California bill to incentivize biomass fuel passes Assembly

By Katie Fletcher | June 09, 2015

Last Week, California Assembly Bill 590 passed the Assembly Committee on Appropriations unanimously with bipartisan support and is on its way to the Senate. The bill will add incentives for biomass utilization of agricultural waste and forest waste.

Assembly Members Brian Dahle, R-Redding, and Rudy Salas, D-Bakersfield, introduced the bill in February. In April, it was passed by the Assembly Committee on Natural Resources and the Assembly Committee on Utilities and Commerce. Around the end of May, the legislation was undergoing review by the Assembly, and now, since it’s passed, has been ordered to the Senate.    

Assemblyman Dahle hopes the bills will help with forest management to avoid forest fires that have occurred in his district, destroying lives, property critical animal habitat, ruining watersheds and wasting valuable resources. “I introduced AB 590 to address this crisis,” Dahle said. “The bill is now on to the Senate with bipartisan support from the Assembly, where I hope to see it receive the same support.”

Another area Dahle and Salas hope AB 590 can address is the loss of biomass power generation in the state, due to some biomass power plants struggling to renew expiring power purchase agreements (PPA). In the last 12 months, California has closed five biomass facilities due to these expired contracts and poor economics. The bill provides cost sharing strategies to help resolve this problem. Financing for biomass power plants would be transferred from within the state’s Greenhouse Gas Reduction Fund.

As the legislative text currently reads, the bill would provide that moneys in the GGRF, upon appropriation by the legislature, may be made available for expenditure by the State Energy Resources Conservation and Development Commission for the purposes of maintaining the current level of biomass power generation in the state and revitalizing currently idle facilities in strategically located regions. “AB 590 provides the necessary structure and resources to protect and incentivize biomass power in California,” Salas said.

According to the Assembly Appropriations Committee, the fiscal effect regarding annual California Energy Commission administrative costs would be between $1.8 million and $2.3 million from the GGRF for the duration of the program. In its analysis, the Assembly estimates there would be annual costs between $175,000 and $316,000 from the account for the Air Resource Board to coordinate with the CEC on program development, implementation and quantification of GHG reductions to establish the legal nexus for the use of cap and trade revenue funds.

If passed, a biomass facility seeking available funding would submit an application to the commission demonstrating that it is a solid fuel biomass facility and is California Renewables Portfolio Standard Program certified. As the bill stands now, an applicant would submit monthly invoices to the commission to document eligible generation and the fuel used for that generation, which would then be reviewed by the commission for the disbursement of monthly incentive payments to each applicant based on the eligible generation and the applicable production incentive rate.