in a 9 % increase to average bills and raising the implied rate to roughly 37 ¢/kWh.

  • Even after IID’s increases, the public utility projects its rates will still be more than 39 % lower than SCE’s

Both utilities encourage customers to shift their usage away from high-demand periods by offering time-of-use (TOU) plans. The table below compares summer on‑peak rates (the most expensive hours) for residential customers in 2025.

The difference is stark: IID’s off‑peak rate is roughly one‑third of SCE’s, and even its on‑peak charge (42.32¢) is lower than SCE’s mid‑peak tiers.

Why are IID’s rates so much lower? Several factors drive the gap:

1. Profit motive. IID is not allowed to earn a profit. SCE must generate enough revenue to cover shareholder returns and wildfire liability costs.

2. Wildfire mitigation. Investor‑owned utilities face escalating costs to underground lines and manage vegetation to reduce fire risk. The CPUC’s 2025 decision authorizes billions for wildfire hardening and undergrounding. According to the Public Advocates Office, wildfire‑related costs make up about 11 % of SCE’s revenue requirement.

3. Aging infrastructure. Both utilities must modernize their aging equipment, but SCE’s service territory is larger and more urbanized, requiring significantly more capital. The CPUC’s decision approves $41.78 billion for 2025–2028 to upgrade infrastructure and support load growth.

4. Power procurement. IID has access to relatively inexpensive hydroelectric and geothermal resources, keeping wholesale costs low. SCE passes through higher renewable portfolio and capacity costs.

5. Rate design. IID uses net billing: energy drawn from the grid is charged at approximately 11.7 ¢/kWh, and excess solar generation is credited at 6.8 ¢/kWh. SCE uses NEM 2.0/3.0 with variable time-of-use rates and mandatory fixed charges, making bills more difficult to predict.

The line dividing the IID and SCE territories is more than symbolic. Residents of Indio, Coachella, and other east‑side communities enjoy substantially lower electricity costs, while their neighbors in Palm Springs pay nearly double for the same kilowatt‑hour. The map below shows the approximate service boundary along Washington Street, as well as the cities it separates.

- Sun City Palm Desert is on the IID due to it being on the East side of Washington.

The CPUC’s 2025 rate decision allows SCE to raise its revenue requirement by about 12.6 %, translating to a 9 % increase in residential bills. More increases are expected through 2028 as SCE invests in wildfire mitigation and grid modernization.

IID, meanwhile, is midway through a four-year rate plan that will bring its residential energy charge to 24.38¢/kWh in 2027. Despite the increases, IID’s rates will remain among the lowest in California. The district plans to use new revenue to modernize aging infrastructure, support renewable energy, and improve financial stability

Living east or west of Washington Street can determine whether you pay around 20 ¢/kWh or nearly 40 ¢/kWh for electricity. IID’s public‑power model, access to cheaper resources, and lower wildfire liabilities keep rates low. SCE’s investor‑owned structure, wildfire costs, and regulatory mandates drive rates higher. Understanding these differences can help homeowners plan for future expenses and evaluate investments, such as solar panels or battery storage.

As the energy landscape evolves, expect both utilities to continue investing in cleaner power and grid reliability. While costs are rising across California, IID’s not‑for‑profit mission and local control offer a rare oasis of affordability for Coachella Valley residents.