39735.
(a) For purposes of this section, the following terms have the following meanings:(1) “Biogas” means gas that is generated from organic waste or other organic materials, through anaerobic digestion, gasification, pyrolysis, or other technology that converts organic waste to gas. Biogas may be produced from, but not limited to, any of the following sources:
(A) Agricultural waste remaining after all reasonably usable food content is extracted.
(B) Forest waste produced from sustainable forest management practices.
(C) Landfill gas.
(D) Wastewater treatment gas and biosolids.
(E) Diverted organic waste, if the waste is separated and processed to (i) enhance the recovery of recyclable materials and (ii) minimize air emissions and residual wastes in accordance with applicable standards.
(2) “Eligible feedstock” means organic waste or other sustainably produced organic material and electricity generated by an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3) “Gas seller” means a gas corporation, as defined by Section 222 of the Public Utilities Code, or another entity authorized to sell natural gas
pursuant to natural gas restructuring (Chapter 2.2 (commencing with Section 328) of Part 1 of Division 1 of the Public Utilities Code), including sales to core and noncore customers pursuant to natural gas restructuring.
(4) “Renewable gas” means gas that is generated from organic waste or other renewable sources, including electricity generated by an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code). Renewable gas includes biogas and synthetic natural gas generated from an eligible feedstock.
(5) “Renewable gas standard” means the quantity of renewable gas that a gas seller is required to provide to retail end-use customers for use in California for each compliance period set forth in subdivision
(b).
(b) (1) On or before June 30, 2016, 2017, the state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall adopt a carbon-based renewable gas standard that requires all gas sellers to provide specified percentages of renewable gas to retail end-use customers for use in California. Each gas seller shall procure a minimum quantity of renewable gas for each of the following compliance periods:
(A) January 1, 2016, June 30,
2017, to December 31, 2019, inclusive. The state board shall require a gas seller to make reasonable progress sufficient to ensure that by the end of the compliance period not less than 1 percent of the gas supplied to retail end-use customers for use in California is renewable gas.
(B) January 1, 2020, to December 31, 2022, inclusive. The state board shall require a gas seller to make reasonable progress sufficient to ensure that by the end of the compliance period not less than 3 percent of the gas supplied to retail end-use customers for use in California is renewable gas.
(C) January 1, 2023, to December 31, 2024, inclusive. The state board shall require a gas seller to make reasonable progress sufficient to ensure that by the end of the compliance period not less than 5 percent of the gas supplied to retail end-use customers for use in California is
renewable gas.
(D) January 1, 2025, to December 31, 2029, inclusive. The state board shall require a gas seller to make reasonable progress sufficient to ensure that by the end of the compliance period not less than 10 percent of the gas supplied to retail end-use customers for use in California is renewable gas.
(E) January 1, 2030, and thereafter. The state board shall require a gas seller to ensure that not less than 10 percent of the gas supplied to retail end-use customers for use in California is renewable gas.
(2) Gas sellers shall be obligated to procure no less than the quantities associated with all intervening years by the end of each compliance period.
(c) Only renewable gas that meets any of the following conditions shall count toward
meeting the procurement requirements of the renewable gas standard:
(1) The renewable gas is used onsite by an end-use customer in California.
(2) The renewable gas is used by an end-use customer in California and delivered through a dedicated pipeline.
(3) The renewable gas is delivered to end-use customers in California through a common carrier pipeline and meets all of the following requirements:
(A) The source of renewable gas injects the renewable gas into a common carrier pipeline that physically flows within California or toward the end-use customers for which the renewable gas was procured under the purchase contract.
(B) The source of renewable gas did not inject the renewable gas
into a common carrier pipeline prior to March 29, 2012, or the source commenced injection of sufficient incremental quantities of renewable gas after March 29, 2012, to satisfy the purchase contract requirements.
(C) The seller or purchaser of the renewable gas demonstrates that the capture and injection of renewable gas into a common carrier pipeline directly results in at least one of the following environmental benefits to California:
(i) The reduction or avoidance of the emission of any criteria air pollutant in California.
(ii) The reduction or avoidance of pollutants that could have an adverse impact on waters of the state.
(iii) The alleviation of a local nuisance within California that is associated with the emission of odors.
(d) In adopting the renewable gas standard, the state board shall do all of the following:
(1) Notify all gas sellers in California of, and how to comply with, the renewable gas standard procurement requirements. The State Board of Equalization may supply the state board with information obtained as a result of its collection of the natural gas surcharge pursuant to Article 10 (commencing with Section 890) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to assist the state board in identifying those gas sellers that are not gas corporations, as defined in Section 222 of the Public Utilities Code. The Public Utilities Commission shall notify the state board of each gas corporation that provides gas service to end-use customers in California.
(2) Maintain and publicize a list of eligible renewable gas
providers. For these purposes, an eligible renewable gas provider means any person or corporation that is able to supply renewable gas meeting the deliverability requirements of subdivision (c).
(3) Adopt a flexible compliance mechanism, such as tradable renewable gas credits, to increase market flexibility and reduce costs of compliance. If the state board adopts tradable renewable gas credits, those credits shall be based on the carbon intensity of the renewable gas and shall give equal value to renewable gas that is used onsite and renewable gas that is injected into a common carrier pipeline. The flexible compliance mechanism shall also allow for credit banking and borrowing. The state board shall consult with the State Energy Resources Conservation and Development Commission in developing any system for tradable renewable gas credits.
(4) The state board shall consult with
the Public Utilities Commission in the development of regulations to implement the renewable gas standard as they affect gas corporations, subject to regulation as public utilities by the commission, in order to minimize duplicative reporting or regulatory requirements.
(5) In consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, adopt a coordinated investment plan to ensure that moneys made available from revenues derived through adoption of a market-based compliance mechanism or through the Alternative and Renewable Fuel and Vehicle Technology Program or Air Quality Improvement Program, are used to reduce the costs to implement the renewable gas standard, including the costs of pipeline injection.
(e) The state board shall waive enforcement of this section if it finds that the gas seller has demonstrated either
of the following conditions are beyond the control of the gas seller and will prevent compliance:
(1) Permitting or other circumstances that delay renewable gas projects, or there is an insufficient supply of renewable gas resources available to the gas seller. In making a finding that this condition prevents timely compliance, the state board shall consider whether the gas seller has done all of the following:
(A) Prudently managed portfolio risks, including relying on a sufficient number of viable projects.
(B) Sought to develop its own renewable gas resources, pipelines, or pipeline interconnections to secure renewable gas resources.
(C) Procured an appropriate minimum margin of procurement above the minimum procurement level necessary to comply with
the renewables gas standard to compensate for foreseeable delays or insufficient supply.
(D) Taken reasonable measures, under the control of the gas seller, to procure allowable tradable renewable gas credits.
(2) There is a disproportionate impact on commodity rates. The state board, in consultation with the Public Utilities Commission, shall establish a limitation for each gas seller on the expenditures for all renewable gas used to comply with the renewable gas standard. This limitation shall be set at a level that prevents disproportionate commodity rate impacts. In determining whether commodity rate impacts are disproportionate, the state board may consider the extent to which procurement required under this section results in a reduction in compliance costs for any other state obligation and may consider the availability of other incentives and credits that reduce the costs
to ratepayers and noncore customers. If the cost limitation is insufficient to support the projected costs of meeting the renewable gas standard requirements, the gas seller may refrain from procuring quantities in excess of those that can be procured within the limitation.
(f) (1) If the state board waives any compliance requirements of this section, the state board shall establish additional reporting requirements on the gas seller to demonstrate that all reasonable actions under the control of the gas seller are taken in each of the intervening years sufficient to satisfy future procurement requirements.
(2) The board shall not waive enforcement pursuant to this section, unless the gas seller demonstrates that it has taken all reasonable actions under its control, as set forth in subdivision (e), to achieve full compliance.
(g) On or before January 1, 2017, the state board shall issue an analysis of the lifecycle emissions of greenhouse gases and reductions for different biogas types and end uses, including, but not limited to, electricity generation, transportation fuels, heating and industrial uses, and as a source of renewable hydrogen for fuel cells. The analysis shall include an assessment of other public health and environmental benefits, including benefits to disadvantaged communities, air and water quality, soil improvement, and wildfire reduction.