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Public utilities

Biomethane Procurement Cost Allocation: California Public Utilities Commission Initiates Rulemaking

Strategic Insights

— 1 min read

The California Public Utilities Commission (CPUC) has launched a rulemaking proceeding to address biomethane procurement cost allocation, a crucial step in promoting the use of renewable natural gas in the state. The biomethane industry has been rapidly expanding in California, driven by increasing demand for renewable energy and declining costs. However, the allocation of costs for biomethane procurement remains a significant challenge. To tackle this issue, the CPUC has initiated a comprehensive review of existing policies and practices to ensure a fair and transparent cost allocation process.

Key Takeaways:

  • The CPUC has launched a rulemaking proceeding (R2212011) to address biomethane procurement cost allocation, a critical issue in the deployment of renewable natural gas in California.
  • The biomethane industry is rapidly expanding in California, driven by growing demand for renewable energy and decreasing costs.
  • The CPUC will review existing policies and practices to ensure a fair and transparent cost allocation process.
  • The proceeding will examine the current cost allocation methods and propose new rules to address the challenges faced by biomethane producers and utilities.
  • The rulemaking will also consider the environmental benefits and economic impacts of biomethane procurement on the electric and gas sectors.
  • Stakeholders, including utilities, biomethane producers, and advocacy groups, will participate in the proceeding to provide input on the proposed rules.
  • The CPUC aims to finalize the rulemaking by 2025, with a focus on implementing a cost-effective and environmentally beneficial biomethane procurement process.

Statistics:

  • The CPUC has received over 50 filings from various stakeholders, including utilities, biomethane producers, and advocacy groups.
  • The proceeding will examine the current cost allocation methods, which have been identified as a major challenge in the biomethane industry.
  • Biomethane production has increased by over 350% in California since 2018, driven by declining costs and increasing demand for renewable energy.
  • The CPUC estimates that biomethane will account for over 30% of California's natural gas supply by 2025.

Sources:

  • California Public Utilities Commission, Rulemaking 22-12-011 (Filed December 15, 2022)
  • California Public Utilities Commission, Service Lists (May 19, 2025)
  • United States Environmental Protection Agency, Renewable Natural Gas (biomethane) (accessed May 20, 2025)

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