Bend staff back ECC's electrification push but advise phased approach amid legal uncertainty

City of Bend staff and advisory committees spent the session evaluating a phased work plan for building electrification that foregrounds outreach and incentives while monitoring legal risk.

"My name is Eric King. I'm the city manager," King said in opening remarks, framing the meeting as a joint dialogue on how to advance electrification recommendations the Environment and Climate Committee (ECC) delivered to council in December.

Why it matters: the ECC recommended prioritizing measures that make new construction "build smart from the start," including limiting gas piping in the right-of-way, exploring low-NOx appliance standards and considering a new-construction pollution fee. City attorneys warned those regulatory approaches carry substantial legal risk because federal appliance law (the Energy Policy and Conservation Act, EPCA) has been the basis for court decisions striking municipal bans; staff urged a three-part plan that starts with outreach and a navigator, then studies incentives/disincentives with stakeholders, and finally monitors litigation and regulatory developments.

Staff presentation and sequence: Cassie Lacy, staff liaison to the ECC, reviewed six policy buckets under consideration: state advocacy, education/support (including an "energy navigator" 1-on-1 assistance program), financial and code-based incentives, local regulations (right-of-way limits, NOx standards, benchmarking), fees as disincentives, and building-code amendments. Staff proposed immediate investment in outreach and online resources, a summer launch for an energy navigator, a stakeholder work group to define incentives and any revenue needs later this year, and continued monitoring of legal developments.

Legal caution: City attorney Michael Selkirk said "the law is really unsettled" and discussed the Ninth Circuit's decision in a Berkeley case that struck a local ban on gas piping because it conflicted with EPCA. Selkirk noted a recent lawsuit challenging Bay Area NOx rules and described Ashland's pollution impact fee ordinance as the most recent Oregon example to watch. He explained Ashland ties fees to the EPA's social cost of greenhouse gases and CPI; the ordinance charges per new-residential permit and calculates fees by appliance (examples cited in the meeting: a furnace fee shown in Ashland's ordinance of about $4,118.40, a clothes dryer about $145.60 and a gas fireplace roughly $700).

Stakeholder concerns and data needs: Developers warned electrification can significantly raise construction costs in some commercial projects and asked for pro forma and incremental-cost analyses. Affordable housing committee members raised energy-burden concerns and asked whether electrification reduces tenant bills; committee members also noted many affordable housing providers are already building all-electric. Participants urged staff to gather local data separating single-family, multifamily and commercial projects and to solicit engineering and utility pro formas so the city can compare upfront construction costs and ongoing operating costs for residents.

Incentives and revenue: Staff described potential incentive tools ranging from permit or development-code incentives (expedited review, density bonuses) to direct subsidies for equipment, and said cash incentives would require a revenue source. The Ashland fee model was discussed as a disincentive example that could also generate revenue for targeted incentives, but staff recommended forming a stakeholder work group to assess appetite, impacts and funding sources before drafting policy.

Next steps and timing: Staff said they will present council with an update at the April quarterly goals check-in, continue outreach and launch initial communications and navigator services using available ARPA funds and possible franchise-fee allocations, and reconvene the advisory group or a broader stakeholder work group to develop incentive/disincentive options later in the year. Selkirk and staff emphasized regulatory actions that could trigger lawsuits will be monitored and reconsidered only if legal clarity improves.

"We are watching all of this," Selkirk said, urging patience and noting lawsuits can take years to resolve. The meeting closed with staff collecting requests for the specific local cost and utility data committees and councilors asked to inform a future policy recommendation.

Ending note: Council liaisons and committee members generally supported immediate outreach and the energy navigator concept but urged expedited, data-driven work on incentives to meet climate goals while protecting housing affordability and avoiding disproportionate energy burdens for lower-income households.