BILL ANALYSIS Ó
AB 2206
Page 1
ASSEMBLY THIRD READING
AB
2206 (Williams)
As Amended May 27, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |15-0 |Gatto, Patterson, | |
| | |Burke, Chávez, Dahle, | |
| | |Eggman, Cristina | |
| | |Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Hadley, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Ting, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Natural |9-0 |Williams, Jones, | |
|Resources | | | |
| | | | |
| | |Cristina Garcia, | |
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| | |Gomez, Hadley, | |
| | |Harper, McCarty, | |
| | | | |
| | | | |
| | |Mark Stone, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: 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:
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 (CPUC) 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 CPUC to require each gas corporation operating
AB 2206
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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 CPUC 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 CPUC 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: According to the Assembly Appropriations
Committee:
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 (CPUC Utilities
Reimbursement Fund) to re-open an existing proceeding or open
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 (CPUC Utilities Reimbursement
Fund) to devote a full time engineer to the proceeding and
provide ongoing training and enforcement expertise.
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COMMENTS:
1)Purpose: According to the author, the new biomethane
standards adopted by the CPUC 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 CPUC 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 CPUC opened a rulemaking proceeding in
February 2013. In January 2014, the CPUC 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 CPUC adopted in
D.14-01-034. In June 2015, the CPUC 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 CPUC included a five-year monetary
incentive program to encourage biomethane producers to design,
construct, and to successfully operate biomethane projects.
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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
Treatment facility in San Diego County indicates it would not
be able to meet the new standards.
3)Related Legislation: AB 2773 (Quirk) of the current
legislative session: requires the PUC to modify the minimum
heating value, the siloxane trigger, and lower action levels
of biomethane. Pending in the Assembly.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0003228