> ## Content Index > Fetch the complete content index at: https://www.raincrossgazette.com/llms.txt > Use this file to discover other available public pages before exploring further. # RPU Taps More Climate Auction Money for Power Costs as Board Debates Refunds - URL: https://www.raincrossgazette.com/rpu-taps-more-climate-auction-money-for-power-costs-as-board-debates-refunds/ - Published: 2026-10-06T12:00:15.000Z - Updated: 2026-10-06T12:00:16.000Z - Description: Board members debate whether to amend the city charter so customers can get direct refunds from the utility's greenhouse gas allowance sales. - Author: Micaela Ricaforte - Tags: City Hall, Budget & Finance Riverside Public Utilities (RPU) is using more of its greenhouse gas auction proceeds to cover renewable energy costs as board members weigh direct customer credits and press for progress on clean energy projects. An annual report presented to the Board of Public Utilities on Monday showed roughly $50 million in a restricted reserve account at the end of 2025\. Since then, RPU has used $34 million to reimburse its renewable energy budget in 2026, up from about $10.6 million in 2025, said Scott Lesch, the utility's assistant general manager for power resources. For electric customers, those reimbursements help cover power supply costs that otherwise would be paid through rates, staff said. A separate state requirement will direct proceeds from additional allowances transferred to RPU beginning in 2028 back to customers. Lesch anticipated RPU could begin issuing those credits in 2029. The board unanimously voted to receive and file the report without approving new spending. Members debated how quickly to use the funds and whether the city charter should be amended to allow direct refunds from existing proceeds. Under California's emissions program, now called [cap-and-invest](https://www.lao.ca.gov/Publications/Report/5097?ref=raincrossgazette.com), RPU [receives greenhouse gas allowances](https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-program/allowance-allocation?ref=raincrossgazette.com) to meet its emissions obligations. It must offer allowances it does not need for sale at quarterly state auctions, with the proceeds restricted to uses that benefit electric ratepayers and meet program requirements. RPU received about $27.8 million from those sales in 2025 and spent roughly $10.6 million, almost entirely on renewable energy purchases. About $29,300 went toward the citywide LED streetlight program. The utility reported that its funded programs had avoided or reduced 216,720 metric tons of carbon dioxide equivalent through 2025. Historically, RPU used the proceeds to reimburse renewable energy purchases above state requirements. In 2025, it expanded that practice to cover a portion of its general renewable energy purchases, which staff said is permitted under state regulations and city policy. Lesch said RPU typically spends about $75 million annually on renewable energy. He did not provide a current reserve balance, noting that additional auction revenue had also come in. Board Chair Brian Siana supported using the proceeds to cover those costs, saying customers would otherwise pay for the power through their bills. "That is effectively helping the ratepayer pay for our power," Siana said. ### Questions over direct refunds Direct bill credits from RPU's existing allowance proceeds face a legal hurdle under City Charter Section 1204, according to the staff report. That section specifies how utility revenues must be used. Staff concluded that refunds providing no exchange of value to the utility risk falling outside the permitted categories unless state law requires them. The coming state program creates that requirement for a separate pool of funds. Beginning in 2028, additional allowances will be transferred from natural gas utilities to electric utilities, and the proceeds must be returned to customers. That mandate applies to the additional allowances, rather than the existing reserve. Board member Gary Montgomery requested a more detailed analysis of how the charter and state rules interact. Deputy City Attorney Anthony Beaumont said the city attorney's office could provide a higher-level guide, while noting that some regulatory details remain uncertain. Board member Tom Evans, who said he has served on two charter review commissions, [urged the city to consider language expressly allowing refunds](https://www.raincrossgazette.com/runoff-election-prompts-faster-charter-review-appointment-process/). "Thinking ahead, why not put some language in the charter that does permit the return of these kind of funds to customers," Evans said. "I think we need to find a way to make it happen and not for ways to not make it happen," he added. Board member Rebeccah Goldware said staff should work within the existing charter and regulations rather than be asked to propose options that violate them. During public comment, resident Malissa McKeith suggested exploring tree planting as another use of the funds and considering a charter amendment to allow refunds. The discussion did not establish whether a tree-planting proposal would qualify. ### Charging stations advance as battery project stalls Staff also updated the board on three potential uses of the proceeds: fleet charging infrastructure, battery storage and local solar projects. RPU is reviewing proposals for electric vehicle charging infrastructure at utility facilities. Lesch said the utility could dedicate up to $10 million to the work, which is expected to take about two years. A proposed 36-megawatt battery storage facility intended to replace the aging Springs generation facility remains stalled because staff has not secured a suitable site sufficiently separated from homes. Lesch said restrictions associated with the March airfield prevent rebuilding at the Springs site. Staff is leaning toward having a developer finance the battery project through a power purchase agreement, rather than RPU paying for construction upfront. The report said staff no longer anticipates using greenhouse gas proceeds to develop the facility. Lesch estimated a total project cost of $60 million to $75 million and said the financing approach has not been finalized. Plans to restore the decommissioned solar facility at the Utility Operations Center had also been paused. Evans questioned how that fit with [a separate, council-approved public benefits spending plan](https://www.raincrossgazette.com/rpu-board-advances-34m-plan-for-solar-battery-and-efficiency-programs/) that included potential solar and battery projects at the Utility Operations Center and Emergency Operations Center. Staff said those projects remained under consideration and that their funding sources could change as plans developed. Lesch subsequently said staff would begin a request for proposals for the solar project. The board discussed tracking that work through its future-items process. RPU also faces a roughly 6% reduction in its allocated allowances for 2027 through 2030 under revised state rules. Decisions about allocations after 2030 have been deferred to a future rulemaking. Staff plans to bring proposed updates to the city's greenhouse gas proceeds policy back to the board by the end of the year or January, before seeking City Council approval.