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Bend staff to orient electrification incentives around possible natural-gas appliance fee
Summary
City staff told the advisory board the city council wants staff to prioritize studying a fee on natural-gas appliances to fund electrification incentives, while delaying regulatory changes and starting a yearlong outreach and incentive-design process this fall.
City staff told the Bend Development Advisory Board on June 4 that the City Council has asked staff to focus the next phase of local electrification work on creating a revenue-generating fee on natural-gas appliances and homes, and to design incentive programs funded by that revenue.
A staff member said the council generally accepted a multi-part approach shared in February: start with public outreach and education, spend roughly a year developing incentive programs with the joint committee and stakeholders, and "wait and see" on new regulations while monitoring litigation nationally. The staff member said the council's direction last week was to "orient the incentives discussion with that kind of primary goal" of creating a fee that can fund incentives, though no ordinance has been adopted and no final decision has been made.
Why it matters: Council direction to center the discussion on a fee shifts staff work from a broader menu of options to a revenue-driven incentive model. That could lead to an ordinance that creates a new local charge and uses proceeds to subsidize electrification for targeted building types.
Staff emphasized several practical caveats. The council asked staff to use a joint committee — including BDAB representation, developers and utilities — to shape any incentive program. Staff said it plans to begin the outreach and incentive-design work in the fall, and tentatively scheduled an August work session to finalize scope.
Staff and the mayor flagged timing risks tied to housing-market and construction conditions. One staff member said the projected incremental construction cost for converting a typical single-family starter home to all-electric was a high-level estimate of "$8,000 to $10,000," and that commercial conversion costs can be substantially higher. The staff member added that the council and mayor acknowledged the city might decide to pause or change direction if economic conditions made a fee infeasible.
Staff also noted the city will look at the Ashland example, where a similar climate-pollution fee was adopted recently; staff said Ashland's ordinance and the legal response there are part of what the city is monitoring. The staff member said the Ashland ordinance is a new model that has not fully played out and, in Bend's case, the city attorney's advice and litigation elsewhere will be considered.
The staff recommended using the joint committee to gather data on incremental costs, differences between new residential and commercial conversions, and whether incentives should target particular subtypes. Councilmember questions at the meeting emphasized concern about housing affordability and the relative incentivizability of modest single-family homes versus large commercial projects.
The board did not take a formal vote on the fee; staff said the council direction was preliminary and staff will return with more detail and possible draft language after additional analysis and stakeholder work.
