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<ns0:Id>20250SB__091999INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-01-28</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>919</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Grayson</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Grayson</ns0:Name>
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<ns0:Title> An act to amend Section 784.2 of the Public Utilities Code, relating to energy. </ns0:Title>
<ns0:RelatingClause>energy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Biomethane projects: investment costs.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including gas corporations. Existing law requires the commission to consider options to promote the in-state production and distribution of biomethane, including whether to allow recovery in rates of the costs of investments to (1) facilitate direct investment in the procurement and installation of utility infrastructure necessary to achieve interconnection between the natural gas transmission and distribution pipeline network and biomethane generation and collection equipment and of gathering lines for a dairy cluster biomethane project, (2) provide for the installation of utility infrastructure to achieve interconnection with facilities that generate biomethane, and (3) ensure that these investments for infrastructure are prudent and reasonable and provide a direct benefit to, and are in
the interests of, all classes of ratepayers.</html:p>
<html:p>This bill would require the commission, on or before June 1, 2026, to allow recovery in rates of the costs of those investments.</html:p>
<html:p>Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.</html:p>
<html:p>Because the provisions of this bill would be part of the act and because a violation of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.</html:p>
<html:p>The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.</html:p>
<html:p>This bill would provide that no reimbursement
is required by this act for a specified reason.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
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<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
Climate change is affecting California’s communities and economy with impacts including wildfires, sea level rise, extreme weather events, extreme droughts, and associated impacts to the global economy.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
California must continue to be a global leader in addressing climate change through effective state policy, while ensuring energy costs remain affordable for citizens.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
To displace fossil gas in our pipelines and save ratepayers money, we must remove cost barriers and reduce overall project timelines and costs for utilities.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
Authorizing California’s gas corporations to include renewable natural gas interconnection in their rate base investments will reduce interconnection costs for in-state renewable natural gas projects, reduce the cost for ratepayers, and help gas corporations meet their climate goals.
</html:p>
<html:p>
(e)
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Currently, renewable natural gas projects are subject to a 24 percent tax factor under the Income Tax Component of Contributions and Advances (ITCCA). The ITCCA does not apply to utility investments. Therefore, rate basing interconnections would result in a lower biomethane procurement price for utilities and save ratepayers money.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 784.2 of the
<ns0:DocName>Public Utilities Code</ns0:DocName>
is amended to read:
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<ns0:Num>784.2.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Before the exhaustion of the funds made available pursuant to the monetary incentive program for biomethane projects adopted in Decision 15-06-029 (June 11, 2015), Decision Regarding the Costs of Compliance with Decision 14-01-034 and Adoption of Biomethane Promotion Policies and Program, and no later than July 1, 2019, the commission shall open a proceeding to consider options to further the goals of Section 399.24, including consideration of whether to allow recovery in rates of the costs of investments to do each of the following:
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<html:p>
(1)
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Ensure that prudent and reasonable investments for infrastructure pursuant to paragraphs (2) and (3) provide a direct benefit, such as safety, reliability, affordability, or reducing emissions of greenhouse gases, to all classes of ratepayers and are in the interests of all classes of ratepayers.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Facilitate direct investment in the procurement and installation of utility infrastructure necessary to achieve interconnection between the natural gas transmission and distribution pipeline network and biomethane generation and collection equipment, and of gathering lines for a dairy cluster biomethane project.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Provide for the installation of utility infrastructure to achieve interconnection with facilities that generate biomethane.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
On or before June 1, 2026, the commission shall allow recovery in rates of the costs of the investments identified in subdivision (a).
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<ns0:Num>SEC. 3.</ns0:Num>
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<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
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B of the California Constitution.
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