BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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                                 THIRD READING


          Bill No:  AB 1900
          Author:   Gatto (D), et al.
          Amended:  8/6/12 in Senate
          Vote:     21

           
           SENATE ENERGY, UTIL. & COMMUNIC. COMM.  :  11-0, 6/25/12
          AYES:  Padilla, Fuller, Berryhill, Corbett, De León, 
            DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Wright
          NO VOTE RECORDED:  Simitian, Strickland

           SENATE ENVIRONMENTAL QUALITY COMMITTEE  :  7-0, 7/2/12
          AYES:  Simitian, Strickland, Blakeslee, Hancock, Kehoe, 
            Lowenthal, Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/16/12
          AYES:  Kehoe, Walters, Alquist, Dutton, Lieu, Price, 
            Steinberg
           
          ASSEMBLY FLOOR  :  72-1, 5/31/12 - See last page for vote


           SUBJECT  :    Renewable energy resources:  biomethane

           SOURCE  :     Author


           DIGEST  :    This bill requires 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.

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           ANALYSIS  :    

          Existing law:

          1. Requires the PUC to specify the maximum amount of vinyl 
             chloride that may be found in landfill gas. 

          2. Prohibits a gas producer from knowingly selling, 
             supplying, or transporting to a gas corporation, and a 
             gas corporation from knowingly purchasing, landfill gas 
             containing vinyl chloride in a concentration exceeding 
             the maximum amount determined by the PUC. 

          3. Requires a person who produces, sells, supplies, or 
             releases landfill gas for sale offsite to a gas 
             corporation to sample and test, bimonthly, the gas at 
             the point of distribution for chemicals known to the 
             state to cause cancer or reproductive toxicity.

          4. Requires the OEHHA to evaluate the environmental and 
             health risks posed by various hazardous substances.

          The Warren-Alquist State Energy Resources Conservation and 
          Development Act establishes the State Energy Resources 
          Conservation and Development Commission (Energy Commission) 
          and requires it to prepare an integrated energy policy 
          report on or before November 1, 2003, and every two years 
          thereafter.  The Act requires the report to contain an 
          overview of major energy trends and issues facing the 
          state, including, but not limited to, supply, demand, 
          pricing, reliability, efficiency, and impacts on public 
          health and safety, the economy, resources, and the 
          environment.

          This bill:

          1. Requires OEHHA to identify all constituents that may be 
             found in landfill gas that is to be injected into a 
             common carrier pipeline and that could adversely impact 
             the health and safety of the public, and to specify the 
             maximum amount of those constituents that may be found 
             in that landfill gas. 

          2. Requires the PUC to develop reasonable and prudent 

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             testing protocols for gas collected from a solid waste 
             landfill that is to be injected into a common carrier 
             pipeline to determine if the gas contains any of the 
             identified constituents at levels that exceed the 
             standards set by OEHHA. 

          3. Prohibits a gas producer from knowingly selling, 
             supplying, transporting, or purchasing gas collected 
             from a hazardous waste landfill.

          4. Requires the Energy Commission to hold public hearings 
             to identify impediments that limit procurement of 
             electricity generated from biomethane in California, 
             including, but not limited to, impediments to 
             interconnection. 

          5. Require the Energy Commission to offer solutions to 
             those impediments as part of the above-mentioned report. 


          6. Require the PUC to adopt policies and programs that 
             promote the in-state production and distribution of 
             biomethane.

           Background
           
           Biomethane in California  .  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.  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.

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


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          Landfill gas may have constituents present that could 
          adversely impact human health.  Some constituents (e.g. 
          lead, arsenic, 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 or dairy 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.  
          The CEC estimates that 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.  According to the Assembly Natural 
          Resources Committee, 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 were equipped with a small 
          generation facility (such as a fuel cell).  As electricity 
          generators these facilities would count toward a utility's 
          requirements under the Renewable Portfolio Standard (RPS).  
          Owners and developers of landfill gas facilities can also 
          bid into the utility RPS solicitations, the Reverse Auction 
          solicitations, and the Feed in Tariff.  Some landfills 
          currently have fuel cells or combustion turbines and use 
          the electricity generated on site.  

           IOU procurement  .  California's three largest electric 
          utilities all have contracts in their renewable portfolios 
          which use biomethane gas onsite at dairies and landfills to 
          generate electricity.  San Diego Gas and Electric has 13 
          landfill gas projects totaling almost 40 MW and a few small 
          dairy digester gas projects.  Southern California Edison 
          advises that it has 14 landfill and dairy contracts with a 
          total capacity of 139 MW.  Pacific Gas and Electric reports 
          eight dairy contracts for 10 MW and 13 landfill gas 
          contracts with a total capacity of 62 MW.  The statewide 
          total is 48 contracts for a total capacity of 252 MW.


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           2011 bioenergy action plan  .  A 2006 executive order set a 
          target of generating 20% of the state's renewable energy 
          from biopower (biomass to electricity) by 2010 and 
          maintaining this ratio through 2020.  To achieve those 
          targets, the CEC developed an action plan in 2006 and 
          updated that plan last year with the "2011 Bioenergy Action 
          Plan."  That plan summarized the barriers to deployment of 
          biomethane as:

             California utilities do not have uniform biomethane 
             quality standards and the standards in place may not be 
             appropriate for biomethane, most standards were designed 
             for natural gas injection;

             Current utility tariffs require project developers to 
             pay for the costs of the interconnection which is a 
             large cost barrier;

             The commercially available conversion technologies, 
             such as anaerobic digestion, are generally limited to 
             high moisture (non-woody) feedstocks;

             New technologies are in development, but have high 
             capital costs and other economic, regulatory, and 
             development barriers; and

             Statute currently prohibits the injection of landfill 
             gas, despite allowing landfill gas from out-of-state to 
             be scheduled into California; other states allow 
             landfill gas to be injected into their systems that 
             deliver gas into the California system.

           Related legislation  .  AB 2196 (Chesbro) clarifies 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.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee:


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           $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.

           SUPPORT  :   (Verified  8/16/12)

          Biofuels Energy
          Bloom Energy
          California Association of Sanitation Agencies
          California Municipal Utilities Association
          California State Association of Electrical Workers
          California State Council of Laborers 
          California State Pipe Trades Council
          Californians Against Waste
          Cambrian Energy 
          City of San Diego
          Coalition for Renewable Natural Gas
          Cornerstone Environmental Group
          County of Nevada
          County Sanitation Districts of Los Angeles County
          First Southwest Company
          Glendale Water and Power
          Pasadena Water and Power
          Regional Council of Rural Counties
          Sacramento Municipal Utility District 
          SCS Energy
          Sonoma County Water Agency
          South Coast Air Quality Management District
          Union of Concerned Scientists
          Waste Management 


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           ASSEMBLY FLOOR  :  72-1, 5/31/12
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Campos, Carter, Chesbro, 
            Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, 
            Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, 
            Gatto, Gordon, Gorell, Grove, Halderman, Hall, Harkey, 
            Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, 
            Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, 
            Ma, Miller, Mitchell, Monning, Morrell, Nestande, 
            Nielsen, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, 
            Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner, 
            Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Hagman
          NO VOTE RECORDED:  Charles Calderon, Cedillo, Fletcher, 
            Mansoor, Mendoza, Norby, Valadao


          RM:k  8/20/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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