IID Secures 86 MW of Geothermal Power in Major Salton Sea Agreement The Imperial Irrigation District has signed 10-year agreements with BHE Renewables, through its CalEnergy subsidiary, to secure 86 megawatts of around-the-clock geothermal power from two established projects in California’s Imperial Valley. The agreement will strengthen IID’s electricity reliability, support renewable-energy compliance and help meet growing demand across the Imperial and Coachella valleys. The new contracts cover 44 MW from the Salton Sea 4 geothermal project and 42 MW from the Leathers geothermal project. Deliveries are scheduled to begin on January 1, 2027, giving IID access to dependable renewable electricity during a period of rising summer demand and increasing pressure on power systems across the American West. The agreement represents an important step in IID’s long-term resource planning. It combines existing geothermal generation with additional capacity from the Yuma Cogeneration facility in ...
IID Secures 86 MW of Geothermal Power in Major Salton Sea Agreement
The Imperial Irrigation District has signed 10-year agreements with BHE Renewables, through its CalEnergy subsidiary, to secure 86 megawatts of around-the-clock geothermal power from two established projects in California’s Imperial Valley. The agreement will strengthen IID’s electricity reliability, support renewable-energy compliance and help meet growing demand across the Imperial and Coachella valleys.
The new contracts cover 44 MW from the Salton Sea 4 geothermal project and 42 MW from the Leathers geothermal project. Deliveries are scheduled to begin on January 1, 2027, giving IID access to dependable renewable electricity during a period of rising summer demand and increasing pressure on power systems across the American West.
The agreement represents an important step in IID’s long-term resource planning. It combines existing geothermal generation with additional capacity from the Yuma Cogeneration facility in Arizona, creating a broader portfolio designed to reduce exposure to volatile spot-market electricity prices while maintaining sufficient capacity during periods of peak demand.
IID Expands Its Geothermal Portfolio
The Imperial Irrigation District is a community-owned public power utility serving customers in California’s Imperial and Coachella valleys. It provides both electricity and water services and is one of California’s largest public power agencies.
Under the new agreements, IID will receive geothermal energy and associated renewable energy credits from two CalEnergy-operated facilities in Calipatria, California. Salton Sea 4 will provide 44 MW, while the Leathers project will contribute an additional 42 MW.
Together, the projects will supply 86 MW of firm renewable power. Unlike variable resources such as solar and wind, geothermal facilities can operate continuously because they draw energy from the Earth’s natural heat rather than relying on weather conditions.
This operating profile is particularly valuable in the Imperial Valley, where electricity demand increases significantly during the summer. High temperatures drive greater use of air-conditioning and cooling equipment, often creating the greatest strain on the electricity system precisely when solar generation begins to decline in the evening.
Geothermal generation can continue producing power throughout the day and night. Its ability to provide stable output makes it useful for meeting base-load requirements, supporting grid stability and reducing the need for short-term electricity purchases during periods of high demand.
The agreements also include renewable energy credits. These credits can help IID meet California’s renewable portfolio requirements and demonstrate the renewable attributes associated with the electricity supplied under the contracts.
Salton Sea 4 and Leathers Projects
The Salton Sea geothermal region is one of the most significant geothermal production areas in the United States. It is located in California’s Imperial Valley, where underground reservoirs contain hot, mineral-rich fluids capable of supporting commercial electricity generation.
The region has hosted geothermal development for decades. Operators extract hot brine from deep underground, separate steam or use the hot fluid in a binary-cycle process, and convert that energy into electricity. After heat extraction, the geothermal fluid is generally reinjected into the reservoir to support long-term resource management.
The Salton Sea 4 project is expected to provide 44 MW under the IID agreement. The Leathers project will provide 42 MW. Both projects are established facilities rather than speculative developments, allowing IID to secure power from operating resources with existing infrastructure and experienced workforces.
This distinction is important for a utility seeking dependable capacity. New geothermal projects can require lengthy permitting, exploration drilling, construction and financing periods. By contracting for output from existing facilities, IID can add renewable capacity without waiting for an entirely new project to be developed.
The agreements also support the continued operation of geothermal assets that contribute to the local economy. Power plants require plant operators, maintenance personnel, drilling contractors, engineering firms and other specialized workers. Long-term power contracts can provide greater revenue certainty for operators while supporting employment in the communities surrounding the projects.
Why Geothermal Matters to IID
Geothermal energy offers several characteristics that complement IID’s existing electricity portfolio.
Solar power is abundant in California and plays a major role in meeting daytime electricity demand. However, solar output falls in the evening, when customers may still be using large amounts of electricity. Wind generation can also vary depending on weather conditions.
Geothermal power provides a different operating profile. A geothermal plant can operate continuously, subject to maintenance and resource conditions, and can provide power during periods when solar and wind output are lower.
For IID, that reliability is especially valuable because the utility serves an area exposed to extreme summer heat. The Imperial Valley regularly experiences high temperatures, increasing demand for cooling and putting pressure on generation and transmission resources.
The 86 MW secured through the new agreements will not eliminate the need for additional generation, storage or transmission investment. However, it gives IID a dependable renewable resource that can operate alongside solar, wind, hydroelectric power, natural gas and market purchases.
Geothermal generation can also reduce dependence on short-term electricity markets. When regional demand rises or transmission constraints occur, wholesale electricity prices can increase sharply. Long-term contracts provide a more predictable supply arrangement and can reduce the amount of power a utility must purchase at uncertain market prices.
Additional Capacity From Yuma Cogeneration
The agreements with BHE Renewables also include additional capacity from the Yuma Cogeneration facility in Yuma, Arizona. The natural-gas-fired combined-cycle plant is not a renewable resource, but it can support reliability during periods of high demand.
Combined-cycle gas plants generally use a gas turbine and a steam turbine to generate electricity from the same fuel source. This configuration can achieve greater efficiency than older simple-cycle gas turbines and can provide dispatchable capacity when renewable generation is unavailable or insufficient.
For IID, the Yuma resource is intended to help meet future peak-demand periods, maintain required capacity margins and reduce exposure to spot-market purchases. Capacity margins provide a buffer between expected demand and the amount of generation available to serve customers.
The inclusion of Yuma Cogeneration reflects the practical challenge facing many utilities. Electricity systems must balance decarbonization goals with reliability requirements. Renewable resources are expanding rapidly, but utilities still need dispatchable capacity, storage and transmission infrastructure to manage periods of low renewable output or unexpectedly high demand.
IID’s approach combines firm geothermal generation with additional conventional capacity. The geothermal portion supports renewable-energy objectives, while the Yuma resource provides additional flexibility and reliability support.
Alignment With IID’s Integrated Resource Plan
The new agreements are consistent with IID’s 2024 Integrated Resource Plan. The plan includes expanded geothermal generation and additional capacity resources as part of the utility’s long-term strategy.
An integrated resource plan evaluates how a utility will meet future electricity demand while considering reliability, cost, regulation, fuel diversity and environmental objectives. It typically examines multiple resource options, including renewable generation, energy storage, energy efficiency, transmission upgrades and conventional generation.
IID’s decision to secure additional geothermal power reflects the resource’s ability to address several of these objectives simultaneously. The power is renewable, locally generated and capable of operating around the clock. It also comes from projects with existing infrastructure in the same region served by the utility.
Local generation can provide additional benefits by reducing dependence on long-distance transmission routes. Although electricity from the Salton Sea region still requires transmission and system coordination, nearby resources may help diversify supply and reduce the risks associated with relying on distant markets.
The agreements also provide a clearer path for IID to meet regulatory requirements. California’s renewable portfolio standards require utilities to procure increasing amounts of renewable electricity, while greenhouse-gas reduction policies place additional pressure on power providers to reduce emissions.
Geothermal resources can help utilities satisfy these requirements while maintaining a stable electricity supply. Their high capacity factor allows them to generate substantially more electricity over the year than an equivalent variable resource operating only when weather conditions are favorable.
Reliability During California’s Summer Peaks
Summer reliability has become a major concern across California and the broader Western electricity market. Demand can rise sharply during heat waves, while multiple utilities may need additional electricity at the same time.
The most difficult period often occurs in the late afternoon and evening. Solar generation begins to decline as temperatures remain high and customers continue using air-conditioning. This creates a period in which demand remains elevated while one major source of electricity is decreasing.
Geothermal plants can help fill this gap because they are not dependent on sunlight. Their continuous output can provide a stable supply during the evening and overnight hours.
For IID, the Salton Sea 4 and Leathers contracts could therefore provide value beyond their annual energy production. They also offer capacity that can be counted on during critical operating periods, subject to contractual terms, plant availability and transmission conditions.
Reliable capacity is increasingly important as utilities add more solar and wind generation. A system with a high share of variable renewable resources needs complementary resources capable of operating when renewable output changes.
Energy storage is one solution. Demand response, transmission expansion, hydropower and flexible gas generation are others. Geothermal energy provides another option, especially in regions where high-temperature resources are already developed.
Economic Benefits for the Imperial Valley
The contracts are expected to support continued operation of geothermal facilities and the local workforce associated with them. Long-term agreements can provide financial stability for plants, helping sustain operations, maintenance and related contracting activity.
Geothermal projects contribute to local economies through direct employment, tax payments, land agreements, procurement and support services. Their economic activity can continue over many years because geothermal power plants are designed for long operating lives.
The Imperial Valley has long been associated with geothermal development. Maintaining existing plants helps preserve technical expertise and industrial capabilities that could become important for future projects.
The region is also gaining attention because of its potential for expanded geothermal development and lithium extraction from geothermal brines. Geothermal brines contain dissolved minerals, and new technologies are being developed to recover lithium while continuing to produce electricity.
Although the IID agreements concern electricity supply rather than lithium production, continued operation of geothermal facilities could support broader investment in the Salton Sea region. Existing wells, pipelines, processing systems and technical personnel may provide a foundation for future energy and mineral projects.
Any expansion, however, would need to address environmental, water-management, permitting and community concerns. The Salton Sea basin is environmentally sensitive, and responsible development will require careful monitoring of geothermal operations and associated industrial activity.
BHE Renewables and CalEnergy
BHE Renewables owns and operates renewable and conventional generating facilities across the United States. Its portfolio includes solar, wind, geothermal, hydroelectric and natural-gas projects.
Through its CalEnergy subsidiary, BHE Renewables operates geothermal facilities in California’s Imperial Valley. The company owns and operates 10 geothermal sustainable power facilities in the region, making it one of the area’s most significant geothermal developers.
The partnership with IID extends an existing relationship between the utility and the CalEnergy geothermal fleet. Rather than relying solely on new project development, IID is securing output from an established operator with knowledge of the local geothermal resource and operating environment.
For BHE Renewables, the agreements provide a long-term customer for power from the Salton Sea 4 and Leathers projects. Long-term contracts are important in the power sector because they can provide predictable revenues and support continued investment in plant maintenance and resource management.
For IID, contracting with a major local geothermal operator provides access to a resource that is already connected to the regional electricity system. This can reduce some of the development risks associated with building an entirely new generation facility.
Ten-Year Contracts Provide Long-Term Certainty
The geothermal agreements will run for 10 years. Their duration gives IID a stable source of renewable power beginning in 2027 and extending through the following decade.
Long-term power purchase agreements are commonly used to allocate risk between generators and utilities. The generator receives greater certainty about future sales, while the utility secures access to electricity and renewable attributes under agreed contractual terms.
The value of such agreements depends on several factors, including pricing, availability guarantees, transmission arrangements, operating costs and market conditions. The public announcement did not disclose the financial terms of the contracts.
A 10-year commitment also gives IID a foundation for future resource planning. The utility can account for the contracted geothermal output when evaluating additional needs for storage, transmission, demand response and generation.
At the same time, IID will need to continue assessing how the contracts fit within changing electricity markets. Demand could increase faster than expected because of population growth, industrial development, electrification or data-center expansion. Regulatory requirements and technology costs may also change during the contract period.
The agreements therefore represent one component of a broader energy strategy rather than a complete solution to future power needs.
Geothermal as a Firm Renewable Resource
The IID agreement highlights the difference between renewable energy and variable renewable energy. Solar and wind are renewable, but their output changes according to weather and time of day. Geothermal energy is renewable and can generally provide a more consistent generation profile.
A geothermal plant uses heat from the Earth to produce electricity. Wells bring hot fluid to the surface, where steam or heat is used to drive a turbine or heat a secondary working fluid. The cooled geothermal fluid is then typically reinjected underground.
The technology can operate continuously, but output depends on reservoir conditions, well performance, plant maintenance and reinjection management. Proper reservoir management is essential to maintaining production over the life of a project.
Geothermal plants also occupy relatively small land areas compared with some other utility-scale generation resources. They can provide high annual energy production from a compact site, although exploration and drilling introduce significant upfront costs.
The Salton Sea region has an additional advantage: it has a history of geothermal development, existing infrastructure and specialized expertise. These factors can reduce some risks compared with developing geothermal power in an entirely unexplored area.
Implications for Future Geothermal Development
The IID agreements may encourage further interest in established geothermal resources in the United States. Utilities are increasingly seeking clean firm power that can complement solar and wind generations
Geothermal energy could benefit from this trend if developers can manage drilling costs, permitting timelines, resource risks and financing requirements. Existing fields such as the Imperial Valley offer a more mature development environment, while emerging projects are exploring enhanced geothermal systems and closed-loop technologies.
Traditional geothermal projects depend on naturally permeable reservoirs containing sufficient heat and fluid. Enhanced geothermal systems seek to create or improve underground permeability, potentially expanding geothermal development into areas without conventional hydrothermal resources.
Closed-loop systems use sealed underground circulation pathways to transfer heat without extracting naturally occurring formation fluids. These approaches remain at different stages of development, but they could eventually broaden the geographic reach of geothermal power.
The commercial success of new technologies will depend on drilling performance, project economics, regulatory approval and the ability to deliver power at competitive prices. In the meantime, agreements such as IID’s provide a market for existing geothermal projects and demonstrate the continuing value of conventional geothermal generation.
Challenges and Considerations
Despite its advantages, geothermal power faces several challenges. Exploration drilling can be expensive, and developers may spend significant capital before confirming whether a resource can support commercial production.
Existing projects also require ongoing maintenance. Wells can experience declining productivity, mineral scaling, corrosion and changing reservoir conditions. Operators must manage these issues to maintain plant output and protect long-term project performance.
Transmission is another consideration. The ability to deliver geothermal electricity depends on available transmission capacity and system interconnection arrangements. A power plant may have sufficient generation capability but still face delivery constraints if the grid is congested.
Geothermal projects must also comply with environmental regulations governing drilling, water management, emissions, land use and reinjection. In the Salton Sea region, environmental sensitivity adds further importance to careful project planning.
The IID agreements do not remove these challenges, but they provide a stable framework for operating established facilities. Their success will depend on the continued performance of the Salton Sea 4 and Leathers projects and the ability of the regional grid to deliver their output reliably.
A Strategic Role for Local Clean Power
IID’s agreement with BHE Renewables demonstrates how community-owned utilities can use local resources to strengthen electricity reliability. The contracts provide 86 MW of geothermal power while supporting renewable-energy objectives and local economic activity.
The arrangement also shows why geothermal energy remains relevant in a rapidly changing electricity market. As utilities add more solar and wind power, they need resources that can provide dependable electricity when variable generation declines.
By combining geothermal energy with additional capacity from Yuma Cogeneration, IID is pursuing a diversified strategy. The geothermal resources support clean-energy goals, while the gas-fired facility adds dispatchable capacity for peak-demand periods.
Deliveries from Salton Sea 4 and Leathers are scheduled to begin on January 1, 2027. Over the 10-year contract period, the resources will form part of IID’s effort to provide reliable, affordable and increasingly renewable electricity to customers in the Imperial and Coachella valleys.
The agreement also reinforces the Imperial Valley’s role as a major geothermal center in the United States. Continued investment in established projects can preserve local expertise, support workers and create a foundation for future geothermal, energy-storage and mineral-recovery opportunities.
Source: IID
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