BILL ANALYSIS �
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THIRD READING
Bill No: SB 767
Author: Lieu (D)
Amended: 4/4/13
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 7-2, 4/30/13
AYES: Padilla, Fuller, Cannella, De Le�n, Knight, Pavley,
Wright
NOES: Corbett, Hill
NO VOTE RECORDED: DeSaulnier, Wolk
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Public utilities: California Renewables Portfolio
Standard Program: biomethane
SOURCE : Author
DIGEST : This bill extends the deadline, from April 1, 2014 to
April 1, 2015, for biomethane to be injected into a common
carrier pipeline in order for it to count towards the
procurement requirements established by the Renewables Portfolio
Standards (RPS).
ANALYSIS :
Existing law:
1.Requires investor-owned utilities, community choice
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aggregators, and electric service providers (collectively
referred to as retail sellers) and local publicly-owned
utilities (POUs), to increase purchases of renewable energy
such that at least 33% of total retail sales are procured from
renewable energy resources by December 31, 2020. In the
interim each entity is required to procure an average of 20%
of renewable energy for the period of January 1, 2011 through
December 31, 2013 and 25% by December 31, 2016. This is known
as the RPS.
2.Requires the California Energy Commission (CEC) to certify
generating facilities for purposes of establishing eligibility
under the RPS and to design and implement an accounting system
to verify compliance with the RPS by retail sellers and POUs.
3.Defines an eligible renewable electrical generation facility
and includes in that definition a facility that uses landfill
gas or digester gas (biomethane) delivered through a common
carrier pipeline if the source and delivery of the fuel can be
verified by the CEC. For facilities that rely on biomethane,
eligibility is distinguished by the contract date for the
fuel. If the contract was executed and reported to the CEC
before March 29, 2012, the biomethane must be flowing on or
before April 1, 2014. This is commonly referred to as the
flow date.
This bill extends the flow date until April 1, 2015.
Background
Eligible Renewable Generation - Procurement from a renewable
facility cannot be counted for purposes of complying with the
RPS unless that facility has been certified as RPS-eligible by
the CEC. Facilities interested in obtaining a bilateral
contract or competing in a load-serving entity's RPS
solicitation generally pre-certify the facility with the CEC.
There are two types of certification: (1) RPS Certification,
and, (2) RPS Pre-Certification. Renewable facilities that are
under development may seek "pre-certification," with the
understanding that the CEC will verify the information submitted
in the pre-certification application once the facility has been
completed and is delivering electricity. All certified and
pre-certified facilities are subject to audit. The Western
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Renewable Energy Generation Information System (WREGIS) has been
developed to satisfy current RPS tracking requirements. All
RPS-certified facilities must register with WREGIS.
The fourth edition of the CEC's RPS eligibility guidebook,
released in January 2011, introduced a number of changes to the
treatment of biomethane injected into the natural gas pipeline
system. Some of the more noteworthy changes were the creation
of the biogas section as a stand-alone section, the introduction
of the term "pipeline biomethane," and clarifying the delivery
requirements for delivering biogas (now called pipeline
biomethane, or biomethane) for use in an RPS-eligible electric
generating facility.
Pipeline biomethane stands out in the portfolio of eligible RPS
resources because it is transported to a natural gas facility
and it is the natural gas facility that gets certified as
RPS-eligible because some portion of the generation from the
facility is considered renewable based on the fuel source.
Other RPS-eligible facilities have the fuel source and
generating facility at the same site. Consequently, until the
adoption of AB 2196 (Chesbro, Chapter 605, Statutes of 2012), in
trying to define as RPS eligible, pipeline biomethane, the CEC
had to try and fit a square peg into a round hole when it
released its 2011 eligibility guidebook.
Prior Legislation
AB 2196 (Chesbro, Chapter 605, Statutes of 2012) - The passage
of this bill brought clarity for biomethane eligibility and
established standards for the fuel source based on the contract
execution date between the biomethane supplier and the utility.
For contracts executed before the CEC's suspension, the CEC is
to certify those supplies as eligible under the rules in place
at that time. Contracts executed or amended on or after March
29, 2012, are subject to new conditions as specified in AB 2196
and subsequent rules adopted by the CEC. Those conditions
include a "flow date" requirement for the biomethane of April 1,
2014 meaning that the biomethane source must be producing and
capturing biomethane and injecting it into a common carrier
pipeline by that date.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
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According to the Senate Appropriations Committee, one-time costs
of approximately $75,000, from the Energy Resources Programs
Account (General Fund), to update the RPS Guidebook in FY
2013-14.
SUPPORT : (Verified 5/23/13)
Burbank Water and Power
City of Vernon
Element Markets Renewables LLC
Imperial Irrigation District
Southern California Public Power Authority
The Coalition for Renewable Natural Gas
OPPOSITION : (Verified 5/23/13)
California Wind Energy Association
Clean Power Campaign
Large-Scale Solar Association
The Utility Reform Network
ARGUMENTS IN SUPPORT : The author opines that there have been
unanticipated delays in the implementation of AB 2196 related to
the execution of biomethane contracts and as a result, it
appears as if the projects won't meet the flow date set in AB
2196 and need additional time to complete the projects. SB 767
makes a minor change to existing law governing procurements for
biomethane executed and reported to the CEC prior to 3/29/12.
It extends by one year the flow date for these projects due to
unanticipated delays in implementation of AB 2196 by the CEC.
The change is meant to allow adequate time for completion of
biomethane projects once the CEC certifies the procurements as
eligible for use in RPS compliance.
ARGUMENTS IN OPPOSITION : The Utility Reform Network in its
opposition to AB 2196 states that the April 2014 "flow date was
a compromise that gave certain developers an opportunity to
demonstrate the near-term viability of their projects. To the
extent that these developers cannot successfully produce or
inject biomethane into a common carrier pipeline prior to April
1, 2014, the projects would remain eligible to provide renewable
fuel under Public Utilities Code Sec. 399.12.6(b) so long as the
sellers can demonstrate physical delivery of the biomethane to
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California and prove that legitimate environmental benefits
accrue to the residents of this state."
JG:ej 5/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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