By Dan Bacher

The Sacramento Municipal Utility District, or SMUD, has cancelled its power purchase agreement with DESRI, a company seeking to build a controversial energy project called Coyote Creek Agrivoltaic Ranch in the eastern part of the county.

Three lawsuits were recently filed against Sacramento County for approving the project in December.

The Board of Supervisors unanimously green-lit the Environmental Impact Report for the Coyote Creek despite wide-spread opposition from Native American tribes, environmental groups and a collection of outdoor enthusiasts. More 150 people showed up at the supervisors’ November hearing to speak against the proposal, which would remove nearly 3,500 old growth oaks and impact Deer Creek, a tributary of the Cosumnes River, the last undammed river in the Central Valley. Opponents say the creek is a vital habitat for multiple sensitive or endangered species that include the tricolored blackbird, the burrowing owl and the American badger.

In 2021, SMUD signed a power purchase agreement with DESRI to be an off taker of solar power from the Coyote Creek project, according to an announcement at the time.

But now, at a moment when lawsuits and news stories are raising broader awareness of the stakes around Coyote Creek, SMUD is backing out of that agreement. In a statement, the utility identified “supply chain constraints, rising prices, tariffs, schedule delays, environmental impacts and pending litigation” as some of the key uncertainties that had triggered its decision.

“Over the years, SMUD and DESRI have delivered multiple important clean energy projects that benefit our community, and we look forward to continuing our partnership for years to come,” SMUD CEO & General Manager Paul Lau noted in his own message to public. “We’d like to thank Sacramento County for all their work throughout the process and our SMUD Board of Directors for their leadership. We remain committed to following a flexible pathway to eliminate all carbon from our power supply by 2030.” 

While opposing groups thanked SMUD for its decision, litigation over Coyote Creek is still moving forward against Sacramento County. 

“In a nice start to the new year, SMUD backed away from the Coyote Creek agrivoltaic project,” observed Heather Fargo, former mayor and current Chair of the Environmental Council of Sacramento. “The developers could still build if they can find a buyer for the power, but ECOS and the California Native Plant Society are  maintaining their lawsuit to void the special use permit approved by the County.”

Fargo added that, after the first major lawsuit was filed by her council, two more were leveled against Coyote Creek, one by the Wilton Rancheria and another by an alliance between the California 4 Wheel Drive Association, the American Sand Association and the BlueRibbon Coalition.

Parties in these civil actions allege that Sacramento County did not properly evaluate the project’s environmental effects or follow its own General Plan.

Other opponents of Coyote Creek include the Sierra Club, 350 Sacramento, the Sacramento Audubon Society, Defenders of Wildlife, the Center for Biological Diversity, the California Wildlife Foundation, the Central Valley Bird Club, Third Act and the Sierra Access Coalition.

County officials acknowledged they may continue to pursue the project, despite SMUD pulling out of its agreement.

“The project applicant may continue to explore additional off-take agreements consistent with existing approvals,” one county spokesperson told KCRA.

Meanwhile, DESRI appears to want to continue pressing ahead with the project.   

Hy Martin, Chief Development Officer of DESRI, commended the Board of Supervisors for what he asserted was “their bold leadership” on the initiative.

“The project is well positioned to permanently preserve extensive oak woodlands and wetland resources at Barton Ranch, generate meaningful property tax revenue, support local economic development, and advance the goals of the County’s Climate Action Plan,” Martin suggested in a statement. “Coyote Creek has been in development for many years and during that time, our team has engaged meaningfully with the community to build lasting partnerships.”