Regulators Reject PG&E’s Proposal to Exit Ivanpah Solar Contracts, Keeping Solar Facility Online
The California Public Utilities Commission (CPUC) rejected a proposal by Pacific Gas & Electric Co. to terminate its long-term power purchase agreements with the Ivanpah Solar Electric Generating Station. The decision keeps the high-profile solar-thermal facility operating despite federal support for closing it.
The CPUC denied PG&E’s request to end contracts covering two of Ivanpah’s three generating units. The proposal had been developed in coordination with the U.S. Department of Energy, which holds a major loan guarantee tied to the plant’s construction. Commissioners said the plan raised concerns about grid reliability, long-term resource planning and the loss of existing clean-energy capacity.
Ivanpah, located in the Mojave Desert near the California-Nevada border, began operations in 2014 and was once promoted as the world’s largest concentrated solar power facility. Unlike photovoltaic solar plants, Ivanpah uses thousands of mirrors to focus sunlight onto towers, generating steam to produce electricity. While the technology was considered cutting-edge at the time, it has since been overtaken by cheaper solar and battery storage systems.
PG&E argued that continuing to purchase power from Ivanpah is no longer cost-effective for customers. In filings with the commission, the utility said exiting the contracts would reduce costs for ratepayers and allow the plant’s owners to retire older units and potentially redevelop the site with more modern technology. PG&E said the agreement it negotiated with Ivanpah’s owners was structured to protect customers while meeting regulatory requirements.
The Department of Energy supported the proposed contract terminations, according to CPUC records. Federal officials told state regulators that allowing the agreements to end would help facilitate repayment of the federal loan guarantee and could reduce environmental impacts associated with the facility’s operations, including concerns related to wildlife.
But in its decision, the CPUC said the proposal did not adequately account for California’s near-term electricity needs. Regulators cited forecasts showing rising demand driven by electrification, electric vehicle charging and data center growth. They also pointed to uncertainty surrounding the timing and availability of replacement resources.
The commission also noted that the Ivanpah facility is connected to transmission infrastructure that was built specifically to serve it. According to CPUC documents, hundreds of millions of dollars have already been invested in those transmission upgrades, and regulators expressed concern that early retirement of the plant could leave those assets underutilized.
Environmental and energy policy advocates have long debated Ivanpah’s role in California’s clean-energy transition. Supporters of retiring the plant say it is expensive to operate and no longer represents the most efficient use of ratepayer dollars. Critics have also raised concerns about operational challenges and impacts on desert wildlife.
Others argue that keeping existing renewable facilities online helps ensure reliability as California works toward its climate goals.