Breaking the Split-Incentive: Franklin Energy's Oregon Multifamily Play

PORT WASHINGTON, WISCONSIN – September 23, 2026 — In the world of commercial real estate and utility infrastructure, multifamily housing has long been considered the "frozen sector." It is a notoriously complex segment where the mechanics of resilience are tested by a stubborn structural barrier: the split-incentive dilemma. Landlords are reluctant to invest capital in building upgrades when the financial upside—lower utility bills—flows directly to their tenants. Conversely, tenants lack the authority and the long-term incentive to upgrade properties they do not own.

Today, Energy Trust of Oregon announced a strategic move to thaw this frozen sector, selecting Franklin Energy to lead the implementation of its next-generation multifamily energy efficiency program. The contract, which expands a partnership spanning more than a decade, represents a fundamental shift in how utilities and program administrators approach consistent value creation and decarbonization in residential real estate.

Historically, Energy Trust’s commercial and existing buildings sector commands an annual expenditure portfolio between $40 million and $65 million, with multifamily offerings representing roughly $12 million to $20 million of that total. But as the regulatory landscape tightens and the low-hanging fruit of basic energy efficiency is exhausted, deploying that capital effectively requires a more sophisticated playbook. Franklin Energy’s mandate is to move beyond superficial upgrades and orchestrate deep, systemic building improvements across the territories of Portland General Electric, Pacific Power, NW Natural, Cascade Natural Gas, and Avista.

Solving the Split-Incentive Dilemma

For years, utility-administered efficiency programs relied heavily on direct-install kits—LED lightbulbs, low-flow aerators, and showerheads. While these measures delivered inexpensive savings, market saturation and tightening federal standards have diminished their impact. The new frontier requires comprehensive retrofits: advanced heat pumps, smart controls, and deep envelope insulation.

To bridge the gap between landlord costs and tenant benefits, Franklin Energy is deploying a multi-pronged approach that combines advanced building-level analytics with a stacked incentive model. By aggregating interval consumption data, the program can identify high-return operational upgrades that require minimal upfront capital.

Past pilot programs have proven the viability of this model. In a recent Multifamily Strategic Energy Management pilot, the partnership achieved 2% electric savings and 3% gas savings purely through operations, maintenance, and behavioral adjustments—such as HVAC scheduling optimization and unit-turn checklists. By proving that savings can be generated without massive immediate capital outlays, the program builds the necessary trust with property owners to pursue subsequent 20% to 30% deep-retrofit capital projects.

“Energy Trust of Oregon has been an important partner to Franklin Energy for more than a decade, and being selected to lead this program represents an exciting next chapter in that relationship,” said Antonio Corradini, Franklin Energy President of Commercial and Industrial Program Delivery. “Multifamily buildings present tremendous opportunities for energy savings, but realizing those savings requires more than incentives alone. It takes strong community relationships, smart use of data, and a customer experience that makes participation easier. We’re proud to bring those pieces together for Energy Trust and the communities it serves.”

Engineering Equity in the Frozen Sector

The most critical component of this expanded initiative is its focus on historically underserved communities. Oregon’s multifamily sector represents roughly a fifth of the state's residential housing units, yet it captures a disproportionately small share of utility-administered efficiency capital. Low-income households often spend upward of 8% to 10% of their income on energy bills, enduring the highest energy burdens in substandard housing stock that lacks adequate cooling during extreme heat events.

Addressing this inequity requires dismantling administrative and cultural barriers. Subsidized and affordable housing operators frequently operate under severe administrative constraints, lacking the bandwidth to navigate complex utility rebate forms. To solve this, Franklin Energy is introducing a Program Navigator mechanism. These navigators will act as single points of contact for property managers and tenants, guiding projects from free site audits through contractor bid collection and incentive stacking.

Furthermore, the implementation team is structured to shift away from traditional top-down corporate delivery toward localized, culturally embedded engagement. Franklin Energy has assembled a consortium of specialized technical and equity consulting subcontractors, including TRC Companies, Kambo Energy Group, Unrooz Solutions, Beira Consulting, Baan Consulting, and ASK Energy.

This consortium is designed to meet stringent diversity spending mandates, ensuring that a significant portion of program delivery value is allocated to state-certified minority-owned, women-owned, and emerging small businesses. Through Kambo Energy Group’s equity-centered methodology, the program will deploy in-language peer educators capable of delivering tenant engagement in multiple languages, ensuring that non-English-speaking communities are not left behind in the clean energy transition.

“Some of the greatest opportunities for energy efficiency are also among the most complex to reach,” noted Amanda Zuniga, Energy Trust of Oregon Program Manager – Commercial. “Our job is to make that complexity invisible to the customer—connecting the right expertise, technology, and local partners behind the scenes so property owners and residents have a clear path to meaningful energy savings.”

The First-Fuel Playbook for Grid Resilience

Beyond immediate affordability and equity, the Franklin Energy contract is a critical mechanism for broader grid resilience and state-level decarbonization. Under Oregon’s ambitious clean energy targets, codified in House Bill 2021, the state's major electric utilities are mandated to eliminate greenhouse gas emissions associated with retail electricity by 2040.

Achieving a zero-carbon grid cannot rely solely on the deployment of utility-scale renewable generation. Energy efficiency remains the first-fuel demand-side resource, essential for offsetting peak capacity constraints as transportation and building heating rapidly electrify. By targeting high-efficiency condensing boilers, heat recovery systems, and deep building envelope insulation, the program also addresses the stringent decarbonization compliance rules facing the region's natural gas utilities.

The integration of advanced analytics sets the foundation for transforming multifamily housing into active grid assets. Grid-interactive efficient buildings represent the future of urban energy management. By coordinating smart thermostat load shifting, heat pump water heater controls, and potential battery energy storage, the program can aggregate interval data to enable demand flexibility. This mitigates peak load strains on regional transmission and substation assets, turning passive residential complexes into dynamic participants in grid stabilization.

As the broader economy navigates the unpredictable headwinds of energy transitions and climate mandates, the collaboration between Energy Trust of Oregon and Franklin Energy offers a blueprint for consistent value creation. By aligning landlord incentives, prioritizing tenant equity, and leveraging building-level data for grid flexibility, the initiative demonstrates how targeted program design can transform a historically frozen sector into a cornerstone of a resilient, decarbonized future.