The California Public Utilities Commission on Dec. 17 approved a renewable natural gas tariff pilot program that will allow customers to purchase the fuel and help expand its market. But CPUC member Martha Guzman Aceves rejected the proposal, saying it could further harm the air and water quality of California's front-line communities.

RNG is a biogas that is emitted from agricultural and waste products, then captured and upgraded to a quality similar to fossil natural gas, according to the commission. The pilot program will last for three years and will help the state understand whether the program "incents polluting activity . . . or takes advantage of a waste," CPUC member Liane Randolph, who voted "yes" on the decision, said at the voting meeting.

"This [pilot] could help us learn lessons . . . about renewable gas," CPUC member Clifford Rechtschaffen, also a supporter, added. "In developing this tariff, we worked closely with the Air Resources Board and they support this decision."

But Guzman Aceves said, "We have to remember with all of these investments that we're not just trying to capture methane, we're trying to reduce the pollution."

"It's important for us to not conflate greenhouse gas capture with actual pollution reduction, especially when we are talking about these localized impacts of the front-line communities who are adjacent to these major methane producing facilities and where the most notable impact is to their air quality and water quality," she said.

The pilot program is voluntary and will be available to residential, small commercial and industrial customers of San Diego Gas & Electric and Southern California Gas Co. SoCal Gas representatives estimated that the RNG commodity charge in the program would be $1.51 per therm, or about four times higher than the non-RNG commodity charge of 36 cents per therm under participants' regular gas tariff, the CPUC decision says.

The decision requires that at least 50 percent of the program's RNG supply be procured from in-state or out-of-state pipelines. No RNG sources outside the U.S. that have not already been delivering RNG through a common-carrier pipeline will be allowed to participate in the pilot program, the decision says. Therefore, the program will promote a regulatory goal to increase production of in-state and national RNG.

Non-settling parties, including Wild Tree Foundation, in the decision said they are concerned that investor-owned utilities will not be able to procure RNG for pipeline injection in California due to cost limitations, meaning all RNG could be purchased from of out-of-state facilities. However, the number of in-state RNG sources has increased in recent years, the commission said. Nine production facilities are currently in operation, four more are under construction, and 14 are under development.

The program will provide other benefits in addition to reducing GHG emissions, such as helping customers gain early experience in using RNG as a part of their regular fossil-based natural gas service, expanding the RNG market in California, and providing valuable information to assist the commission should it later decide to set statewide biomethane targets, the decision says.

But a report last year to the California Energy Commission found that biogas has higher concentrations than fossil natural gas of many organic sulfur types, some of which can damage pipelines or form airborne particulates that affect human health (see CEM No. 1590). There are "several issues related to biogas production" due to "the presence of compounds in biogas and biomethane that are not present in natural gas," the report found.

In a separate decision, the CPUC approved a set of deadlines for energy utilities and other power providers in the state to procure an additional 3,300 MW of capacity.

The CPUC's decision establishes the following three procurement milestones as part of its 2019 decision to procure the additional power and help avoid rolling blackouts:

  • Milestone 1: A signed contract with an energy resource developer; an interconnection agreement with a demonstrated path toward deliverability by the required on-line date; signed land leases or title deeds demonstrating project site control; and a project timeline. The proposed completion date for this task is Sept. 20, 2020.
  • Milestone 2: Proof of a notice to proceed or similar contractual evidence of construction commencement for new construction projects; and executed contracts for demand response, imports or sales of excess resources. The proposed completion date for this task is Feb. 1, 2021.
  • Milestone 3: Evidence of a project being on line and capable of delivering energy. The proposed completion date for this task is Aug. 1, 2021.

All load-serving entities that fall under the CPUC's integrated resource planning process must comply with the milestones, the decision says. Nonutility load-serving entities can either self-procure the additional capacity or choose not to procure the additional capacity at all and have the utility company in their region procure the capacity on their behalf, according to the decision.

The commission in the decision said it is concerned that a load-serving entity could choose to self-provide its additional energy resources, but then fail to do so, which would result in the need for additional resources to be procured on an emergency basis, potentially at a higher cost. In this situation, the CPUC can order an investor-owned utility to procure the needed power on behalf of the LSE that has failed to, the decision says.

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Staff Writer

David Krause is an energy reporter covering the California Energy Commission and Air Resources Board. He writes about transportation, climate change, utilities, and wildfires. He has an MFA in Writing, an MA in English, and a BS in Civil Engineering.