Stronghold Power Systems Invests $8 Million on Contract Despite City Termination

Stronghold Power Systems, Inc., has detailed its efforts and financial investments over the past two years under a municipal utility development agreement with the City of Coachella, highlighting the substantial work delivered despite the city's termination of the contract.

The agreement, resulting from a competitive process initiated and managed by the City, took approximately two years to finalize. The City solicited bids, evaluated proposals from competing bidders, and selected Stronghold Power Systems for the contract, which was then negotiated for nine months. The City Council officially approved the agreement on February 11, 2026. This process was transparent and open, ensuring that the selection of Stronghold was not a sole-source award or a rushed, secretive operation.

In the two years leading up to the agreement, Stronghold Power Systems invested approximately $8 million of its own capital to commence the work required by the contract. No public funds were used for this investment. Despite the City's decision to terminate the agreement, Stronghold continued to fulfill its contractual obligations, delivering essential design documentation by August 2026.

Scott Bailey, Chairman and CEO of Stronghold Power Systems, emphasized the company's commitment and adherence to the contract. "We competed for this project in a fair and open process and won it through hard work and negotiation. We have committed significant capital and have continued to deliver on our contractual responsibilities, even after the City decided to terminate the agreement," Bailey stated.

The City's breach of the agreement has significant financial implications. Stronghold's analysis projects that Phase 1 alone would have generated approximately $54.2 million annually in recurring public revenue. Of this, about $3 million would have gone to the City's general fund through property taxes, and nearly $22 million would have been allocated as net municipal utility revenue. Additionally, the agreement was structured to distribute the remaining $29.2 million to various local agencies, including schools, the Coachella Valley Water District, and other entities.

Bailey added, "We are committed to working with the City to find a mutually beneficial resolution. We believe that continuing discussions can avoid legal action and preserve the benefits of the agreement."

The termination of the agreement and the resulting financial losses underscore the potential economic impact of the City's decision, particularly on public revenue and regional development. Stronghold Power Systems remains ready to engage in dialogue with the City to address these issues.