Existing law vests the State Energy Resources Conservation and Development Commission with the exclusive power to certify sites and related facilities for thermal powerplants. Existing law requires an electrical corporation, local publicly owned electric utility, or community choice aggregator with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration date in the contract that was operative in 2022, except as specified.

This bill would require the commission, on or before December 31, 2024, 2025, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024. The bill would require the report to include various assessments of biomass combustion facilities still in operation as of January 1, 2024, and options to maximize the environmental benefits of these facilities. The bill would also require the report to include a recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural, forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, impacts of upgrading biomass combustion facilities on the procurement costs of the energy produced and the associated impacts to ratepayer costs, and job creation or job loss that may result from the strategy. The bill would require the report to include recommendations related to baseload energy generation and managing excess biomass if biomass combustion facilities cease operation and strategies related to processing waste and job training in areas where biomass combustion facilities cease operation. The bill would require the commission to include in the report an evaluation of the practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.

The bill would require the commission, in preparing the report, to coordinate with the State Air Resources Board and local air districts on assessments of environmental benefits and available technologies to maximize those benefits. By imposing new duties on local air districts, the bill would impose a state-mandated local program. The bill would also require the commission, in preparing the report, to coordinate with specified state entities for feedstock assessments for forest, agricultural, urban, and postfire waste, engage with and solicit feedback from the communities in which biomass combustion facilities are located and the applicable local governments, and provide opportunities for stakeholder and public input.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law vests the State Energy Resources Conservation and Development Commission with the exclusive power to certify sites and related facilities for thermal powerplants. Existing law requires an electrical corporation, local publicly owned electric utility, or community choice aggregator with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration date in the contract that was operative in 2022, except as specified.

This bill would require the commission, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024. The bill would require the report to include various assessments of biomass combustion facilities still in operation as of January 1, 2024, and options to maximize the environmental benefits of these facilities. The bill would also require the report to include a recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural rural, forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, impacts of upgrading biomass combustion facilities on the procurement costs of the energy produced and the associated impacts to ratepayer costs, and job creation or job loss that may result from the strategy. The bill would require the report to include recommendations related to baseload power energy generation and managing excess biomass if biomass combustion facilities cease operation and strategies related to processing waste and job training in areas where biomass combustion facilities cease operation. The bill would require the commission to include in the report an evaluation of the feasibility practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.

The bill would require the commission, in preparing the report, to coordinate with the State Air Resources Board and local air districts on assessments of environmental benefits and available technologies to maximize those benefits. By imposing new duties on local air districts, the bill would impose a state-mandated local program. The bill would also require the commission, in preparing the report, to coordinate with specified state entities for feedstock assessments for forest, agricultural, urban, and postfire waste, engage with and solicit feedback from the communities in which biomass combustion facilities are located and the applicable local governments, and provide opportunities for stakeholder and public input.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law vests the State Energy Resources Conservation and Development Commission with the exclusive power to certify sites and related facilities for thermal powerplants. Existing law requires an electrical corporation, local publicly owned electric utility, or community choice aggregator with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration date in the contract that was operative in 2022, except as specified.

This bill would require the commission, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024. The bill would require the report to include an assessment various assessments of operational factors of each facility, a comparison of direct combustion compared to other biomass energy technologies, and a recommended strategy, if appropriate, to repower biomass combustion facilities to noncombustion conversion technologies. biomass combustion facilities still in operation as of January 1, 2024, and options to maximize the environmental benefits of these facilities. The bill would also require the report to include recommendations and strategies related to areas where combustion biomass facilities may be shut down or repowered, including strategies related to baseload power generation, processing waste, and job training, as provided. The a recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, and job creation or job loss that may result from the strategy. The bill would require the report to include recommendations related to baseload power generation and managing excess biomass if biomass combustion facilities cease operation and strategies related to processing waste and job training in areas where biomass combustion facilities cease operation. The bill would require the commission to include in the report an evaluation of the feasibility of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.

The bill would require the commission, in preparing the report, to coordinate with the State Air Resources Board and local air districts on emissions assessments and emissions control options. of environmental benefits and available technologies to maximize those benefits. By imposing new duties on local air districts, the bill would impose a state-mandated local program. The bill would also require the commission, in preparing the report, to coordinate with specified state entities for feedstock assessments for forest, agricultural, urban, and postfire waste, engage with and solicit feedback from the communities in which biomass combustion facilities are located and the applicable local governments, and to provide opportunities for stakeholder and public input.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law vests the State Energy Resources Conservation and Development Commission with the exclusive power to certify sites and related facilities for thermal powerplants. Existing law requires an electrical corporation, local publicly owned electric utility, or community choice aggregator with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration date in the contract that was operative in 2022, except as specified.

This bill would require the commission, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024. The bill would require the report to include an assessment of operational factors of each facility, a comparison of direct combustion compared to other biomass energy technologies, and a recommended strategy, if appropriate, to repower biomass combustion facilities to noncombustion conversion technologies. The bill would also require the report to include recommendations and strategies related to areas where combustion biomass facilities may be shut down or repowered, including strategies related to baseload power generation, processing waste, and job training, as provided. The bill would require the commission, in preparing the report, to coordinate with the State Air Resources Board and local air districts on emissions assessments and emissions control options. By imposing new duties on local air districts, the bill would impose a state-mandated local program. The bill would also require the commission, in preparing the report, to coordinate with specified state entities for feedstock assessments for forest, agricultural, urban, and postfire waste, and to provide opportunities for stakeholder and public input.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 998 (Connolly) - Biomass energy facilities: State Energy Resources Conservation and Development Commission: report

Bill Summary:

This bill would require the California Energy Commission (CEC) to issue a report on the utility-scale biomass combustion facilities still in operation that includes various assessments and recommendations regarding their continued operation.

Fiscal Impact:

• The CEC estimates one-time costs of about $500,000 (Energy Resources Program Account [ERPA] or other fund) to produce the report and provide technical support. In addition, CEC identifies unknown but likely minor one-time costs (ERPA or other fund) for legal support to review report drafts, workshop notices, contracts, and work authorizations for consultants retained to support report development as well as assist program staff in securing information. CEC notes it is possible this work could be absorbable, but a partial position might be needed depending on actual workload.

Background:

Biomass energy. Biomass energy is the general term for waste-to-energy power plants that burn organic material, including wood waste, to generate electricity. The CEC notes there are just over 80 operating biomass power plants in California, with installed capacity of about 1,260 MW. As of the most recent CEC inventory (2021), biomass energy represented just under three percent of the total in-state generation and just over two percent of the state’s total powermix. Biomass energy can provide reliable and renewable baseload energy, or firm power, meaning that electricity can be generated during scheduled times and at predetermined power levels, unlike intermittent resources (such as solar and wind).

History of state policies to direct procurement of biomass for non-energy-related policies. A number of state policies have required and encouraged the procurement of biomass energy, in many cases to address other policy issues, such as tree mortality and wildfires. These include a 2015 executive order related to tree removal in High Fire Hazard Severity Zones (HHZs) and directing the California Public Utilities Commission (CPUC) to use its authority to extend contracts for bioenergy facilities receiving feedstock from HHZs. This resulted in the procurement of 50 MW of collective generating capacity from biomass generation facilities that use progressively higher annual minimum prescribed levels of HHZ material as feedstock, BioRAM 1 Contracts, by the electric investor-owned utilities (IOUs). BioRAM contracts were required to have terms of five-years, with the right to extend the five-year contract term for one year at a time, up to a cumulative total of 10 years so long as HHZ fuel is available at the minimum fuel requirement (80 percent). SB 859 (Committee on Budget, Chapter 368, Statutes of 2016) included a new requirement for electric IOUs and publicly owned utilities (POUs) to procure their respective share of 125 MW from existing biomass facilities using prescribed amounts of dead and dying trees located in HHZs as feedstock. The electric IOUs were assigned the proportionate share of 96 MW with at least 60 percent of the feedstock coming from HHZs. SB 859 requires that the procurement costs would be recovered from all electric IOU customers on a non-bypassable basis.

SB 901 (Dodd, Chapter 626, Statutes of 2018) required a number of actions to reduce and prevent the risk of wildfires, which also included provisions to loosen the requirements on biomass facilities, including revising the HHZ fuel definitions, require BioRAM contracts to include a monthly compliance option with updated reporting and payment. SB 901 also prohibits biomass facilities for the BioRAM to operate in areas of the state with severe or extreme federal air quality designations, and revise default terms.

More recently, SB 1109 (Caballero, Chapter 364, Statutes of 2022) extended to December 31, 2023, the electrical IOUs’ obligation to collectively procure their proportionate share of 125 MW of cumulative rated generating capacity from existing bioenergy projects, commencing operation before June 1, 2013, through financial commitments of 5 to 15 years, inclusive. The bill also exempted the electric POUs for (1) contracts with a facility operator who was in a bankruptcy or other insolvency proceeding, or (2) a contract for a project that does not deliver energy to the utility.

Costs of biomass energy. Many of California’s biomass plants that originally came on-line in the 1980s and 1990s began dwindling production in the late 1990s. According to the CEC’s website, the expiration of price support to the biomass industry from the government is the main reason for the reduction in biomass power generation in California. Biomass plants are hindered by high operation and feedstock transportation costs, which can result in insufficient revenue to cover operation and maintenance expenses. As a result, biomass energy is generally priced much higher than other renewable energy resources. According to the CPUC’s 2021 Padilla Report, Costs and Cost Savings for the RPS Program, the average price of contracts executed in 2019 that were greater than three MW was 2.8¢/kWh (kilowatt-hour) compared to 3.5¢/kWh in 2020, compared to average contract price of existing BioRAM contracts of 12.0¢/kWh. In the November 2021 CPUC RPS report, the CPUC notes a number of challenges with accessing fuel for biomass facilities, including insufficient supply chain capacity, long hauling distances, and high transportation costs, as well as, the need for retrofits of existing facilities. The analysis notes: “Overcoming these barriers would require further, possibly substantial, investment and subsidies.” Electric POUs have also shared that biomass contracts were priced much higher than other energy resources, including a contract priced 20-30 percent more than other renewable baseload energy contracts for geothermal and landfill gas.

Forest biomass and wildfire. Wildfires have been growing in duration and ferocity over the past 20 years. Their growing risk is due to a number of factors, from accumulating forest fuels to a warming climate to expanding development in the wildland-urban interface. Better management of the fuels that contribute to this wildfire risk is one of the main strategies to help mitigate fires. California’s forestry waste has increased as drought and tree die-off have provided large amounts of fuel for forest fires. Often biomass materials are piled and burned creating air pollution, such as black carbon, or left to decay, creating methane, which has a global warming potential 28 times more powerful than carbon dioxide (CO₂) over a 100-year time horizon. If left on the forest floors, biomass can provide fuel to wildfires. As a result, forested communities confronting the threat of catastrophic wildfires express support for the expansion of biomass plants as a strategy to address the excess fuels. Some idled biomass generation has come back into operation, not necessarily at full capacity, and new projects are being developed.

Proposed Law:

This bill would require the CEC, by December 31, 2025, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024 that includes various assessments and recommendations regarding their continued operation. Specifically, this bill would:

1. Require the CEC, on or before December 31, 2025, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024.
2. Require the report to include various assessments of the biomass combustion facilities and options to maximize the environmental benefits of these facilities.
3. Require the report to include a recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural, forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, impacts of upgrading biomass combustion facilities on the procurement costs of the energy produced and the associated impacts to ratepayer costs, and job creation or job loss that may result from the strategy.
4. Require the report to include recommendations related to addressing various issues if biomass facilities cease operations, including: baseload energy generation, managing excess biomass, strategies related to processing waste, and job training.
5. Require the CEC to include in the report an evaluation of the practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.
6. Require the CEC, in preparing the report, to coordinate with the California Air Resources Board (CARB) and local air districts on assessments of environmental benefits and available technologies to maximize those benefits.
7. Impose a state-mandated local program by imposing new duties on local air districts.
8. Require the CEC, in preparing the report, to coordinate Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery on feedstock assessments for forest, agricultural, urban, and post-fire waste, engage with and solicit feedback from the communities in which biomass combustion facilities are located and the applicable local governments, and provide opportunities for stakeholder and public input.

Related Legislation:

SB 488 (Alvarado-Gil, 2023) would authorize a community choice aggregator (CCA) to procure the proportionate share of the exempted portion of the existing bioenergy procurement requirement applicable to the publicly owned utilities, and require the CPUC to recover the costs from all electric investor-owned utility distribution customers.

SB 1109 (Caballero, Chapter 364, Statutes of 2022) extended requirements on electric IOUs to procure energy from biomass generating electric facilities by five years and requires extension of existing contracts by five years.

SB 843 (Aguiar-Curry, Chapter 234, Statutes of 2021) authorized CCAs to submit eligible bioenergy projects for cost recovery from electric utility ratepayers, pursuant to the BioMAT program, if open capacity exists within the 250 MW program limit.

SB 515 (Caballero, 2019) would have expanded the fuels and feedstocks that are eligible to satisfy requirements related to specified contracts for mandated electricity generation from biomass facilities. The bill was further amended to require a report on available fuel feedstocks. The bill died in the Assembly Committee on Appropriations.

SB 901 (Dodd, Chapter 626, Statutes of 2018) addressed numerous issues concerning wildfire prevention, response and recovery, including provisions related to biomass operations and electricity procurement.

SB 859 (Senate Budget and Fiscal Review, Chapter 368, Statutes of 2016) required retail sellers of electricity to purchase a total of 125 MW of power from biomass facilities that generate electricity from forest materials removed from specific high fire hazard zones, as designated by CalFire in the Governor's Proclamation of a State of Emergency issued October 30, 2015.

Staff Comments:

The CEC’s main funding source, ERPA, has a significant structural deficit. ERPA was established to provide funds for ongoing energy programs and energy projects, including the operations of the CEC. ERPA is supported by a statutory surcharge on electricity consumption. According to the CEC, as building and appliance energy efficiency and the increase of behind-the-meter solar produce customer savings and flatten statewide electricity consumption, ERPA revenues have decreased, and the costs have been borne by fewer and fewer customers. Even as revenues drop, ERPA is repeatedly tapped to support new programs and must cover increases in employee compensation and benefit contributions.

The CEC’s building and appliance standards have led to decreased energy consumption and reduced ratepayer bills, saving California consumers well over $100 billion over the last 40 years. However, these electricity reductions and consumer savings also reduce ERPA revenues. The CEC’s standards continue to save Californians more money than they pay through the ERPA surcharge. In addition, behind-the-meter rooftop solar, wind, and non-utility generation are exempt from the ERPA surcharge. As behind-the-meter capacity grows, ERPA revenues decline correspondingly.

The surcharge generated approximately $69.1 million in 2020-21 and currently costs the average household about $2.13 annually (larger customers pay the same rate but pay more based on volume). Despite CEC efforts to reduce ERPA spending by more than $37 million over four years, a structural deficit remains and ERPA’s fund balance is projected to be in the red in 2024-25. As part of the 2022-23 budget, the Legislature passed trailer bill language that raised the statutory cap on the ERPA surcharge, tied the statutory cap to the Consumer Price Index, and extended the surcharge to behind-the-meter electricity consumption.

Staff note that while ERPA is the primary operating account of the CEC, due to its ongoing structural deficit, ERPA may not be an appropriate fund source to support the implementation of this bill.

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SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: Hearing Date: 6/20/2023

SUBJECT:

DIGEST: This bill would require the California Energy Commission (CEC), by December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024 and include various assessments and recommendations regarding their continued operation.

ANALYSIS:

Existing law:

1. Defines “renewable electrical generation facility” for purposes of the state’s renewable portfolio standard (RPS) to include biomass energy. (Public Resources Code §25741)
2. Requires electrical corporations, by December 1, 2023, to collectively procure, through financial commitments of five to 15 years, their proportionate share of 125 megawatts (MW) of cumulative rated generating capacity from bioenergy projects commencing operation before June 1, 2013. Requires local publicly owned electric utility serving more than 100,000 customers to procure their proportionate shares of 125 MW of cumulative rated generating capacity from those kinds of bioenergy projects subject to terms of at least five years. Exempts from the requirements a local publicly owned electrical utility that previously entered into five-year financial commitments for its proportionate share under specified conditions. (Public Utilities Code §399.20.3)
3. Requires an electrical corporation, local publicly owned electric utility, or community choice aggregator (CCA) with a contract to procure electricity generated from biomass that is operative at any time in 2018, and expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date five years later than the expiration date in the contract that was operative in 2018, so long as the contract extension follows the feedstock requirements. Prohibits this requirement from applying to facilities located in federal severe or extreme nonattainment areas for particulate matter or ozone. (Public Utilities Code §8388)
4. Establishes and vests the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)) with the exclusive power to certify sites and related facilities for thermal powerplants. (Public Resources Code §25500 et seq.)

This bill:

1. Requires the CEC, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024.
2. Requires the report to include various assessments of the biomass combustion facilities and options to maximize the environmental benefits of these facilities.
3. Requires the report to include a recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers impacts on disadvantaged, rural, forested, and agricultural communities, impacts on the ability to maintain existing capacity for managing forest or other excess biomass, the cost of upgrading facilities and financing opportunities, impacts of upgrading biomass combustion facilities on the procurement costs of the energy produced and the associated impacts to ratepayer costs, and job creation or job loss that may result from the strategy.
4. Requires the report to include recommendations related to addressing various issues if biomass facilities cease operations, including: baseload energy generation, managing excess biomass, strategies related to processing waste, and job training.
5. Requires the CEC to include in the report an evaluation of the practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.
6. Requires the CEC, in preparing the report, to coordinate with the California Air Resources Board (CARB) and local air districts on assessments of environmental benefits and available technologies to maximize those benefits.
7. Imposes a state-mandated local program by imposing new duties on local air districts.
8. Requires the CEC, in preparing the report, to coordinate Department of Forestry and Fire Protection (CAL FIRE), the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery on feedstock assessments for forest, agricultural, urban, and post-fire waste, engage with and solicit feedback from the communities in which biomass combustion facilities are located and the applicable local governments, and provide opportunities for stakeholder and public input.

Background

Biomass energy. Biomass energy is the general term for waste-to-energy power plants that burn organic material, including wood waste, to generate electricity. The CEC notes there are just over 80 operating biomass power plants in California, with installed capacity of about 1,260 MW. As of the most recent CEC inventory (2021), biomass energy represented just under three percent of the total in-state generation and just over two percent of the state’s total powermix. Biomass energy can provide reliable and renewable baseload energy, or firm power, meaning that electricity can be generated during scheduled times and at predetermined power levels, unlike intermittent resources (such as solar and wind).

History of state policies to direct procurement of biomass for non-energy-related policies. A number of state policies have required and encouraged the procurement of biomass energy, in many cases to address other policy issues, such as tree mortality and wildfires. These include a 2015 executive order related to tree removal in High Fire Hazard Severity Zones (HHZs) and directing the California Public Utilities Commission (CPUC) to use its authority to extend contracts for bioenergy facilities receiving feedstock from HHZs. This resulted in the procurement of 50 MW of collective generating capacity from biomass generation facilities that use progressively higher annual minimum prescribed levels of HHZ material as feedstock, BioRAM 1 Contracts, by the electric investor-owned utilities (IOUs). BioRAM contracts were required to have terms of five-years, with the right to extend the five-year contract term for one year at a time, up to a cumulative total of 10 years so long as HHZ fuel is available at the minimum fuel requirement (80 percent). SB 859 (Committee on Budget, Chapter 368, Statutes of 2016) included a new requirement for electric IOUs and publicly owned utilities (POUs) to procure their respective share of 125 MW from existing biomass facilities using prescribed amounts of dead and dying trees located in HHZs as feedstock. The electric IOUs were assigned the proportionate share of 96 MW with at least 60 percent of the feedstock coming from HHZs. SB 859 requires that the procurement costs would be recovered from all electric IOU customers on a non-bypassable basis.

SB 901 (Dodd, Chapter 626, Statutes of 2018) required a number of actions to reduce and prevent the risk of wildfires, which also included provisions to loosen the requirements on biomass facilities, including revising the HHZ fuel definitions, require BioRAM contracts to include a monthly compliance option with updated reporting and payment. SB 901 also prohibits biomass facilities for the BioRAM to operate in areas of the state with severe or extreme federal air quality designations, and revise default terms.

More recently, SB 1109 (Caballero, Chapter 364, Statutes of 2022) extended to December 31, 2023, the electrical IOUs’ obligation to collectively procure their proportionate share of 125 MW of cumulative rated generating capacity from existing bioenergy projects, commencing operation before June 1, 2013, through financial commitments of 5 to 15 years, inclusive. The bill also exempted the electric POUs for (1) contracts with a facility operator who was in a bankruptcy or other insolvency proceeding, or (2) a contract for a project that does not deliver energy to the utility.

Costs of biomass energy. Many of California’s biomass plants that originally came on-line in the 1980s and 1990s began dwindling production in the late 1990s. According to the CEC’s website, the expiration of price support to the biomass industry from the government is the main reason for the reduction in biomass power generation in California. Biomass plants are hindered by high operation and feedstock transportation costs, which can result in insufficient revenue to cover operation and maintenance expenses. As a result, biomass energy is generally priced much higher than other renewable energy resources. According to the CPUC’s 2021 Padilla Report, Costs and Cost Savings for the RPS Program, the average price of contracts executed in 2019 that were greater than three MW was 2.8¢/kWh (kilowatt-hour) compared to 3.5¢/kWh in 2020, compared to average contract price of existing BioRAM contracts of 12.0¢/kWh. In the November 2021 CPUC RPS report, the CPUC notes a number of challenges with accessing fuel for biomass facilities, including insufficient supply chain capacity, long hauling distances, and high transportation costs, as well as, the need for retrofits of existing facilities. The analysis notes: “Overcoming these barriers would require further, possibly substantial, investment and subsidies.” Electric POUs have also shared that biomass contracts were priced much higher than other energy resources, including a contract priced 20-30 percent more than other renewable baseload energy contracts for geothermal and landfill gas.

Forest biomass and wildfire. Wildfires have been growing in duration and ferocity over the past 20 years. Their growing risk is due to a number of factors, from accumulating forest fuels to a warming climate to expanding development in the wildland-urban interface. Better management of the fuels that contribute to this wildfire risk is one of the main strategies to help mitigate fires. California’s forestry waste has increased as drought and tree die-off have provided large amounts of fuel for forest fires. Often biomass materials are piled and burned creating air pollution, such as black carbon, or left to decay, creating methane, which has a global warming potential 28 times more powerful than carbon dioxide (CO₂) over a 100-year time horizon. If left on the forest floors, biomass can provide fuel to wildfires. As a result, forested communities confronting the threat of catastrophic wildfires express support for the expansion of biomass plants as a strategy to address the excess fuels. Some idled biomass generation has come back into operation, not necessarily at full capacity, and new projects are being developed.

Comments

More work for the CEC? This bill would require the CEC to issue a report, within one year of enactment of this bill, on the utility-scale biomass combustion facilities in operation as of January 1, 2024 that includes numerous provisions. With the growing threat of wildfire there have been nearly annual efforts to expand the procurement of energy from biomass plants. However, the high costs to operate these facilities makes them less competitive in comparison to other energy resources. Additionally, some communities, especially in the San Joaquin Valley, have expressed concerns about the air pollution impacts from the operation of these facilities. While this bill attempts to have the CEC incorporate all these, and many other facets of the operation of the biomass plants, the CEC is not likely have the information, data, or expertise required to provide the report. While the bill notes the need to coordinate with other agencies and entities who are likely to have this information, including CARB, local air districts, CAL FIRE, and others, the CEC would benefit from more time to provide the numerous elements required in the report, including the time to engage the impacted communities. Therefore, the author and committee may wish to amend this bill to move the date of the issuance of the report to December 31, 2025.

Prior/Related Legislation

SB 488 (Alvarado-Gil, 2023) authorizes a community choice aggregator (CCA) to procure the proportionate share of the exempted portion of the existing bioenergy procurement requirement applicable to the publicly owned utilities, and requires the CPUC to recover the costs from all electric investor-owned utility distribution customers. The bill failed passage in this committee.

SB 1109 (Caballero, Chapter 364, Statutes of 2022) extended requirements on electric IOUs to procure energy from biomass generating electric facilities by five years and requires extension of existing contracts by five years.

SB 843 (Aguiar-Curry, Chapter 234, Statutes of 2021) authorized CCAs to submit eligible bioenergy projects for cost recovery from electric utility ratepayers, pursuant to the BioMAT program, if open capacity exists within the 250 MW program limit.

SB 515 (Caballero, 2019) would have expanded the fuels and feedstocks that are eligible to satisfy requirements related to specified contracts for mandated electricity generation from biomass facilities. The bill was further amended to require a report on available fuel feedstocks. The bill died in the Assembly Committee on Appropriations.

SB 901 (Dodd, Chapter 626, Statutes of 2018) addressed numerous issues concerning wildfire prevention, response and recovery, including provisions related to biomass operations and electricity procurement.

SB 859 (Senate Budget and Fiscal Review, Chapter 368, Statutes of 2016) required retail sellers of electricity to purchase a total of 125 MW of power from biomass facilities that generate electricity from forest materials removed from specific high fire hazard zones, as designated by CAL FIRE in the Governor's Proclamation of a State of Emergency issued October 30, 2015.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Association of California Water Agencies
California Compost Coalition
Rural County Representatives of California

San Joaquin County Board of Supervisors

Sierra Business Council

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

As California continues to struggle with the monumental task of processing millions-of-tons of forest waste generated by wildfire mitigation projects, the State remains reliant on many older, combustion biomass facilities. With forest material byproducts increasing, it is incumbent upon the State to identify opportunities to modernize remaining combustion biomass facilities to improve their function and reduce operational emissions. AB 998 accomplishes this task by requiring CEC to study these issues, as well as creating a contingency plan to respond to the loss to forest waste processing capacity and local jobs that could occur as the result of combustion biomass facilities shutting down, or temporarily ceasing to operate.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 998

Author:(Connolly)

As Amended Ver:April 17, 2023

Majority vote

SUMMARY

Requires the State Energy Resources Conservation and Development Commission (CEC) to report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, and specifies information the report must contain.

Major Provisions

1. Requires the CEC, on or before December 31, 2024, to issue a report assessing utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes specified information, including a recommended strategy to upgrade biomass combustion facilities, where appropriate, pursuant to specified considerations.
2. Requires the CEC to include in the report an evaluation of the practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.
3. Requires the CEC to coordinate with the State Air Resources Board and local air districts, the Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery; engage with and solicit feedback from the local governments and communities in which biomass combustion facilities are located; and, provide opportunities for stakeholder and public input.

COMMENTS

Bioenergy generation, energy from biomass, uses existing waste as a form of electricity production. Common sources of biomass feedstock come from plant-based materials such as agricultural waste and residue, and forest residue and thinnings.

Unlike variable renewable energy resources (such as solar and wind), bioenergy technologies can provide reliable and renewable baseload generation, or firm power, meaning that electricity can be generated during scheduled times and at predetermined power levels. The technical electricity potential of biomass feedstock products is 35,000 GigaWatt hours (GWh) or enough to support 4,650 megawatts (MW) of capacity. A 2020 CEC report estimated that the resulting electricity generation possible from bioenergy if the entire technical capacity is captured is 21,500 GWh, which would be enough electricity to provide 6.6% of the state’s clean energy goals. Currently, there are about 30 direct-combustion biomass facility in operation with a capacity of 640 MW.

AB 998 would require the CEC to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes an assessment of the capacity, feedstock, emissions, options to reduce emissions, feasibility of repowering, grid services, and other operational factors of each facility; assessment of costs and comparison to other biomass energy technologies; and, a strategy, if it makes sense, to modernize some or all biomass combustion facilities to noncombustion conversion technologies.

According to the Author

As California continues to struggle with the monumental task of processing millions-of-tons of forest waste generated by wildfire mitigation projects, the State remains reliant on many older, combustion biomass facilities that still utilize rudimentary technology. With forest material byproducts increasing, it is incumbent upon the State to identify opportunities to modernize remaining combustion biomass facilities to improve their function and reduce operational emissions. AB 998 accomplishes this task by requiring CEC to study these issues, as well as creating a contingency plan to respond to the loss to forest waste processing capacity and local jobs that could occur as the result of combustion biomass facilities shutting down, or temporarily ceasing to operate.

Arguments in Support

The Rural County Representatives of California write, “A recent field study indicates that biomass energy generation results in 98-99 percent lower PM2.5, carbon monoxide, methane, and black carbon emissions compared to open pile burning (along with a significant reduction in NOx and carbon dioxide equivalent greenhouse gas emissions). Given the state’s pressing need to increase capacity to deal with forest waste, upgrading and repowering some of these shuttered facilities could help the state achieve its forest health improvement, wildfire risk reduction, and greenhouse gas emission reduction goals.”

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Appropriations Committee, enactment of this bill would result in one-time costs of approximately $500,000 for CEC staff and a contract with a third party that has expertise in biomass (Energy Resources Programs Account or other special fund) and potential legal work costs.

VOTES

ASM NATURAL RESOURCES: 11-0-0

YES: Luz Rivas, Flora, Addis, Friedman, Hoover, Mathis, Muratsuchi, Pellerin, Ward, Wood, Zbur

ASM UTILITIES AND ENERGY: 15-0-0

YES: Garcia, Calderon, Wendy Carrillo, Chen, Connolly, Dixon, Holden, Mathis, McKinnor, Muratsuchi, Reyes, Santiago, Schiavo, Ting, Wallis

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: April 17, 2023

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0000475

Date of Hearing: May 10, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 998

Author:(Connolly) – As Amended Ver:April 17, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires the California Energy Commission (CEC) to issue a report on the utility-scale biomass combustion facilities currently in operation.

Specifically, this bill requires the CEC, on or before December 31, 2024, issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes all of the following:

• 1. An assessment of the capacity of these biomass combustion facilities to process forest biomass and material resulting from vegetation management and forest treatment projects and of the role each in achieving the state’s forest health improvement and wildfire risk reduction objectives.
  2. Options to maximize the environmental benefit of these biomass combustion facilities and an analysis of the practicality and cost-effectiveness of upgrading these facilities with new technologies or alterations in operations.
  3. A recommended strategy to upgrade biomass combustion facilities.
  4. Recommendations for how baseload energy and the capacity for managing excess biomass would be made up if these biomass combustion facilities cease operation.
  5. Strategies for processing forest, agricultural, urban, or postfire waste in areas where these biomass combustion facilities may cease operation temporarily or permanently; and for job training in any areas where job loss would occur due to a biomass combustion facility shutting down or being repowered.
  6. An assessment of the type and duration of contract that would be necessary to encourage these biomass combustion facilities to upgrade.
  7. An evaluation of the practicality and cost-effectiveness of upgrading utility-scale biomass combustion facilities that ceased operation to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.

FISCAL EFFECT:

CEC anticipates the work required by this bill to be extensive, complex and entailing information CEC does not possess. For these reasons, CEC anticipates needing to contract with a third party that has expertise in biomass to assist CEC with the one-time analytical and reporting effort. CEC anticipates a one-time cost of approximately $500,000 for staff and the contract (Energy Resources Programs Account or other special fund).  

CEC notes the work required by this bill will need legal support from CEC’s Chief Counsel’s Office; however, CEC does not know at this time if this legal work will be minor and absorbable or will require additional resources. 

COMMENTS:

1. Background. Much of the state in covered in forests. The forests are habitat to a wide variety of plants and animals, and their health and existence provide numerous ecological and environmental benefits. In addition, homes, businesses and critical infrastructure sits alongside and within those forests.

Unfortunately, much of this forestland is prone to wildfire.

Following particularly devastating wildfires over the first decades of this century, the state committed to improving forest health and, thereby, decreasing the risk of wildfire. Notable in regards to this commitment was passage of SB 901 (Dodd), Chapter 626, Statutes of 2018, which requires California to double forest “fuel” removal to reduce the risks of catastrophic wildfires.

Prescribed burns are one way to remove forest fuel. Another is mechanical thinning, in which woody biomass is physically removed from the forest. An ongoing challenge for forest managers, and policy makers, is deciding what to do with the millions of tons of biomass that is removed from forests.

One option is to ignite the biomass in what are known as “burn piles.” This open burning disposes of the biomass. Yet, it also creates air pollution, increases wildfire risk and secures no additional benefits from the forest “waste.”

Another way to dispose of biomass removed from the forest is to combust it to produce heat that, in turn, is used to generate electricity. Doing so has the beneficial effect of, as mentioned, producing electricity, as well as reducing air pollution and risk of wildfire, when compared to burn piles, and creating economic activity, oftentimes in economically depressed areas of the state. But producing electricity from biomass has its downsides. The electricity is very expensive, compared to electricity generated from other sources. And biomass facilities release harmful air pollutants.

The state has many ways of encouraging use of biomass for electricity generation. For example, biomass facilities qualify as renewable energy resources for purposes of the state’s renewable portfolio standard (RPS). And the state requires privately owned electrical utilities to procure electricity from facilities that generate electricity from biomass removed from areas of the state at the highest risk of wildfire.

Today, in California, there are about 30 direct-combustion biomass facilities in operation. Many of these facilities are decades old. Compared to newer biomass facilities, they are inefficient, expensive to run and highly polluting. Nonetheless, the state relies on these facilities to make use of the millions of tons of biomass being pulled from the state’s forests to reduce the risk of wildfire, and might need to continue to rely on them in the future. The author intends this bill to ensure the state is getting the best from these biomass plants and prepares for the possibility of their ceasing to operate. As the author puts it:

Given the importance of biomass facilities' ability to process forest waste, the economic lifeline it provides to rural communities, and it’s capacity to generate renewable electricity, the State should establish contingency plans to ensure the effects of a potential shutdown of a biomass facility is accounted for, and most importantly, the affected community is taken care of. Additionally, the CEC should identify opportunities and pathways to improve older facilities to ensure that they reduce emissions, can meet demands to process forest waste, and are enabled to generate electricity more efficiently.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: April 12, 2023

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Eduardo Garcia, Chair

ABPCA Bill Id:AB 998 (

Author:Connolly) – As Amended Ver:March 15, 2023

SUBJECT: Biomass energy facilities: State Energy Resources Conservation and Development Commission: report

SUMMARY: Requires the California Energy Commission (CEC) to report on utility-scale biomass combustion facilities, and specifies information the report must contain.

Specifically, this bill:

1. Requires the CEC, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes all of the following:
   1. An assessment of the capacity of biomass combustion facilities to process forest biomass and material resulting from vegetation management and forest treatment projects.
   2. An assessment of the role each of the biomass facilities plays in achieving the state’s forest health improvement and wildfire risk reduction objectives.
   3. Options to maximize the environmental benefits of biomass combustion facilities and an analysis of the feasibility of upgrading these facilities with new technologies or alterations in operations.
   4. A recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers the following:
      1. Impacts on disadvantaged communities located near the facilities.
      2. Impacts on rural forested or agricultural communities.
      3. Impacts on the ability to maintain existing capacity for managing forest biomass or other excess biomass.
      4. The cost of upgrading biomass combustion facilities as well as financing opportunities that may exist for those efforts.
      5. Job creation or job losses that may result from the strategy.
   5. Recommendations for how baseload power and the capacity for managing excess biomass waste would be made up if existing biomass combustion facilities still in operation as of January 1, 2024, subsequently cease operation.
   6. Strategies for processing forest, agricultural, urban, or postfire waste in areas where combustion biomass facilities still in operation as of January 1, 2024, may cease operation temporarily or permanently.
   7. Strategies for job training in any areas where job loss would occur due to a biomass combustion facility shutting down or being repowered.
   8. An assessment of the type and duration of contract that would be necessary to encourage biomass combustion facilities still in operation as of January 1, 2024, to upgrade.
2. Requires the CEC to include in the report an evaluation of the feasibility of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.
3. Requires the CEC, when preparing the report, to do all of the following:
   1. Coordinate with the California Air Resources Board (CARB) and local air districts on assessments of environmental benefits and available technologies to maximize those benefits.
   2. Coordinate with the Department of Forestry and Fire Protection (Cal Fire), the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery on feedstock assessments for forest, agricultural, urban, and postfire waste.
   3. Engage with and solicit feedback from local governments and communities in which biomass combustion facilities are located, and provide opportunities for stakeholder and public input.

EXISTING LAW:

1. Includes biomass in the definition of “renewable electrical generation facility” for purposes of the state’s renewable portfolio standard (RPS). (Public Resources Code § 25741)
2. Defines “biomass conversion” as the production of heat, fuels, or electricity by the controlled combustion of, or the use of other noncombustion thermal conversion technologies on specified materials when separated from other solid waste. (PRC § 40106)
3. Requires, by December 1, 2023, electrical corporations to collectively procure, through financial commitments of 5 to 15 years, inclusive, their proportionate share of 125 megawatts (MW) of cumulative rated generating capacity from existing bioenergy projects that commenced operations before June 1, 2013. At least 80% of the feedstock of an eligible facility, on an annual basis, shall be a byproduct of sustainable forestry management, which includes removal of dead and dying trees from Tier 1 and Tier 2 high hazard zones and is not from lands that have been clear cut. (Public Utilities Code 399.20.3 § (b)(1))
4. Requires an electrical corporation, local publicly owned electric utility, or community choice aggregator (CCA) with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date five years later than the expiration date in the contract that was operative in 2022, except as specified. (PUC § 8388)

FISCAL EFFECT: Unknown. This bill is keyed fiscal and will be referred to the Committee on Appropriations for its review.

BACKGROUND:

Biomass – Biomass is renewable organic material that can include wood and wood processing wastes, yard and food waste, agricultural crops, animal manure, and human sewage (municipal solid waste). Forest operations such as logging, thinning, fuels reduction programs, and ecosystem restoration create a huge amount of woody biomass, and as much as half of the biomass is left in the forest. When residues from mastication and slash from timber harvests are left scattered throughout the forest, they act as additional dry surface fuel and serve to increase intensity and severity if a wildfire burns through the area. Often biomass materials are piled and burned creating air pollution, such as black carbon, or left to decay, creating methane, which has a global warming potential 28 times more powerful than carbon dioxide (CO₂) over a 100-year time horizon.

Biomass electricity – Biomass can be used as feedstock to generate heat and electricity out of what would otherwise be waste material. Biomass is converted to energy through four main processes: direct combustion, and thermochemical, chemical, and biological conversion. Direct combustion, or simply burning the biomass, is the most common method for converting biomass to useful energy. Thermochemical conversion—such as pyrolysis and gasification—breaks down the biomass material with heat, usually with little to no oxygen so there is no burning. Chemical conversion breaks down the biomass material through chemical reactions; whereas biological conversion—including fermentation and bacterial decay—breaks down the biomass material through the use of enzymes, bacteria, or other microbes.^[1]

In 2019, California increased its aggressive renewable energy goals with the passage of Senate Bill 100 (De León, Chapter 312, Statutes of 2019). That bill mandates RPS-eligible sources must provide 60% of electricity by 2030, and renewable and carbon-free sources must provide 100% of electricity by 2045. There are current more than 80 biomass facilities operating in California—both direct combustion and alternative processes—with a total capacity of 1,259 MW, accounting for about 3% of in-state generation.^[2] Electricity generated from biomass is considered a renewable energy resource for the purposes of meeting the state’s RPS requirements. Unlike variable renewable energy resources (such as solar and wind), bioenergy technologies can provide reliable and renewable baseload generation, or firm power, meaning that electricity can be generated during scheduled times and at predetermined power levels.

The total potential electricity generation of biomass feedstocks, which include products from agriculture and forestry, as well as municipal solid waste, in California is 21,500 Gigawatt hours (GWh) or enough to support 4,650 megawatts (MW) of capacity.^[3] Biomass may aid in offsetting fossil fuel usage by supplying biogas and combustion products, which provide many of the same fast ramping capabilities as natural gas systems. The 21,500 GWh of electrical potential would offset roughly 24% of 2018 natural gas usage in California. The CEC has estimated that the electricity generation possible from bioenergy, if the entire technical capacity is captured, would be enough electricity to provide 6.6% of 2045 SB 100 goals.^[4]

Forest biomass and wildfire – Wildfires have been growing in duration and ferocity over the past 20 years. Their growing risk is due to a number of factors, from accumulating forest fuels to a warming climate to expanding development in the wildland-urban interface. Better management of the fuels that contribute to this wildfire risk is one of the main strategies to help mitigate fires.

According to the Assembly Committee on Natural Resources, the State of California is responsible for fire and resource protection on nearly 13.3 million acres of private and state-owned forested lands. The state owns about 1.1 million acres of these lands, and 12.2 million acres of lands are under private ownership. In the past several years, forest management has significantly expanded on these lands. CalFire has increased its forest thinning and prescribed fire activities from about 30,000 acres in 2016 to more than 50,000 acres in 2020. Partners receiving state-funded grants treated more than 30,000 acres in 2020. Private landowners currently actively manage 250,000-300,000 acres through fuels reduction, mechanical thinning, and timber harvest projects. In addition, SB 901 (Dodd, Chapter 626, Statutes of 2018) requires California to double forest fuel removal. And in August 2020, California and the US Forest Service agreed to scale up vegetation treatment and maintenance to one million acres of federal, state, and private forest and wildlands annually by 2025.^[5] All of these efforts produce forest waste. Sometimes that waste is left in piles, contributing to wildfire risk; whereas at others times the waste is burned on site, contributing to air pollution.

Challenges to biomass energy – Many of California’s biomass plants that originally came on-line in the 1980s and 1990s either shut down or were idled starting around 2010 as supply contracts ran out.^[6] Biomass plants are hindered by high operation and feedstock transportation costs, which can result in insufficient revenue to cover operation and maintenance expenses. California’s forestry waste has increased as drought and tree die-off have provided large amounts of fuel for forest fires. This situation has highlighted the need for additional biomass plants to use forest waste productively. As a result, some idled biomass generation has come back into operation, not necessarily at full capacity, and new projects are being developed. Unlike biomass plants that had large fuel streams from local farms, these new and repowered facilities rely on forest waste, which is less concentrated and produces less waste within the same fuel supply distance. There are various limitations to utility scale biomass combustion, including cost of feedstocks, which are highly variable due to the difficulty and expense to transport them from rural, mountainous areas to biomass facilities.

The effect of biomass utilization on air quality presents another challenge. Biomass conversion systems produce air emissions due to the combustion of biomass or through production and subsequent combustion of syngas or biogas.^[7],[8] California’s air quality standards can be prohibitive to the location and permitting of these facilities. Notably, while these facilities play an important role in mitigating wildfire risk, many facilities are decades-old and still rely on rudimentary combustion technology. Remaining biomass facilities may have opportunities for retrofits to reduce emissions, make technological improvements, and potentially increase forest waste processing capabilities.

COMMENTS:

1. Author’s Statement. According to the author, “As California continues to struggle with the monumental task of processing millions-of-tons of forest waste generated by wildfire mitigation projects, the State remains reliant on many older, combustion biomass facilities. With forest material byproducts increasing, it is incumbent upon the State to identify opportunities to modernize remaining combustion biomass facilities to improve their function and reduce operational emissions. AB 998 accomplishes this task by requiring CEC to study these issues, as well as creating a contingency plan to respond to the loss to forest waste processing capacity and local jobs that could occur as the result of combustion biomass facilities shutting down, or temporarily ceasing to operate.”
2. A Biomass Balancing Act. Biomass energy production serves critical functions in California, processing much of the forest waste produced by California’s wildfire mitigation efforts while providing electricity and acting as an economic engine in many, largely rural, communities. However, the utility of these functions should be balanced with concerns about the price-competitiveness of biomass-produced electricity and pollution, particularly from aging biomass facilities that have not been upgraded with more efficient emissions-reducing technologies. In considering the possibility of upgrades to biomass combustion facilities, questions regarding the practicality, cost-effectiveness, and potential cost impact on ratepayers should be addressed. As such, the author and committee may wish to consider amendments to strike “feasibility” from 25544. (a)(3) and 25544. (b) and replace it with more specificity around the study topics, including “practicality and cost-effectiveness,” as well as add a subparagraph requiring that the cost impact to ratepayers be considered in the recommended strategy to upgrade biomass combustion facilities.
3. Unpacking Impact. In developing the recommended strategy to upgrade biomass combustion facilities, the CEC is asked to consider the impacts on certain communities that may rely on, or be adversely effected by, the operation of biomass combustion facilities. Fully exploring the potential outcomes for these communities should biomass combustion facilities be upgraded is critical to ensuring that the recommended upgrade strategy is equitable. As such, the author and committee may wish to consider amendments to specify in 25544(a)(4)(A) and 25544(a)(4)(B) that impact on disadvantaged, rural forested, and agricultural communities includes, but is not limited to, health, economic, and cultural impacts.
4. Related Legislation.

AB 625 (Aguiar-Curry) establishes the Forest Waste Biomass Utilization Program to develop an implementation plan to meet the goals and recommendations of, and the comprehensive framework to align with the state’s wood utilization policies and priorities and focused market strategy of, specified statewide forest management plans, and to develop a workforce training program to complement the workforce needs associated with the implementation plan. Status: pending hearing in the Assembly Committee on Natural Resources, after passing out of this committee on March 22^nd, 2023 with a 13-0-2 vote.

1. Prior Legislation.

SB 1109 (Caballero) extended the electrical corporations’ obligation to collectively procure their proportionate share of 125 megawatts of cumulative rated generating capacity from existing bioenergy projects, require those entities with a contract to procure electricity generated from biomass that expires before December 31, 2028, to seek 5 year extensions on those contracts, and require any new contracts for incremental procurement of electricity from bioenergy resources to be from a resource that meets emission limits equivalent to the best available retrofit control technology. Status: Chapter 364, Statutes of 2022.

AB 322 (Salas) requires the CEC to consider, in the investment planning process for electric ratepayer-funded Electric Program Investment Charge program, funding for eligible biomass conversion to energy projects. Status: Chapter 229, Statutes of 2021.

SB 100 (De León) establishes the 100 Percent Clean Energy Act of 2018 which increases the Renewables Portfolio Standard (RPS) requirement from 50% by 2030 to 60% and creates the policy of planning to meet all of the state's retail electricity supply with a mix of RPS-eligible and zero-carbon resources by December 31, 2045, for a total of 100% clean energy. Requires the CPUC, in consultation with the CEC, CARB, and all California balancing authorities, issue a joint report to the Legislature by January 1, 2021, reviewing and evaluating the 100 percent clean energy policy. Status: Chapter 312, Statutes of 2018.

SB 1122 (Rubio), established a statewide procurement of up to 250 MW of renewable energy from small biomass or biogas technologies that utilize low emission technologies, and requires 50 MW be from small-scale bioenergy from the byproducts of sustainable forestry. This established the BioMAT program. Status: Chapter 612, Statutes of 2012.

1. Double Referral. This bill was previously heard in the Assembly Committee on Natural Resources on March 27^th, 2023, where it passed with an 11-0-0 vote.

REGISTERED SUPPORT / OPPOSITION:

Support

California Compost Coalition

Marin Clean Energy (MCE)

Rural County Representatives of California (RCRC)

San Joaquin County Board of Supervisors

San Joaquin Farm Bureau Federation

Sierra Business Council

Opposition

None on file

Analysis Prepared by: Samuel Mahanes / U. & E. / (916) 319-2083

1. U.S. Energy Information Administration (EIA); “Biomass explained”; Updated June 2022; https://www.eia.gov/energyexplained/biomass/ ↑

2. CEC; “California Biomass and Waste-to-Energy Statistics and Data”; https://ww2.energy.ca.gov/almanac/renewables_data/biomass/index_cms.php ↑

3. CEC; “Utility-Scale Renewable Energy Generation Technology Roadmap”; September 2020. ↑

4. CEC; “Utility-Scale Renewable Energy Generation Technology Roadmap”; September 2020. ↑

5. Memorandum of Understanding, “Agreement for Shared Stewardship of California’s Forest and Rangelands between the State of California and the USDA, Forest Service Pacific Southwest Region,” August 12, 2020. ↑

6. CEC; “Estimated Cost of New Utility-Scale Generation in California: 2018 Update”; May 2019 ↑

7. U.S. Energy Information Administration (EIA); “Biomass and the environment”; Updated November 2022; https://www.eia.gov/energyexplained/biomass/biomass-and-the-environment.php ↑

8. The Hill; “Biomass is not health neutral”; March 2022; https://thehill.com/opinion/energy-environment/599950-biomass-is-not-health-neutral/ ↑

Date of Hearing: March 27, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 998 (

Author:Connolly) – As Amended Ver:March 15, 2023

SUBJECT: Biomass energy facilities: State Energy Resources Conservation and Development Commission: report.

SUMMARY: Requires the State Energy Resources Conservation and Development Commission (CEC) to report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, and specifies information the report must contain.

EXISTING LAW:

1. Requires the CEC to adopt a biennial integrated energy policy report containing an overview of major energy trends and issues facing the state, including, but not limited to, supply, demand, pricing, reliability, efficiency, and impacts on public health and safety, the economy, resources, and the environment. (Public Resources Code (PRC) § 25302)
2. Includes biomass in the definition of “renewable electrical generation facility” for purposes of the state’s renewable portfolio standard (RPS). (PRC § 25741)
3. Defines “biomass conversion” as the production of heat, fuels, or electricity by the controlled combustion of, or the use of other noncombustion thermal conversion technologies on specified materials when separated from other solid waste. (PRC § 40106)
4. Requires, by December 1, 2023, electrical corporations to collectively procure, through financial commitments of 5 to 15 years, inclusive, their proportionate share of 125 megawatts (MW) of cumulative rated generating capacity from existing bioenergy projects that commenced operations before June 1, 2013. At least 80% of the feedstock of an eligible facility, on an annual basis, shall be a byproduct of sustainable forestry management, which includes removal of dead and dying trees from Tier 1 and Tier 2 high hazard zones and is not from lands that have been clear cut. (Public Utilities Code 399.20.3 § (b)(1))
5. Requires an electrical corporation, local publicly owned electric utility, or community choice aggregator (CCA) with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date five years later than the expiration date in the contract that was operative in 2022, except as specified. (PUC § 8388)

THIS BILL:

1. Requires the CEC, on or before December 31, 2024, to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes all of the following:
   1. An assessment of the capacity of biomass combustion facilities still in operation as of January 1, 2024, to process forest biomass and material resulting from vegetation management and forest treatment projects.
   2. An assessment of the role of each of the biomass facilities still in operation as of January 1, 2024, play in achieving the state’s forest health improvement and wildfire risk reduction objectives.
   3. Options to maximize the environmental benefits of biomass combustion facilities still in operation as of January 1, 2024, and an analysis of the feasibility of upgrading these facilities with new technologies or alterations in operations.
   4. A recommended strategy to upgrade biomass combustion facilities, where appropriate, that considers all of the following:
      1. Impacts on disadvantaged communities located near the facilities;
      2. Impacts on rural forested or agricultural communities;
      3. Impacts on the ability to maintain existing state, regional, and local capacity for managing forest or other excess biomass waste;
      4. Cost of upgrading biomass combustion facilities and financing opportunities that may exist for those efforts; and,
      5. Job creation or job loss that may result from the strategy.
   5. Recommendations for how baseload power and the capacity for managing excess biomass waste would be made up if existing biomass combustion facilities still in operation as of January 1, 2024, subsequently cease operation.
   6. Strategies for processing forest, agricultural, urban, or postfire waste in areas where combustion biomass facilities still in operation as of January 1, 2024, may cease operation temporarily or permanently.
   7. Strategies for job training in any areas where job loss would occur due to a biomass combustion facility shutting down or being repowered.
   8. An assessment of the type and duration of contract that would be necessary to encourage biomass combustion facilities still in operation as of January 1, 2024, to upgrade.
2. Requires the CEC to include in the report an evaluation of the feasibility of upgrading utility-scale biomass combustion facilities that ceased operation before January 1, 2024, to determine whether such facilities could help California increase its capacity to manage forest and other excess biomass.
3. Requires the CEC, when preparing the report, to do all of the following:
   1. Coordinate with the State Air Resources Board (ARB) and local air districts on assessments of environmental benefits and available technologies to maximize those benefits;
   2. Coordinate with the Department of Forestry and Fire Protection (CAL FIRE), the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery on feedstock assessments for forest, agricultural, urban, and postfire waste;
   3. Engage with and solicit feedback from the local governments and communities in which biomass combustion facilities are located; and,
   4. Provide opportunities for stakeholder and public input.
4. Provides that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be pursuant to current law.

FISCAL EFFECT: Unknown.

COMMENTS:

1. Need for the bill. Author’s statement

As California continues to struggle with the monumental task of processing millions-of-tons of forest waste generated by wildfire mitigation projects, the State remains reliant on many older, combustion biomass facilities that still utilize rudimentary technology. With forest material byproducts increasing, it is incumbent upon the State to identify opportunities to modernize remaining combustion biomass facilities to improve their function and reduce operational emissions. AB 998 accomplishes this task by requiring CEC to study these issues, as well as creating a contingency plan to respond to the loss to forest waste processing capacity and local jobs that could occur as the result of combustion biomass facilities shutting down, or temporarily ceasing to operate.

1. Biomass. Bioenergy generation, energy from biomass, uses existing waste as a form of electricity production. Common sources of biomass feedstock come from plant-based materials such as agricultural waste and residue, and forest residue and thinnings. Biomass is converted to energy through four main processes: direct combustion, thermochemical, chemical, and biological conversion. Direct combustion, or simply burning the biomass, is the most common method for converting biomass to useful energy. Thermochemical conversion—such as pyrolysis and gasification—breaks down the biomass material with heat, usually with little to no oxygen. Chemical conversion breaks down the biomass material through chemical reactions; whereas biological conversion—including fermentation and bacterial decay—breaks down the biomass material through the use of enzymes, bacteria, or other microbes.

There are a variety of bioenergy technologies that fall into two major pathways for production: direct combustion of biomass and combustion of biomass derived gases. One of those gases, biogas, is generated from digesters and landfills among other sources. Producer gas can be generated through pathways such as gasification and pyrolysis.

Today, according to the CEC, there are approximately 47 million bone dry tons (BDT) of biomass resource potential in California. According to the Board of Forestry, state requirements to remove forest fuels on one million acres per year will lead to 10 to 15 million bone dry tons of forest waste biomass annually.

Forest operations such as logging, thinning, fuels reduction programs, and ecosystem restoration create a huge amount of woody biomass, and as much as half of the biomass is left in the forest. When residues from mastication and slash from timber harvests are left scattered throughout the forest, they act as additional dry surface fuel and serve to increase intensity and severity if a wildfire burns through the area. Often biomass materials are piled and burned creating air pollution, such as black carbon, or left to decay, creating methane, which has a global warming potential 28 times more powerful than carbon dioxide (CO₂) over a 100-year time horizon.

1. Biomass energy on the grid. In 2019, California increased its aggressive renewable energy goals: with Senate Bill 100 (De León, Chapter 312, Statutes of 2019), renewable sources must provide 60% of electricity by 2030, and renewable and carbon-free sources must provide 100% of electricity by 2045.

Unlike variable renewable energy resources (such as solar and wind), bioenergy technologies can provide reliable and renewable baseload generation, or firm power, meaning that electricity can be generated during scheduled times and at predetermined power levels.

The number of biomass plants in California has decreased significantly since the 1980s, though, due to expiring long-term contracts. In near term, they are hindered by high operation and feedstock transportation costs, which can result in insufficient revenue to cover operation and maintenance expenses.

The technical electricity potential of biomass feedstock products is 35,000 GigaWatt hours (GWh) or enough to support 4,650 megawatts (MW) of capacity. The CEC’s September 2020 report Utility-Scale Renewable Energy Generation Technology Roadmap estimated that the resulting electricity generation possible from bioenergy if the entire technical capacity is captured is 21,500 GWh, which would be enough electricity to provide 6.6% of 2045 SB 100 goals.

Currently, there are about 30 direct-combustion biomass facility in operation with a capacity of 640 MW. These biomass plants use about five million BDT of biomass per year – or about 10% of the total BDT biomass resource potential. 

Last year, the Legislature approved SB 1109 (Caballero, Chapter 364, Statutes of 2022) to extend requirements on electric investor-owned utilities and CCAs to procure energy from biomass generating electric facilities by five years and requires extension of existing contracts by five years. The bill also extended electrical corporations’ obligation to collectively procure their proportionate share of 125 MW of cumulative rated generating capacity from existing bioenergy projects commencing operation before June 1, 2013, through financial commitments of 5 to 15 years.

1. Challenges to biomass energy. The CEC’s Estimated Cost of New Utility-Scale Generation in California: 2018 Update explains that some of California’s biomass plants that originally came on-line in the 1980s and 1990s either shut down or were idled starting around 2010 as supply contracts ran out. California’s forestry waste has increased as drought and tree die-off have provided large amounts of fuel for forest fires. This situation has highlighted the need for additional biomass plants to use forest waste productively. As a result, some idled biomass generation has come back into operation, not necessarily at full capacity, and new projects are being developed. Unlike biomass plants that had large fuel streams from local farms, these new and repowered facilities rely on forest waste, which is less concentrated and produces less waste within the same fuel supply distance.

There are various limitations to utility scale biomass combustion, including cost of feedstocks, which are highly variable due to ability to transport from rural, mountainous areas to biomass facilities. Air quality presents another challenge. Biomass conversion systems produce air emissions due to the combustion of biomass or through production of syngas or biogas followed by their combustion, and California’s air quality standards can be prohibitive to the location and permitting of these facilities.

Notably, while these facilities play an important role in mitigating wildfire risk, many facilities are decades-old and still rely on rudimentary combustion technology. Remaining biomass facilities may have opportunities for retrofits to reduce emissions, make technological improvements, and potentially increase forest waste processing capabilities.

1. This bill. AB 998 would require the CEC to issue a report on the utility-scale biomass combustion facilities still in operation as of January 1, 2024, that includes an assessment of the capacity, feedstock, emissions, options to reduce emissions, feasibility of repowering, grid services, and other operational factors of each facility; assessment of costs and comparison to other biomass energy technologies; and, a strategy, if it makes sense, to modernize some or all biomass combustion facilities to noncombustion conversion technologies.
2. Double referral. Should the Committee approve the bill, it will be referred to the Assembly Utilities and Energy Committee.
3. Related legislation.

AB 625 (Aguiar-Curry) establishes the Forest Waste Biomass Utilization Program to develop an implementation plan to meet the goals and recommendations of, and the comprehensive framework to align with the state’s wood utilization policies and priorities and focused market strategy of, specified statewide forest management plans, and to develop a workforce training program to complement the workforce needs associated with the implementation plan. This bill is scheduled to be heard in the Assembly Natural Resources Committee on March 27.

AB 2878 (Aguiar-Curry, 2022) would have established the Forest Biomass Waste Utilization Program to develop an implementation plan to meet the goals and recommendations of the Biomass Waste Utilization Plan and to develop a workforce training program to complement the workforce needs associated with implementation of this program. This bill was held in the Senate Appropriations Committee.

AB 2587 (E. Garcia, 2022) among its provisions, expands the type of firm resources to be considered in an upcoming CEC assessment to include bioenergy and biomass. This bill was held in the Senate Appropriations Committee.

SB 1109 (Caballero, Chapter 364, Statutes of 2022) extends requirements on electric utilities and CCAs to procure energy from biomass generating electric facilities by five years and requires extension of existing contracts by five years.

REGISTERED SUPPORT / OPPOSITION:

Support

California Compost Coalition
Rural County Representatives of California
San Joaquin County Board of Supervisors
San Joaquin Farm Bureau Federation
Sierra Business Council

Opposition

None on file.

Analysis Prepared by: Paige Brokaw / NAT. RES. /