California would extend biomethane incentives and allow capped rate recovery

The commission would extend the biomethane project incentive program. The extension applies to the existing program for biomethane projects. The extension would run through December 31, 2030; the section would be repealed on January 1, 2031, unless a later law extends it.

The commission could authorize up to $50 million in additional program funding. The funding would support the biomethane monetary incentive program. No more than $10 million could be authorized for dairy biomethane projects. The money would come from revenues, including accrued interest, received by a gas corporation from directly allocated greenhouse gas allowances. The commission could authorize this additional funding on or after January 1, 2027.

The commission would allow gas corporations to recover eligible biomethane interconnection investment costs through rates. This applies to gas corporations’ investments in interconnection costs for biomethane projects. For each project, the combined amount of gas corporation interconnection investments and program funding could not exceed the project’s incentive limit. Each gas corporation’s eligible annual costs could not exceed 1 percent of its total annual revenue requirement approved in its most recent rate case. The rate recovery requirement would begin on or after January 1, 2027.