Amended in Senate August 2, 2016

Amended in Senate June 14, 2016

Amended in Assembly April 26, 2016

Amended in Assembly March 16, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2313


Introduced by Assembly Member Williams

(Coauthor: Senator Hertzberg)

February 18, 2016


An act to addbegin delete and repeal Sections 399.23 andend deletebegin insert Sectionend insert 784.2begin delete toend deletebegin insert to, and add and repeal Section 399.23 of,end insert the Public Utilities Code, relating to renewable energy resources.

LEGISLATIVE COUNSEL’S DIGEST

AB 2313, as amended, Williams. Renewable natural gas: monetary incentive program for biomethane projects: pipeline infrastructure.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including gas corporations. 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 relative to those constituents of concern. Existing law requires the commission to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements. Existing law requires the commission to adopt policies and programs that promote the in-state production and distribution of biomethane, as defined, that facilitate the development of a variety of sources of in-state biomethane. The commission has adopted two decisions implementing these requirements, thebegin delete secondend deletebegin insert 2ndend insert of which adopted a 5-year monetary incentive program effective June 11, 2015, for biomethane projects pursuant to which a qualifying project is entitled to a one-time payment of 50% of the interconnection costs incurred by the biomethane producer, up to a total payment of $1,500,000. Total cost of the monetary incentive program for biomethane projects is limited to $40,000,000 over the 5-year life of the program.

This bill would require the commission to modify the monetary incentive program for biomethane projects so that the total available incentive limitation for a project, other than a dairy cluster biomethane project, as defined, is increased from $1,500,000 to $3,000,000. The bill would require the commission to increase the total available incentive limitation for a dairy cluster biomethane project to $5,000,000 and would require that gathering lines for transport of biogas to a centralized processing facility for the project be treated as an interconnection cost. The bill would require the commission to extend the program, as modified, until December 31, 2021.begin insert Upon exhaustion of the funds available pursuant to the monetary incentive program, the bill would require the commission to consider whether to allow recovery in rates of the costs of investments to (1) facilitate direct investment in the procurement and installation of utility infrastructure necessary to achieve interconnection between the natural gas transmission and distribution pipeline network and biomethane generation and collection equipment, and (2) provide for the installation of utility infrastructure to achieve interconnection with facilities that generate biomethane.end insert

begin delete

This bill would require the commission, in consultation with the State Air Resources Board and State Energy Resources Conservation and Development Commission, to adopt rules for gas corporations by January 2, 2018, relative to investments in infrastructure interconnecting to biomethane sources, as specified. The provisions requiring the adoption of these rules would remain in effect only until January 1, 2026.

end delete

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 the billbegin insert extends the monetary incentive program andend insert requires action by the commission to implement certain of itsbegin delete requirements andend deletebegin insert requirements, and becameend insert failure to comply withbegin delete the commission’s rulesend deletebegin insert these commission actionsend insert would be a crime, the 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:

P3    1

SECTION 1.  

Section 399.23 is added to the Public Utilities
2Code
, to read:

3

399.23.  

The commission shall modify, and extend until
4December 31, 2021, the monetary incentive program for
5biomethane projects adopted in Decision 15-06-029 (June 11,
62015), Decision Regarding the Costs of Compliance with Decision
714-01-034 and Adoption of Biomethane Promotion Policies and
8Program, as follows:

9(a) Except for a dairy cluster biomethane project, the total
10available incentive limitation for a project shall be increased from
11one million five hundred thousand dollars ($1,500,000) to three
12million dollars ($3,000,000).

13(b) For a dairy cluster biomethane project, the total available
14incentive limitation shall be raised to five million dollars
15($5,000,000). For purposes of this subdivision, a dairy cluster
16biomethane project means a biomethane project of three or more
17dairies in close proximity to one another employing multiple
18facilities for the capture of biogas that is transported by multiple
19gathering lines to a centralized processing facility where the biogas
20is processed to meet the biomethane standards adopted by the
21commission pursuant to subdivisions (c) and (d) of Section 25421
22of the Health and Safety Code and injected into the pipeline of the
23gas corporation through a single interconnection. Costs incurred
24for gathering lines for a dairy cluster biomethane project shall be
25treated as an interconnection cost.

P4    1(c) This section shall remain in effect only until January 1, 2022,
2and as of that date is repealed, unless a later enacted statute, that
3is enacted before January 1, 2022, deletes or extends that date.

begin delete
4

SEC. 2.  

Section 784.2 is added to the Public Utilities Code, to
5read:

6

784.2.  

(a) To further the goals of the state’s comprehensive
7strategy to reduce emissions of short-lived climate pollutants
8pursuant to Section 39730 of the Health and Safety Code and the
9California Global Warming Solutions Act of 2006 (Division 25.5
10(commencing with Section 38500) of the Health and Safety Code),
11by January 2, 2018, in consultation with the State Air Resources
12Board and the Energy Commission, the commission shall establish
13rules for gas corporations that do all of the following:

14(1) Facilitate direct investment in the procurement and
15installation of utility infrastructure necessary to achieve
16interconnection between the natural gas transmission and
17distribution pipeline network and biomethane generation and
18collection equipment, including, for a dairy digester cluster project,
19as defined in Section 399.23, gathering lines.

20(2) Provide for the installation of utility infrastructure to achieve
21interconnection with facilities that generate biomethane.

22(3) Provide that prudent and reasonable investments for
23infrastructure pursuant to paragraphs (1) and (2) are recoverable
24in rates and recovered as a direct benefit to, and in the interests of,
25all classes of ratepayers.

26(4) Financially protect ratepayers by ensuring that infrastructure
27is installed for biomethane projects that will actually be built and
28operated and that will be cost effective, considering the volume
29and carbon intensity of the biomethane, the costs of
30interconnection, alternatives available to the biomethane use and
31distribution, and other costs and benefits.

32(5) Ensure that biomethane facilities that interconnect to the
33natural gas transmission and distribution pipeline network meet
34all applicable laws and standards, including those laws, rules, and
35regulations pertaining to safety, gas quality, and environmental
36protection.

37(b) This section shall remain in effect only until January 1, 2026,
38and as of that date is repealed, unless a later enacted statute, that
39is enacted before January 1, 2026, deletes or extends that date.

end delete
P5    1begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 784.2 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert, to
2read:end insert

begin insert
3

begin insert784.2.end insert  

Upon exhaustion of the funds made available pursuant
4to the monetary incentive program for biomethane projects adopted
5in Decision 15-06-029 (June 11, 2015), Decision Regarding the
6Costs of Compliance with Decision 14-01-034 and Adoption of
7Biomethane Promotion Policies and Program, the commission
8shall consider whether to allow recovery in rates of the costs of
9investments to do each of the following:

10
(a) Facilitate direct investment in the procurement and
11installation of utility infrastructure necessary to achieve
12interconnection between the natural gas transmission and
13distribution pipeline network and biomethane generation and
14collection equipment, including, for a dairy digester cluster project,
15as defined in Section 399.23, gathering lines.

16
(b) Provide for the installation of utility infrastructure to achieve
17interconnection with facilities that generate biomethane.

end insert
18

SEC. 3.  

No reimbursement is required by this act pursuant to
19Section 6 of Article XIII B of the California Constitution because
20the only costs that may be incurred by a local agency or school
21district will be incurred because this act creates a new crime or
22infraction, eliminates a crime or infraction, or changes the penalty
23for a crime or infraction, within the meaning of Section 17556 of
24the Government Code, or changes the definition of a crime within
25the meaning of Section 6 of Article XIII B of the California
26Constitution.



O

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