BILL ANALYSIS Ó
AB 2313
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CONCURRENCE IN SENATE AMENDMENTS
AB
2313 (Williams)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: |57-20 |(May 23, 2016) |SENATE: |37-2 |(August 23, |
| | | | | |2016) |
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Original Committee Reference: U. & C.
SUMMARY: Increases ratepayer-funded incentive amounts available
to encourage development of biomethane projects and directs the
California Public Utilities Commission (CPUC) to consider
whether to allow additional ratepayer funds to be provided for
the cost of infrastructure for biomethane to interconnect with
the natural gas pipeline network.
The Senate amendments allow the CPUC to consider whether to
allow recovery in rates of the costs of investments for direct
investment in the procurement and installation of utility
infrastructure necessary to achieve interconnection between
biomethane facilities to the natural gas transmission and
distribution pipeline network, as specified.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
AB 2313
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1)One-time costs of approximately $550,000 and ongoing costs of
approximately $60,000 (Utilities Reimbursement Account) to the
CPUC.
2)Unknown, potentially significant costs to the state as a
ratepayer.
COMMENTS:
Background: Biogas and biomethane: natural gas by other names.
Bioenergy is renewable energy produced from biomass wastes
including forest and other wood waste, agriculture and food
processing wastes, organic urban waste, waste and emissions from
water treatment facilities, landfill gas and other organic waste
sources. Biomass waste can be used to generate renewable
electricity, liquid fuels and biogas.
Statute defines "biogas" as a gas produced from the anaerobic
decomposition of organic material. The result is a gaseous
mixture composed primarily of carbon dioxide and methane.
Depending on where it is produced, biogas can be categorized as
landfill gas or digester gas. Landfill gas is produced by
decomposition of organic waste in a municipal solid waste
landfill. Digester gas is typically produced from livestock
manure, sewage treatment or food waste.
AB 1900 (Gatto), Chapter 602, Statutes of 2012, was passed to
facilitate in-state biogas production by enabling it to be
transported in common carrier pipelines. In 2014, the CPUC
adopted standards for the protection of both public health and
pipeline and end-use equipment. The CPUC also adopted a
decision that considered the costs associated with injecting
biomethane into natural gas pipelines and assigned those to
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biomethane producers as is consistent with the statutory
requirement to provide nondiscriminatory access to common
carrier pipelines. However, in the same decision, the CPUC
recognized that AB 1900 specifically required adoption of
"policies and programs that promote the in-state production and
distribution of biomethane" and adopted a ratepayer funded
program that will offset a portion of the costs to gas producers
of connecting to utility pipelines. The program is capped at a
total of $40 million and will pay up to 50% of a project's
interconnection cost but not exceed to $1.5 million. No
pipeline biogas project has been built or applied for since the
enactment of AB 1900.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0004882