A Legacy in Common

How Portland created PECI and how PECI helped define Portland’s progressive identity

Continue to Prologue

From the east-facing windows on the fifteenth floor of PECI’s office building at Southwest First and Main Street in Portland, Oregon, you can, on a clear day, see 100 miles to Mount Hood. You can look down on the Willamette River and watch joggers and bikers streaming along the shared paths of Tom McCall Waterfront Park. You can notice the uncommonly high percentage of developable land on the east side of the city that instead remains designated for green space and park land. Turning westward, you can look into the heart of downtown, where the daily governance of the city hums along in the offices and meeting rooms of the Portland Municipal Services Building and City Hall.

Everything we see and live today was shaped by past choices. In 1993, Portland became the first city in the country to establish a public action plan to address climate change, which resulted in a 39 percent reduction of per-capita carbon emissions as of 2010. New plans are in place to lower total carbon emissions by 40 percent by 2030 and 80 percent by 2050.

Much of the groundwork for Portland’s progressiveness - and the ideals that guide it - was cemented during the nationwide energy crisis of the 1970s. In 1979, the city’s rising public demand for responsible energy use and environmentally sensitive governance earned its first significant legislative victory, took the first step onto unmapped ground, with the adoption of the 1979 Portland Energy Policy. The centerpiece of that policy was the creation of a government-held nonprofit corporation called Portland Energy Conservation, Inc. to manifest the policy’s goals. That organization ultimately became the nonprofit we know as PECI.

This is the story of the creation of that policy. It’s the story of the convergence of a handful of ambitious leaders, unique events and rapidly evolving public attitudes, at a particularly crucial time in the history of the city, state, region and country. It’s the story of how Portland created PECI and PECI helped crystallize Portland’s identity as a national leader of environmental policy.

Chapter 1

Building an Identity

Evolution mostly happens by slow degrees; but occasionally a conflict jolts it into swifter movement.

Continue to Chapter One

Three conflicts were instrumental in Portland’s development into a progressive, vocal democracy: the Progressive Movement that rose in the wake of the industrial revolution, the suburban sprawl that necessitated urban growth boundaries, and the fight over the Mount Hood Freeway, which refocused Portland on developing public transportation and mending its downtown core.

The industrial revolution provided new systems to expend natural resources to create previously unseen amounts of wealth. By the time Oregon became a state in 1859, out-of-state financiers and land speculators had the run of the legislature and were consolidating control of the state’s resources to amplify logging and agriculture industries, and local loggers and farmers found themselves increasingly subjugated to industrial concerns.

This specific friction sparked the Progressive Movement, which by 1902 won several key reforms in the state government, including direct primary elections, a 10 hour workday for women and the Corrupt Practices Act. In the historical context of Portland, this early activism started a tradition of citizen-led participatory democracy and hearty defense of individual land ownership that perseveres today.

The Invention of Urban Growth Boundaries

Skipping ahead a few decades, post-World War II Oregon of the 50s and 60s had the same problem many growing cities did at that time: migration from rural to urban areas was creating unchecked suburban sprawl and withering downtown cores. In response, Governor Tom McCall, elected in 1967, introduced and oversaw the passage of three bills between 1969 and 1973 that built upon each other to fundamentally change the way the state governed land use.

The first bill, Senate Bill 10, required every city and county in Oregon to have a land-use plan to prevent sprawl from overtaking the state’s considerable natural beauty and local agriculture. With no explicit power to enforce the requirement, however, Senate Bill 10 was fatally flawed.

This shortcoming was the impetus for Senate Bill 100, passed in 1973, which created a seven-member Land Conservation and Development Commission to administer the adoption of city and county land-use plans. The commission set specific and comprehensive goals for air and water quality, economic development and natural resource protection to which every local land-use plan had to adhere.

The third bill, Senate Bill 101, also passed in 1973, required all Oregon cities to set urban growth boundaries, rezone urban land to create affordable housing and refine transportation networks to reduce the necessity of car travel.

Defeating the Mount Hood Freeway

In parallel to Governor McCall’s administration, a former Portland city councilman and newly elected mayor echoed many of the same principles locally. Neil Goldschmidt won the mayor’s seat on a pledge to defeat the federally funded Mt. Hood freeway, which drew the ire of Portland’s citizens for a construction plan that would bisect many established urban neighborhoods. After Goldschmidt was elected mayor in 1972, over freeway supporter Frank Ivancie, the plan was nixed. The federal money was reallocated to lay infrastructure for a new light rail system, improve bus lines and make repairs to arterial streets. This investment in public transportation led to the creation of TriMet, now an established symbol of the city’s livability.

One of primary intents of the McCall’s urban growth boundaries was the revitalization of Oregon’s downtown cores; Goldschmidt’s involvement in the adoption of the 1972 Downtown Plan embodied this goal even more explicitly. The plan aimed to overhaul the design of downtown Portland by actively consulting with citizen groups through advisory committees, which were open to all Portlanders. Their work led to the creation of McCall Waterfront Park, the continued development of a light rail system, a downtown bus mall, and the now familiar bonding of downtown with farther-flung neighborhoods via a four-quadrant city layout.

Chapter 2

Surrounded by Upheaval

As Portland shaped its progressive identity, an unprecedented energy crisis developed on the international stage.

Continue to Chapter Two

In October of 1973, the oil-producing nations of the Middle East voted to cease shipments to the U.S. and any other country that supported Israel in its conflict with Palestine. As President Nixon worked to negotiate to end the embargo, oil prices ballooned beyond control, forcing gas rationing and other government-mandated efforts to reduce energy use.

The 1973 energy crisis was particularly crippling for people in the Pacific Northwest. The region relies on hydroelectric power generated from dams along the Columbia River. Two major droughts in 1973 and 1976, coupled with growing populations and rising per-capita energy use, led to shortage of electricity supply and heavy investment in nuclear power.

The Washington Public Power Supply System (WPPSS) produced a plan for five nuclear plants, but only one was ever built. A study in mismanagement, the WPPSS plan decayed into the largest municipal bond default in US history: $2.25 billion. The cost of the mistake was yoked to Pacific Northwest ratepayers, who, already feeling the pinch of the oil embargo, saw their energy prices increase by eightfold in a few months. At the same time, a facility producing weapons-grade plutonium was found to have been regularly dumping waste into the Columbia River for more than thirty years.

In Need of New Answers

1977. From the White House, new president Jimmy Carter delivered pleas for conservation and personal accountability. Portlanders adapted in earnest. Businessmen in suits hitchhiked to work from Beaverton. Electricity rationing forebodingly dimmed the nighttime Portland skyline. Governor McCall was famously photographed working by kerosene lamp in his otherwise unlit office. The Portland city government, led by Mayor Neil Goldschmidt, was searching for solutions to improve the quality of daily life, conserve resources and reduce the city’s vulnerability to energy-related upheaval.

Neil Goldschmidt remembered a fellow University of Oregon student government leader with strong ideals and equally strong management skills: Mike Lindberg. “In our college days, Neil was president of the student body and I was on the student senate,” recalls Lindberg. “I went to a reunion that year, had been working an obscure job in a tiny office, and he casually asks me if I want to be Director of Public Works. That’s how my time on the City Council started.” Within months, Lindberg was promoted to Director of Planning and Development responsible for housing, economic development, land use and energy. A lifetime of civil service would follow.

Lindberg and Goldschmidt brought their mission of responsible energy use to the 1977 Conference of Mayors in Syracuse, where they won a $150,000 grant from the United States Department of Housing and Urban Development to develop a model energy policy for U.S. cities.

Eager to seize the moment, the City Council created the Energy Commission, a group of engineers, architects, professors, city officials, and other leaders to study and make recommendations for the energy policy. “We looked at what was state of the art nationally and internationally with the goal of becoming more energy efficient,” says Lindberg. “We wanted to save energy and become more energy independent, but also create jobs. The city’s energy policy still has those same goals today.”

They worked steadily for over a year, in which time President Jimmy Carter, aiming to fill his cabinet with visionary mayors from all over the U.S., offered Mayor Goldschmidt a cabinet position in Washington as Secretary of Transportation.

Goldschmidt was determined to complete the energy policy before joining President Carter’s administration. The redoubled efforts of the Energy Commission pushed the primary pieces of the policy into place: citywide mandates for energy efficiency, achieved by providing loans to business and homeowners to undertake energy audits and weatherization retrofits.

The 1979 Energy Policy, described in bureaucratic syntax as Ordinance No. 1482514, was adopted by the City Council on August 15, 1979 , the same day Goldschmidt was sworn in as Secretary of Transportation in Washington, D.C. Mike Lindberg was the policy’s primary author. The language made the policy’s emphasis on energy efficiency clear: "All buildings in the City shall be made as energy efficient as is economically possible and that retrofit programs must be cost effective, comprehensive and have the most equitable impact possible on all sectors of the community."

The policy mandated that all commercial and residential building owners had to complete weatherization retrofits within 5 years or before the building could be sold, whichever came first. Though the policy did not carry the weight of law, the mandates were still regarded as an aggressive strategy.

Chapter 3

Making it Real

The 1979 Energy Policy adoption created a need for instruments to turn its vision into an everyday reality.

Continue to Chapter Three

The city council made a strategic decision to create a government-held, non-profit corporation to administer loans and carry out energy audits. It was a common tactic at the time; the City Council felt non-profit corporations were better equipped to work quickly on the ground. “Independent organizations would have more freedom to move more quickly and make decisions more quickly, leverage things and not be burdened as much as a city bureau,” says Lindberg. “A non-profit corporation could do a better job reaching out to small and medium-sized businesses.”

The City Council voted to file for incorporation of Portland Energy Conservation, Inc., on October 31, 1979.

Nationwide, Portland’s energy policy was gathering acclaim. The American Planning Association gave the city a merit award and the U.S. Secretary of Energy, Charles Duncan Jr., cited Oregon as “One of the leaders, if not the leader, of the conservation effort among states in the nation.” And on July 23, 1980, President Carter gave the city of Portland a special award for conservation efforts.

“The public sentiment was 95 percent positive,” remembers Lindberg. The remaining five percent still had a few things to say.

Measure 51

In 1979, Margie Harris, now executive director of Energy Trust of Oregon, was an assistant to Mike Lindberg and was a prominent voice in helping to implement the energy policy and designing its instruments. She describes the source of the post-adoption resistance: “They were reluctant, especially in those days, to require government to impose a will on the people. There really was not precedent for this.”

The language in the policy that mandated weatherization riled some Portlanders. To them, the mandates tipped the policy into the realm of over-legislation and infringed upon the basic rights of property ownership. In a letter-to-the-editor of The Oregonian, an anonymous Portland resident decried the policy as an “insidious vehicle” and a “totalitarian assault by politicians on our freedoms.”

City Councilman Frank Ivancie led the opposition. Ivancie, the unsuccessful mayoral candidate who had backed the Mount Hood Freeway project and was running for election again in 1980, was a conservative Democrat widely supported by the Portland business community. He organized a campaign for ballot Measure 51, which required the city to put any weatherization mandates to a citywide public vote. Ivancie’s camp gathered more than 20,000 verified signatures, ensuring that Measure 51 was placed on the ballot for the 1980 general election.

On November 4, 1980, Portland voted down the weatherization mandates of the energy policy and elected Ivancie as the new mayor. Knowing the mandates were unlikely to pass a public vote, the City Council stripped them from the language of the energy policy. The loans and audits would continue, but public participation would be strictly voluntary.

Meanwhile, Portland Energy Conservation, Inc. had begun operational life in a small office that is now a trendy wine bar called Pour. “I sat at a tiny little desk,” remembers Margie Harris. “We wrote the first draft of how the plan for the energy conservation program for commercial and industrial buildings would unfold.” Meanwhile, Mike Lindberg was hustling to find funding for the loans: “I approached PGE [Portland General Electric] to get $50,000 in funding to start things up.” Portland Energy Conservation, Inc. established the Portland Energy Center as a public resource for Portlanders to learn about the economic benefits of energy conservation and apply for loans.

“The debate at that time was mostly, ‘Well, we have to make sacrifices, we have to be colder in our homes, we have to drive less,’” remembers Lindberg. “We launched an educational campaign to say, ‘Actually, an energy policy will retain money in the local economy and every household will save money.’”

Where President Carter’s gospel was sacrifice and personal responsibility, the shapers of the energy policy reframed the argument for conservation as good economic sense.

The Northwest Embraces Energy Efficiency

The immediate perception was that stripping the mandates would render the policy toothless. But in reality, attractive loan rates and the potential to save money on electric bills attracted early adopters, who spread the word, creating momentum. Soon, Portland Energy Conservation, Inc. had assembled a loan pool of $12 million from local lenders and secured an additional $3 million from a federal urban development action grant.

Loans were offered at zero percent interest to home and business owners who completed energy audits. If the recipient chose to implement the measures identified by auditors, who were also employees of Portland Energy Conservation, Inc., the loan was forgiven. Another attractive feature: audits only recommended retrofits that would pay for themselves in saved energy costs within one year. Many people, particularly small business owners, found the deal too good to pass up.

“[That year] we did about 400 energy audits of small- and medium-sized businesses,” says Lindberg.

At the same time, Mike Lindberg and Margie Harris were advocating for the tenets of the policy, and for energy efficiency as a concept, to the Northwest Power Planning Council, which sets high-level recommendations for resource planning in the Columbia River Basin. Among the council’s responsibilities is to create a priority order of energy demand reduction strategies.

The testimony of Lindberg and Harris, along with the growing success and recognition of the energy policy, as well as the droughts and Washington Public Power Supply System fiasco, culminated in 1980 decision by the Northwest Power Planning Council to name energy efficiency the top priority load-reduction strategy for the entire region.

This not only validated the energy policy and the growing practice of energy efficiency, it created new demand for services like those provided by Portland Energy Conservation, Inc.

Chapter 4

Breaking Free

The momentum was broken suddenly, and nearly permanently, by a seemingly tangential argument about pension plans.

Continue to Chapter Four

In 1984, the state Public Employees Retirement Board filed suit against the city of Portland, contending that all employees of every nonprofit corporation established by the city were in fact city employees, and thereby required to be covered through the Public Employees Retirement Fund. The city council fought the case to the Oregon Supreme Court, which ruled in favor of the Retirement Board.

Government-held nonprofit corporations were common in Portland and typically funded by government grants, for which every dollar was contested. The ruling made all such organizations, including Portland Energy Conservation, Inc., financially unsustainable.

Portland Energy Conservation, Inc. was dissolved and re-established, on October 8, 1984, as a private nonprofit 501(c)(3) company under the leadership of its first executive director, Dolores Hurtado. The company drafted a new contract with the city to continue offering loans and energy audits to Portland residents, per the intent of the energy policy. That agreement served as the company’s financial model going forward, as they began to pursue similar contracts with utility providers and other organizations. Phil Welker, who succeeded Hurtado as executive director in 1991, notes, “The city let us keep some furniture and a few computers. In fact, if we ever dissolve our current charter, we’re legally required to give them back.”

According to Mike Lindberg, this arrangement was predestined: “I think the whole idea was that PECI would take on a life of its own, find its own funding sources and run in a more entrepreneurial fashion without being burdened by too much government oversight.” The leadership of Portland Energy Conservation, Inc. had similar ambitions, says Margie Harris: “For a long time they were tethered exclusively to the city, and then eventually they got more notoriety and more exposure and visibility and potential for other clients, so a decision had to be made about breaking free.”

For PECI’s employees and board members, the new freedom mirrored their ambitions and personal investments in the company’s future. Nancy Benner came to PECI during those very first days and her work ultimately made her a pioneer in the building commissioning industry. In the mid-nineties, as demand for energy efficiency programs waned, Phil Welker resigned as executive director in order to save the company his salary, preventing deeper staff cuts. Nancy Benner served as executive director for a year, until an illness required her full attention and energy, then Debby Dodds stepped into the role. Together, Benner and Dodds brought PECI, client roster and staff intact, into a more prosperous time and market. At that point, Welker rejoined the company at his original post.

Many of the company’s current board members have served multi-decade tenures that began early in PECI’s life as a private company.

The Beginning of a New Wave

The 1979 Portland Energy Policy was not only innovative, it was effective in making Portland’s buildings more energy efficient and introducing the city to the economic benefits of energy conservation at a time when those benefits were particularly meaningful. In 1990, Mike Lindberg, the author of the 1979 policy, serving as the Commissioner of Public Affairs, introduced an update to the Energy Policy that was even more ambitious: to reduce citywide energy use by 10 percent. The new policy widened its vision to commercial buildings, industrial facilities, transportation, waste reduction and city operations.

The 1990 Energy Policy heralded a new wave of equally ambitious legislation by the city government. A year later, Portland joined 13 other cities from around the world as a founder of the International Council for Local Environmental Initiatives (ICLEI), which aims to “build and serve a worldwide movement of local governments to achieve tangible improvements in global sustainability with special focus on environmental conditions through cumulative local actions.” Today ICLEI has member communities in 86 countries worldwide.

In 1993, Portland set aggressive goals to reduce CO2 emissions by 20 percent by 2010, a level that exceeded the landmark 1997 Kyoto Protocols (which the United States signed but never ratified, citing potentially adverse economic effects). It was the first legislation in the country to explicitly address climate change.

The 1979 Energy Policy is the beginning of the lineage of these local efforts and ambitions, and any that might one day follow as Portland continues to work in service of its environmental ideals.


PECI was born in a unique convergence of people, ideas and events: an ambitious young mayor who’d taken up energy as a banner, his college buddy who happened to possess love of environment and skill at policy in equal measure, a governor who innovated policies for livable cities, two crippling droughts in a region dependent on hydropower, an embarrassing default on a municipal bond sale to build nuclear power plants, a conservation-minded new president, a nation reeling from oil shortages and beginning to recognize the degree to which it was dependent on other nations’ resources, a business-minded city councilman expressing the perfectly Oregonian trait of fighting for landowner rights, countless other policy makers and leaders inspired to embrace the opportunities revealed by the era’s upheaval, a new and growing public awareness of environmental issues, tempered by the practical need to cope with the energy crises and still protect and prosper by their own livelihoods.

“It was a time of great hope and despair, both sides of that coin,” remembers Margie Harris. “People were living amid crises in their communities from polluted water and air and land, and finally, after years of trying to create social and political change, there were opportunities to change and create laws to protect the natural world.”

The 1979 Portland Energy Policy and the work of Portland Energy Conservation, Inc. were among the first expressions of the ideals that would cast Portland as a national leader in environmental policy.

With the distance of history, we can see how the crucible of the mid- and late-70s could yield an inventive energy policy, a model for the whole nation, focused on the voluntary public adoption of energy efficiency. It’s easy enough to trace in hindsight. But it’s still remarkable, particularly to the people who remain associated with PECI to this day, who work every day, thirty-five years later, to carry out the principles at its heart: to help people save energy to the mutual benefit of the environment, their communities and themselves.

Certainly, both PECI and the city of Portland have relied on insightful leadership and sizeable, active collective intelligence to grow and thrive. But without these events unfolding in their specific sequence and with their specific effects, without these people and their individual ideals and ambitions, without the thoughtful work of Portland Energy Conservation, Inc., so many invaluable and positive evolutions — to our city, our attitudes about energy, our lives and livelihoods — might have remained forever unrealized.