Palou led the majority of the race, but Power used an alternate tyre strategy to lead a chunk of the event, the pair trading the lead before Palou stamped his authority on proceedings.
A flurry of late yellow flags threatened to cause chaos but Palou kept his cool through all of them to beat Power by just over 1s and extend his championship lead.
After one false start, as the field wasn’t arranged beyond the first four rows, polewinner Palou brought the field to green for the 100-lap event around the all-new 1.645-mile, nine-turn street circuit, using some sections from the Formula 1 grands prix of the 1980s.
The first yellow flew almost immediately, as Callum Ilott (Juncos Hollinger Racing) rode over the rear of Long Beach GP winner Kyle Kirkwood at the first corner and ended his race in the tirewall. Kirkwood continued and received a new rear wing in his Andretti Autosport pit.
“I didn’t have anywhere to go, but it was my bad because I couldn’t slow it down enough,” said Ilott. “Sorry to the team and to Kyle.”
At the third attempt on lap seven, Romain Grosjean (Andretti Autosport) grabbed second from his St Petersburg nemesis Scott McLaughlin (Team Penske), running ahead of Scott Dixon (Ganassi, who escaped a first corner tag from Indy 500 winner Josef Newgarden), Marcus Ericsson (Ganassi) and Power – the latter the best-placed driver starting on the primary Firestone tyres, with the top six all starting on the green alternates.
By lap 10, Palou led Grosjean by 3.7s, who was followed by McLaughlin and Dixon. Power marched up to fifth, followed by Felix Rosenqvist, who also started his Arrow McLaren car on primaries, as Ericsson fell back and pitted on lap 17 to get rid of his alternate tyres.
Power passed Dixon for fourth on lap 18, overtook McLaughlin a couple of laps later and then outbraked Grosjean for second on lap 22.
Just before quarter distance, Palou’s lead was over 9s but Power began to carve into that advantage. Grosjean outbraked himself at Turn 8 on lap 29, allowing McLaughlin to pass as he performed a spin-turn in the run-off and the Frenchman then dived for the pitlane.
Leader Palou and McLaughlin pitted together on lap 30, switching to the primaries. On hotter tyres after pitting earlier, Dixon just managed to pass McLaughlin.
Power pitted on lap 34, switching to the alternate tyres but handing the lead back to Palou as he rejoined. Two frontrunners were delayed when Arrow McLaren’s Pato O’Ward rejoined with a loose left-rear wheel after pitting on lap 36, and his car had to be retrieved by his pitcrew, and Newgarden suffered a fuel-filler issue.
By lap 40, Palou led Power by 5s, ahead of Dixon, Rosenqvist, Alexander Rossi (McLaren), McLaughlin and Grosjean. A charging O’Ward managed to unlap himself from Palou but misjudged a move on Santino Ferrucci (AJ Foyt Racing) at Turn 9 and slapped his car into the wall, causing a yellow just before half distance.
The race briefly went green again on lap 49, but another caution occurred almost immediately with Sting Ray Robb stranded at Turn 3. Bizarrely, under yellow, Graham Rahal crashed at Turn 1 and was collected by Benjamin Pedersen.
Power got a huge run on Palou, who suffered an electronic glitch with his gearbox, at the lap 57 restart and dived inside him to grab the lead at Turn 3, scampering away by almost 3s on his softer tyres. But the pendulum swung back as Palou’s rubber came to life as the race entered its final third.
Palou duped Power into overshooting Turn 3 on lap 66, grabbing the lead back. Dixon dived to the pits from third at this point for his final stop, triggering his rivals to pit too. Palou rejoined well clear of Power and Dixon, who were running nose to tail, with Rossi rejoining ahead of Rosenqvist, but they switched spots at Turn 3 on the following lap.
Behind them, McLaughlin hit Grosjean as he rejoined from the pits. Then Newgarden rejoined into the midst of the that fight, with Rossi and Grosjean elbowing their way past him.
With 20 laps to go, Palou was over 6s clear of Power and Dixon but the yellow flew again as Grosjean clipped the apex wall at Turn 4 and ended his race in the wall on the exit. In better news for Andretti, back in the frame was Kirkwood, whose miraculous recovery had led to him taking sixth from Newgarden.
The next restart was effectively aborted as David Malukas crashed at Turn 9, but it went green for real with 10 laps remaining.
Power got a great restart but couldn’t work past Palou on the outside and was then clipped into the air by Dixon and his engine lapsed into anti-stall. Rossi grabbed his big chance to take second, ahead of Power, while Rosenqvist nipped past Dixon when the latter was shoved wide by a recovering Power at Turn 4. But the yellow flew again as Ferrucci and Robb clashed.
The final shootout was over five laps, with Power catching Rossi napping at Turn 4 to retake second as Palou jumped clear again. Rossi and Rosenqvist then swapped positions but the McLarens somehow kept Dixon at bay.
Palou beat Power by 1.1843s at the flag. Rosenqvist made a forceful move stick on Rossi for third with two laps to go, and this time Dixon also got ahead of Rossi for fourth.
Kirkwood finished an unlikely sixth, ahead of McLaughlin, Marcus Armstrong (Ganassi), Ericsson and Newgarden.