BILL NUMBER: AB 2206 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 14, 2016
AMENDED IN ASSEMBLY MAY 27, 2016
INTRODUCED BY Assembly Member Williams
FEBRUARY 18, 2016
An act to add Section 39734 to the Health and Safety Code,
and to add Section 784.1 to the Public Utilities Code, relating
to biomethane. energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2206, as amended, Williams. Biomethane:
interconnection and injection into common carrier pipelines:
research. Renewable gas.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations.
Existing
(1) The California Global Warming Solutions Act of 2006
establishes the State Air Resources Board as the state agency
responsible for monitoring and regulating sources emitting greenhouse
gases. The act requires the state board to adopt regulations to
require the reporting and verification of statewide greenhouse gas
emissions and to monitor and enforce compliance with this program.
The act requires the state board to adopt a statewide greenhouse gas
emissions limit, as defined, to be achieved by 2020 equivalent to the
statewide greenhouse gas emissions level in 1990. Existing law
requires the state board to complete a comprehensive strategy to
reduce emissions of short-lived climate pollutants, as defined, in
the state.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations. The
California Renewables Portfolio Standard Program requires the Public
Utilities Commission to establish a renewables portfolio standard
requiring all retail sellers, as defined, to procure a minimum
quantity of electricity products from eligible renewable energy
resources, as defined, at specified percentages of the total
kilowatthours sold to their retail end-use customers during specified
compliance periods.
This bill would require the state board, in coordination with the
Public Utilities Commission, to adopt a policy to increase the
production and use of renewable gas, as specified, generated by
either an eligible renewable energy resource that meets the
requirements of the California Renewables Portfolio Standard Program
or direct solar energy, as specified.
(2) 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
(3) 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 39734 is added to the
Health and Safety Code , to read:
39734. (a) For purposes of this section, "biogas" has the same
meaning as in Section 25420.
(b) To meet the state's renewable energy, low-carbon fuel, and
waste diversion goals, the state board, in coordination with the
Public Utilities Commission, shall adopt a policy that is consistent
with existing state policies and programs to increase the production
and use of renewable gas, including biogas, generated by either of
the following:
(1) An eligible renewable energy resource that meets the
requirements of the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of the Public Utilities Code).
(2) Direct solar energy.
(c) In adopting the policy described in subdivision (b), the state
board shall ensure that eligible renewable gas provides direct
benefits to the state's environment by reducing or avoiding all of
the following:
(1) Emissions of criteria pollutants.
(2) Emissions that adversely affect the waters of the state.
(3) Nuisances associated with the emission of odors.
SEC. 2. SEC. 3. Section 784.1 is
added to the Public Utilities Code, to read:
784.1. (a) 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.
(b) (1) If the California Council on Science and Technology agrees
to undertake and complete the study pursuant to subdivision (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.
(c) If the California Council on Science and Technology agrees to
undertake and complete the study pursuant to subdivision (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. SEC. 4. 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.