Amended in Assembly July 3, 2013

Amended in Senate April 4, 2013

Senate Bill No. 767

Introduced by Senator Lieu

February 22, 2013

An act to amend Section 399.12.6 of the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

SB 767, as amended, Lieu. Public utilities: California Renewables Portfolio Standard Program: biomethane.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. The existing California Renewables Portfolio Standard Program (RPS program) requires a retail seller of electricity, as defined, and a local publicly owned electric utility to purchase specified minimum quantities of electricity products from eligible renewable energy resources, as defined, for specified compliance periods. Existing law requires the procurement of biomethane delivered through a common carrier pipeline under a contract, as provided, to count toward the procurement requirements established by the RPS program, under rules in place at the time the contract was executed, provided that the rules apply only to sources that are producing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.

This bill would amend that date to begin delete April 1, end delete begin insert January 31, end insert 2015.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 399.12.6 of the Public Utilities Code is
amended to read:

399.12.6.  

(a) (1) Any procurement of biomethane delivered
through a common carrier pipeline under a contract executed by
a retail seller or local publicly owned electric utility and reported
to the Energy Commission prior to March 29, 2012, and otherwise
eligible under the rules in place as of the date of contract execution
shall count toward the procurement requirements established in
this article, under the rules in place at the time the contract was
executed, including the Fourth Edition of the Energy Commission’s
Renewables Portfolio Standard Eligibility Guidebook, provided
that those rules shall apply only to sources that are producing
biomethane and injecting it into a common carrier pipeline on or
before begin delete April 1, end delete begin insert January 31, end insert 2015.

(2) The eligibility requirements of subdivision (b) shall apply
beginning March 29, 2012, to any quantities of biomethane
associated with any of the following:

(A) An extension of the term of the original contract.

(B) Any quantity of biomethane that exceeds the quantities of
biomethane specified in the original contract.

(C) Any optional quantities of biomethane that can be exercised
at the discretion of the buyer.

(D) Any change in the source or sources of biomethane
identified in the original contract or the original application for
certification submitted to the Energy Commission.

(E) Any quantity of biomethane from a source not producing
and capturing biomethane and injecting it into a common carrier
pipeline on or before begin delete April 1, end delete begin insert January 31, end insert 2015.

(F) The conditions of this paragraph shall apply beginning
March 29, 2012.

(b) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract
amendments executed on or after March 29, 2012, the use of
biomethane by a generating facility shall not qualify as an eligible
renewable energy resource unless it satisfies all applicable
requirements established by the Energy Commission and meets
any of the following requirements:

(1) The biomethane is used by an onsite generating facility.

(2) The biomethane is used by an offsite generating facility and
delivered to the generating facility through a dedicated pipeline.

(3) The biomethane is delivered to a generating facility through
a common carrier pipeline and meets all of the following
requirements:

(A) The source of biomethane injects the biomethane into a
common carrier pipeline that physically flows within California
or toward the generating facility for which the biomethane was
procured under the original contract.

(B) The source of biomethane did not inject biomethane into a
common carrier pipeline prior to March 29, 2012, or the source
commenced injection of sufficient incremental quantities of
biomethane after March 29, 2012, to satisfy the contract
requirements.

(C) The seller or purchaser of the biomethane demonstrates that
the capture and injection of biomethane into a common carrier
pipeline directly results in at least one of the following
environmental benefits to California:

(i) The reduction or avoidance of the emission of any criteria
air pollutant in California.

(ii) The reduction or avoidance of pollutants that could have an
adverse impact on waters of the state.

(iii) The alleviation of a local nuisance within California that
is associated with the emission of odors.

(c) For all electricity products generated using biomethane that
are credited toward the renewables portfolio standard procurement
obligations established pursuant to this article, sufficient renewable
and environmental attributes of biomethane production and capture
shall be transferred to the retail seller or local publicly owned
electric utility that uses that biomethane to ensure that there are
zero net emissions associated with the production of electricity
from the generating facility using the biomethane. The provisions
of this subdivision shall be applied in a manner consistent with
the definition of “green attributes” as specified by the commission
in Decision 08-08-028, Decision on Definition and Attributes of
Renewable Energy Credits for Compliance with the California
Renewables Portfolio Standard (August 21, 2008), as may be
modified by subsequent decision of the commission.

(d) All sellers and purchasers of biomethane shall comply with
a system for tracking and verifying the use of biomethane, as
established by the Energy Commission, that is equivalent to the
system required by subdivision (c) of Section 399.25.

(e) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract
amendments executed after March 29, 2012, the use of biomethane
shall be assigned to the appropriate portfolio content category
based on the application of the criteria in subdivision (b) of Section
399.16 to the procurement of electricity by the retail seller or local
publicly owned electric utility from the generating facility
consuming the biomethane.

(f) A retail seller, local publicly owned electric utility, or an
intermediary party to a biomethane procurement contract shall not
make a marketing, regulatory, or retail claim that asserts that a
biomethane procurement contract to which that entity was a party
resulted, or will result, in greenhouse gas reductions related to the
destruction of methane if the capture and destruction is required
by law. If the capture and destruction of the biomethane is not
required by law, a retail seller, local publicly owned electric utility,
or an intermediary party to a biomethane procurement contract
shall not make a marketing, regulatory, or retail claim that asserts
that a biomethane procurement contract to which that entity was
a party resulted, or will result, in greenhouse gas reductions related
to the destruction of methane, unless the environmental attributes
associated with the capture and destruction of the biomethane
pursuant to that contract are transferred to the retail seller or
publicly owned electric utility that purchased that biomethane and
retired on behalf of the retail customers consuming the electricity
associated with the use of that biomethane, or unless the
biomethane procurement contract prohibits the source of
biomethane from separately marketing the environmental attributes
associated with the capture and destruction of the biomethane sold
pursuant to that contract. These attributes shall be retired and may
not be resold.

(g) For the purposes of this section, “biomethane” means landfill
gas or digester gas, consistent with Section 25741 of the Public
Resources Code.

(h) If any provision of this section or the application of any
provision of this section is held invalid, biomethane delivered
through a common carrier pipeline pursuant to a contract executed
within 180 days of, or at any time subsequent to, the invalidation
of that provision shall not qualify as an eligible renewable energy
resource.