11. Gas Supply Plan
PG&E presented an Electric Portfolio Gas Supply Plan, which included a proposal to procure biomethane for use in its electric generation plants. Specifically, PG&E proposes that: 1) it be authorized to pay a premium for biomethane over current forward gas prices; 2) that its procurement of biomethane be determined to be renewables portfolio standard (RPS) eligible for purposes of PG&E's compliance obligations under the California RPS; and 3) that PG&E not be required to file a separate advice letter or otherwise obtain Commission approval to count the purchase and use of biomethane towards PG&E's RPS requirements. (Ex. 101-C at D-13.)
TURN opposes PG&E's biomethane proposal, and makes alternative proposals as to how biomethane would count towards RPS compliance. (TURN Opening Brief at 1-5.) In the alternative, TURN recommends that this issue be addressed in the Commission's RPS proceeding, Rulemaking 11-05-005. (Id. at 5.)
This is not an appropriate forum for the Commission to make a finding of RPS eligibility. First, the determination of what resources are RPS-eligible is to be made by the California Energy Commission, not by this Commission. To the extent that this Commission does make any determination as to whether a particular resource can be counted for RPS compliance, the appropriate place for such a determination is in the RPS proceeding, not in this proceeding.9 Accordingly, we decline to find that procurement of biomethane for use in electric generation facilities is eligible for RPS compliance.
PG&E's request for authority to pay a premium price for biomethane is based upon the additional value of its environmental attributes. Because we do not reach the issue of biomethane's RPS eligibility, we also decline to pre-authorize payment of a premium for biomethane over conventional gas. PG&E is free to purchase biomethane for use in its power plants, and may do so under the same conditions that it purchases conventional gas, but only to the extent that the price it pays for biomethane is no higher than the price of conventional gas. If PG&E wishes to pay a premium price for biomethane, independent of whether the biomethane may be RPS-eligible, it must obtain Commission approval via a Tier 3 advice letter process.
9 Even if such a determination could be made in this proceeding, there is inadequate record support to make that determination here.
