California Public Utilities Commission Opens New Rulemaking on Biomethane

The California Public Utilities Commission has commenced a new rulemaking to implement Assembly Bill (AB) 1900, on the use of common carrier gas pipelines for biomethane. In the rulemaking, the CPUC will develop standards and requirements for biomethane injected into pipelines, as well as pipeline access rules to ensure non-discriminatory open access to the system. Under current tariffs, most gas utilities specifically decline to accept or transport gas from landfills. Under AB 1900, the CPUC is also directed to adopt policies and programs that promote the in-state production and distribution of biomethane. This aspect of AB 1900 is being handled in the CPUC’s existing proceeding on implementation of the state 33% RPS. The California Energy Commission is charged with implementing other provisions of AB 1900, including identifying impediments that limit procurement of biomethane in California and offering solutions to those impediments. 

In January 2013, the CPUC updated the scope of its 33% RPS proceeding to also implement Senate Bill (SB) 1122, requiring investor-owned utilities to procure at least 250 MW of electrical generation from new bioenergy projects. A third bioenergy bill, AB 2196, allowing electrical generating facilities using landfill or digester gas to qualify for the California RPS, will largely be implemented by the Energy Commission. This suite of legislation from the 2011-2012 California Legislative Session offers new opportunities in California for the bioenergy and biogas industries, after the setback suffered in March 2012 when the Energy Commission suspended the RPS-eligibility of biogas.

Governor Brown Signs Three Biogas Bills Into Law

Here's a California law update from my partner Wayne Rosenbaum in San Diego:

The California legislature continues to emphasize the importance of renewable energy for the State’s environment and economy. Of the renewable energy bills passed by the legislature and signed by the Governor this year, three of them focused on biogas. Some of the aspects of these bills actively encourage the increased use of biogas for electricity generation by calling on the California Public Utilities Commission (“CPUC”) to look at access to transmission facilities and setting minimum procurement quotas for public utilities. These new laws will also regulate the quality and sources of the biogas that can be used. Here’s a brief summary of some important provisions in each:

SB 1122 requires the CPUC to direct the electrical corporations (PG&E, SDG&E, and SCE) to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013.

AB 1900, chaptered as Health and Safety Code 25420 et seq., seeks to do three things primarily:

  1. Regulate chemicals of concern. AB 1900 requires state agencies to compile a list of, and regulate, compounds and elements of concern that could pose resins? to human health that are found at significantly higher concentrations in biogas than in natural gas. The bill also prohibits the sale or transmission of biogas generated at hazardous waste landfills.

     

  2. Identify barriers to procurement. AB 1900 requires the CPUC to hold public hearings to identify the impediments to procurement of biogas in California, including interconnections. It then requires the CPUC to adopt policies and programs to promote the in-state production and distribution of biogas.

     

  3. Adopt pipeline access rules. AB 1900 requires the CPUC to adopt pipeline access rules that ensure non-discriminatory access to the gas pipeline system for biogas generators.

Among other things, AB 2196 amends the definition of a renewable electrical generation facility under the California Energy Commission’s Renewable Energy Resources Program . The new definition provides that if the RPS program eligibility of a facility is based on the use of landfill gas, digester gas, or another renewable fuel delivered to the facility through a common carrier pipeline, the transaction for the procurement of that fuel, including the source of the fuel and delivery method must meet certain conditions including green biomethane claims and greenhouse gas reduction claims.