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.
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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.
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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.
Things to watch
Three ongoing items from the program's own public record — the Council staff reports (most recently the March 2026 spenddown progress report, #26-048-CC), the executed Peninsula Clean Energy funding agreement, and the PCE and BHCDF monthly reports. Each is a status note worth tracking as the program continues, not a prediction and not a claim of wrongdoing.
›capital exposureBelle Haven Child Development Center electrification (the largest single building project funded under this grant) is at approximately 90% design completion with $94,155 in design-phase spend as of February 2026. The construction-phase cost has not been broken out in the public reports; it will be in front of Council when the construction RFP closes.
Belle Haven Child Development Center electrification (the largest single building project funded under this grant) is at approximately 90% design completion with $94,155 in design-phase spend as of February 2026. The construction-phase cost has not been broken out in the public reports; it will be in front of Council when the construction RFP closes.
Staff Reports #25-176-CC (Nov. 18, 2025) and #26-048-CC (Mar. 24, 2026).
Resolution: Resolution requires the construction budget breakdown when the contractor RFP closes.
Source: Staff Reports #25-176-CC (Nov. 18, 2025) and #26-048-CC (Mar. 24, 2026)
›eligibilitySeveral Council-directed program enhancements (e-bike and EV vouchers via Acterra, the electrification bundle program via BHCDF, solar and battery adders) use the grant for purposes broader than gas-to-electric appliance conversion. The CEC has executed two amendments to the grant agreement since the enhancements were directed, with no public indication that any enhancement was disallowed.
Several Council-directed program enhancements (e-bike and EV vouchers via Acterra, the electrification bundle program via BHCDF, solar and battery adders) use the grant for purposes broader than gas-to-electric appliance conversion. The CEC has executed two amendments to the grant agreement since the enhancements were directed, with no public indication that any enhancement was disallowed.
Staff Reports #25-176-CC (Nov. 18, 2025) and #26-048-CC (Mar. 24, 2026); two executed CEC amendments (July 2025; March 5, 2026).
Resolution: Resolution: confirm via the executed CEC amendments (obtainable by Public Records Request) that the e-bike/EV and bundle programs are explicitly within scope.
Source: Staff Reports #25-176-CC (Nov. 18, 2025) and #26-048-CC (Mar. 24, 2026)
›reimbursement structureHow the City gets reimbursed: PCE invoices the City only for completed homes that meet income eligibility (Belle Haven and citywide income-qualified up to 120% AMI as of December 2025). Homes outside the eligibility envelope are absorbed by PCE without City reimbursement, which bounds General Fund exposure on this program. As of February 2026, 22 of the 27 completed installations had been invoiced to the City.
How the City gets reimbursed: PCE invoices the City only for completed homes that meet income eligibility (Belle Haven and citywide income-qualified up to 120% AMI as of December 2025). Homes outside the eligibility envelope are absorbed by PCE without City reimbursement, which bounds General Fund exposure on this program. As of February 2026, 22 of the 27 completed installations had been invoiced to the City.
Staff Report #26-048-CC (Mar. 24, 2026); PCE April 2026 monthly report; executed Home Electrification Program Funding Agreement.
Resolution: Lower severity than originally framed. Mitigation: monitor invoicing pace; confirm midway report submission tracks for Dec. 31, 2026.
Source: Staff Reports #26-048-CC (Mar. 24, 2026), #25-176-CC (Nov. 18, 2025), and PCE April 2026 monthly report; executed City–PCE Funding Agreement
Open questions (3 of 3 still open)
›Why does the sum of Fund 394 appropriations across FY 2024-27 (about $7.1M expense, $6.9M revenue) exceed the $4.5M total grant value? This is almost certainly multi-year carryforward and appropriation headroom — the same dollars showing up in more than one year as the project budget rolls forward, not actual additional money. Staff confirmation of the Fund 394 presentation across years would resolve it definitively.Open
Raised by Independent fiscal review (site owner) · June 2, 2026
No staff answer on record yet.
Source: FY 2026-27 Proposed Budget detail, Fund 394; Staff Report #26-048-CC (Mar. 24, 2026)
›What is the total expected construction-phase cost for the Belle Haven Child Development Center electrification, given the design is now approximately 90% complete and going to construction RFP?Open
Raised by Independent fiscal review (site owner) · June 2, 2026
No staff answer on record yet.
Source: Staff Report #26-048-CC (Mar. 24, 2026)
›Has the CEC formally agreed in writing that the e-bike and EV voucher program (Acterra), the BHCDF bundle program, and the solar and battery adders are within the grant's eligible use scope? The two executed amendments suggest yes, but the explicit eligibility language lives in the executed grant agreement, which is obtainable via Public Records Request.Open
Raised by Independent fiscal review (site owner) · June 2, 2026
No staff answer on record yet.
Source: Staff Reports #25-176-CC (Nov. 18, 2025) and #26-048-CC (Mar. 24, 2026)
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The questions above were developed as part of an independent review of the grant's public record (Council staff reports, the executed PCE funding agreement, and the PCE and BHCDF monthly reports), and each resolves to a City or partner source. Questions about the grant that are not yet answered in the public materials are tracked here so a Council member, journalist, or resident can bring them to City staff productively.
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)