CEC Suspends Biomethane Renewable Eligibility

By Published On: March 30, 2012

In a setback for the state’s biomethane industry, the California Energy Commission suspended renewable eligibility for new biomethane-fueled power plants. Under the March 28 decision, new or expanded biomethane power projects cannot count toward utilities’ or other electricity providers’ 33 percent renewable mandate, at least until CEC sorts out whether biomethane is truly meeting the state’s clean energy goals. Commission president Bob Weisenmiller said he’s concerned about the integrity of the 33 percent Renewables Portfolio Standard program. “We all know that gas traders can be very creative,” he said. “I think we really have to pause, we have to suspend, to basically say ‘no more applications’ until we’re sure the program is right,” Weisenmiller said. CEC acted after legislators and others questioned the environmental benefits of biogas-fueled projects. They include facilities that burn it to make power and also a growing number of fuel cells that supply distributed generation to big facilities, like universities, that are emissions free. CEC renewables technical director Kate Zocchetti explained that the CEC plans to evaluate whether “the intended benefits of the statute are realized.” She said, “We would like to ask ourselves ‘do the RPS requirements for the generating facilities using biomethane demonstrate that the environmental objectives are being met’?” Before the CEC acted, over a dozen speakers testified to express their support or opposition to the suspension. Among those opposed was Pacific Gas & Electric agency relations manager Valerie Winn, who said that the decision would destabilize the energy markets. “There’s a lot of concern about the uncertainty that the suspension will create in the marketplace,” she said. However, the commission was not swayed and voted 3-0 in favor of the suspension, which is effective immediately. Under the overhaul to the state’s 33 percent Renewable Portfolio Standard, which was signed into law in April 2011, preference is given to alternative generation that provides more environmental benefits , such as displacing in-state fossil fuel consumption, reducing air pollution, or curbing greenhouse gas emissions. Biomethane is a biogas--usually produced in landfills, animal feedlots, and sewage treatment plants--that often is treated and transported through the natural gas pipeline system for use as fuel, including at power plants. Consequently, a key question CEC hopes to answer in its review is whether the renewable portfolio standard tracking and verification system is rigorous enough to ensure the biomethane being transferred to power plants for purposes of the RPS isn’t being double counted for other purposes, something that commission staff says has happened in the past. “We’re trying to make sure that that gas molecule … is somehow not being sold three or four different times, but just once, and we’re paying for it once” Weisnemiller said. “We have to get the tracking and verification; we have to make sure the benefits are there.” Under the suspension, biomethane power plants that have been pre-certified for the RPS remain so during the review period. Also, according to the CEC, if a power plant applies for RPS certification during the suspension, the application can’t be processed until the suspension is lifted.

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