Recent funding allocations from the Portland Clean Energy Community Benefits Fund (PCEF) demonstrate a shift in the program’s strategy, in response to its growing revenue. 

Though city staff say the carbon-reduction and climate resiliency program’s mission is still community-centered, the clean energy fund is now doling out millions to Portland’s bureaus during a time of financial uncertainty for city operations. 

In its latest round of grants, approved by the outgoing Portland City Council at their final meeting on December 18, PCEF plans to distribute $300 million among eight large-scale climate projects. The grants include plans to improve transit service on 82nd Avenue, create more sidewalks near schools, replace the city’s fleet vehicles, and add green infrastructure and energy-efficient housing to the Broadway Corridor in Northwest Portland, among others. 

More than a third of the funding from this grant program, dubbed Collaborating for Climate Action, will go to projects headed by Portland bureaus alongside nonprofit partners. The investment comes after PCEF allocated an additional $623 million to city bureaus for climate work, formalized by City Council earlier this month. 

PCEF’s previous grant cycles have supported projects led by nonprofit organizations, ranging in scope and budget. In September, PCEF split up nearly $92 million among 71 projects for its third round of community grants. Many organizations received awards ranging from $100,000 to $500,000, and the largest single grant was about $6 million. 

By comparison, PCEF’s latest round of awards are much larger, and the recipients include government agencies like the Portland Bureau of Transportation (PBOT), TriMet, and Prosper Portland. Each award recipient will work with at least one project partner to carry out their plan. For example, PBOT is teaming up with Oregon Walks for its Sidewalks to Schools program, which was awarded $20.5 million in PCEF funds. 

PCEF was created by a voter-approved ballot measure in 2018 as a means of spurring clean energy projects and job training, and is funded through a 1 percent tax on local sales at large businesses. Late last year, the program received an unexpectedly strong financial forecast. Earlier in 2023, PCEF leaders developed a $750 million Climate Investment Plan to guide the fund’s spending over five years. Now, the city expects PCEF will have $1.6 billion to use on carbon-reduction projects in that same timeframe. 

As PCEF evolved, city leaders and members of the fund’s committee had different opinions about how to prioritize the program’s spending. PCEF was crafted specifically to help people of color and low-income Portlanders, who are most impacted by the effects of the climate crisis but have historically been overlooked when it comes to investments from the city. Low-income communities and communities of color are less likely to have abundant tree canopy coverage, leaving residents more vulnerable to extreme heat events. 

Clean energy fund leaders say the program is still dedicated to funding unique projects led by community nonprofit organizations. But recent budget decisions have been met with concerns about the fund being used to fill city funding gaps rather than to support community-led carbon reduction efforts. As Portland's government officially changes hands and the city continues to deal with budget deficits in other areas, PCEF will likely continue to be the subject of political debate. 

PCEF’s changing budget—and role

At the same time PCEF leaders learned of the fund’s updated—and bullish—financial forecast last year, other city bureaus were struggling. After a good deal of back and forth about maintaining the integrity of the fund, PCEF stepped in to help. 

While Portland City Council did agree to allocate a one-time, $7.6 million transfer of PCEF interest dividends into the city’s general fund, most of the clean energy fund’s contributions to city bureaus have been dedicated to climate-related projects. An amendment to PCEF’s Climate Investment Plan approved by City Council earlier this month earmarked $623 million for city bureaus over the next five years. 

Much of the funding will go to PBOT and Portland Parks & Recreation, and is dedicated to city programs that PCEF agrees will contribute to its overall goal of reducing greenhouse gas emissions citywide.

The latest PCEF allocation comes as the city of Portland faces an estimated $27 million budget deficit in the upcoming fiscal year.

Donnie Oliveira, interim deputy city administrator for Portland’s Community and Economic Development service area (which houses the Bureau of Planning and Sustainability and PCEF), acknowledged the importance of the community grants at the December 18 Council meeting. 

“Our community-responsive grants are the backbone of the program, and it still remains the priority for this program to invest in our community organizations,” Oliveira said. “But this opportunity is very unique. It asked our partners externally to partner with sometimes unusual suspects, to find new ways to deliver climate justice, provide economic prosperity and opportunity, and keep after our climate action goals for the city.” 

The recent amendments to the Climate Action Plan also increase funding for the community grants program by $120 million, which will offer more opportunities for nonprofit organizations to seek grant funding. 

Collaborating for Climate Action funding 

The Collaborating for Climate Action grant program is another initiative developed in response to PCEF's new financial outlook. Sam Baraso, PCEF’s program manager, told the City Council the program was “designed to fill a gap in our climate funding ecosystem” and complement other PCEF-funded projects.  

PCEF received more than 50 proposals, totaling about $2.4 billion, for Collaborating for Climate Action funding. The fund moved forward with eight: 

• $24.9 million for Portland Solar for All, to install rooftop solar capacity and backup battery storage for about 2,700 low-income Portland households. The project will be led by Energy Trust of Oregon in partnership with Asian Pacific American Network of Oregon (APANO), Community Energy Project, Energy Assurance Company LLC, Oregon Department of Energy, Oregon Solar Energy Education Fund, Self Enhancement, Inc. 

• $31.5 million for a project that aims to “deliver large-scale environmental, economic, and community benefits” to underserved populations through a combination of solar, battery storage, and energy efficiency upgrades. The project, called Empowering PDX, will be led by Bonneville Environmental Foundation, partnering with organizations including APANO, Central City Concern, Leaders Become Legends, and Verde to serve 1,500 BIPOC and low-income households. 

• $70.3 million for energy-efficient HVAC systems, LED lighting, transportation decarbonization, green schoolyard projects, and more at all Portland school districts, with a focus on schools that serve low-income students and students of color. Local districts will partner with the Coalition for Communities of Color. 

• $36 million for the first phase of the Broadway Corridor project. Project leaders plan to install green infrastructure and net-zero middle-income housing in Northwest Portland’s Broadway Corridor, which includes the 14-acre US Postal Service site, and grow a “diverse green construction workforce” in the process. Prosper Portland leads the project, with partners including Oregon Tradeswomen, PBOT, Portland General Electric, Portland Housing Bureau. 

• $20 million for the Clean Energy Industry Program, to clean up local industrial operations. The effort is led by the Portland Bureau of Planning and Sustainability (BPS) with partners including the Portland Metro Chamber Charitable Institute, Portland State University Institute for Sustainable Solutions, Neighbors for Clean Air, and Prosper Portland. The program aims to “transition the industrial sector toward a cleaner, more inclusive future,” and will use funding to conduct feasibility studies and “capital projects for efficient and renewable industrial technologies.” 

• $41 million for Collaborating for Climate Action on Workforce Development and Capital Improvements, led by the Portland Bureau of Fleet & Facilities with partners Portland Community College (PCC) and PCC Foundation. The funds will be used to replacePortland’s fleet of vehicles with electric or low-emissions models, and provide opportunities for career pathways in fleet and facility maintenance to disadvantaged students through PCC. 

• $55.5 million for bus transit upgrades on 82nd Avenue. TriMet aims to create infrastructure for Bus Rapid Transit (BRT) along 82nd Avenue, as well as workforce development and corridor cooling, and will partner with organizations including 82nd Ave Coalition/Asian Pacific American Network of Oregon (APANO), Metro, PBOT, and PCC to use the funds. TriMet will use PCEF funds to match federal dollars to help pay for the project, which is projected to cost about $361.7 million in total. 

• $20.5 million to PBOT and Oregon Walks for the Sidewalks to Schools project, which aims to support low-carbon transportation (walking) by building new sidewalks near schools, especially in low-income communities and communities of color, like Cully and East Portland. 

Among the funded projects, the Sidewalks to Schools program has received particular enthusiasm from community advocates. Oregon Walks Executive Director Zachary Lauritzen pointed out the project’s potential for long-term change, saying he sees it as a way to “build the tools for our community, to get kids understanding how to move around safely, and in low or no-carbon modes.” 

“If our kids grow up and their only option is to hop in the back of mom and dad’s car to get to school, that’s part of their rhythm,” Lauritzen said at the City Council meeting. “We appreciate this as a long-term investment. People are going to feel it, see it in their community.” 

Meanwhile, the Clean Energy Industry Program has been met with skepticism. Megan Horst, co-chair of the PCEF Committee, said at a committee meeting that the program’s application was “unusual” and the “concept is not fully developed.” 

“It’s a lot of money to put in a planning project,” Horst said. 

With lingering hesitation, committee members ultimately agreed to fund the project. Planners say it will result in one of the only “clean industry hubs” in the nation, and was directly influenced by Danish models of industrial symbiosis and sustainable power production. 

PCEF’s future 

With everyone except Dan Ryan leaving the City Council next year, Mayor Ted Wheeler said he hopes the clean energy fund will remain under strong leadership as the city government changes hands. The incoming City Council will face serious budget challenges across bureaus amid an escalating urgency for strong climate action. The government structure will be different, but PCEF’s future may still hang in the balance. 

“At the end of this meeting, there will not be a commission form of government meeting in the city of Portland ever again. That accountability under Commissioner Carmen Rubio will no longer be a part of the structure of this government,” Wheeler said. Rubio oversaw BPS, which houses PCEF, during most of her time in office. 

“Somebody [in the future City Council] will need to step into that role and be as accountable as Rubio was.”