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, and requires that these policies and programs facilitate the development of a variety of sources of in-state biomethane. The commission has adopted two decisions implementing these requirements, the 2nd 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 wouldbegin delete require thatend deletebegin insert authorize the use of incentive payments subject to this limitation for interconnection costs and costs incurred forend insert gathering lines for transport of biogas to a centralized processing facility for thebegin delete project be treated as an interconnection cost.end deletebegin insert project.end insert The bill would require the commission to extend the program, as modified, until December 31, 2021. Before the exhaustion of the funds available pursuant to the monetary incentive program, and before the expiration of the program, the bill would require the commission to considerbegin insert
options to promote the in-state production and distribution of biomethane, includingend insert 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 collectionbegin delete equipment, andend deletebegin insert equipment and of gathering lines for a dairy cluster biomethane project,end insert (2) provide for the installation of utility infrastructure to achieve interconnection with facilities that generatebegin delete biomethane.end deletebegin insert biomethane, and
(3) ensure that these investments for infrastructure are prudent and reasonable and provide a direct benefit to, and are in the interests of, all classes of ratepayers.end insert
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 bill extends the monetary incentive program and requires action by the commission to implement certain of its requirements, and became failure to comply with these commission actions 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:
Section 399.19 is added to the Public Utilities
2Code, to read:
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
15begin delete ($5,000,000).end deletebegin insert ($5,000,000), which may be used for interconnection
16costs and costs incurred for gathering linesend insertbegin insert to help reduce
17emissions of short-lived climate pollutants pursuant to Section
1839730 of the Health and Safety Code.end insert For purposes of this
19subdivision, a dairy cluster biomethane project means a biomethane
20project of three or more dairies in close proximity to one another
21employing multiple facilities for the capture of biogas that is
22transported by multiple gathering lines to a centralized processing
P4 1facility where the biogas is processed to meet the biomethane
2standards adopted by the commission pursuant to subdivisions (c)
3
and (d) of Section 25421 of the Health and Safety Code and
4injected into the pipeline of the gas corporation through a single
5interconnection.begin delete Costs incurred for gathering lines for a dairy
6cluster biomethane project shall be treated as an interconnection
7cost.end delete
8(c) This section shall remain in effect only until January 1, 2022,
9and as of that date is repealed, unless a later enacted statute, that
10is enacted before January 1, 2022, deletes or extends that date.
Section 784.2 is added to the Public Utilities Code, to
12read:
Before the exhaustion of the funds made available
14pursuant to the monetary incentive program for biomethane projects
15adopted in Decision 15-06-029 (June 11, 2015), Decision
16Regarding the Costs of Compliance with Decision 14-01-034 and
17Adoption of Biomethane Promotion Policies and Program, and
18before the expiration of that program, the commission shall
19considerbegin insert options to further the goals of Section 399.24, including
20consideration ofend insert whether to allow recovery in rates of the costs of
21investments to do each of the following:
22
begin insert(a)end insertbegin insert end insertbegin insertEnsure that prudent and reasonable
investments for
23infrastructure pursuant to subdivisions (b) and (c) provide a direct
24benefit, such as safety, reliability, affordability, or greenhouse gas
25reduction, to, and are in the interests of, all classes of ratepayers.end insert
26(a)
end delete
27begin insert(b)end insert Facilitate direct investment in the procurement and
28installation of utility infrastructure necessary to achieve
29interconnection between the natural gas transmission and
30distribution pipeline network and biomethane generation and
31collection equipment,begin delete including, for a dairy digester cluster project, begin insert
and of gathering
32as defined in Section 399.19, gathering lines.end delete
33lines for a dairy cluster biomethane project.end insert
34(b)
end delete
35begin insert(c)end insert Provide for the installation of utility infrastructure to achieve
36interconnection with facilities that generate biomethane.
No reimbursement is required by this act pursuant to
38Section 6 of Article XIII B of the California Constitution because
39the only costs that may be incurred by a local agency or school
40district will be incurred because this act creates a new crime or
P5 1infraction, eliminates a crime or infraction, or changes the penalty
2for a crime or infraction, within the meaning of Section 17556 of
3the Government Code, or changes the definition of a crime within
4the meaning of Section 6 of Article XIII B of the California
5Constitution.
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