A fight this week over control of Portland’s cash-rich clean energy fund previewed the contentious battle to come over attempts to raid the balance for a Moda Center renovation.
On Thursday, Portland councilors who sit on the Climate, Resilience and Land Use Committee fielded harsh rebukes from nonprofits and affordable housing developers after their decision last week to table a citizen-led committee’s recommendation to shift $15 million from an electric‑vehicle financing program into energy‑efficiency upgrades for affordable housing developments.
Advocates say the move undermines the intent of the citizen-led committee, which oversees the Portland Clean Energy Community Benefits Fund, also known as PCEF.
PCEF’s nine-member citizen committee — which represents the nonprofits and communities that benefit from the fund — is tasked with soliciting community ideas and making funding recommendations to the City Council.
Final approval of PCEF spending rests with the council. But that’s where the power struggle lies.
Councilor Steve Novick, who co-chairs the climate committee, says councilors should also have a say over how the money is spent, rather than just rubber-stamping everything the committee proposes.
The debate is the latest of multiple attempts to divert the clean energy fund to other needs amid shrinking city revenues and an ongoing budget crunch. This includes a recent ballot proposal, now challenged in court, to divert 25% of the clean energy fund’s annual revenue to hire hundreds more police officers in Portland.
The fund, approved by voters in 2018, is seeded by a 1% surcharge on sales at large retailers in the city such as Walmart and Target. It was expected to raise $30 million a year but now generates about $200 million in revenue annually and is projected to raise more than $1.6 billion through 2028. That makes it a tempting target for cash-strapped projects citywide, especially those that can find any kind of green angle to justify funding.
The basketball-dribbling elephant in council chambers Thursday was a plan by Mayor Keith Wilson and other officials to pull as much as $75 million from existing city projects funded via PCEF to help pay to renovate the Rose Quarter arena, as The Oregonian/OregonLive first reported.
Ultimately, the question of who controls the lock to the fund’s coffer could help determine whether the Moda Center idea advances.
Councilor Angelita Morillo, the other committee co-chair, said the $15 million at issue Thursday paled in comparison to the Moda request that’s expected to come before PCEF leaders.
“I would be remiss if I didn’t point out the fact that we are having a discussion as a committee about $15 million within the PCEF fund while a proposal to spend quite a lot more of that is being had in the public eye about the Moda Center and the revitalization there,” Morillo told fellow climate committee members. “That discussion, frankly, makes this look insignificant because of how much money is being asked to be taken from PCEF to do that remodel.”
Thursday’s meeting zeroed in on who controls the clean energy fund and who should make funding decisions.
It also showed how swiftly prospective awardees launch into action when they feel their funding is under threat — backlash the Moda proposal could easily face if it chews into existing city programs.
One prospective PCEF recipient, Path Home, sent a letter to the council’s climate committee decrying the attempt to shift funds away from their affordable housing project. The developers said they expected the council to approve PCEF committee decisions from last December, particularly because they had penciled city awards into their project budgets on those PCEF committee decisions.
“Based on those expectations, we made spending commitments to our housing projects with confidence,” the letter noted.
Path Home’s Family Village development would bring online 38 low-income, two- and three-bedroom units that prioritized homeless families with children. The project is seeking $1.2 million in PCEF funding to achieve net-zero energy use via solar panels, battery storage systems and other green certifications on-site, according to the letter. Council’s failure to adopt the PCEF committee recommendations could jeopardize its green efforts at Family Village, or in a worst case scenario, the development itself.
6 townhomes on one Portland lot The University Row community at Northeast 27th Avenue and Northeast Holman Street rests on a 50-foot-by-100-foot corner lot. This is one of the townhomes for sale at market rate. Proud Ground, Portland Clean Energy Fund, Eli Spevak of Orange Splot
The PCEF-funded townhomes in Northeast Portland, a project of Proud Ground, are “net zero,” thanks to solar panels, extra insulation, high-performance windows, highly efficient HVAC systems and other measures. The PCEF citizen committee hopes to move more money to similar projects. Proud Ground
Jill Sherman of development firm Edlen & Co., a partner on the Family Village project, said project officials reasonably expected the PCEF money would be available to close project funding gaps based on its green features and the way the PCEF committee had been voting.
“Everybody expected that this would be an easy thing to approve,” Sherman said. “The citizen committee recommended it. It seems like a win for the city.”
Path Home Executive Director Brandi Tuck said the group has all its funding secured except for the PCEF dollars.
“It kind of feels like the rug has been pulled out from underneath us,” Tuck said.
A core issue is whether the PCEF citizen committee’s recommendations are just that: recommendations.
“When we have these citizen community members that are making recommendations and then elected officials are not hearing their recommendations and they’re kind of jockeying it around, it’s just really unfortunate,” she said.
Alan Hipólito, executive director of suma, a community-led technology nonprofit in Portland, said the citizen committee should make the call on where the money is needed.
That’s because, according to Hipólito and other advocates, the fund grew out of a grassroots, community‑led effort by Asian American, Hispanic, Black, and Indigenous activists worried that low‑income residents — many of them people of color — would be left out of access to heat pumps, solar power, and clean‑energy jobs. About 65% of Portland voters approved the measure.
“We’re not stakeholders. We’re your peers. I want to be clear, PCEF isn’t your money,” Hipólito told the council committee. “It’s our money, we built the fund, we will never let it go. This money belongs to the communities on the front lines of climate change, to PCEF priority populations.”
At Thursday’s meeting, Novick was quick to rebuff that idea.
“I disagree with Mr. Hipólito, with his contention that this money, that the PCEF money, belongs to the nonprofits that put it on the ballot,” he said. “I think it belongs to all the people of Portland and Portland’s elected representatives should have a say.”
Councilor Sameer Kanal said he shared concerns about the council’s role.
“This is entirely performative if we’re not asking the people’s elected leaders to weigh in,” Kanal said. “We should just have it be an administrative decision in that scenario. I’m very frustrated by that contention.”
Kanal said Portlanders who want a say in how the dollars are spent need to know whether to weigh in before the PCEF committee or the City Council.
“If the idea is that we’re a rubber stamp, then people should not be watching us, they should be going and watching the committee more, and we should be clearly communicating that, because I want to make sure that the public has the ability to weigh in at the right time to have the maximum level of their input,” Kanal said.
He added that he didn’t think it was a problem for councilors to provide feedback to PCEF committee recommendations.
Novick said the $15 million, originally slated to help Portlanders buy electric vehicles, should still be used for transportation rather than being diverted to housing. And he’s willing to wait until next year to give the citizen committee time to discuss them, if need be.
The council-approved Climate Investment Plan — a five-year spending plan for the massive fund — currently allocates about 15% of the total $1.6 billion, or $250 million, to housing energy efficiency upgrades, including $60 million to energy efficiency in new housing projects.
Meanwhile, only about 16% of the funding in the plan is directed to transportation projects. That share is far too small, Novick said, given that transportation generates roughly 40% of Portland’s greenhouse gas emissions.
Shifting $15 million to housing “would upset the balance even further,” he said. “The (citizen) committee should not assume the council is going to sign off on something that changes that balance.”
In December, the fund’s citizen committee approved several amendments to the five‑year plan, including the proposal to redirect the $15 million from an EV financing program to energy‑efficiency upgrades — such as solar panels or heat pumps — in new affordable housing.
Elizabeth Stover, a PCEF spokesperson, said the $15 million won’t be needed because the EV program was deprioritized due to limited staffing and remains in development.
Earlier this month, the council’s climate committee advanced the technical amendments to the full council but stripped out the $15 million shift to discuss other options, including keeping the funding for transportation projects.
“The reason we’re even having this very difficult discussion is because the state legislature failed to fund basic infrastructure for public transit and for some core things that our constituencies need,” Morillo said at the meeting this week.
Novick said there are already multiple ideas for transportation projects that $15 million could be spent on. These include preserving Portland Streetcar service in the coming year, handing out free TriMet Youth Passes for David Douglas and Parkrose school district students and a Bike Together program that would entice more Portlanders to choose bikes over cars.
The full City Council will discuss PCEF amendments next Wednesday.