BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 1900 (Gatto) - Renewable energy resources: biomethane.
          
          Amended: August 6, 2012         Policy Vote: E,U&C 11-0  EQ  7-0
          Urgency: No                     Mandate: Yes
          Hearing Date: August 6, 2012                      Consultant: 
          Bob Franzoia  
          
          This bill meets the criteria for referral to the Suspense File.


          Bill Summary: AB 1900 would require the Office of Health Hazard 
          Assessment (OEHHA), the California Energy Commission (CEC) and 
          the Public Utilities Commission (PUC) to take actions related to 
          the delivery of biomethane gas within the state for the purposes 
          of electricity generation.

          Fiscal Impact: $139,000 in 2012-13 and 2013-14 from the Public 
          Utilities Reimbursement Account to OEHHA for a health and safety 
          study of landfill gas.
              $100,000 in 2012-13 and 2013-14 from the Energy Resources 
              Programs Account (General Fund) to the CEC for hearings to 
              identify impediments to interconnections and to develop 
              solutions.
              $150,000 in 2012-13 and 2013-14 from the Public Utilities 
              Reimbursement Account to the PUC to set standards for 
              landfill gas, adopt testing protocols and policies that 
              promote in-state production and distribution of biomethane, 
              $120,000 annually thereafter to monitor standards, protocols 
              and, as necessary, pilot projects.

          Background: As noted in the policy committee analysis, 
          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 with pipelines 
          being the preferred method of transportation.  This energy 
          release allows biogas to be used as a fuel. The methane can also 
          be used onsite, such as at dairies, in anaerobic digesters where 
          it is typically used in a combustion engine to convert the 
          energy in the gas into electricity and heat.









          AB 1900 (Gatto)
          Page 1


          As a result of state law, California's major gas corporations, 
          Sempra Utilities and Pacific Gas and Electric, operate common 
          carrier pipelines but will not allow biomethane from landfills 
          to be injected into the pipelines they operate.  

          Landfill gas may have constituents present that could adversely 
          impact human health.  Some constituents, for example, lead, 
          arsenic and 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, gas 
          corporations do not allow landfill or dairy gas into their 
          pipelines.  Gas corporations are also concerned about potential 
          damage to the pipelines themselves, depending upon what is in 
          the gas, moisture, for example, could cause corrosion.  

          Related Legislation: AB 2196 (Chesbro) would clarify the 
          definition of an eligible renewable electrical generation 
          facility to include a facility that generates electricity 
          utilizing biomethane delivered through a common carrier pipeline 
          if the source and delivery of the fuel can be verified by the 
          CEC.  AB 2196, which contains contingent enactment language with 
          AB 1900, is on today's agenda.

          Staff Comments: SB 1018 (Budget Committee) Chapter 39/2012 
          appropriated $139,000 from the Public Utilities Reimbursement 
          Account to OEHHA for additional staffing to identify 
          constituents of biomethane injected into a common carrier 
          pipeline that are reasonably anticipated to be hazardous to 
          human health and to determine inhalation standards for those 
          identified constituents.