Citywide Electrification Program grant (CEC, named earmark in CA Budget Act of 2022)
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Award, received, and remaining figures are from the grants table for CEC-AB179-ELECTRIFICATION. Source: Staff Reports #24-059-CC (Apr. 2, 2024), #25-176-CC (Nov. 18, 2025), and #26-048-CC (Mar. 24, 2026); executed Home Electrification Program Funding Agreement (City–PCE).
How the money is restricted
Statutory named earmark per AB 179 (CA Budget Act of 2022): "$4,500,000 to the City of Menlo Park for the citywide electrification Program." Reimbursement-and-milestone structure. Restricted (per PCE Funding Agreement Sec. 4) to transitioning gas equipment to electric, increasing energy efficiency, and enhancing electrical infrastructure for income-qualified households. Second $2.25M only releases after first $2.25M is spent within milestone deadline; unspent funds must be returned.
How this grant is structured
The California Energy Commission (CEC) named Menlo Park in Assembly Bill 179 (2022) for a $4.5 million communitywide electrification grant. The City received the first $2.25 million in September 2023 and holds it in Fund 394. Most of that money flows through a sub-agreement with Peninsula Clean Energy ($2,210,000), which delivers the actual home installations; the City retained $40,000 for direct marketing.
How the City gets paid back for what it spends
PCE installs electrification upgrades at no cost to the income-qualified resident. PCE then invoices the City for completed homes that meet eligibility — originally Belle Haven income-qualified homes only, expanded citywide to 120% of area median income from December 2025 onward. Homes outside the City's eligibility envelope are absorbed by PCE without City reimbursement. As of February 2026, PCE had completed 27 installations and invoiced the City for 22.
The City fronts the cash from the grant tranche already in Fund 394. The State reimburses by releasing the second $2.25 million tranche after the City has spent the first $2.25 million, submitted a midway project report, and invoiced — all by December 31, 2026 under the latest amendment.
The deadlines have moved twice
- Original deadline (2023 grant award): all $4.5 million spent by June 30, 2025.
- First CEC amendment (July 2025): first $2.25 million by March 31, 2026; full $4.5 million by December 2027.
- Second CEC amendment (March 5, 2026): first $2.25 million expended and midway report and invoice for the second half all submitted by December 31, 2026. Full $4.5 million by December 31, 2028.
Staff continue to work toward March 31, 2026 as an operational target so the City can be in the State's May budget revision cycle — but the contractually binding date is now December 31, 2026.
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Structure, repayment, and deadline history are from Staff Reports #24-059-CC (Apr. 2, 2024), #25-176-CC (Nov. 18, 2025), and #26-048-CC (Mar. 24, 2026), and the executed City–PCE Home Electrification Program Funding Agreement.
Disbursement in two halves
First half — disbursed on grant award acceptance. Held in Fund 394.
Received September 1, 2023
Second half — released after the City (a) has expended the first $2.25M, (b) submits a midway project report, AND (c) submits an invoice for the second $2.25M. All three required by December 31, 2026 under the March 5, 2026 CEC amendment.
Deadline December 31, 2026
What's actually being spent
| Component | Spent (Feb 2026) | Projected by Dec 2026 |
|---|---|---|
| PCE Home Upgrade Services | $818,796 | $1,748,796 |
| Knob-and-tube pilot | $0 | $108,600 |
| Solar and battery projects | $0 | $60,000 |
| Citywide matching rebates | $0 | $75,000 |
| E-bike and EV voucher program | $0 | $90,000 |
| Referral program | $2,000 | $4,000 |
| Marketing and outreach | $74,545 | $113,000 |
| Electrification bundles for renters (BHCDF) | $72,648 | $93,000 |
| BHCDC electrification (design phase) | $94,155 | $120,000 |
| City staff time | $55,499 | $60,000 |
| Total | $1,117,643 | $2,472,396 |
The projected total exceeds the $2.25 million first-half threshold — the threshold the City needs to clear in order to invoice the State for the second tranche.
›Show source
Staff Report #26-048-CC (March 24, 2026), Table 1.
How the program is funded
Everything spent through this program is funded by the $4.5 million CEC grant. The City received the first half in September 2023 and is on track to clear the milestone needed to invoice the State for the second half by the end of 2026.
First tranche received (Sept 2023) Disbursed on grant award acceptance. Held in Fund 394. | $2,250,000 |
Second tranche, contingent Releases only after the City submits a midway project report and an invoice for the second half. All required by December 31, 2026 under the March 5, 2026 CEC amendment. | $2,250,000 |
Total CEC grant value | $4,500,000 |
Why the budget appears to show more than the $4.5 million
A resident scanning the City's adopted budget for Fund 394 will see the same fund appear with appropriations in FY 2024, FY 2026, and FY 2027 that, summed across years, total more than the $4.5 million grant. This is almost certainly multi-year carryforward and appropriation headroom — the same grant dollars rolling forward across fiscal years as the project budget is re-presented, not additional money. The grant total is still $4.5 million. The Fund 394 presentation is just how multi-year capital project budgets are shown. Staff confirmation of how Fund 394 is presented across years is one of the open questions tracked below.
›Show source
Tranche structure and amendment deadlines: Staff Report #26-048-CC (March 24, 2026). Fund 394 appropriations across FY 2024-27: City of Menlo Park FY 2026-27 Proposed Budget detail, Fund 394.
Pending Council actions
One item for this project has been flagged but is not in the current budget. These are commitments the City knows it will need to address — tracked here so they're visible alongside what's being voted on now.
Belle Haven Child Development Center electrification — construction cost
- Amount:
- Amount not yet quantified
- Expected action:
- On RFP closure, expected within FY 2026-27
- Status:
- pending
›Consequence of inaction
Construction must complete by December 31, 2028 under the CEC grant amended deadline. The City's share of any construction cost above the CEC allocation would fall to General Fund or other restricted sources.
Source: Staff Report #26-048-CC (March 24, 2026)