BILL ANALYSIS Ó
AB 2206
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2206 (Williams) - As Introduced February 18, 2016
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|Policy |Utilities and Commerce |Vote:|15 - 0 |
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| |Natural Resources | |9 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requests the California Council on Science and
Technology (CCST) to complete a study analyzing issues relating
to minimum heating value and maximum siloxane specifications for
biomethane injected into common carrier gas pipelines.
Specifically, this bill:
AB 2206
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1)Requests CCST to undertake and complete a study analyzing
issues relating to minimum heating value and maximum siloxane
specifications adopted by the California Public Utilities
Commission (PUC) for biomethane before it can be injected into
common carrier gas pipelines. Requires CCST to complete the
study within nine months from entering into a contract to do
so.
2)Directs the PUC to require each gas corporation operating
common carrier pipelines in California to proportionately
contribute to the total costs to undertake the study if CCST
agrees to undertake and complete the study. Provides costs
are recoverable through rates.
3)Allows the PUC to modify the allocation of certain available
incentives and use the funds instead to pay for some or all of
the costs of the study.
4)Requires the PUC 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.
FISCAL EFFECT:
1)Unknown increased one-time costs (special fund) of up to
$500,000, depending on the scope, for CCST to complete the
study.
2)Increased one-time costs of $118,480 (PUC Utilities
Reimbursement Fund) to re-open an existing proceeding or open
AB 2206
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a new proceeding on methane to consider the blending of gas
downstream, lowering the minimum heating value and modifying
siloxane levels. This includes an Administrative Law Judge
and Analyst.
3)Ongoing annual costs of $263,305 (PUC Utilities Reimbursement
Fund) to devote a full time engineer to the proceeding and
provide ongoing training and enforcement expertise.
COMMENTS:
1)Purpose. According to the author, the new biomethane
standards adopted by the PUC apply to biomethane even when
dilution in the pipeline means the biomethane will only be 1%
of the total gas that reaches the first end user. As such,
the contaminant and thermal values could be very different
than if the biomethane were 100%.
This bill directs the PUC to contract with CCST to analyze the
contaminant and thermal requirements, including standards in
other states as well as the different sources of biomethane
and the impacts on cost and safety.
2)Background. The PUC opened a rulemaking proceeding in
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February 2013. In January 2014, the PUC issued Decision (D)
14-01-034 adopting concentration standards for 17 Constituents
of Concern (these include ammonia, biologicals, hydrogen,
mercury, and siloxanes), as well as the monitoring, testing,
reporting, and recordkeeping protocols for biomethane to be
injected into the gas utilities' pipelines.
On April 9, 2014, the second phase of the same proceeding was
opened to consider who should bear the costs of meeting the
standards and requirements that the PUC adopted in
D.14-01-034. In June 2015, the PUC adopted D.15-06-029 and
concluded that the costs of complying with the standards and
protocols adopted by D.14-01-034 should be borne by the
biomethane producers.
However, to provide initial support to the developing
biomethane market, the PUC included a five-year monetary
incentive program to encourage biomethane producers to design,
construct, and to successfully operate biomethane projects.
As described in this decision, each biomethane project that is
built over the next five years, or sooner if the program funds
are exhausted before that period, can receive 50% of the
project's interconnection costs, up to $1.5 million, to help
offset these costs upon the successful interconnection and
operation of the facility.
According to the author, since the new standards were adopted,
not one new pipeline biogas project has been built and the
only one currently in operation, the Point Loma Wastewater
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Treatment facility in San Diego County indicates it would not
be able to meet the new standards.
3)Related Legislation. AB 2773 (Quirk) requires the PUC to
modify the minimum heating value, the siloxane trigger, and
lower action levels of biomethane. This bill is on Suspense
in this Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081