The California Public Utilities Commission (CPUC) has denied Pacific Gas and Electric Company's (PG&E) application for a pilot project aimed at converting woody biomass into renewable natural gas (RNG).
The decision was issued last month.
PG&E has been ordered to return $16.936 million in cap-and-trade proceeds, with accrued interest, to ratepayers via the California Climate Credit next year.
In February 2022, the CPUC directed both PG&E and the Southern California Gas Company (SoCalGas) to propose at least one woody biomass-to-gas project by 1 July 2023.
The intention was that agricultural, forest or urban wood waste would be utilised as biomass, to be converted into biomethane.
The PG&E project proposed a pilot that would be implemented by West Biofuels. It would aim to harness $16.936 million from PG&E's cap-and-trade takings for infrastructure funding and pipeline build-out costs.
However, the CPUC said the project failed to comply with California Air Resources Board (CARB) stipulations.
In particular, it failed to adhere to 17 CCR section 95893(d), which directs that allocated allowance auction proceeds need to demonstrably reduce greenhouse gas (GHG) emissions.
It was decided that the PG&E proposal lacked sufficient evidence to prove this.
PG&E's ratepayer refund will be processed through the Tier 2 Annual Gas True-Up of Gas Transportation Balancing Accounts, effective 1 January next year.
California’s PG&E to return $16.9 million as pilot biomass project is rejected
