On January 3, the CPUC issued a proposed decision that would require PG&E, Southern California Gas Company, San Diego Gas & Electric Company, and Southwest Gas Corporation to procure biomethane derived from eight million tons of organic waste diverted from landfills by 2025. This is intended to compliment CalRecycle’s new organic waste diversion regulations. CalRecycle estimates that existing organic waste infrastructure will be able to process 10 million tons of organic waste in 2025, well short of the 18 million tons required by SB 1383 (Lara) of 2016. As a result, the CPUC is considering requiring gas utilities to create a market to achieve the additional 8 million tons of capacity.
The proposed decision would bar facilities that enter into contracts with those gas utilities from leasing or purchasing new diesel vehicles. Instead, those facilities would have to commit to purchase or lease near-zero emission or zero-emission vehicles in the future. It is unclear whether this requirement would extend to or impact actual landfill operations, which would effectively neuter the program because of a lack of that equipment in the marketplace.
The proposed decision also sets longer term goals for those utilities to procure roughly 15% of their natural gas demand from renewable gas from forest management, agricultural waste, and urban wood waste by 2030 (excluding livestock biomethane, which often participates in the state’s Low Carbon Fuel Program). Together, these two requirements seek to displace a significant amount of fossil fuel gas with renewable biogas.
Finally, the proposed decision also requires PG&E and SoCalGas to implement pilot projects that convert woody biomass from forest, agricultural, and urban wood waste into biogas.
It is unclear what the total impact of the proposed decision would be on ratepayers; those costs and allocations will be determined in forthcoming rate setting proceeding.
Comments on the proposed decision are due on January 24 and a final decision is likely to occur in mid-2022. RCRC and ESJPA are working with local government and industry stakeholders to coordinate a response to the proposal.
For more information, please contact RCRC Policy Advocate, John Kennedy.