California bill calls for state to share biomass fuel costs

By Katie Fletcher | May 22, 2015

Legislation pending in the California legislature aims to transfer funds within the state’s Greenhouse Gas Reduction Fund for the purpose of maintaining the current level of biomass generation. The bill, S.B. 590, is currently undergoing review by the Assembly Committee on Appropriations. In April, it was unanimously passed by the Assembly Committee on Natural Resources and the Assembly Committee on Utilities and Commerce.

The bill was first introduced in February by Assembly Members Brian Dahle, R-Redding, and Rudy Salas , D- Bakersfield,  to create the Biomass State Cost Share Account within the GHG Reduction Fund. Certain amounts from the GHG Reduction Fund would be transferred to the biomass share account for the 2015-2016 through 2019-2020 fiscal years. The California Energy Commission would appropriate the funds to biomass plants, but precisely how much money will be available has yet to be determined.

The language in the bill reads that in order to prove eligibility for funding from the Biomass State Cost Share Account a facility’s solid fuel biomass electrical generation must be generated on and after Jan. 1, 2016, generated within the state and sold to customers within California. Additionally, facilities must be certified under California’s Renewable Portfolio Standard Program. The bills states an applicant shall submit monthly invoices to the commission to document eligible generation and the fuel used for that generation. The commission then shall review the submitted invoices and make monthly incentive payments to each applicant based on the eligible generation and the applicable production incentive rate.

The hope is to maintain the current level of biomass power generation in the state and revitalize currently idle facilities in strategically located regions. Assembly Member Dahle hopes that the bill can help biomass power become more competitive, because in California it’s hard for biomass to compete with subsidized renewable energy sources like wind and solar. “Power purchase contracts that are up for biomass plants aren’t getting renewed because utilities can buy power cheaper at other places,” Dahle said.

One example of this is the Rio Bravo biomass plant in Fresno, California, which opened in 1988. The plant’s 30-year power purchase contract with PG&E is expiring soon and it’s not expected the contract will be renewed. “If we lose that infrastructure it’s very hard to get it back,” Dahle said. “We used to generate about 750 MW statewide under biomass, and we’re down to around 550 MW now.”

Dahle’s goal with pending AB 590 is that the allocation of funds within the GHG Reduction Fund for use amongst state biomass power plants would help level the playing field and make biomass more competitive amongst other renewables. He believes biomass plants need to be kept up and running for the many co-benefits provided to the state. “The co benefits of doing biomass are huge,” Dahle said. “We have all kinds of endangered species in the forest, we have water quality standards that we have to meet, and by allowing catastrophic wildfires to burn with so much fuel out there it’s devastating the watershed, emitting carbon into the air and wiping out the habitat for species.”

Dahle adds that currently forests have a too much fuel loading with more small trees per acre than in the past. This has caused wildfires. According to Dahle, firefighting costs have skyrocketed and watersheds are in desperate need of repair. “It’s a win-win to do biomass because it allows forests to open back up and snow to get to the ground,” Dahle said. “Snow lays on the limbs and the brush called evapotranspiration, but when snow lands on the floor of the forest it recharges ground water, makes meadows work properly and filters the water before it gets to our farms, cities and for the wildlife and fish on their way to the ocean.”

The bill covers more than forestry residue, including agricultural waste, diversion from landfills, etc. “There are different kinds of biomass, but they’re all in the same boat,” Dahle said.

He said that he has a lot of co-authors and bipartisan support on the bill, including his democratic joint-author Salas, who is having issues with agricultural waste in his area. “I’m optimistic we get the bill to the governor and actually get it signed,” Dahle said. “The policy is good, but the funding is always the tough part.”

The exact amount of funding that would transfer per fiscal year if the bill passed is still undetermined. Currently, the bill reads as allocating $74 million into the Biomass State Cost Share Account in the 2015-16 fiscal year, $118 million for 2016-17 and in each of the following fiscal years $120 million up to fiscal year 2019-20.

Although it’s uncertain if the full allotment will be distributed if passed, Dahle is happy to have the ball moving. “It’s designed to keep the ones that are here going and then still have the conversation on how we go forward,” Dahle said. “There are lots of idled plants that may be able to be fired back up if this bill goes through. We need some time to get the forest back into shape, so we need a long-term solution and this is one of the tools in the toolbox to use right now.”