Editorial: Scrutiny begets progress in Portland Clean Energy Fund

Giving away $120 million isn’t as easy as it might sound, as Portland Clean Energy Fund officials are finding.

After months of reviewing, questioning and reworking applications from nonprofits seeking money from the city’s Clean Energy Fund, program officials sought – and received – approval of their recommended list of 65 projects by the Portland City Council last week. But not without a directive to examine the grant applications even more to ensure they are solid investments to make.

As much as some bristle over such scrutiny, this is exactly what city officials must do if they want the Clean Energy Fund to succeed. Already, the young program botched the awarding of its single largest grant – an $11.5 million contract to buy, store and coordinate with other nonprofits to install 15,000 cooling units over five years. City Council rescinded the award after an Oregonian/OregonLive investigation revealed the nonprofit founder’s criminal record of defrauding energy companies and unverifiable job history claims. Then, a city audit exposed significant risks due to the program’s failure to establish performance and accountability targets. And last week, even as the City Council was preparing to vote on the recommendations, the fund still had not posted on its website the applications of those seeking grant money, despite a city ordinance requiring such transparency, as The Oregonian/OregonLive’s Jamie Goldberg wrote.

These are not minor things, and the Portland Clean Energy Community Benefits Fund is not some rinky-dink initiative of little consequence. It is a never-been-tried-before program, funded by a 1% tax on large retailers which companies can – and do – pass on to Portlanders to pay. The grants approved last week total more than one-fifth the size of the city’s general-fund budget. Scrutiny is not only merited, it is necessary for responsible stewardship, long-term sustainability and building public trust.

Credit City Commissioner Carmen Rubio, who oversees the Bureau of Planning and Sustainability where the fund is housed, for taking action in response to issues raised by both fellow councilmembers and the public. While she defended the vetting conducted for this round of grants by program officials – and to be fair, the process was far more robust and thorough this time – she also took into consideration concerns about potential conflicts of interest in selecting grantees, the capacity of small nonprofits to take on large new projects and the transparency with which the program is run. In voting for the slate of recommendations last week, she announced that no funds will be disbursed for 45 days, during which time officials will conduct further due diligence. In addition, she authorized the planning bureau director to cancel a pending award if merited.

She said she also plans to bring forward code changes to address some of the weaknesses identified in the audit, as well as to make clear the timing for when applications should be posted to the website. These are all smart steps necessary to help build public trust.

But there’s one more thing Rubio should do. She should press the clean energy program to release a report showing the progress and outcomes of the program’s first round of recipients, announced in April 2021. Did they meet their promised objectives? Were there any lessons learned in issuing the first round of grants? How much time and attention did program officials have to give each grantee and was it sufficient? Are administrative costs exceeding the 5% cap that the ballot measure promised and if so, should the city change that? Does the Clean Energy Fund have enough people to provide the necessary oversight to 65 projects from the eight they oversaw over the past year? Answers to such questions would also help build confidence that program officials are unafraid to confront any shortcomings and find solutions.

We still believe it would have been better for the program to limit its grant-giving this year to specific projects – such as the initiative to install cooling pumps or home retrofits – rather than issuing the full $120 million on such a broad array of proposals. Overseeing 65 projects while program officials are also addressing the deficiencies identified by the audit would be challenging for any program.

But Rubio’s responsiveness and program officials’ stronger vetting processes are encouraging. They also show a recognition that scrutiny can beget progress – as long as city officials are able to withstand it.

-The Oregonian/OregonLive Editorial Board