The California Public Utilities Commission (CPUC) has rejected an application from Pacific Gas and Electric Company (PG&E) for a pilot project that aimed to convert woody biomass into renewable natural gas (RNG). The decision was made last month, reports Bioenergy Insight.
As a result, PG&E must return $16.936 million—plus interest—from its cap-and-trade funds to customers. The refund will be issued through the California Climate Credit starting January next year, as part of the Tier 2 Annual Gas True-Up process.
The proposed pilot, to be carried out by West Biofuels, planned to use funds from PG&E’s cap-and-trade program to cover infrastructure and pipeline development. The project was part of a broader CPUC directive issued in February 2022, requiring both PG&E and Southern California Gas Company (SoCalGas) to submit at least one biomass-to-gas project by July 2023. These projects were intended to turn wood waste from agriculture, forests, or urban areas into biomethane.
However, the CPUC concluded that PG&E’s proposal failed to meet California Air Resources Board (CARB) requirements. Specifically, it did not comply with a regulation that mandates allowance auction proceeds be used for projects that clearly reduce greenhouse gas emissions. The CPUC found that PG&E did not provide enough evidence to show the project would meet this goal.
