$600 Per Kilowatt Into a Trap
PacifiCorp removed 9,448 megawatts of clean energy from its integrated resource plan, including 3,700 megawatts of wind, 3,366 megawatts of solar, and 2,382 megawatts of battery storage. The revision makes PacifiCorp the first major Western utility to formally quantify how the One Big Beautiful Bill Act’s repeal of clean energy tax credits changes long-term procurement. What the utility chose as a replacement may prove more expensive than what it cut.
The updated plan extends coal plant lifespans at Jim Bridger, Naughton, and Wyodak in Wyoming, converts 562 megawatts of coal capacity to natural gas, and adds carbon capture to 700 megawatts of remaining coal units. PacifiCorp did not abandon storage entirely. The revised IRP still includes 1,680 megawatts of four-hour battery storage and 510 megawatts of 100-hour iron-air storage by 2030. But the net reduction, nearly 2,400 megawatts of storage that existed in the plan six months ago, is gone.
Gas turbines at $600 per kilowatt by 2027. Wood Mackenzie published a report this week projecting gas turbine costs will reach $600 per kilowatt by the end of 2027, a 195 percent increase above 2019 levels. Aurora Tenorio, Wood Mackenzie’s senior supply chain analyst, described turbines as “by far the largest driver of gas plant costs,” representing 20 to 30 percent of combined-cycle project costs and an even higher share for simple-cycle peakers. The cause is not commodity inflation or labor rates. It is competition: data center operators are bidding against utilities for a fixed number of turbines from a manufacturing base that cannot expand fast enough. Tenorio described a “significant market imbalance” that “will affect U.S. power investments well into the next decade.”
At $600 per kilowatt for the turbine component alone, a full combined-cycle gas plant now costs $1,200 to $1,500 per kilowatt installed. A four-hour lithium iron phosphate battery system installs at $250 to $350 per kilowatt in the United States. IRENA’s 2026 capacity statistics document a 93 percent decline in battery storage installation costs since 2010, from $2,571 per kilowatt-hour to $192 per kilowatt-hour for fully installed utility-scale projects. The technology PacifiCorp is pulling from its procurement plan is getting cheaper. The technology it is leaning toward is getting more expensive, with the supply squeeze projected to persist through the end of the decade.
$2.55 billion in storage-specific credit. While PacifiCorp was revising its IRP downward, Aypa Power closed on $2.55 billion in combined credit facilities dedicated to U.S. battery storage projects. The corporate revolving credit facility was upsized to $1.05 billion, comprising a $300 million term loan, a $200 million revolving credit facility, and a $550 million letter of credit facility. That supplements a separate $1.5 billion construction warehouse facility closed in February 2026, led by CIBC and Wells Fargo, with participation from Banco Santander, Nomura, BNP Paribas, ING Capital, Bank of America, Standard Chartered, and more than a dozen additional lenders. Aypa CEO Moe Hajabed described the capital as backing for “over 3 GW of battery storage and clean energy projects” across Arizona, California, Idaho, and Texas.
Eighteen banks did not commit $2.55 billion in storage-specific credit because they expect the asset class to contract. They ran the same installed-cost comparison that PacifiCorp’s revised IRP sidesteps: batteries are cheaper to build, carry no fuel cost risk, and face no turbine delivery queue. The capital markets are pricing storage as core infrastructure at the same moment utility resource planners, responding to a changed tax code rather than changed economics, are removing it from procurement pipelines.
53,000 workers short, 93 days from a deadline. The divergence between policy signals and capital signals collides with a labor market that cannot serve either side cleanly. Analysis of USEER and IREC Census data published by pv magazine this week finds the U.S. solar and storage industry needs approximately 355,000 workers to meet deployment targets before the OBBBA’s July 4, 2026 construction-start deadline. The current workforce stands at roughly 280,000. Eighty-six percent of solar employers report hiring difficulty. Twenty-seven percent of utility-scale firms describe hiring for installation roles as “very difficult.” The OBBBA’s own apprenticeship mandate, requiring 15 percent of labor hours from qualified apprentices for full Section 48E tax credit value, compounds the problem in a market where only 43 percent of the workforce has access to required training.
The constraint falls unevenly. Utility-scale ground-mount projects need specialized site crews and heavy equipment operators in shortest supply. Smaller commercial installations using electrician-led teams face less direct competition for workers. But the aggregate effect is the same: even projects that survive the tax credit repeal face an execution gauntlet of inflating costs, scarce labor, and compressed schedules.
Five states absorb the cost of the pivot. PacifiCorp serves Oregon, Washington, Utah, Wyoming, and Idaho. Every dollar of gas plant capital and coal extension cost enters the rate base. At $1,200 to $1,500 per kilowatt for new combined-cycle capacity, those costs will flow through to commercial and industrial demand charges for the next 30 to 40 years. The 2,382 megawatts of storage PacifiCorp removed would have delivered peak capacity at a fraction of the cost, with no fuel expense and a useful life that matches gas plant economics on a levelized basis.
Other utilities face the same revision pressure. Xcel Energy, Duke Energy, and Dominion Energy all have pending resource plans with storage components built on tax credit assumptions that OBBBA invalidated. Whether they follow PacifiCorp’s path depends on whether their planners trust the policy signal or the price signal.
PacifiCorp chose the policy signal. Gas turbines are quoting $600 per kilowatt with a supply squeeze that Wood Mackenzie projects into the next decade. Eighteen banks just committed $2.55 billion to the position that batteries are the cheaper asset.
Sources
PacifiCorp Pares Back Renewable Plans After Tax Credit Repeal (E&E News)
PacifiCorp Scales Back Renewable Buildout Following Tax Credit Changes (Gillette News Record)
Gas Turbine Costs to Spike 195% From Data Center Boom, Report Says (E&E News)
Aypa Power Upsizes Corporate Credit Facility to US$1.05 Billion (Energy-Storage.News)
Aypa Power Closes US$1.5 Billion Credit Facility for US BESS Projects (Energy-Storage.News)
Workforce Gap of 53,000 Threatens 2026 Solar Deployment Targets (pv magazine USA)
IRENA Reports Global Renewable Capacity Hits 5,149 GW in 2025 (Solar Quarter)