BILL ANALYSIS Ó
AB 1900
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Date of Hearing: April 16, 2012
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1900 (Gatto) - As Amended: April 11, 2012
SUBJECT : Renewable energy resources: biomethane.
SUMMARY : Clarify existing law with respect to the injection of
biomethane into common carrier pipelines and the treatment of
biomethane in the Renewable Portfolio Standard (RPS).
Specifically, this bill :
1)Require the California Public Utilities Commission (PUC) to
identify all constituents that may be found in landfill gas
that is to be injected into a common carrier pipeline.
2)Require the PUC to develop testing protocols for gas collected
from a solid waste landfill that is to be injected into a
common carrier pipeline.
3)Prohibit a gas producer from knowingly selling, supplying,
transporting, or purchasing gas collected from a hazardous
waste landfill.
4)Revise the method used by the California Energy Commission
(CEC) for certifying facilities using pipeline biomethane.
5)Extend the period of time allowed for facilities certified
using pipeline biomethane to be grandfathered for purposes of
RPS procurement requirements.
6)Creates a biomethane pilot projects at the PUC to assess
pipeline biomethane quality and procurement at least cost-best
fit levels and adopt policies and programs to facilitate
biomethane for energy and transportation uses.
7)Revise the certification and pre-certification procedures used
by the CEC to qualify RPS-eligibility for facilities using
pipeline biomethane.
8)Allows the owner or operator of a facility with a contract
executed for procurement of pipeline biomethane by January 1,
2013 to be certified or pre-certified by the CEC for RPS
purposes.
9)Replaces the term "renewable energy credits" with
"environmental attributes" and applies the compliance
requirements for purposes of quantifying renewable energy
credits at facilities with certified environmental attributes
in accordance with the CEC accounting system used to verify
compliance with the RPS.
10)Requires the PUC to adopt a rule consistent with SDG&E's Rule
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39 in its Gas Tariff Rule Book.
EXISTING LAW
1)Sets exposure limits for vinyl chloride, as well as testing
and Prop 65-type notice requirements, for landfill gas.
2)Requires PUC to adopt rules related to specify the maximum
amount of vinyl chloride that may be found in landfill gas
that is to be injected into a common carrier pipeline.
3)Prohibits gas corporations from knowingly and intentionally
exposing any customer, employee, or other person to gas from a
landfill if that gas contains any chemical known to the state
to cause cancer or reproductive toxicity without first giving
clear and reasonable warning to that individual.
4)Requires increasing amounts of electricity generated per year
to be obtained from eligible renewable energy resources.
5)Specifies that California's Renewable Portfolio Standard is
33% by 2020.
6)Requires investor owned utilities (IOUs), publicly owned
utilities (POUs), and retail sellers to meet the RPS.
7)Requires all RPS-eligible facilities must be within the
Western Electricity Coordinating Council (WECC), Categories 1,
2 or 3.
8)Establishes procurement category requirements for eligible
generation and deadlines for reaching targets:
Category 1 : Directly connected or scheduled to a California
Balancing Authority, at least:
50% by 12/2013
65% by 12/2016
75% by 12/2020 and thereafter
Category 2 : Must be located within the WECC transmission grid
and the electricity must be firmed and shaped with substitute
electricity to provide incremental electricity that is
scheduled into a California Balancing Authority, no minimum or
maximum.
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Category 3 : Unbundled renewable energy certificates, no more
than:
25% by 12/2013
15% by 12/2016
10% by 12/2020 and thereafter
9)Requires that facility counted toward RPS to have a first
point of interconnection to the transmission network outside
the state, within the WECC service area.
10)Allows the PUC to authorize the IOUs to conduct research,
development and demonstration programs.
FISCAL EFFECT : Unknown
COMMENTS :
1)According to the author, this bill does six things:
a. Clarifies use of biomethane under the RPS
b. Breaks down barriers to using in-state biomethane
c. Bans landfill gas from hazardous waste landfills
from in-state pipelines
d. Amends CEC certification processes related to
biomethane
e. Establishes a monitoring system at the CEC to track
RPS credits for biomethane to avoid potential
double-counting
f. Establishes biomethane pilot projects
2)Biomethane is a renewable fuel that is produced at several
types of facilities, including dairy farms and landfills. The
gas can be collected and then transported to a generation
facility where it can be used to make electricity.
Transportation of biofuels via truck or rail is not
economically feasible. Transport via pipeline is the preferred
method.
3)As a result of state law, the IOUs (Sempra and PG&E) operate
common carrier pipelines but will not allow biomethane from
landfills to be injected into the pipelines they operate.
Biomethane from dairies is tested and allowed. Pipeline
operators may or may not have similar restrictions.
4)Landfill gas may have constituents present in the gas that
could adversely impact human health. Some constituents (such
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as lead or arsenic or cadmium) could cause cancer or birth
defects. Since the delivery of the gas to a household
appliance could inadvertently provide close exposure to these
constituents, the IOUs do not allow landfill gas into their
pipelines. The IOUs are also concerned about potential damage
to the pipelines themselves, depending upon what is in the gas
- moisture, for example, could cause corrosion. This bill
amends the laws currently restricting the injection of
landfill gas into common carrier pipelines by requiring the
PUC to adopt rules for landfill gas to be injected into common
carrier pipelines and banning landfill gas from common carrier
pipelines.
The reference to the "no significant test levels" refers to a
test that is based on exposures in micrograms per day. This
was developed for exposure to constituents in the air and may
not be the correct measurement units for landfill gas. The
author may wish to consider the following amendment:
On page 6, modify the sentence that begins in line 2:
The maximum amount adopted by the commission shall not exceed
the equivalent of the no significant risk level set in Section
25705 of Title 27 of the California Code of Regulations.
The author may wish to consider the following amendments to
clarify the issue of injecting landfill gas into common
carrier pipelines:
On Page 6, lines 33 through 38: replace as follows:
(1) In developing the protocols, the Public Utilities
Commission shall consider environmental protection, the
protection of public health and safety, and the environmental
cobenefits of achieving the renewables portfolio standard and
of promoting the use of landfill gases that otherwise would be
flared by, instead, directing the landfill gases to a
productive use. Recognizing the potential environmental
benefit of landfill gas that meets required standards and
specification, the Public Utilities Commission shall ensure
that adopted protocols provide for efficient testing
procedures that identify accurately and where needed,
continuously, levels of constituents relative to the adopted
standards and specifications.
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5)According to a CEC estimate, 358 MW is potentially available
from new landfill gas development. Of these landfills, some
are small and are therefore unlikely to be developed for gas
by 2020. Many are not near a gas transmission line. Of 10
landfills operated by Waste Management, 4 are sufficiently
close to a suitable pipeline with a sufficient volume of gas
to be considered for development for landfill gas. Waste
Management estimates around 150 MW of in-state gas that could
be developed in California for delivery to a generation
facility. There is also the potential to produce electricity
at a landfill if it were equipped with a small generation
facility (such as a fuel cell). As electricity generators
these facilities would qualify for the RPS. They are also
eligible to bid into the utility RPS solicitations, the
Reverse Auction solicitations, and the Feed in Tariff. Some
landfills currently have fuel cells and use the electricity
generated on site. SDG&E currently contracts with landfills to
buy electricity from landfill generation facilities.
This bill directs the PUC to create biomethane pilot projects
to assess pipeline biomethane quality and procurement at least
cost-best fit levels and adopt policies and programs to
facilities. The author may wish to specify a date when these
projects are expected to begin and when results of the
assessment would be made available. The author may wish to
direct the PUC to specify minimum electricity procurement
targets for the IOUs to procure electricity from landfill gas
in their annual procurement update.
6)In 2007 the CEC addressed RPS program eligibility for
biomethane as a separate category of renewable resources was
first recognized and addressed using the natural gas pipeline
system to transport biomethane to a designated power plant for
use in generating electricity. In 2011 the CEC introduced the
term 'pipeline biomethane" and clarified delivery requirements
for biomethane for use in an RPS-eligible generating facility.
7)A number of entities subject to the RPS requirements have
entered into contracts with biomethane suppliers and have
achieved Energy Commission certification of their facilities
for RPS compliance. The Energy Commission has also allowed
pre-certification of facilities that have not yet entered into
contracts with biomethane suppliers. These facilities cannot
achieve certification until the biomethane is actually
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flowing.
8)In March 2012, the CEC suspended new requests to certify
facilities using pipeline biomethane for RPS compliance in
order to allow time for the Legislature to consider how
pipeline biomethane should be treated in the RPS program.
This bill will clarify that facilities with contracts signed
by January 1, 2013 will be allowed to certify their facilities
that use pipeline biomethane. This bill also specifies
criteria to be used in certification of facilities and allows
this to be applied retroactively if the facility meets
specified criteria.
9)The treatment of pipeline biomethane is also being addressed
in AB 2196 (Chesbro). AB 2196 also allows eligibility of a
generation facility that uses landfill gas, digester gas, or
another renewable fuel delivered to the facility through a
common carrier pipeline and requires verification of the fuel
transaction and certification of the facility by the CEC.
10)Suggested amendments, including one technical correction
(item e, below):
a) Specify a date when the biomethane pilot projects are
expected to begin and when results of the assessment would
be made available.
b) Direct the PUC to specify minimum electricity
procurement targets for the IOUs to procure electricity
from landfill gas in their annual procurement update.
c) On page 6, modify the sentence that begins in line 2:
The maximum amount adopted by the commission shall not
exceed the equivalent of the no significant risk level set
in Section 25705 of Title 27 of the California Code of
d) On Page 6, lines 33 through 38: replace as follows:
(1) In developing the protocols, the Public Utilities
Commission shall consider environmental protection, the
protection of public health and safety, and the
environmental cobenefits of achieving the renewables
portfolio standard and of promoting the use of landfill
gases that otherwise would be flared by, instead, directing
the landfill gases to a productive use. Recognizing the
potential environmental benefit of landfill gas that meets
required standards and specification, the Public Utilities
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Commission shall ensure that adopted protocols provide for
efficient testing procedures that identify accurately and
where needed, continuously, levels of constituents relative
to the adopted standards and specifications.
e) Lines 24-28 on page 17 should read as follows:
(c) In certifying or pre-certifying an eligible renewable
energy resource utilizing biomethane where the owner or
operator of the facility executed a contract for
procurement of a renewable source of energy pursuant to
this section after January 1, 2013, determine which one of
the following biomethane source categories is applicable:
REGISTERED SUPPORT / OPPOSITION :
Support
BioFuels Energy, LLC (BFE)
Bloom Energy
California Association of Sanitation Agencies
California State Council of Laborers
Coalition For Renewable Natural Gas
Flotech Services, North America
Greenlane Biogas, North America
Sanitation Districts of Los Angeles County
Sonoma County Water Agency
Waste Management
Opposition
California Wind Energy Association (CalWEA) (unless amended)
Californians Against Waste
Clean Power Campaign (CPC) (unless amended)
Large-scale Solar Association (LSA)
Northern California Recycling Association (NCRA)
Southern California Edison (SCE)
The Utility Reform Network (TURN) (unless amended)
Union of Concerned Scientists (UCS) (unless amended)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
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