BILL ANALYSIS Ó
AB 1900
Page 1
ASSEMBLY THIRD READING
AB 1900 (Gatto, et al.)
As Amended May 25, 2012
Majority vote
UTILITIES & COMMERCE 11-1 NATURAL
RESOURCES 6-3
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|Ayes:|Bradford, Fong, Fuentes, |Ayes:|Chesbro, Brownley, |
| |Furutani, Gorell, Roger | |Dickinson, Huffman, |
| |Hernández, Knight, Ma, | |Monning, Skinner |
| |Nestande, Swanson, | | |
| |Valadao | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Huffman |Nays:|Knight, Grove, Halderman |
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Ammiano, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
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SUMMARY : Clarifies existing law with respect to the injection
of biomethane into common carrier pipelines. Specifically, this
bill :
1)Requires 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)Requires 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)Prohibits a gas producer from knowingly selling, supplying,
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transporting, or purchasing gas collected from a hazardous
waste landfill.
4)Requires the PUC to consider adopting pilot projects involving
the injection of biomethane into common carrier pipelines by
January 1, 2014.
5)Requires the PUC to adopt pipeline access rules that will
ensure nondiscriminatory open access to each corporation's gas
pipeline system to any party for the purpose of physically
interconnecting with the gas pipeline system and effectuating
the delivery of gas.
EXISTING LAW :
1)Sets exposure limits for vinyl chloride, as well as testing
and Proposition 65-type notice requirements, for landfill gas.
2)Requires the PUC to adopt rules 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 (RPS)
is 33% by 2020.
6)Requires investor owned utilities (IOUs), publicly owned
utilities (POUs), and retail sellers to meet RPS.
7)Requires RPS-eligible facilities must be within the Western
Electricity Coordinating Council (WECC), Categories 1, 2 or 3.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the PUC will incur ongoing costs of around $270,000
for two regulatory analysts and an administrative law judge to
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oversee implementation of all requirements, as outlined above
and one-time cost in the range of $250,000 for consultants to
develop gas testing protocols. ÝPublic Utilities Reimbursement
Account]
COMMENTS : 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.
As a result of state law, IOUs (Sempra and Pacific Gas and
Electric (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.
Landfill gas may have constituents present in the gas that could
adversely impact human health. Some constituents (such 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, IOUs
do not allow landfill gas into their pipelines. 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.
CEC data : According to a California Energy Commission (CEC)
estimate, 358 megawatts (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, four 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
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were equipped with a small generation facility (such as a fuel
cell). As electricity generators these facilities would qualify
for 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. San Diego Gas and Electric
(SDG&E) currently contracts with landfills to buy electricity
from landfill generation facilities.
Pilot program : This bill directs the PUC to consider adopting
pilot projects involve injecting
biomethane into common carrier pipelines by January 1, 2014.
The pilot projects should satisfy all of the following
requirements: 1) are capable of being safely implemented; 2)
demonstrate the accuracy of PUC's testing protocols pursuant to
statute, demonstrate the level of consistency of the quality of
gas injected into the gas pipeline system, and demonstrate the
capacity of biomethane to be procured at the lowest cost and
best fit.
RPS program : In 2007, 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, CEC introduced the term "pipeline
biomethane" and clarified delivery requirements for biomethane
for use in an RPS-eligible generating facility.
A number of entities subject to RPS requirements have entered
into contracts with biomethane suppliers and have achieved CEC
certification of their facilities for RPS compliance. CEC 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 flowing.
Similar legislation : The treatment of pipeline biomethane is
also being addressed in AB 2196
(Chesbro) (currently in the Senate). 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
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facility by CEC.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
FN: 0003927