Products | Biomethane

PG&E is committed to increase the amount of renewable energy it provides customers throughout its northern and central California service area.

Biomethane is pipeline-quality gas derived from biomass as defined in the California Health & Safety Code, which includes any organic material not derived from fossil fuels, including agricultural crops, agricultural and forestry wastes and residues, and construction wood wastes, among others. Biomethanation is the process of converting biomass to biomethane.

Biomethane Supply Interconnection

Two key California Public Utilities Commission (CPUC) decisions in the last year and a half help set the stage for in-state biomethane projects to move forward. The first decision, Decision 14-01-034,issued on January 22, 2014, sets forth gas quality criteria specifically applicable to biomethane, to ensure that biogas can be treated and conditioned into merchantable biomethane that can be safely injected into the utilities’ pipeline systems and used by customers. PG&E’s Gas Rule 21, Section C, Quality of Gas, has been modified to include these criteria, in addition to the existing natural gas quality criteria.

The more recent CPUC Decision 15-06-029, issued on June 16, 2015, addresses cost responsibility for biomethane projects, including interconnection costs, and establishes that these costs must be borne by the biomethane project developer. However, as an incentive, the CPUC has established a program under which a biomethane developer may qualify for payment of up to 50% of the interconnection costs, subject to a $1.5 million cap. Per Decision 15-06-029, the funding for the program is capped at $40 million statewide and is available for five years, at which point the program will expire. 

On June 15, 2017 the CPUC issued Rulemaking 17-06-015 (Rulemaking), to develop a framework which will direct gas corporations to implement not less than five dairy biomethane pilot projects to demonstrate interconnection to the common carrier pipeline system and allow for rate recovery of reasonable infrastructure costs pursuant to Senate Bill 1383. The proposed implementation framework covers four general categories: pilot selection (selection criteria and procurement approach); definition of infrastructure; cost recovery framework (how will reasonableness of the infrastructure be assessed, and cost cap/cost limitations); and data gathering (to support evaluation of the pilots).

In accordance with Senate Bill 1383, the Rulemaking retains the meaning of “Pipeline Infrastructure” to include biogas collection lines, interconnection facilities at the point of receipt, and the interconnection pipeline extension to the existing pipeline network. All other costs (e.g., digester and biogas conditioning facility costs), are the responsibility of biomethane producers and are not considered Pipeline Infrastructure costs. Pipeline Infrastructure costs may be included in utility transportation rates, subject to certain conditions. The CPUC expects to issue a final Decision by the end of 2017.

If you are interested in discussing interconnection of a biomethane project with PG&E’s California Gas Transmission, please contact at our email address Biomethane@pge.com.