Portland Clean Energy Fund revenues wildly exceed estimates

PORTLAND, Ore. (PORTLAND TRIBUNE) -- The voter-approved tax on businesses for the Portland Clean Energy Community Benefit Fund is raising three times more money than estimated — $90 million a year compared to the original $30 million claim.

The soaring increase is happening as a new audit said the climate-and-equity program needs more guidance from the City Council and the volunteer oversight committee that approves its grants. Among other things, the Portland City Auditor's Office found the program has still out not finalized methods to track, measure and report its performance, as required by the 2018 ballot measure that created it.

In addition, the audit released on March 10 said the program goals are tied to the city's Climate Action Plan. When adopted by the council, it included 20 objectives and 247 action items. But the plan expired in 2020 and has only been replaced by the declaration of a climate emergency.

Supporters say the City Council should keep the revenue and expand the scope of the fund, which was overwhelmingly approved at the November 2020 general election.

The fund is located in the Portland Bureau of Planning and Sustainability. It is overseen by Commissioner Carmen Rubio, who supports the recommendation. She has directed staff to define performance measures by July, submit recommendation for a clear climate strategy by the end of the year, and establish performance goals by July 2023.

"Given the updated and increased revenue projections, I believe we have a collective and unprecedented opportunity to move more urgently, and more aggressively, to tackle our carbon emissions and better prepare our community for increasing climate-related extreme weather events," Rubio said in a March 9 letter to program supporters.

Measure critics did not immediately respond to a request for comment.

Measure 26-201 was drafted by a coalition of minority, environmental, social justice and faith-based organizations. It impose a 1 percent surcharge on Portland retail sales of large businesses to fund energy-related projects to benefit lower-income communities, including communities of color.

The council unanimously approved the first group of 45 grants worth $8.6 million recommended by the oversight committee in April 2021. Project staff estimated they would offset 11,500 metric tons of greenhouse gas emissions.

During the campaign, supporters estimated the tax would raise approximately $30 million a year. Businesses said it would raise far more than that and they were right.

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In a March 7 letter to Portland officials, fund supporters admitted the tax was raising three times more money than originally estimated.

"When the PCEF Coalition originally developed the PCEF initiative, the City's Bureau of Revenue estimated that the surcharge would raise approximately $30 million annually ... Recently, it has come to light that the program is bringing in $80-90 million annually with a current fund balance in excess of $170 million," reads a letter signed by representatives of 10 organizations that supported the measure.

The letter urges the city to keep and spend the higher-than-expected revenue.

"This is exciting news for the PCEF Coalition, as we see this as an opportunity to further address climate change impacts on our most vulnerable and impacted communities led by and for those communities. The PCEF Coalition has always recognized the need for comprehensive climate action, and that PCEF was one source of funding among many that are needed. The scale of adaptation needed to mitigate climate change and prepare for its impacts is immense. More resources for climate justice above and beyond the earlier projections of PCEF revenues have always been needed. These additional funds are a boon to Portland," it said.

The letter was signed by representatives of: Coalition of Communities of Color; Asian Pacific American Network of Oregon; Verde; Native American Youth and Family Center; OPAL Environmental Justice; Sierra Club Oregon; Portland Audubon; Oregon Physicians for Social Responsibility; 350PDX; and Columbia Riverkeeper.

Measure 26-201 was drafted by a coalition of minority, environmental, social justice and faith-based organizations. It was placed on the Cover 2018 ballot by an initiative petition drive supported by the same groups, and was endorsed by such high-profile liberals as Democratic U.S. Sen. Jeff Merkley. It was opposed by fiscal conservatives and some business interests. During the campaign, both sides said they supported the goals of the measure — to provide energy-efficiency upgrades and job training to communities of color. Beyond that, they disagree over just about everything, including whether the proposed surcharge on large retailers is the right way to pay for them, how much it will actually raise and whether any of the costs will be passed on to Portland residents and businesses.

"The Portland Clean Energy Fund will benefit those who have been left out of previous programs and feel the brunt of climate change most acutely," Tony DeFalco, the Living Cully coordinator at Verde, a nonprofit organization that supports low-income and minority communities, told the Portland Tribune editorial board at the time.

"We agree the goals are laudable, but we have issues with the mechanism," said then-Portland Business Alliance Vice President Marion Haynes.

The alliance did not immediately respond to a request for comment.

The letter from the supporters can be found here.

Rubio's letter can be found here.

The audit can be found here.