BILL NUMBER: AB 2206 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 27, 2016
INTRODUCED BY Assembly Member Williams
FEBRUARY 18, 2016
An act to add Section 784.1 to the Public Utilities Code, relating
to biomethane.
LEGISLATIVE COUNSEL'S DIGEST
AB 2206, as amended, Williams. Biomethane: interconnection and
injection into common carrier pipelines: research.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations.
Existing law authorizes the commission to fix the rates and charges
for every public utility and requires that those rates and charges be
just and reasonable. Existing law authorizes certain public
utilities, including gas corporations, to propose research and
development programs and authorizes the commission to allow inclusion
of expenses for research and development in the public utility's
rates. Existing law requires the commission to consider specified
guidelines in evaluating the research, development, and demonstration
programs proposed by gas corporations.
The California Renewables Portfolio Standard Program requires the
commission to adopt policies and programs that promote the in-state
production and distribution of biomethane. Existing law requires the
commission to adopt, by rule or order, (1) standards for biomethane
that specify the concentrations of constituents of concern that are
reasonably necessary to protect public health and ensure pipeline
integrity and safety, as specified, and (2) requirements for
monitoring, testing, reporting, and recordkeeping, as specified.
Existing law requires a gas corporation to comply with those
standards and requirements and requires that gas corporation tariffs
condition access to common carrier pipelines on the applicable
customer meeting those standards and requirements.
This bill would request the California Council on Science and
Technology to undertake and complete a study analyzing the regional
and gas corporation specific issues relating to minimum heating value
and maximum siloxane specifications adopted by the commission for
biomethane before it can be injected into common carrier gas
pipelines. If the California Council on Science and Technology agrees
to undertake and complete the study, the bill would require each gas
corporation operating common carrier pipelines in California to
proportionately contribute to the expenses to undertake the study
with the cost recoverable in rates. The bill would authorize the
commission to modify certain available monetary incentives to
allocate some of the incentive moneys to pay for the costs of the
study so as to not further burden ratepayers with additional expense.
If the California Council on Science and Technology agrees to
undertake and complete the study, the bill would require the
commission, within 6 months of its completion, to reevaluate
requirements and standards adopted for injection of biomethane into
common carrier pipelines and, if appropriate, change those
requirements and standards or adopt new requirements and standards,
giving due deference to the conclusions and recommendations made in
the study.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because certain provisions of the bill would be a part of the act
and a violation of an order or decision of the commission
implementing its requirements would be a crime, this bill would
impose a state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) California imports 91 percent of its natural gas, which is
responsible for 25 percent of the state's emissions of greenhouse
gases.
(b) California made a commitment to address climate change with
the California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code) and
the adoption of a comprehensive strategy to reduce emissions of
short-lived climate pollutants (Chapter 4.2 (commencing with Section
39730) of Part 2 of Division 26 of the Health and Safety Code). For
California to meet its goals for reducing emissions of greenhouse
gases and short-lived climate pollutants, the state must reduce
emissions from the natural gas sector and increase the production and
distribution of renewable and low-carbon gas supplies.
(c) Biomethane is gas generated from organic waste through
anaerobic digestion, gasification, pyrolysis, or other conversion
technology that converts organic matter to gas. Biomethane may be
produced from multiple sources, including agricultural waste, forest
waste, landfill gas, wastewater treatment byproducts, and diverted
organic waste.
(d) Biomethane provides a sustainable and clean alternative to
natural gas. If 10 percent of California's natural gas use were to be
replaced with biomethane use, emissions of greenhouse gases would be
reduced by tens of millions of metric tons of carbon dioxide
equivalent every year.
(e) Investing in biomethane would create cobenefits, including
flexible generation of electricity from a renewable source that is
available 24 hours a day, reduction of fossil fuel use, reduction of
air and water pollution, and new jobs.
(f) Biomethane can also be used as transportation fuel or injected
into natural gas pipelines for other uses. The most appropriate use
of biomethane varies depending on the source, proximity to existing
natural gas pipeline injection points or large vehicle fleets, and
the circumstances of existing facilities.
(g) The biomethane market has been slow to develop in California
because the collection, purification, and pipeline injection of
biomethane can be costly.
(h) Biomethane is poised to play a key role in future natural gas
and hydrogen fuel markets as a blendstock that can significantly
reduce the carbon footprint of these two fossil-based alternative
fuels.
(i) Biomethane is one of the most promising alternative vehicle
fuels because it generates the least net emissions of greenhouse
gases. According to the low-carbon fuel standard regulations
(Subarticle 7 (commencing with Section 95480) of Article 4 of
Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the
California Code of Regulations) adopted by the State Air Resources
Board, vehicles running on biomethane generate significantly lower
emissions of greenhouse gases than vehicles running on electricity or
fossil fuel-derived hydrogen.
(j) The California Council on Science and Technology was
established by California academic research institutions, including
the University of California, the University of Southern California,
the California Institute of Technology, Stanford University, and the
California State University, and was organized as a nonprofit
corporation pursuant to Section 501(c)(3) of the Internal Revenue
Code, in response to Assembly Concurrent Resolution No. 162
(Resolution Chapter 148 of the Statutes of 1988).
(k) The California Council on Science and Technology was uniquely
established at the request of the Legislature for the specific
purpose of offering expert advice to state government on public
policy issues significantly related to science and technology.
(l) It is in the public's interests, and in the interest of
ratepayers of the state's gas corporations, that the policies and
programs adopted by the Public Utilities Commission be guided by the
best science reasonably available.
SEC. 2. Section 784.1 is added to the Public Utilities Code, to
read:
784.1. (a) The Legislature finds and declares both of
the following:
(1) The California Council on Science and Technology was
established by California academic research institutions, including
the University of California, the University of Southern California,
the California Institute of Technology, Stanford University, and the
California State University, and was organized as a nonprofit
corporation pursuant to Section 501(c)(3) of the Internal Revenue
Code, in response to Assembly Concurrent Resolution No. 162
(Resolution Chapter 148 of the Statutes of 1988). The council was
uniquely established at the request of the Legislature for the
specific purpose of offering expert advice to state government on
public policy issues significantly related to science and technology.
(2) It is in the public's interests, and in the interest of
ratepayers of the state's gas corporations, that the policies and
programs adopted by the commission be guided by the best science
reasonably available.
(b) The Legislature
requests that the California Council on Science and
Technology undertake and complete a study analyzing the regional and
gas corporation specific issues relating to minimum heating value and
maximum siloxane specifications for biomethane before it can be
injected into common carrier gas pipelines, including those
specifications adopted in Sections 4.4.3.3 and 4.4.4 of commission
Decision 14-01-034 (January 16, 2014), Decision Regarding the
Biomethane Implementation Tasks in Assembly Bill 1900. The study
shall consider and evaluate other states' standards, the source of
biomethane, the dilution of biomethane after it is injected into the
pipeline, the equipment and technology upgrades required to meet the
minimum heating value specifications, including the impacts of those
specifications on the cost, volume of biomethane sold, equipment
operation, and safety. The study shall also consider whether
different sources of biogas should have different standards or if all
sources should adhere to one standard for the minimum heating value
and maximum permissible level of siloxanes. The study shall develop
the best science reasonably available and not merely be a literature
review. In order to meet the state's goals for reducing emissions of
greenhouse gases and short-lived climate pollutants and the state's
goals for promoting the use of renewable energy resources in place of
burning fossil fuels, the California Council on Science and
Technology, if it agrees to undertake and complete the study, shall
complete the study within nine months of entering into a contract to
undertake and complete the study.
(c)
(b) (1) If the California Council on Science and
Technology agrees to undertake and complete the study pursuant to
subdivision (b), (a), the commission
shall require each gas corporation operating common carrier pipelines
in California to proportionately contribute to the expenses to
undertake the study pursuant to Sections 740 and 740.1. The
commission may modify the monetary incentives made available pursuant
to commission Decision 15-06-029 (June 11, 2015), Decision Regarding
the Costs of Compliance with Decision 14-01-034 and Adoption of
Biomethane Promotion Policies and Program, to allocate some of the
moneys that would be made available for incentives to instead be made
available to pay for the costs of the study so as to not further
burden ratepayers with additional expense.
(2) The commission's authority pursuant to paragraph (1) shall
apply notwithstanding whether the gas corporation has proposed the
program pursuant to Section 740.1.
(d)
(c) If the California Council on Science and Technology
agrees to undertake and complete the study pursuant to subdivision
(b), (a), within six months of its
completion, the commission shall reevaluate its requirements and
standards adopted pursuant to Section 25421 of the Health and Safety
Code relative to the requirements and standards for biomethane to be
injected into common carrier pipelines and, if appropriate, change
those requirements and standards or adopt new requirements and
standards, giving due deference to the conclusions and
recommendations made in the study by the California Council on
Science and Technology.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.