California Utilities Worry Biogas Won't Qualify as Renewable

Date: October 28, 2011

Source: News Room

California utilities and others in industry are concerned about a proposal that would restrict the eligibility of biogas power under the state's new renewable portfolio standard (RPS) law. California is being closely watched as it has the most ambitious RPS, which requires utilities and other electric service providers to derive 33 percent of their power from renewable sources by the end of 2020, and would likely be a model for other states. The California Energy Commission (CEC), which is responsible for regulating the publicly owned utilities under the new RPS, recently proposed changes to its "Renewables Portfolio Standard Eligibility" guidebook, to conform to provisions of the new law, and other recently enacted laws that affect renewables. CEC said in an Oct. 21 workshop that they were "re-examining the RPS requirements for pipeline biomethane," and "may propose revisions to the biomethane section after consideration of the comments and input from technical staff." In addition, CEC is "re-examining the requirements for municipal solid waste conversion facilities." They are concerned with biomethane that is injected into the nation's natural gas pipeline in another state that then gets combusted in a California plant, and, whether gas from municipal solid waste should even by considered renewable in the first place.

During the workshop, representatives of utilities and power industries urged CEC to abandon the proposal saying it would be nearly impossible for certain utilities to comply with the law and it threatens to cause soaring electricity rates while ignoring the power sources' benefits.

Randy Howard, an official with the Los Angeles Department of Water & Power (LADWP) -- the largest municipal utility in the country -- told CEC staff during the workshop that it is critical the utility be awarded RPS credit for using biogas from both landfills in the city as well as agricultural waste digesters in more than 100 new power turbines that the utility recently purchased for more than $750 million. He said these units will help replace much dirtier coal power the utility currently generates and purchases from out-of-state power plants. "Currently we're one of the largest gas end users in the state and we expect that to double," Howard said. "We'd like to be able to use some of the biogas to hedge our [natural] gas requirements going forward.

Rosalie Mulé, representing Waste Management Inc., which operates more than 100 landfill gas projects in the U.S., said during the meeting that any changes to the RPS eligibility guidebook concerning the use of gas from waste-to-energy projects would thwart the company's plans to supply more biogas to California power plants. "In order for Waste Management or any company to make investments in California, the state must set clear legislative policy and regulatory guidance that creates certainty for the renewable energy market," she said. "Today, our industry does not have a functional regulatory system that makes in-state investment in renewable energy possible."