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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Solar Energy Power Sales Agreement: 30-Year Power Sales Agreement (PSA) with Southern California Public Power Authority (SCPPA) for Purchase of 25 MW from Notch Peak Project.
1. Resolution authorizing a 30-year Power Sales Agreement (PSA) with Southern California Public Power Authority (SCPPA) for the purchase of 25 MW (or equivalently, a 7.72% entitlement share of the 324 MW contract capacity) of renewable solar energy and environmental attributes from the Notch Peak Project, and finding that the City’s action authorizing purchase of 25 MW of solar power from SCPPA is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines sections 15061 and 15277.
COUNCIL ACTION
Item Type: Action
Approved for June 2, 2026 calendar
EXECUTIVE SUMMARY
GWP continuously seeks opportunities to expand its clean energy portfolio, and through its participation with SCPPA, ensures access to utility scale renewable energy projects that are competitively priced, and cost effective.
On April 16, 2026, SCPPA approved a Power Purchase Agreement and Option Agreement with Notch Peak Project, LLC for the Notch Peak Project for a term of 30 years. This long-term agreement offers significant price stability with a competitive fixed rate of $46.75 per megawatt-hour (MWh), with no annual escalation. The participants of this project include the Cities of Glendale and Los Angeles through GWP and LADWP.
Energy will be delivered at the Intermountain Power Project (IPP) switchyard, facilitating integration with existing transmission infrastructure. GWP’s entitlement share in this Project is 25 MW (or equivalently, a 7.72% share of the 324 MW contract capacity) of renewable solar energy and environmental attributes.
Notch Peak Project aligns with City of Glendale’s 2024 Integrated Resource Plan (IRP) and GWP’s strategic goals to engage in opportunities that secure long term, low-cost, reliable, and sustainable energy supplied to City of Glendale customers.
RECOMMENDATION
Adopt a Resolution authorizing the City Manager to execute a 30-year Power Sales Agreement with SCPPA for the purchase of solar energy and environmental attributes 210a
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from Notch Peak and finding that the purchase of solar power from SCPPA is exempt from the requirements of CEQA.
ANALYSIS
On April 16, 2026, SCPPA approved a Power Purchase Agreement (PPA) and Option Agreement with Notch Peak Project, LLC a special purpose entity, for the Notch Peak Project (herein referred to as “Notch Peak” or “Project”) for a term of 30 years. Notch Peak Project, LLC’s Project, was selected through SCPPA’s competitive procurement process via a Request for Proposal (RFP) for renewables and energy storage for utility- scale projects. Notch Peak is a 324 MW powerplant of solar photovoltaic generation, located near Millard County, Utah. The Project’s target Commercial Operation Date (COD) is September 30, 2028, with a Guaranteed Commercial Operation Date (GCOD) of December 31, 2028. Notch Peak is the developer and lead agency for all project entitlement, environmental review, permitting and development in Utah.
On December 12, 2023, the City of Glendale adopted Scenario 4 of the 2024 IRP, which was accepted by California Energy Commission (CEC) on April 29, 2024. This progressive plan considers the City Council’s goal to achieve 100% clean energy by 2035, ten years ahead of the statewide target. Participation in Notch Peak reinforces Glendale's commitment to sustainability and environmental leadership.
Glendale's most recent Power Content Label (PCL) for 2024 reporting year contains
35.3% of energy sourced from renewables, with 16.8% of its energy supplied through solar power. (The PCL for the 2025 reporting year is still under third-party verification and is not final). The proposed agreement with SCPPA for Notch Peak is expected to boost solar energy to an estimated 30%, increasing the total renewable energy to an estimated 49%, and overall clean energy to 68%. By integrating this utility-scale solar project into Glendale’s energy mix, the City not only increases its commitment to clean energy but also continues to diversify its energy portfolio.
SCPPA’s Renewable Energy Procurement Process
SCPPA administers an open, competitive procurement process to support Members in complying with the state of California’s renewable energy mandates. Developers submit and update proposals across multiple renewable technologies.
In 2025, SCPPA launched an RFP for Renewable Energy Resources and Energy Storage Solutions, soliciting competitive proposals for renewable energy projects or products consistent to the California Renewable Energy Resources Program (Public Resources Code sec. 25740 et seq.) and the California Renewable Portfolio Standard Program (Public Utilities Code sec. 399.11 et seq.), including amendments enacted by passage of SB 100 (De Leon 2018). Notch Peak Project, LLC’s proposal for Notch Peak was selected through SCPPA’s competitive procurement process.
On April 16, 2026, following negotiations with SCPPA, Notch Peak Project, LLC and participating members LADWP and the City of Glendale, SCPPA authorized execution and delivery of a PPA and option Agreement with Notch Peak Project, LLC. It further authorized SCPPA to enter into a PSA with each of the participating members.
PPA between SCPPA and Notch Peak Project, LLC
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The PPA establishes the commercial, operational, and legal terms of energy procurement between Notch Peak Project, LLC, the seller, and SCPPA, the buyer, for a 30-year term, commencing on the facility's target COD of September 30, 2028. The 324 MW solar facility is located near Millard County, Utah, and the energy will be delivered at the Intermountain Power Project (IPP) switchyard. Beginning on COD, the price for delivered energy under the PPA, including all associated environmental attributes and capacity rights is fixed at an expected $46.75 per megawatt-hour (MWh), with no escalation over the 30-year term. However, the PPA includes price adjustment provisions if certain qualified events occur as defined in Appendix A.
Due to several complex factors, including the implementation of federal tax law and potential rulings by federal agencies such as the IRS, the final pricing under the PPA includes an adjustment formula. If a Qualified IPP Retirement occurs on a given date as noted below, the contract price commencing on COD will be adjusted accordingly:
$46.75 per MWh fixed for the Delivery Term, if the Qualified IPP Retirement occurs by May 31, 2026;
$50.85 per MWh fixed for the Delivery Term, if the Qualified IPP Retirement occurs (a) after May 31, 2026, and (b) by the date the Facility is “placed in service” for tax purposes pursuant to 26 C.F.R. § 1.48-9(b)(5) (“Placed in Service”);
$52.70 per MWh fixed for the Delivery Term, if the Qualified IPP Retirement does not occur by the date the Facility is Placed in Service.
The PPA establishes Annual Expected Generation and Guaranteed Energy Delivered in MWhs and prescribes penalties if the energy delivery targets are missed.
Notch Peak will deliver Portfolio Content Category 1 (PCC1) eligible renewable energy, along with associated Renewable Energy Credits (RECs), capacity attributes, and environmental benefits, ensuring compliance with California’s Renewable Portfolio Standard (RPS). The RECs are transferred to SCPPA and allocated to participating members based on their project entitlement share.
Under the PPA, SCPPA will distribute ownership shares of the purchased energy among its participating members via a Power Sales Agreement (PSA). The participating members’ shares are as follows:
Member MW (AC) of PV Capacity Project Entitlement Share LADWP 299 92.28%
GWP 25 7.72%
Total 324 100%
Facility Purchase Option
The Notch Peak Project includes a structured purchase option granting SCPPA the right, but not the obligation, to negotiate with Seller to acquire the facility at specified intervals throughout the 30-year term. These intervals include the 10th and 15th 410a
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anniversaries of the project’s COD and every five years thereafter. SCPPA may also exercise its purchase option in the event of a default by the developer.
The fair market value of the facility will be determined by an independent appraisal process, with transaction terms governed by the Option Agreement executed alongside the PPA. This agreement ensures transparency in pricing and clearly defined ownership transfer provisions.
PSA Between SCPPA and City of Glendale
While the PPA and PSA run in close parallel, each serve distinct but interrelated purpose. The PSA governs the terms under which the participating members receive and assume cost responsibility based on their entitlement shares from the Project.
Glendale’s entitlement share of the Project is 25 MW or 7.72% entitlement share of the 324 MW contract capacity. In addition, the PSA addresses the following:
Defines roles, rights, and obligations of SCPPA and participants, including project management, budgeting, accounting, and reporting; Establishes a Coordinating Committee with representation and voting proportional to project shares;
Designates LADWP to act as Agent and administer the Project; Establishes payment mechanisms, and billing procedures; Defines delivery of energy, capacity and environmental attributes. Addresses nonperformance, default, liability, termination, and amendments; Covers transmission, and scheduling.
Requires the City of Glendale and other Project participants to provide approval before exercising the facility purchase option.
Under the terms of the PSA, City of Glendale agrees on the following key points:
Purchase Price:
oFixed pricing of $46.75 per MWh for the entire 30-year term (contract price could change according to the Qualified IPP Retirement formula) oTest energy will be charged at a discounted rate of 50% of the contract price during the pre-commercial operation phase.
Start Dates:
oCOD is expected by September 30, 2028, and GCOD by December 31, 2028;
oTest energy delivery will begin prior to the full COD; oFailure to achieve GCOD will result in liquidated damages per the terms. Energy Deliveries:
oTotal expected generation over the 30-year term of the agreement is approximately 24,027,632 MWh, with Glendale’s share equating to roughly 1,854,933 MWh.
Delivery Points and Transmission Path:
oThe point of delivery is the IPP Switchyard in Utah.
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oSouthern Transmission System
oIPP AdelantoAirway
Billing and Payments:
oSCPPA monthly invoices include energy charges, administrative costs, and project management costs, pass through project management costs, and any other ancillary charges allocated based on Glendale’s share.
Annual true-ups reconcile estimated versus actual costs which will result in annual over/underbilling adjustments.
Liquidated Damages:
oIf the seller, Notch Peak Project, LLC, fails to meet key milestones or guaranteed generation levels, liquidated damages will be applied as outlined in the PPA. Performance assurance in the form of Development Security in the amount of $32.4 million pre-COD, and Performance Security in the amount of $48.6 million after COD are required to be delivered to SCPPA.
oSCPPA participants, including Glendale, will be compensated for shortfalls through these penalties or replacement energy.
Environmental Compliance:
oEnergy and RECs delivered under the PSA will qualify as PCC1 resources, adhering to CEC certification standards.
Notch Peak is a critical project for the City of Glendale for several economic, strategic, and environmental reasons:
Long-Term Contract Price Stability: The Project offers a competitive price of $46.75 per megawatt-hour (MWh) for the 30-year contract term, providing long- term financial stability. The fixed energy price, including environmental attributes, and capacity rights for the term of the PPA contribute to electric rate stability. Ideal Location: Located near Millard County, Utah, the Project benefits from excellent solar insolation, optimizing energy generation. Transmission Access via IPP: Delivery at the IPP switchyard takes advantage of existing transmission infrastructure.
Compliance with RPS: Notch Peak Project will increase GWP’s renewable energy portfolio content, advancing Glendale’s clean energy goals as set forth in Resolution No. 22-125 adopted by City Council on August 16, 2022. Timely Implementation: Notch Peak Project’s target COD is September 30, 2028.
Having this resource online and fully operational in 2028, aligns with Glendale’s goals for renewable energy expansion.
STAKEHOLDERS/OUTREACH
Not applicable.
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FISCAL IMPACT
The total estimated cost for the Notch Peak Project over the 30-year term of the PSA is projected to range between $69,374,000 and $86,718,000. The estimated budget for the first year is between $2,484,500 and $3,105,600, which will be included as part of the FY 2028-29 budget process in the Electric Works Revenue Fund (5820). Funding for future contractual years will be requested through the annual budgetary process.
Several factors can affect the generation at a solar facility, like Notch Peak, including weather patterns, maintenance schedules, equipment outages, grid congestion, and curtailments. To account for these issues, the Project has built-in a 20% cost range between the Expected Annual Generation and Guaranteed Delivered Energy (minimum target).
As a prudent budgeting and forecast approach, staff estimates cost based on Expected Annual Generation while tracking actual expenses based on the annual Guaranteed Delivered Energy.
The Project’s target COD is September 30, 2028, with a GCOD date of December 31, 2028. Based on these milestones, staff will incorporate the 1st year cost of the project in Fiscal Year 2028-29 in GWP’s Power Management Cost Center. Glendale’s first year annual cost is estimated to range between $2,484,500 and $3,105,600, based on Guaranteed Delivered Energy and Annual Expected Generation MWhs provided for in the PPA, at $46.75 per MWh, for Glendale’s 7.72% entitlement share.
The amounts noted in this section are based on the contract price of $46.75; however, it should be noted that there is a contract price change depending on whether a Qualified IPP Retirement occurs, as noted above. If a Qualified IPP Requirement is not determined to have occurred under the formula set forth above, the total expenditure would likely be higher. Regardless of this potential, these fixed prices for a renewable resource are still more cost effective than attempting to acquire this energy on the open market where prices can fluctuate and the energy source could be non-renewable. 610a
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ENVIRONMENTAL REVIEW
The Council’s action to approve a power sales agreement to purchase renewable solar power from SCCPA is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3)(common sense exemption) and Public Resources Code Section 15277 (CEQA not applicable to projects located outside of California) because the Council’s approval of a power sales agreement is not a “project” as defined by California Public Resources Code, Section 21065, and would not result in a direct or reasonably foreseeable indirect change in the physical environment. The Notch Peak project is located in Utah; ; the City is not the Project developer or issuer of Project entitlements for development. Accordingly, the Council action does not have the potential to cause a significant effect on the environment and is thus exempt from CEQA requirements.
CAMPAIGN DISCLOSURE
Not applicable.
ALTERNATIVES TO STAFF RECOMMENDATION
The City Council may decline to adopt the Resolution to approve the Power Sales Agreement, in which case, Glendale will not purchase renewable solar energy and capacity from the Notch Peak Project. GWP would then be obligated to procure renewable or non-renewable energy from the open market, where prices fluctuate and are typically higher, to replace this needed energy.
ADMINISTRATIVE ACTION
Submitted by:
Scott K. Mellon, P.E., General Manager - Glendale Water and Power Prepared by:
Ileana Cardenas, Integrated Resource Planning Administrator Alina Morshidian, Power Contracts Manager
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
Exhibit 1: SCPPA Board Resolution 2026-024
Exhibit 2: Power Purchase Agreement Between SCPPA & Notch Peak Project, LLC Exhibit 3: Proposed Power Sales Agreement between SCPPA and the City of Glendale for Notch Peak Project