2898.1.
(a) On or before July 1, 2019, January 1, 2020, the State Air Resources Board, in consultation with the commission, shall adopt a biogas and biomethane procurement requirement for gas corporations with over 100,000 customers and other purchasers of biogas,
customers, except local publicly owned gas utilities. The program shall be known and may be cited as the Biogas and Biomethane Procurement Program. The Biogas and Biomethane Procurement Program requirements shall be consistent with all of the following:(1) The organic waste diversion requirement of Section 39730.6 of the Health and Safety Code.
(2) The requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1).
(3) The requirements of Section
399.12.6.
(b) In adopting the biogas and biomethane procurement requirements, the State Air Resources Board and the commission shall ensure all of the following:
(1) Appropriate allocations by the organic waste sector to meet the requirements of Section 39730 of the Health and Safety Code and state policies to reduce greenhouse gases.
(2) Consistency with the recommendations of the California Council on Science and Technology pursuant to Section 784.1.
(3)Adoption of a long-term contract requirement that provides sufficient certainty and duration to secure the investment needed for new and upgraded biogas and
biomethane production facilities.
(3) A gas corporation shall meet the biomethane procurement program’s requirements through contracts with terms of no fewer than 10 years, formed pursuant to a competitive solicitation process or a bilateral agreement.
(4) Adoption of targets for specific sectors sectors, including, but not limited to, landfill waste, municipal sewage sludge,
gas, livestock waste, diverted organic waste, and wastewater. wastewater treatment.
(5) In adopting the targets in paragraph (4), the State Air Resources Board shall adopt a declining target for landfill gas in accordance with achieving the goals outlined in Section 39730.6 of the Health and Safety Code.
(6) Additions to the environmental benefits of existing state biogas or biomethane programs, rules, or regulations, including, but not limited to, furthering the purposes of methane reductions required in Section 39730.5 of the Health and Safety Code.
(7) That utilities do not unfairly compete with nonutility enterprises.
(c)(1)The overall procurement mandate for biogas across all sectors shall be determined by the State Air Resources Board, in consultation with the commission, through the regulatory process.
(2)
(c) (1) The overall procurement mandate for biomethane across all commercially available sectors shall initially be determined by the State Air Resources Board, in consultation with the commission, and initially be set to 32 billion cubic feet.
(2) The overall procurement mandate for biomethane generated using nascent technologies or other technologies not included in paragraph (1), including those using forest and agricultural biomass as a fuel source or others consistent with Section 40106 of the
Public Resources Code, shall initially be set to up to two billion cubic feet. The State Air Resources Board and the commission shall limit the cost impacts of this paragraph to the maximum extent possible while also encouraging the development of new technologies to generate biomethane.
(d) The State Air Resources Board, in consultation with the commission, shall review and, if necessary, update the biogas
and biomethane procurement program requirements requirements, and report to the Legislature, pursuant to Section 9795 of the Government Code, on the progress toward meeting the program requirements, at least once every five years, with the first review concluding before January 1, 2025.
(e) (1) The commission shall allow recovery in rates, or other alternatives as appropriate, of
rates of the costs of utility investments pursuant to this chapter for prudent and reasonable investments for infrastructure that provide direct benefits, such as safety, reliability, affordability, or greenhouse gas reduction, to all classes of ratepayers, and that are in the interests of all classes of ratepayers.
(2) The following investments shall be eligible for recovery:
(A) Direct investments in the procurement and installation of infrastructure Fifty percent of the direct investment in
infrastructure necessary to achieve interconnection between from the natural gas transmission and distribution pipeline network and biomethane generation and collection equipment, including, but not limited to, gathering lines for dairy cluster
biomethane projects. up to and including the point of receipt. The point of receipt is limited to equipment that monitors gas quality, prevents noncompliant gas from entering the common carrier system, and meters and odorizes gas.
(B)Installation of utility infrastructure to achieve interconnection with facilities that generate biomethane.
(C)
(B) Other investments the commission determines
support the purposes of this chapter.
(3) Utility investment shall be limited to three million dollars ($3,000,000) per project.
(f) Any costs incurred by a gas corporation to comply with the biomethane procurement program’s requirements that are in excess of the resale value of the biomethane it procures shall be allocated as a fully nonbypassable charge to the gas corporation’s customers, including both core and noncore customers, subject to the commission’s authority to determine just and reasonable expenditures pursuant to Article 1 (commencing with Section 451) of the Public Utilities Code.
(g) The commission shall require 15 percent of revenues received annually by a gas corporation as a result of the direct allocation of greenhouse gas allowances to natural gas suppliers, pursuant to subdivision (f) of Section 95890 of Title 17 of the California Code of Regulations, to be used to offset the costs of procuring biomethane to meet the requirements of this chapter.
(h) Notwithstanding any other provision of this chapter, if the cost of the commodity purchased to comply with the biomethane procurement program exceeds an average cost of fifteen dollars ($15) per million British thermal units above the average National Gas Index price, a gas corporation shall no longer be required to procure gas above that cost to comply with this program.
(f)
(i) It is not the intent of the Legislature in enacting this chapter to supplant any existing state biogas or biomethane programs, rules, or regulations.