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Glenarm BESS Project ​

Gross CapEx
$37.62 M
Fixed Revenue (Yr 1-15)
$3.65 M
Equity IRR
16.8%
Project IRR
12.1%

I. Project Basic Information ​

  • Project Name: Glenarm Battery Energy Storage System (Glenarm BESS).
  • Location: Glenarm Power Plant, 45 E. Glenarm Street, Downtown Pasadena, California.
  • Scale & Technology: A 25 MW / 100 MWh (4-hour duration) standalone storage facility utilizing Lithium Iron Phosphate (LFP) technology across 28 battery containers, with a 20-year design life.
  • Offtaker: City of Pasadena / Pasadena Water and Power (PWP), an AA-rated municipally-owned electric utility.
  • Site Control: The City of Pasadena owns the land and has approved a 16-year site lease for a nominal $1/year, completely eliminating land acquisition costs and site control risks.
  • Developer: Jenix Energy (in a Joint Venture with Infinite Grid Capital).

📸 Project Site Images ​

Glenarm Project Site 1

Glenarm Project Site 2

📍 Google Map Information ​

II. Profit Logic ​

The core strategy converts infrastructure investment into highly predictable, de-risked, bond-like cash flow through a strong municipal contract:

  • 15-Year Fixed Toll (Take-or-Pay): PWP pays a fixed storage capacity rate of $12.18/kW/month under a 15-year Energy Storage Agreement (ESA). This guarantees $3,654,000 in fixed annual revenue for 180 consecutive months.
  • Zero Market Risk: Revenue is completely decoupled from electricity prices, CAISO market settlement, or grid curtailment. PWP pays the fixed fee regardless of whether or how often they dispatch the battery.
  • Federal Tax Shields (ITC): The project qualifies for a 30% Federal Investment Tax Credit (ITC). This generates $12.2M in net cash in Year 1 via a credit transfer, arriving before the first debt service payment and immediately covering 72% of the senior debt. (Note: Pending tax counsel confirmation, an "energy community" designation for LA County could boost this to 40%).
  • City Purchase Option (Exit Path): PWP holds an embedded option to purchase the facility at pre-agreed prices. For example, the Year 2 purchase price is $27.6M, which is sufficient to fully repay senior debt and recover the majority of equity, providing an independent exit strategy.

III. Investment Calculation ​

  • Total Gross CapEx: $37,616,400.
  • Net CapEx (after 30% ITC): $24,074,496.
  • Senior Debt: $16,927,380 (representing 45% of gross CapEx, modeled as a 12-year term at a 6.2% fixed rate).
  • Effective Equity Required: Nominal JV equity is $20,689,020, but after the $12.2M ITC cash receipt in Year 1, the actual net effective equity at risk drops to approximately $8.5M.
  • Annual Fixed Revenue & EBITDA: $3.65M flat annual revenue generates a strong Year 1 EBITDA of $3,283,618 (an 89.9% margin).
  • Debt Service Coverage Ratio (DSCR): 1.61x in Year 1, and it never falls below 1.40x across the full 12-year loan tenor, even in years with planned battery augmentation expenses.
  • Return Metrics:
    • Project IRR (Unlevered): 12.1%.
    • Equity IRR: 16.8% (USD-denominated).
    • Equity MOIC: 1.64x.
    • Simple Payback (Unlevered): 8 years.

IV. Project Cycle ​

The project has successfully cleared major development hurdles and is entering its final construction and financing phase:

  • Completed Milestones: 15-year ESA executed (Sep 2024); City lease and Change of Control approved by City Council (Dec 2025); Construction bids closed (May 2026).
  • Current Phase: Finalizing the construction contractor award and targeting financial close (July–September 2026 window).
  • Construction Commencement: Targeted for October 2026.
  • Commercial Operation Date (COD): Expected in August 2027, triggering the start of the monthly ESA revenue.
  • Asset Lifespan: The ESA contract term runs for 15 years (2027–2042). The senior debt will be fully repaid by Year 12 (2039).

📅 Project Implementation Timeline ​

Completed Milestones

ESA & Lease Executed: 15-year ESA executed (Sep 2024). City Council approved site lease and Change of Control (Dec 2025). Construction bids closed (May 2026).

Current Phase

Contractor Award & Financial Close: Finalizing construction EPC award and closing construction financing (July–September 2026).

October 2026 (Targeted)

Construction Commencement: Groundbreaking, engineering foundation work, and initial conduit routing starts.

August 2027 (Targeted)

COD & Toll Commencement: Commercial Operation Date (COD) commissioning completes, starting the 15-year PWP toll revenue.

V. Risk Points & Mitigation Mechanisms ​

  • Construction & COD Delay Risk: The estimated August 2027 COD slightly exceeds the ESA's hard deadline of June 30, 2027. Mitigation: Jenix must formally engage PWP by October 2026 to negotiate a contract amendment extending the hard stop date to eliminate this timeline mismatch.
  • Battery Degradation Risk: Cell capacity declines naturally over time, which could trigger capacity shortfall damages. Mitigation: A binding augmentation schedule is fully budgeted for Years 3, 6, 9, and 12 ($2.4M total) to restore capacity. Additionally, the system launches with a 10.4 MWh buffer and is backed by a 15-year Cornex performance warranty.
  • ITC Recapture & FEOC Risk: Potential disqualification for the 30% tax credit due to Foreign Entity of Concern (FEOC) supply chain rules. Mitigation: The project established its "Beginning of Construction" (BOC) prior to Jan 1, 2026, granting it legacy safe harbor exemptions from FEOC material restrictions. Tax counsel opinions and ITC insurance backstop this prior to transfer.
  • Single Counterparty Risk: 100% of revenue relies on the City of Pasadena. Mitigation: PWP is an AA-rated municipal entity with zero contract default history. The BESS satisfies non-discretionary Resource Adequacy requirements for the city, and because the City is both the offtaker and the landlord, there is deep institutional alignment protecting the project's success.