(1) As used in this section:

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(a) ‘Bulk fuel’ means liquid petroleum, propane, coal, wood, wood-based products or other fuel delivered and stored until used on-site by the final consumer to produce energy.

(b) ‘Climate zone’ means a heating or cooling climate zone assigned to a county by the Bonneville Power Administration.

(c) ‘Electric resistance heat’ means heat produced by passing an electric current through a material that has high resistance, such as used in an electric baseboard, wall or space heater.

(d) ‘Electric utility’ has the meaning given that term in ORS § 757.600.

(e) ‘Eligible entity’ means a:

(A) Local government as defined in ORS § 174.116;

(B) Local housing authority;

(C) Nonprofit organization;

(D) Federally recognized Indian tribe in Oregon;

(E) Coordinated care organization as defined in ORS § 414.025;

(F) Community action agency as described in ORS § 458.505;

(G) Manufactured dwelling park nonprofit cooperative as defined in ORS § 62.803; or

(H) An electric utility.

(f) ‘Energy burden’ means the percentage of gross household income spent on energy costs.

(g) ‘Environmental justice communities’ has the meaning given that term in ORS § 469A.400.

(h) ‘Heat pump’ means an air-source or ground-source heat pump with an energy efficiency rating set by the State Department of Energy under subsection (5) of this section or a higher efficiency rating.

(i) ‘Region’ means an economic development district in Oregon, designated by the Economic Development Administration of the United States Department of Commerce, for which a regional solutions center has been established under ORS § 284.754.

(2) The Heat Pump Deployment Program is established within the State Department of Energy. The purpose of the program is to award grants to one eligible entity for each region and federally recognized Indian tribe in Oregon to provide financial assistance, including loans, grants, rebates or incentives, for the purchase and installation of heat pumps and related upgrades to individuals who reside within that region or who are members of that tribe.

(3)(a) To be eligible to receive a grant from the Heat Pump Deployment Program, an eligible entity must establish that it:

(A) Serves or represents:

(i) An environmental justice community or communities within a region; or

(ii) Members of a federally recognized Indian tribe in Oregon; and

(B) Has the capacity to administer grant funds received under this section.

(b) An eligible entity applying for a grant may partner with other eligible entities, but the entity that is awarded the grant shall take a lead role in administering grant funds and providing financial assistance.

(c) An eligible entity that serves or represents a community that is located within more than one region may apply for a grant only for the region within which the greatest percentage of the individuals of that community reside.

(d) An eligible entity that serves a specific geographical area may propose, in consultation with any electric utility that serves the area, that the department use alternative boundaries to define a region. The department may approve the use of alternative boundaries to define a region provided that a minimum percentage, as determined by the department, of the eligible entity’s specific geographical area is within the alternative boundaries of the region.

(e) If an electric utility is awarded a grant from the Heat Pump Deployment Program:

(A) The electric utility may provide financial assistance from grant funds only to individuals who reside within the electric utility’s service area and within the region for which the electric utility is awarded a grant.

(B) The electric utility shall partner with one or more other eligible entities to provide financial assistance from grant funds to individuals who reside outside the electric utility’s service area and within the region for which the electric utility is awarded a grant.

(4) An eligible entity that is awarded a grant from the Heat Pump Deployment Program shall:

(a) Use the grant funds to cover up to:

(A) One hundred percent of the purchase and installation costs of a heat pump.

(B) A percentage, as determined by the department, of the costs for related upgrades that support or enable the use of a heat pump, including:

(i) A new electrical panel or other upgrades to the electrical system of a home or building.

(ii) Weatherization or other structural repairs to reduce home or building heat and cooling loss.

(iii) Upgrades to improve the airflow of a home or building.

(b) Prioritize the provision of financial assistance to:

(A) Environmental justice communities.

(B) Individuals who rely on bulk fuels or electric resistance heating.

(C) Individuals who reside in a home or structure that does not have a functioning heating or cooling system.

(c) Enter into a performance agreement with the department as described in subsection (8) of this section.

(5) The department shall:

(a) Award grants using available funds in the Heat Pump Deployment Fund established under ORS § 469B.466.

(b) In awarding grants, give preference to eligible entities with:

(A) Experience in administering state grant programs or programs similar to the Heat Pump Deployment Program.

(B) Experience with community program development within a region or with members of a tribe.

(C) Connections to communities within a region or with members of a tribe.

(c) Develop criteria for allocating the amount of each grant based on the energy burden of residences within the region or of members of the tribe and the climate zones that make up the counties of that region or of tribal lands.

(d) Permit a review of awarded grant funds by members of communities who may benefit from the Heat Pump Deployment Program.

(e) In consultation with electric utilities, the Bonneville Power Administration and the nongovernmental entity that administers public purpose charge moneys collected under ORS § 757.612 (3)(d), set the minimum energy efficiency rating that a heat pump must have to be eligible for grant funds. The minimum energy efficiency rating for a heat pump set by the department must be equal to or greater than federal energy efficiency rating standards for heat pumps.

(6) The department may not use moneys collected through the energy resource supplier assessment required under ORS § 469.421 (8) to fund grants awarded under the Heat Pump Deployment Program.

(7) The department may:

(a) Establish a maximum amount of grant funds payable toward the purchase and installation of a heat pump and related upgrades.

(b) Permit the use of loans, grants, rebates or incentives offered by an electric utility or other programs toward any costs of the purchase and installation of a heat pump and related upgrades not covered by the Heat Pump Deployment Program.

(c) Provide information to individuals receiving financial assistance from the Heat Pump Deployment Program about other loans, grants, rebates or incentives that may be offered by an electric utility or other programs.

(d) Develop criteria for how specific loans, grants, rebates or incentives offered by an electric utility or other programs may be used toward the costs of the purchase or installation of a heat pump and related upgrades.

(e) Establish incentives to encourage the purchase and installation of heat pumps and related upgrades that have higher efficiency ratings.

(f) Establish incentives for the purchase and installation of a heating or cooling device that has an efficiency rating similar to or higher than that of a heat pump and that provides additional benefits such as improving indoor air quality or lowering an individual’s energy burden.

(g) Develop program procedures and practices that align with the reporting and other requirements of loans, grants, rebates or incentives offered by an electric utility or other programs.

(h) Require, by rule, that eligible entities notify electric utilities of a heat pump installation and whether grant funds may be used for necessary electric distribution system upgrades associated with the installation of the heat pump.

(8) Before receiving a grant under this section, an eligible entity shall enter into a performance agreement with the department that:

(a) Indicates the purposes for which the grant funds may be used;

(b) Prohibits the eligible entity from using more than 15 percent of awarded grant funds for administrative expenses and marketing costs;

(c) Includes the repayment provisions set forth in subsection (9) of this section;

(d) Permits the department to conduct audits and investigations of the eligible entity regarding the use of grant funds; and

(e) Requires the eligible entity to provide reports as required by subsection (10) of this section.

(9) An eligible entity must repay to the department, in whole or in part, grant funds received under this section to the extent that:

(a) The eligible entity does not use the grant funds in accordance with the provisions of the performance agreement executed between the department and the eligible entity under subsection (8) of this section; or

(b) The Director of the State Department of Energy determines that the eligible entity must repay all or part of the grant funds on grounds of misappropriation, fraud or similar reasons after auditing or investigating the eligible entity’s operations and conducting a contested case hearing under ORS § 183.413 to 183.470.

(10) Each eligible entity that receives a grant under this section shall report to the department each year concerning the status and use of grant funds for the period of July 1 to June 30. The report must be submitted on a schedule determined by the department. The report may not disclose the personal information of the recipients of financial assistance under the program. The report must include:

(a) A detailed description of the eligible entity’s use of grant funds;

(b) A list of each loan, grant or other financial assistance that the eligible entity has provided and, where applicable, a full accounting of the repayment status of the loans;

(c) The nature and amounts of the administrative expenses and marketing costs the eligible entity has incurred in providing loans, grants and other financial assistance under the program; and

(d) Any other information required by the department.

(11) The department shall adopt rules to carry out the provisions of this section. The rules shall be developed in consultation with:

(a) The Bureau of Labor and Industries on issues related to the workforce.

(b) The Building Codes Division of the Department of Consumer and Business Services on issues related to building codes and commissioning.

(c) The Housing and Community Services Department to ensure the Heat Pump Deployment Program complements any existing programs or services.

(d) The Department of Environmental Quality on issues of air quality related to bulk fuels and to ensure the Heat Pump Deployment Program complements any existing programs or services.

(e) The Oregon Health Authority on any health impacts and health impact data related to the Heat Pump Deployment Program and to ensure the program complements any existing programs or services.

(f) Electric utilities and utility program administrators on any impacts the Heat Pump Deployment Program may have on utility systems or services and to ensure the program complements any existing programs, incentives or services.

(g) Nonprofit organizations, housing providers, heat pump technicians and other stakeholders as appropriate. [2022 c.86 § 14; 2023 c.442 § 73]