BILL ANALYSIS Ó
AB 2313
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2313 (Williams) - As Amended April 26, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
The bill increases monetary incentives for biomethane projects
until December 31, 2021. Specifically, this bill:
1)Requires the California Public Utilities Commission (PUC) to
modify an existing monetary incentive program for biomethane
projects so that the total available incentive limitation for
a project, other than a dairy cluster biomethane project, as
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defined, is increased from $1.5 million to $3 million.
2)Requires the PUC to increase the total available incentive
limitation for a dairy cluster biomethane project to $5
million. A dairy cluster biomethane project is a project of
three or more dairies in close proximity to one another, as
specified.
3)Requires gathering lines for the transport of biogas to a
centralized processing facility to be treated as an
interconnection cost.
FISCAL EFFECT:
No additional state costs.
COMMENTS:
1)Rationale. In June 2015, the PUC issued a decision
(D.1506029) which provided a five-year monetary incentive
program to encourage biomethane producers to design,
construct, and to successfully operate biomethane projects
that interconnect with the gas utilities' pipeline systems.
Each biomethane project built over the next five years, or
until program funds are exhausted, is eligible to receive 50%
of the project's interconnection costs, up to $1.5 million per
project. The program is capped at $40 million.
According to the author, the individual project cap isn't
reflective of the actual cost to interconnect, which is
estimated to be between $1.5 million and $3 million per mile.
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This bill increases the cap per project to facilitate the
development of biomethane projects throughout California in
the solid waste, dairy, and waste water sectors.
2)Background. California uses more than two trillion cubic feet
of natural gas per year, but could produce almost 300 billion
cubic feet of renewable gas per year just from organic waste
from food, livestock, agriculture, yard waste, construction
debris, soiled paper and forest biomass. According to the
American Biogas Council, California has 276 operational biogas
systems, but has the potential for 1,187 more.
The current monetary incentive requires PG&E, San Diego Gas
and Electric, SoCalGas, and Southwest Gas to establish
accounts to track the costs associated with the monetary
incentive a biomethane producer may receive if it successfully
interconnects and operates the project with the gas utility.
The program is capped at $40 million and the utilities may
recover the monetary incentive amount in rates, plus interest,
from its customers.
This bill modifies the amount a project may receive but stays
within the existing $40 million cap.
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Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081