Assembly Bill 1900, authored by Assemblyman Mike Gatto (D-Los Angeles), a bill which removes barriers to the development of renewable natural gas (RNG) as a fuel in California and will save local rate-payers millions on their utility bills, was signed by Governor Brown last week. AB 1900 will save the millions of Californians who get their power from municipal utilities hundreds-of-millions of dollars by protecting the municipal utilities’ contracts for biomethanee. AB 1900 will also create a California industry for producing biogas, creating thousands of local jobs and economic activity in a new, homegrown, renewable-energy industry.
Representatives from Burbank and Pasadena utilities applauded the bill for both its significant cost savings for rate-payers and its environmental impact.
“Biomethane is a valuable renewable resource that Burbank Water and Power is using to effectively keep the cost of Burbank’s renewable portfolio standard program affordable and reliable,” said Lianne McGinley of Burbank Water and Power, “We need more of this renewable resource in our state and I am pleased that AB 1900 will help bring that about.” Without the bills, Burbank Water and Power would have lost $110 million in biomethane contracts that would have been declared invalid by the state. If the bills had failed, the utilities would have been forced to raise rates for rate-payers to pay for the now invalid contracts, and search for new contracts to fill the gap.
Representatives from Glendale, Pasadena, and Los Angeles traveled to Sacramento to support the bill. Elected officials heard from numerous stakeholders concerned that utility rates in Burbank and Pasadena would skyrocket unless Gatto's bill passed.
Angela Kimmey of Pasadena Water and Power said, that “Assemblyman Gatto recognizes that diversification of California’s renewable energy portfolio is critical for electric reliability, managing financial risk, and ultimately for maintaining low and stable electric rates. AB 1900 lays the regulatory groundwork for the use of California’s landfill gas for renewable electric generation in a responsible way, without compromising public health.”
Todd Campbell, the former Mayor of Burbank and Vice-President of Regulatory and Public Affairs for Clean Energy explained that biogas is “both a renewable and an ultra-low-carbon fuel derived from landfill, sanitation, and agricultural waste streams. When properly harnessed, biomethane can help our municipal utilities provide affordable and reliable service to local businesses and residents, and cost effectively power our cars, trucks, and buses with a near zero emissions alternative that will help protect California’s air quality.”
“Currently, outdated regulatory barriers prevent in-state biomethane to be directly injected into the common carrier pipeline,” stated Burbank Mayor Dave Golonski. “Allowing direct injection will provide an efficient and cost-effective way to transport this valuable renewable resource. I strongly support AB 1900 and welcome its enactment.” Under current law, RNG producers in California are banned from selling their fuel. Thus, California’s RNG producers are forced to either burn it, or let it escape into the atmosphere, both of which pollute the air.
RNG is natural gas produced by decomposing matter. It is a by-product of many regular activities. It can be burned instead of natural gas in electricity-producing facilities, natural-gas-powered vehicles and home appliances, and it is 21-times more potent as a greenhouse gas than carbon dioxide.
“Go outside and light a fire so that the smoke blocks your solar panels,” said Gatto. “That’s the effect of our policies in the biogas arena. We not only force producers to waste their natural energy source, but we force them to pollute as well.”
Because of California’s ban, many utilities purchase RNG from non-California sources. This means the jobs from this burgeoning industry were being created chiefly outside the state. ABs 1900 and 2196 would protect current contracts with RNG producers around the country, prevent utilities from having to raise rates by expressly allowing them to make good on their existing contracts, but would set up a new system within California to foster local industry and local jobs.
“I am thrilled that we have been able to solve this problem this year,” said Gatto. “This new law will put Californians to work, clean our air, keep utility bills low, and stop the insanity of requiring existing producers of biogas to burn it while they use fossil fuels for electricity. Today, with these two bills, we have taken a step closer to a carbon-free electricity grid.”