Key Takeaways
The California Public Utility Commission has rejected the termination of Pacific Gas & Electric contracts, which would have closed the Ivanpah Solar Plant, due to “reliability” and the state’s “green” energy mandates.
Ivanpah has struggled to generate power and has had to rely on natural gas to operate.
The plant’s continued operation is costing ratepayers an additional $105 million.
California’s sky-high electricity rates — the second highest in the country and second only to Hawaii — are the direct consequence of state policies that deliberately sideline reliable, conventional fuels (including large hydropower) in favor of mandating and subsidizing politically preferred renewables.
California is keeping the Ivanpah solar plant operating due to “reliability” and the state’s “green” energy mandates, despite concerns from the private sector and the federal government. The Ivanpah Solar Power Facility was set to shut down in 2026 after failing to meet its energy targets. Despite receiving $1.6 billion in federal loan guarantees, nearly 75% of the facility’s cost, it struggled to generate power and had to rely on natural gas to operate rather than the sun. In January, Pacific Gas & Electric (PG&E) announced an agreement with the plant’s owners to terminate its contracts for two of the plant’s three units starting in 2026. According to the Las Vegas Review-Journal, the California Public Utilities Commission (CPUC) recently rejected those contracts, citing shifting federal priorities, state policy regarding renewables project development, and sunk infrastructure costs.
As explained by the Review-Journal, to generate electricity, Ivanpah uses concentrated thermal power plants — a system of mirrors to reflect sunlight and generate thermal energy, which is then concentrated to power a steam engine. The plant, which cost $2.2 billion to build, was originally expected to run until 2039, but Solar Partners offered PG&E an opportunity to terminate the power purchase agreements to save ratepayers money. However, California’s stringent “green energy” goals, requiring 100% “clean” energy by 2045, are standing in the way.
Ivanpah has been accused of reportedly blinding pilots, incinerating over 6,000 birds a year, and generating power inefficiently. The Review-Journal explains that birds incinerated by Ivanpah are referred to as “streamers” for the smoke plume that comes from birds that ignite in midair. Federal wildlife investigators reported an average of one “streamer” every two minutes on a visit to the plant 10 years ago. There are also other wildlife concerns with the plant, such as road runners that become trapped along its perimeter fencing and are attacked by predators.
The Ivanpah concentrated solar technology has essentially been replaced by solar photovoltaic (PV). Solar PV is the technology that is being built throughout the United States and abroad by utilities and installed on homeowners’ rooftops. According to Robert Bryce, Ivanpah is costing California residents an extra $100 million per year, but the state “can’t afford to let go of any renewables no matter how uneconomic.”
As he explains, “Ivanpah is producing about 750,000 megawatt-hours of electricity per year. Reports show that PG&E has been paying about $180 per megawatt‑hour for the electricity from Ivanpah. For comparison, new solar PV projects can produce power for about $40 per MWh. Thus, the CPUC commissioners — all appointed by Newsom — are requiring California ratepayers to pay a premium of $140 per MWh for the juice from Ivanpah, even though they could get the same electricity from cheaper sources. Simple multiplication ($140/MWh x 750,000 MWh/yr) shows that Newsom’s minions are mandating Californians to pay $105 million per year more for electricity from Ivanpah than they should be paying.”
California has the second-highest residential electricity price in the country at 32 cents per kilowatt-hour, second only to Hawaii. According to Robert Bryce, PG&E, the state’s largest utility, has been requesting rate increases and receiving them from the CPUC. Last year, the CPUC approved six rate increases. In March, the utility asked the CPUC for another rate increase, followed by another rate increase in October. In September, PG&E announced a $73 billion grid upgrade plan supposedly to meet surging artificial intelligence data center demand.
Rather than letting utilities determine the best technologies to meet consumers’ needs and achieve grid reliability, California has a renewable portfolio standard that mandates utilities add renewable energy like wind and solar power. Senate Bill (SB) 1078 created the Renewable Portfolio Standard (RPS) in 2002, beginning with a 20% renewables requirement by 2017. In 2015, SB 350 raised the RPS target to 50% by 2030; in 2018, SB 100 pushed it to 60% by 2030 and 100% “carbon-free” electricity by 2045.
Besides the RPS, California has other policies that intentionally increase electricity rates, including a carbon dioxide reduction mandate, net metering for solar, nuclear reactor closures, and electric vehicle charging subsidies, among others. Via Robert Bryce, last year, the CPUC issued a report predicting that the state’s electricity rates would soar over the next few years.
Analysis
Robert Bryce puts it well when he argues that, “The Ivanpah concentrated-solar project has been an environmental and economic disaster.” If California had allowed reliable generating technologies to continue being built instead of forcing their premature retirement in favor of “green” energy, consumers and businesses could have the power they need without rising rates. As is the case with keeping Ivanpah open, California’s policies force utilities to request rate increases to pay for their implementation.
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