Sacramento Municipal Utility District is canceling its agreement to purchase power from the Coyote Creek project.  

The utility company announced Monday they would not be moving forward with the power purchase agreement with D.E. Shaw Renewable Investments (DESRI), which SMUD signed in 2021.

SMUD officials cited "project uncertainties" for their decision – naming supply chain constraints, rising prices, tariffs, schedule delays, environmental impacts and pending litigation as the chief factors.

"We'd like to thank Sacramento County for all their work throughout the process and our SMUD Board of Directors for their leadership," SMUD CEO & General Manager Paul Lau said in a statement. "We remain committed to following a flexible pathway to eliminate all carbon from our power supply by 2030."

The Coyote Creek Agrivoltaic Ranch project, as proposed, would be one largest solar projects in the region.

However, the project has run into stiff opposition from Sacramento County residents and conservation groups over how the nearly 3,000-acre solar field would necessitate the destruction of more than 3,000 old-growth oak trees.

"My immediate reaction was relief and surprise and a little bit of gratitude," Heather Fargo, president of the Environmental Council of Sacramento (ECOS) and former Sacramento mayor, said about SMUD's decision.

ECOS has strongly opposed the project, but Fargo said their battle against it isn't over yet since "the project isn't dead" despite this latest development.

DESRI partnered with SMUD on the project, which would be located in eastern Sacramento County at Barton Ranch.

"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," DESRI said in a statement to CBS Sacramento.