The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms in regulating those emissions. The implementing regulations adopted by the state board provide for the direct allocation of greenhouse gas allowances to electrical corporations and gas corporations pursuant to a market-based compliance mechanism.

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, and that facilitate the development of a variety of sources of in-state biomethane. The commission has adopted 2 decisions implementing these requirements, the 2nd of which adopted a 5-year monetary incentive program effective June 11, 2015, for biomethane projects. Existing law requires the commission to modify the biomethane monetary incentive program in specified respects and to extend the program, as modified, until December 31, 2026, or until all available program funds are expended, whichever occurs first.

This bill would require the commission to extend the biomethane monetary incentive program until December 31, 2030. The bill would authorize the commission to authorize additional funding for the program using the revenues, including any accrued interest, received by a gas corporation as a result of the direct allocation of greenhouse gas allowances provided to gas corporations as part of the above-described market-based compliance mechanism. The bill would also require the commission to allow recovery in rates of the costs of gas corporation investments in interconnection costs for biomethane projects, subject to certain limitations.

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.