Portland's City Council approved the transfer of Zenith Energy's city franchise to I Squared Capital on Wednesday, but the vote did not complete the companies' business deal. Mayor Keith Wilson cast the deciding vote after councilors split 6-6, clearing a path for the Miami-based firm to take over Zenith's oil-by-rail and storage operations in Northwest Portland if the companies complete their arrangement. It was Wilson's second tie-breaking vote this year.
The council's vote split 6-6, according to Portland Mercury, with Wilson joining councilors Olivia Clark, Steve Novick, Elana Pirtle-Guiney, Dan Ryan, Loretta Smith, and Eric Zimmerman in voting yes while six other councilors voted no. It was the second time Wilson has been asked to break a tie on the council, following a vote in July over public safety funding, according to KPTV.
Zimmerman told KPTV that progressive councilors had encouraged him to support the transfer. The outlet also reported that an earlier attempt to approve it failed 5-6, with one councilor absent.
A Lawsuit Forced the Issue
The vote followed a legal challenge as well as council deliberations. Zenith sued the city in federal district court in July, alleging that officials had unnecessarily delayed the franchise transfer, according to the Mercury. The lawsuit formed part of the backdrop to Wednesday's decision.
The council's action allows the franchise to be transferred; it does not itself complete Zenith's business arrangement with ISQ. The Mercury's report did not detail the terms of that arrangement.
Years of Regulatory Trouble
Zenith's operations have drawn scrutiny from city and state regulators. The Mercury reported that the company constructed and used new piping for fossil and renewable fuel transport on at least 34 occasions from 2021 to 2024 without notifying the city or the Oregon Department of Environmental Quality.
Oregon DEQ initially paused a permitting process and fined Zenith more than $370,000 for those infractions before negotiating with the company on appeal, the outlet reported. Zenith's throughput has more than doubled since 2018, when the company promised state regulators and city officials that its operations would bring no new throughput, according to a March 2025 report from Street Roots.
On March 19, 2025, the Portland City Council voted 11-1 for a resolution directing Wilson to investigate potential violations of Zenith's franchise agreement, according to Street Roots. The franchise traces back to a 1991 agreement between the city and Chevron; it was extended for 20 years in 2017 and transferred to Zenith in 2018, the outlet reported.
Broader Push to Shrink Fuel Storage
The Zenith vote lands alongside a wider city effort to rein in fossil fuel infrastructure along the Willamette. A Bureau of Planning and Sustainability policy package would require the 11 companies operating at Portland's Critical Energy Infrastructure Hub to reduce fuel storage capacity by 20 percent by 2036, according to the Mercury. The city also received a federal grant in 2025 to develop a policy aimed at making the CEI Hub safer, according to testimony from Columbia Riverkeeper.
What the Transfer Leaves Unresolved
The approval concerns the franchise transfer; it does not specify here which franchise obligations would apply after the transfer or which separate permits govern operations. In a separate investigation, the City of Portland said it found no compliance issues or violations of the codes and regulations the city administers and enforces, according to the City of Portland. A county-commissioned study also modeled potential earthquake consequences at the hub. A Multnomah County summary says a Cascadia Subduction Zone earthquake could cause potential releases of 94.6 million to 193.7 million gallons from CEI Hub tanks. Those figures describe a scenario, not an event that has occurred; the summary gives a hub-wide estimate rather than a breakdown by nearby community.
The transfer can proceed, but Zenith and ISQ still need to complete their business arrangement. Portland officials have not publicly said whether the broader proposal to reduce storage at the CEI Hub will shape ISQ's future operations there.
