Renewable Gas

Biomethane—also referred to as renewable natural gas or “RNG”—is combustible gas produced from the anaerobic decomposition of organic materials (i.e., biogas) that is captured and then purified to a quality suitable for injection into an IOU-operated gas pipeline. For IOU procurement purposes, "biomethane" also includes bio-synthetic natural gas derived from organic feedstock. Major sources of biomethane include non-hazardous landfills, wastewater treatment facilities, organic waste, and animal manure.

Biomethane can capture methane emissions from the waste sector and be used as a direct replacement for fossil natural gas to help California reduce its GHG emissions. Like fossil natural gas, biomethane is a mix of numerous different compounds, consisting primarily of methane (CH₄), which is combusted to operate common building appliances, power industrial operations, generate electricity, and fuel certain vehicles. Unlike fossil natural gas, however, biomethane can be produced sustainably and consistently after investing in the infrastructure necessary to capture and purify it, as it is derived from sources that are constantly being replenished because of regular human and animal activity.

The CPUC oversees various incentives and initiatives to encourage biomethane while also actively exploring the role that other gases like renewable hydrogen can play in helping California decarbonize. More info regarding what the CPUC is doing to encourage renewable gas usage and production can be found below.

Recent News, Events, and Quick Links

December 20, 2024: Application of Southern California Gas Company (U 904 G) for Authorization to Implement Revenue Requirement for Costs to Enable Commencement of Phase 2 Activities for Angeles Link (A.24-12-011)

On February 17, 2022, SoCalGas filed Application (A.) 22-02-007 to track incremental costs associated with Angeles Link for stakeholder engagement and engineering, design, and environmental feasibility studies to develop a first-of-its-kind hydrogen pipeline transport system to deliver clean renewable hydrogen into the Los Angeles Basin. SoCalGas detailed how Angeles Link could benefit ratepayers and the State by advancing California’s net zero goals, increasing the use of clean fuels, and creating new jobs and economic benefits, while furthering the State’s clean energy policy objectives.
In this application, SoCalGas requests to implement a revenue requirement based on a forecasted cost of approximately $266 million to conduct Phase 2 activities that could ultimately support the affordability of the clean energy transition.

December 19, 2024: Decision Granting Southern California Gas Company’s Request for Voluntary Dismissal of Application Proposing Approval of Woody Biomass Pilot Project (A.23-06-024)

This decision grants, with conditions, Southern California Gas Company’s request for voluntary dismissal of Application 23-06-024 proposing approval of a woody biomass pilot project. By October 15, 2025, Southern California Gas Company is directed to either use the Tier 2 Annual Regulatory Account Balance Update for Rates Effective January 1, 2026 advice letter returning the $19.704 million of Cap-and-Trade funds, including interest, to ratepayers through the California Climate Credit in 2026 or file a new woody biomass pilot project application as directed in Decision 22-02-025.

December 9, 2024: Order Extending Statutory Deadline for Pacific Gas & Electric Company’s Application Proposing a Woody Biomass Pilot Project (A.23-06-023).

On June 30, 2023, Pacific Gas and Electric Company (PG&E) filed Application A. 23-06-023 seeking approval of its woody biomass to renewable natural gas pilot project pursuant to Ordering Paragraph (OP) 43 of Decision D. 22-02-025. D.24-12-059 extends the statutory deadline in this proceeding to June 30, 2025.

November 12, 2024: Order Instituting Rulemaking to Address Biomethane Procurement Cost Allocation (R.22-12-011)

On December 15, 2022, the California Public Utilities Commission (Commission) opened this Order Instituting Rulemaking (OIR) to consider cost allocation for biomethane procurement, pursuant to Decision 22-02-025, which established biomethane procurement targets to reduce short-lived climate pollutant emissions.
Decision 24-11-015 was issued on November 12, 2024 to extend the statutory deadline for this proceeding until March 31, 2025.

August 14, 2024: Decision Addressing Reasonableness of Merced Dairy Biomethane Pilot Project Costs from Application (A.23-04-005)

On December 14, 2017, the Commission adopted Decision (D.) 17-12-004, which established the necessary framework for gas corporations to implement the pilot projects required by SB 1383. On June 22, 2018, an application (pilot application) was submitted to the Selection Committee by Merced Pipeline LLC for the Merced Pipeline Dairy Digester Cluster Project (Project). The total estimated budget approved by the Selection Committee for the Project was $10,183,855.
This decision finds reasonable and authorizes Pacific Gas and Electric Company to recover in rates and reimburse Maas Energy Works, Inc. (MEW) $4,848,720 above the bid amount of $10,183,855 approved for the Merced Pipeline Dairy Digester Cluster Project.

October 20, 2023: Pacific Gas and Electric Company (PG&E), Southern California Gas Company (SoCalGas), San Diego Gas and Electric Company (SDG&E), and Southwest Gas Corporation (Southwest Gas) files application (A.23-06-015) to make revisions to IOUs respective Standard Renewable Gas Interconnection (SRGI) Rules

AB 1900 requires OEHHA and CARB to compile a list of Constituents of Concern (COCs) that could pose risks to human health and that are found in varying sources of biogas at concentrations that significantly exceed the constituents in fossil natural gas. CARB and OEHHA have to develop health protective standards for COCs in biomethane and must update these standards every 5 years or sooner. In collaboration with OEHHA, on April 25, 2023, CARB issued its 2023 Report which provides recommendations for updating California’s biomethane safety standards.
D. 24-11-009 revises the utilities’ respective SRGI Rules to implement CARB’s 2023 recommendations, adopts an interim Carbon Monoxide trigger level for bio-synthetic natural gas, modifies the Applicants’ current SRGI Rules to address operational issues, and directs the utilities to implement the decision with a Tier 2 Advice Letter. The decision denies the request to change Decision 14-01-0341 to permit utilities to file a Tier 2 Advice Letter instead of an application in response to future CARB and OEHHA updates

June 30, 2023: Pacific Gas and Electric Company (PG&E) files application (A.23-06-023) proposing approval of woody biomass pilot project in Woodland, CA

On February 25, 2022, the Commission issued D.22-02-025 directing SoCalGas and PG&E to file an application by July 1, 2023 proposing at least one woody biomass pyrolysis/gasification pilot project that would include procurement of RNG from “agricultural, forest, and/or urban wood waste using methanation,” as determined by each utility. This is PG&E’s proposed pilot project.

June 30, 2023: Southern California Gas Company (SoCalGas) files application (A.23-06-024) proposing approval of woody biomass pilot project in McFarland, CA

On February 25, 2022, the Commission issued D.22-02-025 directing SoCalGas and PG&E to file an application by July 1, 2023 proposing at least one woody biomass pyrolysis/gasification pilot project that would include procurement of RNG from “agricultural, forest, and/or urban wood waste using methanation,” as determined by each utility. This is SoCalGas’s proposed pilot project.

April 5, 2023: Application (A.23-04-005) submitted by PG&E to initiate reasonableness review of Merced Dairy Biomethane Pilot Project Costs

PG&E requesting that the Commission conduct a reasonableness review of the Merced (CEE) Dairy Biomethane Pilot Project’s (Project) costs incurred over the bid amount approved by the CPUC’s dairy biomethane pilot project Selection Committee. The application also asks the Commission to authorize PG&E to reimburse the Project developer for those costs above the approved bid amount determined to be reasonable. PG&E does not seek recovery of any utility-owned infrastructure costs related to the Project in this Application.

April 25, 2023: CARB files Supplement Report on Biogas Constituents of Concern and Health Protective Levels for Biomethane

Supplement Report: Biogas Constituents of Concern and Health Protective Levels for Biomethane: Supplement Report to OEHHA AB 1900 Biogas Recommendations.
Transmittal Letter: Recommendations regarding updating the health protective standards for injection of biomethane into the common carrier pipeline.

December 15, 2022: D.22-12-057 adopted

This decision directs California’s four large gas utilities to propose system testing on the effects of hydrogen blended into methane at concentrations ranging from 0.1% to 20%. It further establishes safety thresholds for hydrogen content in biomethane and makes modifications to existing biomethane-related reporting requirements.

December 15, 2022: D.22-12-055 adopted

This decision grants SoCalGas the authority to establish the Angeles Link Memorandum Account to record the costs of performing Phase One feasibility studies for the Angeles Link project, up to a cap of $26 million with the option for an increase of up to 15%.

February 24, 2022: D.22-02-025 adopted

This decision establishes a biomethane procurement program for California’s four large gas utilities that is designed to help achieve the state’s short-lived climate pollutant (SLCP) goals, which call for a 40% reduction in methane and other SLCPs by 2030.
Press release: CPUC Sets Biomethane Targets for Utilities (ca.gov).

July 15, 2021: D.21-07-005 adopted

This decision dismisses without prejudice the Application filed jointly by California’s four large IOUs to perform testing of hydrogen blended into methane and transported through segments of their respective pipeline systems.

December 17, 2020: D.20-12-031 adopted

This decision approves the Standard Renewable Gas Interconnection Agreement (SRGIA) and related documents jointly proposed by California’s four large gas utilities. It additionally increases funding for the biomethane monetary incentive program, mandates updates to certain constituents of concern, and imposes new reporting requirements.

December 17, 2020: D.20-12-022 adopted

This decision adopts a three-year Voluntary Renewable Natural Gas Tariff (VRNGT) program for SoCalGas and SDG&E. The two utilities are authorized to offer this program to their respective eligible core customers.

August 27, 2020: D.20-08-035 adopted

This decision adopts the Standard Renewable Gas Interconnection Tariff (SRGIT) jointly proposed by California’s four large gas utilities.

December 5, 2019: D.19-12-009 adopted

This decision implements an Incentive Reservation System for the biomethane monetary incentive program established in D.15-06-029. The biomethane monetary incentive program provides up to $3 million for non-dairy clusters and $5 million for dairy clusters that successfully interconnect with the natural gas pipeline system and operate by December 31, 2026. The Incentive Reservation System allows project developers to reserve incentive funds during the development phase of a project and receive the funds once the project is interconnected and operating.

Renewable Gas Proceedings (Open)

A.24-12-011: Application of Southern California Gas Company (U 904 G) for Authorization to Implement Revenue Requirement for Costs to Enable Commencement of Phase 2 Activities for Angeles Link

On February 17, 2022, SoCalGas filed Application (A.) 22-02-007 to track incremental costs associated with Angeles Link for stakeholder engagement and engineering, design, and environmental feasibility studies to develop a first-of-its-kind hydrogen pipeline transport system to deliver clean renewable hydrogen into the Los Angeles Basin. SoCalGas detailed how Angeles Link could benefit ratepayers and the State by advancing California’s net zero goals, increasing the use of clean fuels, and creating new jobs and economic benefits, while furthering the State’s clean energy policy objectives.
In this application, SoCalGas requests to implement a revenue requirement based on a forecasted cost of approximately $266 million to conduct Phase 2 activities that could ultimately support the affordability of the clean energy transition.

A.23-06-023: Pacific Gas & Electric Company’s Application proposing a woody biomass to biomethane pilot project

On June 30, 2023, Pacific Gas and Electric Company (PG&E) filed Application A. 23-06-023 seeking approval of its woody biomass to renewable natural gas pilot project pursuant to Ordering Paragraph (OP) 43 of Decision D. 22-02-025.

Public Utilities Code (Pub. Util. Code) Section 1701.5(a) provides that the Commission shall resolve the issues raised in the scoping memo of a ratesetting Proceeding within 18 months of the date the Proceeding is initiated unless the Commission makes a written determination that the deadline cannot be met and issues an order extending the deadline.
D.2412059 extends the statutory deadline in this proceeding to June 30, 2025.

R.22-12-011: Rulemaking to Address Biomethane Procurement Cost Allocation

The CPUC opened this Rulemaking to consider cost allocation for biomethane procurement pursuant to Decision D.22-02-025, which established biomethane procurement targets to reduce short-lived climate pollutant (SLCP) emissions.
Cost allocation between core and noncore customer classes to be considered for biomethane procured pursuant to D.22-02-025.

A.22-09-006: Hydrogen Injection Application

Application from SoCalGas, SDG&E, and SWG for the creation of hydrogen blending demonstration projects by each utility.

R.13-02-008: Rulemaking on Biomethane Issues, Pipeline Open Access, and Related Enforcement Provisions

The CPUC opened this Rulemaking to implement two provisions of Assembly Bill 1900 (Gatto, 2012). First, to adopt standards and requirements relative to health, safety and facility integrity for biomethane injected into common carrier pipelines, including the obligation that gas corporation tariffs condition access to those pipelines on customers meeting the adopted standards and requirements. Second, to adopt pipeline access rules to ensure that each gas corporation provides non-discriminatory open access to its system.

Renewable Gas Proceedings (Closed)

A.23-06-024: Southern California Gas Company’s request for voluntary dismissal of Application proposing approval of a woody biomass pilot project

By October 15, 2025, Southern California Gas Company is directed to either use the Tier 2 Annual Regulatory Account Balance Update for Rates Effective January 1, 2026 advice letter returning the $19.704 million of Cap-and-Trade funds, including interest, to ratepayers through the California Climate Credit in 2026 or file a new woody biomass pilot project application as directed in Decision 22-02-025.

A.23-04-005: PG&E Application to initiate reasonableness review of Merced Dairy Biomethane Pilot Project Costs

This decision finds reasonable and authorizes Pacific Gas and Electric Company to recover in rates and reimburse Maas Energy Works, Inc. (MEW) $4,917,819 above the bid amount of $10,183,855 approved for the Merced Pipeline Dairy Digester Cluster Project.

A.22-02-007: SoCalGas Angeles Link Application

Application filed by SoCalGas to establish a memorandum account in order to record costs associated with the development of the Angeles Link project. Angeles Link is a proposal to develop a clean renewable hydrogen energy transport system to serve the Los Angeles Basin and beyond.

A.24-12-011

Application filed by SoCalGas to Implement Revenue Requirement for Costs to Enable Commencement of Phase 2 Activities for SoCalGas Angeles Link Application. SoCalGas requests $266 million to conduct Phase 2 activities that could ultimately support the affordability of the clean energy transition.

A.20-11-004: Original Hydrogen Injection Application

Application filed by PG&E, SoCalGas, SDG&E, and SWG for the creation of hydrogen blending demonstration projects by each utility.

A.19-02-015: Voluntary Renewable Natural Gas Tariff

Application filed by SoCalGas and SDG&E to offer a three-year Voluntary Renewable Natural Gas Tariff (VRNGT) program for their respective eligible core customers.

R.17-06-015: Dairy Biomethane Pilot Projects

The CPUC opened this Rulemaking to establish the necessary framework to 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 (Lara, 2016).

Biomethane Monetary Incentive Program

D.19-12-009 implemented an Incentive Reservation System for the biomethane monetary incentive program established as part of D.15-06-029. The biomethane monetary incentive program provides up to $3 million for non-dairy clusters and $5 million for dairy clusters that successfully interconnect with the natural gas pipeline system and operate by December 31, 2026. The Incentive Reservation System allows project developers to reserve incentive funds during the development phase of a project and receive the funds once the project is interconnected and operating. D.15-06-029 originally provided $40 million for incentives.

The CPUC authorized an additional $40 million in funding from gas utility Cap-and-Trade auction proceeds, bringing total funding to $80 million. The collective allocation of the additional $40 million in additional incentive spending is distributed across each of California four large gas utilities’ service territories consistent with each gas utility’s respective percentage of their combined CARB allocation of Cap-and-Trade allowances:

SoCalGas: $19,704,000 (49.26 percent of $40 million)
PG&E: $16,936,000 (42.34 percent of $40 million)
SDG&E: $2,708,000 (6.77 percent of $40 million)
SWG: $652,000 (1.63 percent of $40 million)

The interconnection incentive program is currently fully subscribed, but still accepting reservations from interested developers. Reservation applications that have been received to date are tabulated below.