Bill would let community renewable grants fund standalone energy-resilience projects

Chair Lively opened a public hearing on House Bill 2566 on Feb. 11, which would allow the Oregon Department of Energy’s Community Renewable Energy Grant Program to fund stand‑alone energy resilience projects in addition to renewable‑plus‑resilience projects. The bill would also direct the agency to adopt a list of eligible technologies and measures, and includes proposed amendments to preserve the program’s renewable focus and to set a 20% carve‑out for stand‑alone resilience projects.

Why it matters: proponents say the change gives smaller consumer‑owned utilities and tribal or public bodies a way to fund resilience measures they currently cannot support — and could be used as match for new federal grid‑resilience money. Opponents and some industry advocates warn the program is already oversubscribed and that diverting up to 20% of funds to non‑renewable projects risks reducing funding for renewables‑plus‑resilience work.

Overview and examples Christy Split, government relations coordinator at the Oregon Department of Energy, told the committee the Community Renewable Energy Grant Program was established to offset planning and construction costs for small community renewable or renewables‑plus‑resilience projects and that the program has received wide interest across the state. "We think this program has been a great success," Split said, describing 195 applications since launch and funded projects in 28 of Oregon’s 36 counties. Split gave examples of projects already funded under the program — municipal microgrid and battery projects in Ashland; a floating solar array and microgrid components for the Roseburg Urban Sanitation Authority; and biomass system upgrades in Burns.

Under HB 2566, the program would add a new pathway for stand‑alone energy resilience projects — measures that do not include on‑site renewable generation but improve the ability of facilities "essential for the public welfare" to avoid or shorten outages. Split said battery storage at an essential facility or undergrounding a line supplying a critical building are potential examples. "This would allow a pathway for resilience only," she said, but added that the department would have to complete rulemaking to formalize eligible technologies and measures.

Amendments and program safeguards Split described several amendments under consideration. The posted "dash‑1" amendment would ensure program funds cannot be used to build or repair non‑renewable generation systems (for example, diesel generators). A forthcoming "dash‑2" amendment would apply the program’s existing requirement — that 50% of construction projects be in eligible communities (coastal, rural, low‑income and similar designations) — to the new resilience pathway. Split also said the department expects an amendment clarifying the 20% carve‑out language and does not plan to oppose it: "We intend to spend 20% as long as there's the demand," she said.

Supporters and opposition Representatives of consumer‑owned utilities and rural utilities testified in favor of HB 2566. Jennifer Jolley, director of the Oregon Municipal Electric Utilities Association, said the amendment would give COUs flexibility for resilience projects that lack a renewable energy component and help small utilities pursue federal grants with match requirements they cannot otherwise meet. "These stand‑alone resilience improvements may not generate as much excitement as a microgrid, but arguably can have more widespread community benefit," Jolley said.

The Oregon Solar and Storage Industries Association (OSEA) voiced support for the dash‑1 amendment but urged caution about diverting program funds. Angela Crowley Cook, OSEA executive director, said the program is oversubscribed and that reserving 20% for non‑renewable resilience projects could reduce funding available for renewable projects. "We would love to see a different fund and keep this one intact because it is oversubscribed," she said.

Program funding and federal match issues Split said the governor’s recommended budget includes $25 million for the program and that the department expects to roll some unspent funds forward, estimating a working budget near $35 million after carryover and the new request. The department also signaled a plan to add staff to manage the expanded pathway. Split and other witnesses pointed to the Infrastructure Investment and Jobs Act and other federal grid‑resilience opportunities as potential additional funding sources; smaller COUs commonly face match requirements that the bill’s carve‑out could help satisfy.

Committee discussion Committee members asked for clarifications about the difference between "reliability" and "resilience," the potential effect on renewables funding and interconnection bottlenecks for projects. Jason Knauss, a program staffer with ODOE, said interconnection issues have occurred in both COU and IOU territories but described them as an active operational constraint that can slow project completion. Representative Wallen said the distinction between reliability and resilience mattered to him; Split answered that the program will continue to support both concepts under the new pathway.

Next steps Chair Lively closed the public hearing on HB 2566 at the end of the committee’s allotted time; the department indicated amendments (dash‑1 and dash‑2) are posted or pending on OLIS for committee consideration and that a fiscal impact statement will be available. No formal committee votes were recorded during the hearing.

Ending: The committee will consider amendments and a fiscal report before any subsequent work session or vote on HB 2566.