Stronghold Details Two Years of Competitive Procurement, $8 Million Invested, and Substantive Work Delivered as Part of Its Contractual Obligations

Company publishes analysis projecting $54.2 million a year in recurring public revenue forgone, and repeats its offer to work with the City of Coachella

RIVERSIDE, Calif., Sept. 3, 2026 /PRNewswire/ -- Stronghold Power Systems, Inc. today set out the record of its work under the Municipal Utility Development Agreement with the City of Coachella and reiterated its analysis of what the City's breach of that agreement is projected to cost the public each year.

The agreement between the City of Coachella and Stronghold Power Systems was the product of a competitive process the City itself designed and ran over approximately two years. The City solicited proposals, evaluated Stronghold against competing bidders, selected Stronghold, and negotiated the definitive agreement with the company over nine months. The City Council approved the resulting agreement in open session, and it took effect on February 11, 2026. It was not a sole-source award, nor was it a rushed or secretive process. In the end, Stronghold Power Systems was the winner of the open, competitive procurement process and entered into a contract with the City in good faith.

In reliance on that agreement, Stronghold expended approximately $8 million of its own capital to begin performing the work the contract required. No Coachella taxpayer funds went toward that investment. Stronghold continued to perform after the City moved to end the agreement, delivering the design documentation required under the contract in August 2026. No public hearing on the proposed project was held, and the City Council never voted on the project itself. The City Council voted on June 4, 2026 to terminate the agreement, and the City sent its termination letter on June 11, 2026.

"We competed for this work in a process the City designed and ran, and we won it. We negotiated in good faith for nine months, we committed our own capital at no cost to taxpayers, and we kept performing after the City voted to end the agreement, delivering our work product on time, because that is what the contract required of us," said Scott Bailey, Chairman and Chief Executive Officer of Stronghold Power Systems. "We are not trying to take anything away from the people of Coachella. We would rather sit down with the City and work something out than end up in a courtroom. That is still where we would like this to go."

The City's decision to breach the contract with Stronghold Power Systems has real financial consequences for the City and the region, both in what Stronghold has already expended on the project and in lost revenue. Stronghold's analysis projects that Phase 1 alone would have generated approximately $54.2 million a year in recurring public revenue once operating.

Of that, approximately $3 million a year in property tax would have gone to the City's general fund, and approximately $22 million a year in net municipal utility revenue would have gone to the City under the public-private structure the agreement established. The remaining approximately $29.2 million would have been distributed to schools and education agencies, Riverside County, the Coachella Valley Water District and other local agencies under California's property tax allocation.

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SOURCE Stronghold Engineering Inc.