BILL ANALYSIS Ó
AB 2773
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Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2773 (Quirk) - As Amended March 28, 2016
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|Policy |Rules |Vote:|10 - 0 |
|Committee: | | | |
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| |Utilities and Commerce | |14 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the California Public Utilities Commission
(PUC) to modify the minimum heating value, the siloxane trigger,
and lower action levels of biomethane. Specifically, this bill:
1)Requires the PUC to modify the minimum heating value
requirement of biomethane to allow for the injection of
AB 2773
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biomethane without first being blended upstream with other
fuel to account for the downstream blending occurring
naturally in the pipeline.
2)Requires the PUC to consider modifying the minimum heating
value for biomethane from 990 British thermal units per
standard cubic foot (Btu/scf) to 970 Btu/scf.
3)Requires the PUC to modify the siloxane trigger level and
lower action level to reflect a standard that can be met by
siloxane processing equipment manufacturers and suppliers, and
for which those manufacturers and suppliers are willing to
provide performance guarantees.
4)Requires the PUC to consider modifying the siloxane trigger
level to 1.0 milligram of silicon per square meter (mg Si/m3)
and the lower action level to 2.5 mg Si/m3.
FISCAL EFFECT:
1)Increased one-time costs of $118,480 (PUC 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.
2)Ongoing annual costs of $263,305 (PUC Utilities Reimbursement
Fund) to devote a full time engineer to the proceeding and
provide ongoing training and enforcement expertise.
AB 2773
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This bill will require PUC to either reopen R.13-02-008, or
open a new proceeding, to consider these issues. Since these
issues involve impacts on the safety and reliability of the gas
pipeline system and on gas appliances, evidentiary hearings on
the impact of such changes are likely.
COMMENTS:
1)Purpose. According to the author, the standards developed for
biomethane injection into distribution pipelines have been so
stringent that no pipeline biomethane projects have been
developed since the implementation of the standards in 2014.
AB 2773 directs the PUC to expedite the review and
modification of standards taking into account recent
experiences and challenges in meeting the current standards .
The author further states that this bill will require the PUC
to consider practicable approaches to delivering the same
reliability of natural gas delivered while encouraging
in-state biomethane production.
2)Background. The PUC opened a rulemaking proceeding in February
2013. In January 2014, the PUC 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 PUC adopted in
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D.14-01-034. In June 2015, the PUC 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.
3)Related Legislation. AB 2206 (Williams) requires the PUC to
contract with the California Council on Science and Technology
to conduct a study evaluating siloxane and minimum heating
value requirements. This bill is pending in this Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081