Portlanders will soon reap the benefits of a reformed Portland Clean Energy Community Benefits Fund (PCEF) and the estimated $750 million it will have to spend on programs like electric bike incentives and residential clean energy upgrades from now until 2028.
Guided by the PCEF Climate Investment Plan (CIP), which received unanimous City Council approval in September, fund leaders say the plan is on track to reduce Portland’s carbon emissions and address climate inequities at the same time.
PCEF was created in 2018 after voters approved a tax on large retailers to pay for clean energy projects and initiatives. The fund raked in more money than initially projected, and leaders were criticized for how they planned to allocate it. Commissioner Carmen Rubio, who oversees the Portland Bureau of Planning and Sustainability (BPS) led a PCEF code overhaul last year, in order to get the program back on track and in better alignment with the city’s climate goals.
The result, after a year of community engagement and fine-tuning, is the CIP: PCEF's five-year "road map to climate action.” The plan determines how the fund's revenue should be spent, with the goal of reducing carbon emissions and aiding communities at the frontlines of the climate crisis.
The CIP represents a new framework for the fund’s implementation and investments. Initially, PCEF relied on nonprofits to carry out its climate strategy via grants, and the fund has doled out two rounds of community grants totaling more than $100 million. The CIP still enables PCEF to grant a portion of its revenue to community organizations looking to lead carbon reduction projects, but most of the spending is dedicated to its new strategic initiatives, which will be overseen by PCEF staff and may be implemented through partnerships with nonprofits, government entities, or businesses.
After a rocky start, program leaders hope PCEF will now be able to hone in on the most effective and equitable ways to spend its dollars. While City Council’s approval of the CIP makes the strategy official, some of the work outlined in the investment plan is already underway. PCEF’s next big move will be to open its third round of grant applications to nonprofits and government organizations later this year. But conversations about the fund at City Council over the past few weeks illustrated how fund staff and stakeholders may have to deal with skepticism from some City Council members and navigate tense budget talks citywide.
The Climate Investment Plan Is a Go
Nearly $564 million of the $750 million PCEF expects to collect over the next five years will be allocated to strategic programs like planting more trees, reducing carbon emissions from transportation with electric bike incentives, spurring energy efficiency upgrades in homes and buildings across the city, and creating resilient community centers.
The second-largest chunk of the anticipated funds, $181.2 million, will be dedicated to grants for nonprofits who may want to carry out projects outside the scope of the strategic programs. In PCEF's early years, questions swirled about how the program would hold nonprofit grantees accountable. With an increased allowance for PCEF staffing to oversee the contracts, leaders feel confident they'll be able to manage nonprofit grants responsibly.
"We do quarterly reporting on all of our grants and contracts, particularly our nonprofit grant agreements," PCEF Program Manager Sam Baraso told the Mercury in a July interview. "Along with our quarterly reporting, we get their invoices. So [the nonprofits] submit their documentation, which includes their payroll reports, receipts, agendas, invoices, things we need in order to validate what they purchased lines up with the original grant agreement we developed with them and the project management plan that we have."
The remaining $5 million is for a tree canopy maintenance reserve, intended to keep Portland’s tree canopy healthy and allow more people to plant trees on their property without having to worry about expensive upkeep.
PCEF staff have already begun work on two fast-tracked programs: growing the city’s tree canopy and making energy efficient upgrades to new and redeveloped affordable multifamily housing. The fund is currently in the process of hiring several new staff members.
Nonprofits and government organizations will soon be able to submit bids with PCEF to take on carbon-reduction projects. Organizations that focus on historically underserved communities will be prioritized for grant funding.
During a September 20 City Council meeting, community stakeholders testified in support of investment plan.
"The CIP's transportation programs will put hundreds [or] thousands of dollars directly back in the pockets of low-income people and people of color in our city every year, and that money can be life-changing," Indi Namkoong, transportation justice coordinator at Verde, said. "When everybody who wants those options has them, we all win on climate, air quality, safety, and quality of life. This plan will build more of those clean, affordable, and abundant choices for communities who have been harmed more often than they've been helped by the transportation investments of the past."
The CIP’s funding allocation table can be found here.
As PCEF is flush with funds, the city’s transportation department is staring down a $32.6 million budget shortfall. The day before City Council voted to adopt the CIP, Portland Bureau of Transportation (PBOT) staff and transportation commissioner Mingus Mapps met with the council to discuss the breadth of PBOT’s funding woes. Many of PBOT’s active transportation programs are at risk. If Portland slashes investments in biking, walking, and transit use, it will hinder the city’s climate goals.
The stark juxtaposition between PBOT’s budget deficit and PCEF’s comparative bounty raised some questions about how the clean energy fund is allocating its dollars.
“We have an impending funding crisis for PBOT,” Commissioner Rene Gonzalez said at a September 20 City Council meeting. “I would certainly be open to exploring with colleagues whether we have put sufficient resources towards transportation decarbonization here.”
Donnie Oliveira is the director of Portland’s Bureau of Planning and Sustainability, which oversees PCEF. Oliveira said although transportation is a substantial contributor to Portland’s carbon emissions, there’s a lot of demand, and $750 million isn’t enough to fund everything.
“We picked $750 million worth of projects that are fabulous and fantastic. We probably could have picked $750 million worth of other projects,” Oliveira said. “That's just to say the demand is very real.”
Within the CIP’s transportation decarbonization budget, $35 million will be available for community grants over the next five years. At the recent PBOT budget session, transportation leaders implied they may be interested in applying for some of that funding in order to continue their existing programming.
But if PCEF begins to serve as a stopgap for struggling city programs, it could raise concerns about the purpose of the fund. Already, the fund has committed $25 million toward PBOT’s Transportation Wallet program, and that money may be what keeps the initiative alive for another five years.
Baraso told the Mercury the fund committee has been clear about wanting its investments to be "additive," not "backfilling."
"We're making sure as part of these investments, we're able to show every dollar we put in [is providing] additional community benefit and additional emissions reductions," Baraso said.
The extent to which PBOT— or any other city bureau— will be able to count on PCEF funds will be an ongoing conversation.
“PBOT is proposing to significantly curtail investments in alternative transportation,” Mayor Ted Wheeler said at a September 27 meeting. “The minds need to meet, rather than having one or the other, which clearly won’t work…I'm very optimistic that we can get there.”
A Focus on Climate Justice
When members of the PCEF committee voted to approve the CIP in July, some expressed trepidation that Portland City Council— Commissioner Gonzalez in particular— would try to change significant components of the plan before moving to approve it. Though some City Council members shared concerns about the program after PCEF staff presented at City Hall in September, none suggested major modifications.
At a September 27 City Council meeting, Gonzalez said he felt there are “permanent racial grievances” embedded into a number of the Climate Investment Plan’s objectives. Gonzalez said while he acknowledges marginalized communities are more impacted by the effects of climate change, those negative outcomes apply to lower-income people of all races.
“A strictly racial framing of that concern is problematic to me,” he said.
The CIP prioritizes “groups that have been historically under-resourced by sustainability, climate action, and clean energy programs,” which program developers categorized as including but not limited to people with low incomes, people of color, and people with disabilities.
Due to Portland’s history of racist urban planning, which the city itself categorized in a 2019 BPS report, many of the most racially diverse neighborhoods in the city are also the most susceptible to negative environmental impacts.
At last week’s City Council meeting, Rubio didn’t falter on the importance of maintaining a climate justice lens within the CIP.
“Meaningful climate action can’t happen without significant investments in communities that have been underinvested in,” Rubio said. “[Climate justice] means we can’t make meaningful carbon emissions reductions without investing in deferred maintenance for communities that haven’t seen any investment in decades or ever, in some cases.”