WEBVTT 00:00:00.340 --> 00:00:08.751 Brought to you by adminmonitor.com. 00:00:08.776 --> 00:00:22.449 Tom. Are we good? Okay, great. 00:00:22.449 --> 00:00:29.104 All right, everybody. Good morning. Good morning. Okay, we're 00:00:29.116 --> 00:00:35.030 gonna do one more time, and then we're going to start. 00:00:35.030 --> 00:00:37.502 Good morning, everybody. Thank you. Thank you 00:00:37.514 --> 00:00:39.890 very much. Happy to see all of your smiling 00:00:39.890 --> 00:00:43.361 faces this Friday morning. My name is Jaime Ormand. 00:00:43.373 --> 00:00:46.320 I'm a senior analyst here at the California 00:00:46.320 --> 00:00:48.586 Public Utilities Commission in Energy Division. 00:00:48.598 --> 00:00:50.829 And I've been working on the Renewable Natural 00:00:50.829 --> 00:00:54.132 Gas portfolio for over two years. It is 00:00:54.144 --> 00:00:58.140 December 6. We have had quite a year. I think 00:00:58.140 --> 00:01:04.475 this is our fifth workshop date in the auditorium 00:01:04.487 --> 00:01:09.819 this year. We have talked about renewable 00:01:09.819 --> 00:01:13.758 gas interconnection processes, hydrogen and 00:01:13.770 --> 00:01:17.810 hydrogen blending, new off-spec gas blending 00:01:17.810 --> 00:01:22.303 processes. What was the last thing we talked 00:01:22.315 --> 00:01:26.520 about? Anyone? Oh, yes, the filing. Thank 00:01:26.520 --> 00:01:28.704 you. The filing for the standardized, renewable 00:01:28.716 --> 00:01:30.729 gas interconnection tariff for the state of 00:01:30.729 --> 00:01:34.206 California that was filed on November 1st. 00:01:34.218 --> 00:01:37.789 And here we are today at the first workshop 00:01:37.789 --> 00:01:48.450 on implementing Senator Wayso's Bill, SB1440, that was passed in 2018. Thanks 00:01:48.450 --> 00:01:52.168 for coming. So before we get started, let's 00:01:52.180 --> 00:01:55.570 do our normal safety information check. 00:01:55.570 --> 00:01:59.142 In case of anything bad happening, please calmly 00:01:59.154 --> 00:02:02.299 exit the auditorium, and then proceed down 00:02:02.299 --> 00:02:06.321 Van Ness to the War Memorial, which is the 00:02:06.333 --> 00:02:10.649 big, beautiful concrete, or granite, block on 00:02:10.649 --> 00:02:13.278 the right. We will gather there and then get 00:02:13.290 --> 00:02:15.989 more information. Hopefully, nothing bad will 00:02:15.989 --> 00:02:18.344 happen, but that's what we're supposed to 00:02:18.356 --> 00:02:20.780 do. Secondly, bathrooms are in the back of 00:02:20.780 --> 00:02:22.930 this building. And then thirdly, we have coffee, 00:02:22.942 --> 00:02:25.060 should you need it, in Mocha's cafe on the other 00:02:25.060 --> 00:02:27.642 side of the house. We're gonna take a break 00:02:27.654 --> 00:02:30.012 for lunch in the middle. And there will 00:02:30.012 --> 00:02:32.513 be stretch breaks. So that is our safety 00:02:32.525 --> 00:02:35.160 announcement. This is our little map here. 00:02:35.160 --> 00:02:37.678 So out the building to the right, you can 00:02:37.690 --> 00:02:40.219 go out here on the right or in the front, 00:02:40.219 --> 00:02:44.325 down the hill, and then to the right to the 00:02:44.337 --> 00:02:48.549 War Memorial. Okay, Workshop information for 00:02:48.549 --> 00:02:52.263 today. As you know, it's 10 a.m. in the California 00:02:52.275 --> 00:02:55.489 Public Utilities Commission auditorium. The 00:02:55.489 --> 00:02:59.037 call-in number and the webcast can be found 00:02:59.049 --> 00:03:02.689 on the CPUC's Renewable Natural Gas website, 00:03:02.689 --> 00:03:05.247 along with all of our past workshops and past 00:03:05.259 --> 00:03:07.549 PowerPoints. All of the information will 00:03:07.549 --> 00:03:13.280 get uploaded from today next week. And all you have to do is Google CPUC 00:03:13.280 --> 00:03:16.079 renewable natural gas. The website pops up at 00:03:16.091 --> 00:03:18.840 the top and all of the information is there, 00:03:18.840 --> 00:03:21.094 if you scroll down. Before we get started, 00:03:21.106 --> 00:03:23.319 I just want to do a couple of thank yous. 00:03:23.319 --> 00:03:26.252 First to Robert Stanford, the master of the 00:03:26.264 --> 00:03:29.209 auditorium. Thomas in the booth. My interns 00:03:29.209 --> 00:03:33.501 for today. Giorgio Connolly is at UC Davis. 00:03:33.513 --> 00:03:37.230 Jack Chang is at UC Berkeley. And let 00:03:37.230 --> 00:03:39.914 me introduce the Renewable Natural Gas team 00:03:39.926 --> 00:03:42.560 there in the room. First of all, our newly 00:03:42.560 --> 00:03:51.659 esquired Rich Sandow. We have Love Aceda Acrofee from L. A in the back. And 00:03:51.659 --> 00:03:55.522 our supervisor, Gene Spencer is right here, 00:03:55.534 --> 00:03:59.849 please say hello and talk to them. So, something 00:03:59.849 --> 00:04:02.623 happened this morning that I want to talk about 00:04:02.635 --> 00:04:05.420 before I go into my, like, normal presentation. 00:04:05.420 --> 00:04:09.421 And, we received a letter from Senator 00:04:09.433 --> 00:04:14.079 Wayso about this workshop, which has never 00:04:14.079 --> 00:04:16.281 happened to me before. And I have helped a 00:04:16.293 --> 00:04:18.609 lot of workshops. And he specifically wanted 00:04:18.609 --> 00:04:21.661 it delivered before the workshop started. So 00:04:21.673 --> 00:04:24.669 I figured I just read it. Dear Commissioner 00:04:24.669 --> 00:04:27.807 Rechtschaffen, he writes, in 2018, I authored 00:04:27.819 --> 00:04:30.900 SB1440 which is aimed at reducing the harmful 00:04:30.900 --> 00:04:33.768 methane emissions by encouraging the use of 00:04:33.780 --> 00:04:36.660 bio methane as a renewable energy resource. 00:04:36.660 --> 00:04:39.809 On December 6, 2019, the CPUC will host a workshop 00:04:39.821 --> 00:04:42.610 to take steps towards the implement, towards 00:04:42.610 --> 00:04:44.435 implementing SB1440 by soliciting 00:04:44.447 --> 00:04:46.840 stakeholder feedback on several important 00:04:46.840 --> 00:04:49.553 questions related to the bill's implementation, 00:04:49.565 --> 00:04:52.120 including mechanisms for evaluating the cost 00:04:52.120 --> 00:04:54.676 effectiveness of renewable natural gas procurements 00:04:54.688 --> 00:04:56.860 and considerations for developing renewable 00:04:56.860 --> 00:04:59.492 natural gas procurement targets for utilities. 00:04:59.504 --> 00:05:01.811 According to theEPA, methane is 25 times 00:05:01.811 --> 00:05:04.615 more effective than carbon dioxide at trapping heat 00:05:04.627 --> 00:05:07.280 inside our atmosphere, which further accelerates 00:05:07.280 --> 00:05:10.007 global warming. While landfills are the 00:05:10.019 --> 00:05:13.110 third largest source of methane emissions, 00:05:13.110 --> 00:05:15.198 agricultural processes are the largest source of 00:05:15.210 --> 00:05:17.310 methane emissions in California. When evaluating 00:05:17.310 --> 00:05:20.191 the number of sources from which bio methane can 00:05:20.203 --> 00:05:22.919 be procured, I encourage the CPUC to consider 00:05:22.919 --> 00:05:25.348 the full scope of these sources. California 00:05:25.360 --> 00:05:27.690 is one of several states with higher than 00:05:27.690 --> 00:05:30.244 average concentrations of methane emissions, 00:05:30.256 --> 00:05:32.879 and certain communities are disproportionate, 00:05:32.879 --> 00:05:35.624 disproportionately impacted by these emissions. 00:05:35.636 --> 00:05:38.220 Recent studies also indicate that the amount 00:05:38.220 --> 00:05:40.983 of methane emissions in California may be higher 00:05:40.995 --> 00:05:43.600 than data in current estimates. As California 00:05:43.600 --> 00:05:46.281 grapples with accelerating effects of climate 00:05:46.293 --> 00:05:48.810 change, it is critical that the state acts 00:05:48.810 --> 00:05:51.418 expediently on efforts to mitigate the most 00:05:51.430 --> 00:05:54.289 harmful effects of emissions. Renewable natural 00:05:54.289 --> 00:05:56.801 gas, including bio-methane, is a critical part 00:05:56.813 --> 00:05:59.069 of California's strategy to use a diverse 00:05:59.069 --> 00:06:01.661 suite of renewable energy resources to reduce and 00:06:01.673 --> 00:06:04.069 mitigate the impact of emissions. In addition 00:06:04.069 --> 00:06:06.342 to reducing the most harmful of greenhouse gas 00:06:06.354 --> 00:06:08.590 emissions, encouraging the use of bio-methane 00:06:08.590 --> 00:06:14.250 as a renewable energy source also helps create thousands of in state jobs. The 00:06:14.250 --> 00:06:16.343 addition of these jobs can bolster California's 00:06:16.355 --> 00:06:18.240 economy by helping workers transition from 00:06:18.240 --> 00:06:23.259 fossil fuel industries and expand the state's green collar workforce 00:06:23.259 --> 00:06:25.922 into new communities. I urge you to take 00:06:25.934 --> 00:06:28.870 steps to implement SB1440 in a timely manner 00:06:28.870 --> 00:06:31.192 as you consider the full scope of bio-methane 00:06:31.204 --> 00:06:33.690 resources that can be used to meet our renewable 00:06:33.690 --> 00:06:36.188 energy and climate goals. And if you have any 00:06:36.200 --> 00:06:38.820 questions, please reach out to my staff person. 00:06:38.820 --> 00:06:42.109 Sincerely, Senator Ben Wayso, District 40. I 00:06:42.121 --> 00:06:45.789 thought that that was an amazing way to start the 00:06:45.789 --> 00:06:49.662 morning. So now back to our regularly scheduled 00:06:49.674 --> 00:06:53.720 program. Here's your quiz. Who knows who that is? 00:06:53.720 --> 00:06:56.975 Please raise your head. One. Yes, it's taken 00:06:56.987 --> 00:06:59.819 a year. We've gone up from four people 00:06:59.819 --> 00:07:04.044 to like, you know, half. Half is good. (audience 00:07:04.056 --> 00:07:08.639 chatter) Well, then everyone should have raised their 00:07:08.639 --> 00:07:12.698 hand, right? Okay. Greta has been traversing 00:07:12.710 --> 00:07:16.509 the world and sailing across oceans using 00:07:16.509 --> 00:07:20.475 wind to talk about reducing emissions. In her 00:07:20.487 --> 00:07:24.120 2019 Time Person of the Year profile, she 00:07:24.120 --> 00:07:27.118 noted to the author that she sees climate 00:07:27.130 --> 00:07:30.569 change as a black or white issue. Either reduce 00:07:30.569 --> 00:07:32.751 emissions or we don't on. I'm really happy 00:07:32.763 --> 00:07:35.110 that we're here today to talk about how we're 00:07:35.110 --> 00:07:36.879 gonna continue to reduce emissions, especially 00:07:36.891 --> 00:07:38.520 here in the state of California. Quiz Part 00:07:38.520 --> 00:07:42.023 two. Do we know who that is? Jamie Margolin 00:07:42.035 --> 00:07:45.629 is the head of the Zero Hour Movement. She's 00:07:45.629 --> 00:07:47.989 also organizing students and kids and teens 00:07:48.001 --> 00:07:50.319 all across America to take steps to reduce 00:07:50.319 --> 00:07:53.010 emissions. And just in case we are unaware. 00:07:53.022 --> 00:07:55.909 Another organization of youth activists called 00:07:55.909 --> 00:07:59.529 the Sunrise Movement is doing direct activism 00:07:59.541 --> 00:08:03.409 among politicians and people in power, including 00:08:03.409 --> 00:08:05.942 attending Commission meetings right here. 00:08:05.954 --> 00:08:08.680 They're here, they're involved and they want 00:08:08.680 --> 00:08:11.124 to see us take action, so I wanted to make sure 00:08:11.136 --> 00:08:13.439 that we highlighted that people are watching 00:08:13.439 --> 00:08:16.359 us, and we need to be working quickly to do 00:08:16.371 --> 00:08:19.169 our best to reduce methane emissions now. 00:08:19.169 --> 00:08:22.428 Now, before we, like, get into your talking 00:08:22.440 --> 00:08:25.710 about how to do that, let's briefly discuss 00:08:25.710 --> 00:08:30.413 the system as it is today. That is the subject 00:08:30.425 --> 00:08:34.840 of their ire. Voila! The natural gas system 00:08:34.840 --> 00:08:36.893 as it is today. A couple of things to note 00:08:36.905 --> 00:08:38.970 because there's only a few things you need 00:08:38.970 --> 00:08:41.242 to know in order to change it. But you got to 00:08:41.254 --> 00:08:43.390 know a few things. First, it's really old. 00:08:43.390 --> 00:08:45.783 California, here, we're at the end of the line. 00:08:45.795 --> 00:08:47.900 You can see the yellow coming in from the 00:08:47.900 --> 00:08:50.927 north and the east. We actually import 95% 00:08:50.939 --> 00:08:54.120 of the fossil fuel natural gas we use in the 00:08:54.120 --> 00:08:57.322 state of California every day. That's a lot. 00:08:57.334 --> 00:09:00.690 And in 2013 and 2015, the way the system works 00:09:00.690 --> 00:09:03.445 changed quite significantly. There was an event 00:09:03.457 --> 00:09:05.820 in San Bruno, and, as we all know, there 00:09:05.820 --> 00:09:09.002 was an event, in Aliso Canyon. I just want to 00:09:09.014 --> 00:09:12.000 say that these two events have complicated 00:09:12.000 --> 00:09:15.274 how the traditional system has functioned 00:09:15.286 --> 00:09:18.650 and that brings us an opportunity to think 00:09:18.650 --> 00:09:20.876 about optimizing how we can use it differently 00:09:20.888 --> 00:09:23.030 and better in the future in a low carbon and 00:09:23.030 --> 00:09:26.505 zero carbon future. it has two peaks when 00:09:26.517 --> 00:09:30.170 it's really hot. When it's really cold. And 00:09:30.170 --> 00:09:32.302 just for a little reference on the bottom 00:09:32.314 --> 00:09:34.560 right there, I just showed you a picture of 00:09:34.560 --> 00:09:37.517 the Rose Bowl. And why? During the Aliso 00:09:37.529 --> 00:09:40.570 Canyon event, the LA Times noted that, at 00:09:40.570 --> 00:09:43.994 the peak, Aliso Canyon was releasing an entire 00:09:44.006 --> 00:09:46.930 Rose Bowl filled of fossil fuel natural 00:09:46.930 --> 00:09:49.702 gas into the atmosphere every day. You think 00:09:49.714 --> 00:09:52.560 that that's a lot. We did some in house, back 00:09:52.560 --> 00:09:55.134 of the envelope calculations, and for the six 00:09:55.146 --> 00:09:57.620 billion cubic feet of renewable, of natural 00:09:57.620 --> 00:10:00.066 gas that we use every day in the state of 00:10:00.078 --> 00:10:02.770 California, that's about 74 Rose bowls filled 00:10:02.770 --> 00:10:05.179 with fossil fuel natural gas that we import 00:10:05.191 --> 00:10:07.501 into our state every single day. So as we 00:10:07.501 --> 00:10:11.338 think about decarbonizing, that's where the 00:10:11.350 --> 00:10:14.850 carbon is. So, I want to just say that, 00:10:14.850 --> 00:10:17.400 that's basically what you need to know about 00:10:17.412 --> 00:10:20.030 this. So traditionally, and this is gonna get 00:10:20.030 --> 00:10:23.527 really basic everybody. This is how the system 00:10:23.539 --> 00:10:26.750 works. Ready? The dinosaurs died. We drill 00:10:26.750 --> 00:10:29.944 in the, thank you. We drill for the, you know, 00:10:29.956 --> 00:10:32.890 the oil, gas associated with the oil spews 00:10:32.890 --> 00:10:35.511 out of the earth, gets shoved through the pipe 00:10:35.523 --> 00:10:38.100 and gets used by our end uses. Transportation 00:10:38.100 --> 00:10:40.549 fuel, electricity generation, residential 00:10:40.561 --> 00:10:43.021 and commercial heat storage, agricultural 00:10:43.021 --> 00:10:45.430 and industrial. We can quibble about if there's 00:10:45.442 --> 00:10:47.560 more or less or different categories, but 00:10:47.560 --> 00:10:50.157 let's just, we're gonna go with these as, like, 00:10:50.169 --> 00:10:52.560 end uses. And I do recognize that that pipe 00:10:52.560 --> 00:10:56.582 there is potentially a sewage pipe. But it's 00:10:56.594 --> 00:11:00.180 OK. It works well enough for, you know, 00:11:00.180 --> 00:11:04.659 the matter. So in 2017, the Air Resources Board 00:11:04.671 --> 00:11:08.600 put out the short-lived Climate Pollutant 00:11:08.600 --> 00:11:12.519 Reduction Strategy, and they noted that in these 00:11:12.531 --> 00:11:15.980 end uses, we have greenhouse gas emissions 00:11:15.980 --> 00:11:18.430 by various sectors. You can see on the right. 00:11:18.442 --> 00:11:20.850 The transportation sector is a lot, but, you 00:11:20.850 --> 00:11:25.007 know, here we are, dead dinosaurs, drills, all the end 00:11:25.019 --> 00:11:28.960 uses. And the end uses, that's what the atmospheric 00:11:28.960 --> 00:11:32.336 impact looks like, according to Air Resources 00:11:32.348 --> 00:11:35.810 Board. Lo and behold, I got assigned renewable 00:11:35.810 --> 00:11:40.422 natural gas and I learned that you could actually 00:11:40.434 --> 00:11:44.410 get an interchangeable resource that could 00:11:44.410 --> 00:11:47.269 be put into our pipeline, that would be used 00:11:47.281 --> 00:11:49.960 by all of our end uses. And it comes from 00:11:49.960 --> 00:11:52.829 our waste resources. From our dairies and our 00:11:52.841 --> 00:11:55.660 agriculture, from wastewater treatment, from 00:11:55.660 --> 00:11:59.308 landfills, and from ag waste. And actually 00:11:59.320 --> 00:12:02.640 as Senator Wayso noted, many of these, 00:12:02.640 --> 00:12:05.676 these resources are found near to 00:12:05.688 --> 00:12:09.660 environmental justice communities. Anyway, 00:12:09.660 --> 00:12:11.896 all of these resources today are putting 00:12:11.908 --> 00:12:14.540 atmospheric warming waste methane gas pollution 00:12:14.540 --> 00:12:20.207 into the atmosphere. Pollution. Could be used 00:12:20.219 --> 00:12:25.280 by our end uses. Okay, in the ARB's 2017 00:12:25.280 --> 00:12:27.880 shortlived climate pollution reduction strategy. 00:12:27.892 --> 00:12:30.290 They also note that, the Air Resources Board 00:12:30.290 --> 00:12:34.725 also noted, where our waste methane gas emission 00:12:34.737 --> 00:12:38.640 come from? This is using their perspective 00:12:38.640 --> 00:12:41.559 2030 outlook from their 2017 report because we're 00:12:41.571 --> 00:12:44.150 kind of in the middle of their two reports. 00:12:44.150 --> 00:12:46.610 So, I just used the 2030 to look at what the 00:12:46.622 --> 00:12:48.820 future could look like if we don't bend 00:12:48.820 --> 00:12:51.303 the curve. But if you look, you can see that 00:12:51.315 --> 00:12:53.920 our resources of methane emissions, landfills, 00:12:53.920 --> 00:12:56.860 dairies, wastewater, you know, that's a significant 00:12:56.872 --> 00:12:59.370 amount of methane that we could capture and 00:12:59.370 --> 00:13:03.094 use, cleanup, shove through the pipes, and use 00:13:03.106 --> 00:13:07.000 at all of the end uses. Now I want to talk about 00:13:07.000 --> 00:13:09.540 the California Public Utilities Commission 00:13:09.552 --> 00:13:12.460 because what we do here as a utilities regulator 00:13:12.460 --> 00:13:16.056 and what other sister agencies do are unique. 00:13:16.068 --> 00:13:19.520 We regulate utilities. I would say that, in 00:13:19.520 --> 00:13:22.308 some ways, we tell them what to do. They could 00:13:22.320 --> 00:13:25.060 also ask us permission to do things. But here 00:13:25.060 --> 00:13:28.666 we are taking our renewable gas, or fossil gas, 00:13:28.678 --> 00:13:31.920 and the Commission doesn't think about the 00:13:31.920 --> 00:13:34.965 end uses. We think about two types of customers, 00:13:34.977 --> 00:13:37.910 the core customers and the non core customers. 00:13:37.910 --> 00:13:40.364 The core customers who are served by the utility 00:13:40.376 --> 00:13:42.540 or core transport agents, and the non core 00:13:42.540 --> 00:13:44.999 customers purchase gas either through a marketer 00:13:45.011 --> 00:13:47.180 or with their own purchasing capacity, out 00:13:47.180 --> 00:13:50.115 on the market, and bring it to their own facility. 00:13:50.127 --> 00:13:52.670 They can find gas wherever they look in the 00:13:52.670 --> 00:13:55.933 market, and they can use it however they want. 00:13:55.945 --> 00:13:59.220 The CPUC has jurisdiction, again, over telling 00:13:59.220 --> 00:14:01.848 utilities what to do, and so we have jurisdiction 00:14:01.860 --> 00:14:04.130 over what happens with the core customers. 00:14:04.130 --> 00:14:09.675 40% of the market. Blue. So that's why pollution, 00:14:09.687 --> 00:14:14.800 we can talk about taking the pollution, clean 00:14:14.800 --> 00:14:17.988 it up and using it at the end uses, and now, I 00:14:18.000 --> 00:14:21.200 have color coded the end uses for the majority 00:14:21.200 --> 00:14:24.516 of core and what's not core. So you can see, 00:14:24.528 --> 00:14:27.930 of the end uses, what we can talk about first 00:14:27.930 --> 00:14:29.615 versus what other people could talk about, but 00:14:29.627 --> 00:14:31.180 here at the Commission, what we talk about 00:14:31.180 --> 00:14:33.252 is interconnection issues. If you're a new 00:14:33.264 --> 00:14:35.300 facility that's trying to take this waste 00:14:35.300 --> 00:14:37.623 methane gas and put it in the pipeline, you're 00:14:37.635 --> 00:14:39.870 gonna run into the Commission. We talk about 00:14:39.870 --> 00:14:42.044 gas quality issues. If you have a project, and 00:14:42.056 --> 00:14:44.010 you want to clean up your gas product and 00:14:44.010 --> 00:14:46.745 put it in the pipeline. Gas quality is the 00:14:46.757 --> 00:14:49.760 Commission. We also think about system issues. 00:14:49.760 --> 00:14:52.598 How does isn't work? Is it reliable? Is the 00:14:52.610 --> 00:14:55.330 gas gonna be there when we need it? Is it 00:14:55.330 --> 00:14:58.447 going to support our renewable electricity 00:14:58.459 --> 00:15:01.660 system that still uses a huge amount of gas 00:15:01.660 --> 00:15:04.877 to balance itself and stay functioning. 00:15:04.889 --> 00:15:08.450 And core customers, as I mentioned. Okay, 00:15:08.450 --> 00:15:12.927 so now I want to talk about renewable gas 00:15:12.939 --> 00:15:17.000 and the Air Resources Board. So we've 00:15:17.000 --> 00:15:20.763 seen this graph already. The Air Resources 00:15:20.775 --> 00:15:24.550 Board said, we see a lot of our greenhouse 00:15:24.550 --> 00:15:26.425 gas emissions coming from the transportation 00:15:26.437 --> 00:15:28.240 sector, you could see I've highlighted one 00:15:28.240 --> 00:15:30.730 of the end uses, the transportation sector 00:15:30.742 --> 00:15:33.360 and my pollution, just so you can tell where 00:15:33.360 --> 00:15:37.151 we're talking about. The Air Resources Board 00:15:37.163 --> 00:15:41.050 created a program that incentivizes, provides 00:15:41.050 --> 00:15:45.690 the money for matching the production of low 00:15:45.702 --> 00:15:49.940 carbon fuel with one of our end uses. So 00:15:49.940 --> 00:15:53.306 there are others. And obviously there is an 00:15:53.318 --> 00:15:56.620 entire industry that is being built around 00:15:56.620 --> 00:16:00.423 the value of these credits and reducing the 00:16:00.435 --> 00:16:04.250 carbon tension of our transportation fleet. 00:16:04.250 --> 00:16:08.001 But we here at the Commission, that's not our 00:16:08.013 --> 00:16:11.530 thing. We just get the gas into the pipes. 00:16:11.530 --> 00:16:13.501 We make sure it is interchangeable. That's 00:16:13.513 --> 00:16:15.450 a term of art. That means it's put in the 00:16:15.450 --> 00:16:18.517 pipes, it all works at all. It's used by the 00:16:18.529 --> 00:16:21.540 end uses. But I just wanted to clarify that 00:16:21.540 --> 00:16:23.481 there's a lot of low carbon fuel standard 00:16:23.493 --> 00:16:25.540 discussion. We had a whole discussion about 00:16:25.540 --> 00:16:28.581 it this week. That's the Air Resources Board. 00:16:28.593 --> 00:16:31.380 They created a program, and they targeted 00:16:31.380 --> 00:16:34.389 one of the end uses. So here's the question. 00:16:34.401 --> 00:16:37.220 That's our gas production resources, here 00:16:37.220 --> 00:16:39.900 on the left. It's gonna go through the pipes. 00:16:39.912 --> 00:16:42.370 We got interconnection gas quality system 00:16:42.370 --> 00:16:45.174 issues and core customers from the PUC. We 00:16:45.186 --> 00:16:48.330 regulate core. Air Resistance Board has created 00:16:48.330 --> 00:16:51.422 a financial program for one of our end uses. 00:16:51.434 --> 00:16:54.470 The transportation sector. It is clear that 00:16:54.470 --> 00:16:58.163 the state of California has a desire to direct 00:16:58.175 --> 00:17:01.880 where the gas, or renewable gas product, would 00:17:01.880 --> 00:17:04.787 go. So the question is, if we wanted to target a 00:17:04.799 --> 00:17:07.540 different end use based on what we've learned 00:17:07.540 --> 00:17:12.578 today, who can do that? That's my talking 00:17:12.590 --> 00:17:18.120 points. I hope we have all moved through with 00:17:18.120 --> 00:17:21.431 basics, and we have some preliminary thoughts 00:17:21.443 --> 00:17:24.839 on the matter. I would just like to note that, 00:17:24.839 --> 00:17:28.003 you know, as we're moving through this proceeding, 00:17:28.015 --> 00:17:30.880 1440, renewable gas is not the silver bullet. 00:17:30.880 --> 00:17:33.398 There is no silver bullet to climate change, 00:17:33.410 --> 00:17:35.940 but it is a tool, and I just like to clarify 00:17:35.940 --> 00:17:38.929 that as we're thinking about what we're doing 00:17:38.941 --> 00:17:41.941 in 2020, we oughta consider what question are 00:17:41.941 --> 00:17:44.567 we trying to answer? As we're looking at the 00:17:44.579 --> 00:17:47.510 climate change fight, are we asking the question? 00:17:47.510 --> 00:17:49.905 How do we decarbonize buildings as fast as 00:17:49.917 --> 00:17:52.379 possible? There's a set of tools, including 00:17:52.379 --> 00:17:54.695 electrification that could do that. Is the 00:17:54.707 --> 00:17:56.980 question are we trying to decarbonize our 00:17:56.980 --> 00:17:59.110 energy system as fast as possible? There's a 00:17:59.122 --> 00:18:01.169 different suite of tools that we could use 00:18:01.169 --> 00:18:04.859 to do that. Or is the question are we trying to 00:18:04.871 --> 00:18:08.419 reduce emissions, climate change, atmospheric 00:18:08.419 --> 00:18:10.503 warming emissions as fast as possible? Because 00:18:10.515 --> 00:18:12.610 that's a different question. And there's gonna 00:18:12.610 --> 00:18:15.271 be different tools that we could use to 00:18:15.283 --> 00:18:18.230 do that. I did hear someone say something 00:18:18.230 --> 00:18:20.651 this week that I just wanted to recall, which 00:18:20.663 --> 00:18:22.990 is what are the lowest cost options to meet 00:18:22.990 --> 00:18:25.455 our goals? So instead of just continuing to 00:18:25.467 --> 00:18:28.000 talk about the price of the options that are 00:18:28.000 --> 00:18:33.198 no longer acceptable, we should talk about how 00:18:33.210 --> 00:18:38.309 to get to an area that is. So today's agenda. 00:18:38.309 --> 00:18:41.572 We have a robust group of panelists who are 00:18:41.584 --> 00:18:44.710 going to share their thoughts on the four 00:18:44.710 --> 00:18:48.390 questions that were sent out two weeks ago 00:18:48.402 --> 00:18:52.009 to launch a conversation about SB1440 and 00:18:52.009 --> 00:18:55.513 after they do, I hope to have a robust conversation 00:18:55.525 --> 00:18:58.500 with our members and interested parties who 00:18:58.500 --> 00:19:02.072 are here. Lots of question, answers. This is 00:19:02.084 --> 00:19:05.509 the time that we get to raise our thoughts 00:19:05.509 --> 00:19:08.102 on the matter and have a discussion about them. 00:19:08.114 --> 00:19:10.340 Then we're gonna go to lunch. Then after 00:19:10.340 --> 00:19:12.900 lunch, we're gonna come back. We're gonna have 00:19:12.912 --> 00:19:15.320 a panel of our utility members, and they're 00:19:15.320 --> 00:19:17.338 going to then do with their presentations. And 00:19:17.350 --> 00:19:19.250 then we're gonna have a question and answer 00:19:19.250 --> 00:19:22.817 and discussion, and then we'll end. And that 00:19:22.829 --> 00:19:26.169 will be it for workshops for 2019. I will 00:19:26.169 --> 00:19:28.293 say that there's only two rules. The first 00:19:28.305 --> 00:19:30.490 rule is, if you're gonna talk, you must use 00:19:30.490 --> 00:19:33.211 the microphone. And then the other rule is 00:19:33.223 --> 00:19:36.019 if we're gonna have a great discussion, one 00:19:36.019 --> 00:19:37.870 question at a time, please. And then circle back 00:19:37.882 --> 00:19:39.669 and then come back and ask your next question. 00:19:39.669 --> 00:19:43.550 Because assuredly, there will be many. So at 00:19:43.562 --> 00:19:47.629 this time, I'd like to invite up our wonderful 00:19:47.629 --> 00:19:50.634 speakers. Julia Leven from the Bio Energy Association 00:19:50.646 --> 00:19:53.440 of California. Janice Tran from Generate Capital. 00:19:53.440 --> 00:19:55.873 Sam Wade from the Renewable Natural Gas Coalition. 00:19:55.885 --> 00:19:58.090 Michael Colvin from the Environmental Defense 00:19:58.090 --> 00:20:00.341 Fund. Jeff Reed from a California Hydrogen 00:20:00.353 --> 00:20:02.669 Business Council. And Michael Bouguereau is 00:20:02.669 --> 00:20:04.537 listening on the phone and was unable to make 00:20:04.549 --> 00:20:06.429 it. So we'll see if we can get him in at some 00:20:06.429 --> 00:20:10.125 point. Thanks for your attention. I'm throwing 00:20:10.137 --> 00:20:13.450 up the four questions, and I look forward 00:20:13.450 --> 00:20:19.614 to hearing what our panelists have to say and thank you very much for coming. 00:20:27.759 --> 00:20:30.932 So good morning, everyone. I'm Julia Leven 00:20:30.944 --> 00:20:33.799 with the Bio Energy Association of California, and 00:20:33.799 --> 00:20:36.572 it's really great to be here. And it's really 00:20:36.584 --> 00:20:39.309 exciting to talk about a procurement program 00:20:39.309 --> 00:20:43.869 for bio methane. It's long overdue. I'm 00:20:43.881 --> 00:20:49.039 gonna start off. Actually, I'm gonna sort 00:20:49.039 --> 00:20:51.052 of take off from a couple of the points that 00:20:51.064 --> 00:20:52.999 Jamie made. And I think Jamie did a really 00:20:52.999 --> 00:20:55.860 fantastic job laying it out, and particularly, 00:20:55.872 --> 00:20:58.500 how important it is for us to do more with 00:20:58.500 --> 00:21:01.795 our bio resources to reduce short lived climate 00:21:01.807 --> 00:21:04.700 pollutants. So and I love the slide about 00:21:04.700 --> 00:21:06.655 Greta Thunburg and Greta's sweatshirt saying 00:21:06.667 --> 00:21:08.590 something to effect of we have to be guided 00:21:08.590 --> 00:21:11.429 by science, and I think that's really, really 00:21:11.441 --> 00:21:14.169 critical here. The science is crystal clear 00:21:14.169 --> 00:21:17.364 that we have about a decade to seriously 00:21:17.376 --> 00:21:20.740 reverse climate change emissions, or we're 00:21:20.740 --> 00:21:23.893 facing utterly catastrophic changes. And I 00:21:23.905 --> 00:21:27.070 just spent a month in India and Sri Lanka, 00:21:27.070 --> 00:21:29.632 and you can see those changes already starting, 00:21:29.644 --> 00:21:31.950 the loss of coral reefs, the loss a boreal 00:21:31.950 --> 00:21:33.560 forests. We were in the desert where it's 00:21:33.572 --> 00:21:35.309 only supposed to get an inch of rain a year, 00:21:35.309 --> 00:21:37.482 and they had four inches in three days and 00:21:37.494 --> 00:21:39.780 buildings are falling down as a result. They 00:21:39.780 --> 00:21:42.309 weren't built for that. So I would say climate 00:21:42.321 --> 00:21:44.700 changes is here and now. But it is going to 00:21:44.700 --> 00:21:47.995 get so much worse so quickly if we don't do 00:21:48.007 --> 00:21:51.840 something about it, and that brings up short lived 00:21:51.840 --> 00:21:53.523 climate pollutants. According to the Inter 00:21:53.535 --> 00:21:55.230 Government Panel on Climate Change and the 00:21:55.230 --> 00:21:56.908 California Air Resources Board, there are 00:21:56.920 --> 00:21:58.730 only two things that will impact the climate 00:21:58.730 --> 00:22:01.521 in the next decade. Reducing carbon dioxide 00:22:01.533 --> 00:22:04.400 is not one of them. Whatever we do to reduce 00:22:04.400 --> 00:22:07.683 fossil fuel emissions or reduce carbon dioxide 00:22:07.695 --> 00:22:10.919 from landfills and other sources is not gonna 00:22:10.919 --> 00:22:13.246 affect the climate in the next decade or 00:22:13.258 --> 00:22:15.940 three. You've got to focus more on short lived 00:22:15.940 --> 00:22:18.444 climate pollutants, which are tens to thousands 00:22:18.456 --> 00:22:20.710 of times more damaging to the climate. But 00:22:20.710 --> 00:22:23.308 when you reduce them, they have an immediate 00:22:23.320 --> 00:22:25.640 benefit on the climate. Now, that's not 00:22:25.640 --> 00:22:28.473 just my opinion. One of the other slides from the state's 00:22:28.485 --> 00:22:31.379 short, not short-lived climate pollutant plan, the state's 00:22:31.379 --> 00:22:33.643 2030 climate change scoping plan, which is 00:22:33.655 --> 00:22:35.879 the state's plan to meet the requirements 00:22:35.879 --> 00:22:39.007 of SB 32, more than 1\/3 of all the climate 00:22:39.019 --> 00:22:42.159 pollution reductions in the state's climate 00:22:42.159 --> 00:22:45.620 strategy are short lived climate pollutant reductions, 00:22:45.632 --> 00:22:48.600 meaning we can't possibly hit our 2030 climate 00:22:48.600 --> 00:22:51.063 goals in California without a massive reduction 00:22:51.075 --> 00:22:53.549 in short lived climate pollutants. It's really, 00:22:53.549 --> 00:22:57.442 really critical to the state's overall strategy. 00:22:57.454 --> 00:23:01.200 So I'm gonna go now to Jamie's four questions. 00:23:01.200 --> 00:23:03.638 But I really wanted to start with that because 00:23:03.650 --> 00:23:05.840 a lot of my answers to the four questions 00:23:05.840 --> 00:23:07.550 about this proceeding are gonna come back 00:23:07.562 --> 00:23:09.120 to short lived climate pollutants and 00:23:09.120 --> 00:23:12.557 how we really need to focus this procurement 00:23:12.569 --> 00:23:15.559 program, in the hope that the PUC does 00:23:15.559 --> 00:23:17.883 adopt a procurement program, it needs to stay focused 00:23:17.895 --> 00:23:20.230 on short lived climate pollution reduction above all. 00:23:20.230 --> 00:23:25.100 So, one of the first questions, actually the first two questions that Jamie posed 00:23:25.100 --> 00:23:27.430 have to do with cost effectiveness, and I 00:23:27.442 --> 00:23:29.840 would say there is both an easy measure of 00:23:29.840 --> 00:23:32.288 cost effectiveness. And then there's several 00:23:32.300 --> 00:23:34.759 other measures that, and we need all of them 00:23:34.759 --> 00:23:37.630 to really build a complete portfolio of bio 00:23:37.642 --> 00:23:40.590 methane sources and and uses and to maximize 00:23:40.590 --> 00:23:43.591 the benefits. So the obvious test of cost 00:23:43.603 --> 00:23:46.760 effectiveness when a program is intended to 00:23:46.760 --> 00:23:50.572 benefit the climate is dollars per ton of 00:23:50.584 --> 00:23:54.499 CO2 equivalent reduction. And I absolutely 00:23:54.499 --> 00:23:57.175 think that that dollar per ton of reduction is a 00:23:57.187 --> 00:23:59.820 critical metric in terms of cost effectiveness. 00:23:59.820 --> 00:24:03.315 But it's not enough. And the reason is there's 00:24:03.327 --> 00:24:06.460 a very wide variety of carbon intensities 00:24:06.460 --> 00:24:09.243 for different bio methane sources, even within 00:24:09.255 --> 00:24:12.049 the same category, say, landfill gas or forest 00:24:12.049 --> 00:24:14.976 waste or diverted organic waste that would 00:24:14.988 --> 00:24:18.200 otherwise go to a landfill. We need to account 00:24:18.200 --> 00:24:20.602 for that wide range of carbon intensity. We 00:24:20.614 --> 00:24:22.919 also need to keep our eyes on short lived 00:24:22.919 --> 00:24:25.668 climate pollutants and just looking at life 00:24:25.680 --> 00:24:28.629 cycle carbon intensity. The Air Board, Argonne 00:24:28.629 --> 00:24:31.352 National Labs, the folks that do that work, all 00:24:31.364 --> 00:24:33.929 put it in terms of carbon dioxide equivalent 00:24:33.929 --> 00:24:36.667 emissions. And so there's no separate analysis 00:24:36.679 --> 00:24:39.429 of short lived climate pollutants, and I think 00:24:39.429 --> 00:24:43.165 that that's critical. An SB 1440 refers repeatedly 00:24:43.177 --> 00:24:46.410 to short lived climate pollutant reductions 00:24:46.410 --> 00:24:49.099 specifically. In fact, in several places, the 00:24:49.111 --> 00:24:51.929 legislation says greenhouse gas and short lived 00:24:51.929 --> 00:24:54.407 climate pollutant reduction. In more than one place 00:24:54.419 --> 00:24:56.669 that says it has to help meet the requirements 00:24:56.669 --> 00:24:58.825 of SB 1383, the state's short lived climate 00:24:58.837 --> 00:25:01.350 pollutant law. It says specifically that it has to 00:25:01.350 --> 00:25:04.353 help implement the diverted organic waste 00:25:04.365 --> 00:25:07.309 goals of SB 1383. So we need to keep our 00:25:07.309 --> 00:25:09.979 eyes on both of those. In addition to the 00:25:09.991 --> 00:25:12.929 climate benefits, though, bio energy products 00:25:12.929 --> 00:25:15.626 can provide a lot of other benefits. And I do 00:25:15.638 --> 00:25:18.289 think that this program to maximize benefits 00:25:18.289 --> 00:25:20.804 also should consider things like potential to 00:25:20.816 --> 00:25:23.179 reduce wildfire emissions or the emissions 00:25:23.179 --> 00:25:25.979 from controlled burns of forest, agricultural 00:25:25.991 --> 00:25:28.620 and other vegetative waste. We should also 00:25:28.620 --> 00:25:30.817 look at air pollution benefits, and we should 00:25:30.829 --> 00:25:32.990 look at benefits to the grid because bio gas 00:25:32.990 --> 00:25:35.710 can provide a really critical niche to fill 00:25:35.722 --> 00:25:38.330 in around solar and wind. So I think it's 00:25:38.330 --> 00:25:40.918 important, above all to have climate and short lived 00:25:40.930 --> 00:25:43.629 climate pollution reductions as the cost effectiveness 00:25:43.629 --> 00:25:46.844 test, but also the other benefits that bio 00:25:46.856 --> 00:25:50.309 methane can provide. So those are my comments 00:25:50.309 --> 00:25:54.024 on the first two questions about cost effectiveness. 00:25:54.036 --> 00:25:57.200 The next question is, how should we consider 00:25:57.200 --> 00:25:59.996 procurement targets? And I think there are a 00:26:00.008 --> 00:26:03.129 couple of points I'd like to make on procurement. 00:26:03.129 --> 00:26:05.418 First and most important is I think this should 00:26:05.430 --> 00:26:07.540 be an ambitious program. On the electricity 00:26:07.540 --> 00:26:10.077 side, we've learned from the bio mat program, 00:26:10.089 --> 00:26:12.860 which is a small scale bio energy for electricity 00:26:12.860 --> 00:26:15.718 generation program. It's not any easier to 00:26:15.730 --> 00:26:18.600 do a small program than a big program. The 00:26:18.600 --> 00:26:20.901 rules are just has complicated. The implementation 00:26:20.913 --> 00:26:22.909 takes just as much time at the PUC, and for 00:26:22.909 --> 00:26:26.345 the utilities and other stakeholders. We know 00:26:26.357 --> 00:26:29.580 we need to do this from SB 1383, the State 00:26:29.580 --> 00:26:32.102 Short Lived Climate Pollution Law, 2030 Climate 00:26:32.114 --> 00:26:34.490 Change Scoping Plan, The Forest Carbon Plan. 00:26:34.490 --> 00:26:36.269 There's no question we have to move in this 00:26:36.281 --> 00:26:37.990 direction, so let's just do it. Let's not 00:26:37.990 --> 00:26:41.118 do it incrementally. Let's adopt the procurement 00:26:41.130 --> 00:26:44.590 target we need to meet our 2030 climate requirements. 00:26:44.590 --> 00:26:47.098 That's my first recommendation. My second 00:26:47.110 --> 00:26:50.110 recommendation is let's look at all the potential 00:26:50.110 --> 00:26:53.246 sources of bio methane, including forest waste, 00:26:53.258 --> 00:26:56.210 sawmill waste, all the other vegetation that 00:26:56.210 --> 00:26:58.958 is required by law now to be removed for defensible 00:26:58.970 --> 00:27:01.730 space, which includes a lot of grassland, shrubland 00:27:01.730 --> 00:27:05.060 and other vegetation around power lines, infrastructure, 00:27:05.072 --> 00:27:07.769 homes and communities as well as agricultural 00:27:07.769 --> 00:27:11.385 waste and urban wood waste. Since 1440 requires 00:27:11.397 --> 00:27:15.100 that a procurement program help meet the organic 00:27:15.100 --> 00:27:17.777 waste diversion requirements of SB 1383. You 00:27:17.789 --> 00:27:20.299 can't do that without getting at the wood 00:27:20.299 --> 00:27:23.428 waste. So the top five categories are basically 00:27:23.440 --> 00:27:26.580 wet waste, that can be converted to bio methane 00:27:26.580 --> 00:27:28.844 with anaerobic digestion. The bottom three 00:27:28.856 --> 00:27:31.080 categories, which represent 80% of the in 00:27:31.080 --> 00:27:33.356 state bio methane potential, require other 00:27:33.368 --> 00:27:35.710 conversion technologies, but they can still 00:27:35.710 --> 00:27:38.536 be used to produce bio methane. It's a two step 00:27:38.548 --> 00:27:41.090 process, but it's really, really critical, 00:27:41.090 --> 00:27:43.449 including to get to the largest share of organic 00:27:43.461 --> 00:27:45.929 waste currently, going to landfills is cellulosic, 00:27:45.929 --> 00:27:49.247 and it's going to need other conversion technologies 00:27:49.259 --> 00:27:52.149 besides anaerobic digestion. But this program 00:27:52.149 --> 00:27:54.243 won't help meet the waste diversion goals 00:27:54.255 --> 00:27:56.210 of 1383 if it's limited to bio methane 00:27:56.210 --> 00:27:58.110 from anaerobic digestion. So we should be 00:27:58.122 --> 00:28:00.080 looking at all the potential organic waste 00:28:00.080 --> 00:28:02.889 sources and again really focus on getting 00:28:02.901 --> 00:28:05.789 out to our 2030 goals, which is gonna take 00:28:05.789 --> 00:28:11.017 all of this. Let's see, I was gonna end 00:28:11.029 --> 00:28:16.940 with this. I've given away my ending. Back 00:28:16.940 --> 00:28:19.053 to climate change. They're a couple of other 00:28:19.065 --> 00:28:21.190 issues that I think we need to consider, But 00:28:21.190 --> 00:28:24.569 I'm not gonna go into today. Ramp up timelines. 00:28:24.581 --> 00:28:27.619 What's really feasible? I do think we need 00:28:27.619 --> 00:28:29.700 to look at broader end uses than just core 00:28:29.712 --> 00:28:31.999 customers. It doesn't make sense to only focus 00:28:31.999 --> 00:28:34.093 on residential and small business users at 00:28:34.105 --> 00:28:36.309 the same time that the Energy Commission and 00:28:36.309 --> 00:28:38.989 the Legislature are saying we should be electrifying 00:28:39.001 --> 00:28:41.389 buildings. We really need to be looking across 00:28:41.389 --> 00:28:44.151 the entire economy at all the potential end 00:28:44.163 --> 00:28:47.000 uses and not just limited to core customers. 00:28:47.000 --> 00:28:48.841 And I realized that maybe out of the purview of 00:28:48.853 --> 00:28:50.629 the PUC. But maybe one of the recommendations 00:28:50.629 --> 00:28:53.510 of this proceeding is that a bio methane procurement 00:28:53.522 --> 00:28:56.360 program should be broader than just core customers. 00:28:56.360 --> 00:28:58.665 I think we need to ensure that whatever has 00:28:58.677 --> 00:29:01.100 adopted maintains competition among end users 00:29:01.100 --> 00:29:03.418 so that we don't shut non utility participants 00:29:03.430 --> 00:29:05.760 out of the market. And I think it's some point 00:29:05.760 --> 00:29:07.927 we'll have to address how to deal with environmental 00:29:07.939 --> 00:29:09.789 credits. But all of those are down the line, 00:29:09.789 --> 00:29:12.080 I think what's critical of the outside is 00:29:12.092 --> 00:29:14.559 really framing this big and bold, so that it 00:29:14.559 --> 00:29:16.194 actually does what it was intended to do by 00:29:16.206 --> 00:29:17.740 Senator Wayso, which is help us meet the 00:29:17.740 --> 00:29:20.717 requirements of 1383, and sorry, actually, one 00:29:20.729 --> 00:29:23.400 last thing, I meant to say on 1383. Jamie 00:29:23.400 --> 00:29:26.119 talked about a lot about methane, but SB 1383, the 00:29:26.131 --> 00:29:28.809 state short lived climate pollutnat, also requires 00:29:28.809 --> 00:29:31.876 a 40% reduction in anthropogenic black carbon. 00:29:31.888 --> 00:29:34.770 And that's burning of forests, agricultural 00:29:34.770 --> 00:29:37.656 waste. Both controlled burns and wildfire. 00:29:37.668 --> 00:29:40.769 It's also diesel pollution, and then 10 other 00:29:40.769 --> 00:29:43.538 sources. Wood stoves, things like that. So 00:29:43.550 --> 00:29:46.460 we need this program to help do both methane 00:29:46.460 --> 00:29:49.703 reduction and black carbon reduction. So I'm 00:29:49.715 --> 00:29:52.970 gonna stop there. I'm really excited to hear 00:29:52.970 --> 00:29:54.746 from the other Panelists, and I think this 00:29:54.758 --> 00:29:56.629 is gonna be very, very important proceeding. 00:29:56.629 --> 00:30:02.400 Thank you. Thank you. Would you like 00:30:02.412 --> 00:30:07.759 to go second, Michael, and then let us come down 00:30:07.759 --> 00:30:09.529 the line? Perfect. 00:30:09.554 --> 00:30:12.154 Good morning, everyone. 00:30:12.166 --> 00:30:14.840 My name's Michael Holden. I'm the director 00:30:14.840 --> 00:30:16.781 of the California Energy Program at Environmental 00:30:16.793 --> 00:30:18.629 Defense Fund. It's a pleasure to be here today 00:30:18.629 --> 00:30:22.448 and to be joining you all with this proceeding 00:30:22.460 --> 00:30:25.639 now in phase four. I think Jamie did a 00:30:25.639 --> 00:30:29.119 really great job setting us up, and I learned a lot from 00:30:29.131 --> 00:30:32.440 you just now, so I'm trying, I'm trying to absorb all 00:30:32.440 --> 00:30:34.975 this. I heard from Jamie that she really wanted 00:30:34.987 --> 00:30:37.269 this to be his dialogue based possible, So 00:30:37.269 --> 00:30:39.681 I decided to scrap my entire slide deck. And 00:30:39.693 --> 00:30:42.009 I just have some thoughts with the extent, 00:30:42.009 --> 00:30:44.576 or with the hope that we can convert this 00:30:44.588 --> 00:30:46.860 into Q&A amongst us and then amongst 00:30:46.860 --> 00:30:50.336 everybody in the room as quickly as we can. 00:30:50.348 --> 00:30:53.440 A couple of thoughts. Jamie, maybe you 00:30:53.440 --> 00:30:55.458 can put it pull up the four questions again. 00:30:55.470 --> 00:30:57.409 Why is this night different from all other 00:30:57.409 --> 00:31:00.683 nights? No four questions? No? Anyone? Thank 00:31:00.695 --> 00:31:04.200 you. Thank you for the pity laugh. I appreciate 00:31:04.200 --> 00:31:07.627 it. No, I have them, I thought for the people 00:31:07.639 --> 00:31:10.929 in the room. So for the first two questions 00:31:10.929 --> 00:31:13.319 on cost effectiveness, a couple of thoughts 00:31:13.331 --> 00:31:15.679 that I had. The Environmental Defense Fund 00:31:15.679 --> 00:31:20.648 is really focused on the integrity of the 00:31:20.660 --> 00:31:25.879 pipeline system as a whole. And so we think 00:31:25.879 --> 00:31:27.786 about what is the integrity of the pipe? How 00:31:27.798 --> 00:31:29.590 do we reduce leaks coming out of the pipe 00:31:29.590 --> 00:31:32.829 because of methane is as we just said is so extraordinarily 00:31:32.841 --> 00:31:35.279 potent. We need to make certain that there's 00:31:35.279 --> 00:31:37.275 enough integrity attached to that. And then 00:31:37.287 --> 00:31:39.250 we figure out, well, how can we reduce the 00:31:39.250 --> 00:31:41.584 amount of gas flowing through our gas demand 00:31:41.596 --> 00:31:44.359 response programs, through our gas energy efficiency 00:31:44.359 --> 00:31:47.222 programs. So integrity, the pipe, reducing, 00:31:47.234 --> 00:31:50.109 and then we want to figure out what are the 00:31:50.109 --> 00:31:55.570 right levels of blend of non fossil fuel that are going through it. The position 00:31:55.570 --> 00:31:57.788 that we've maintained all along is we don't 00:31:57.800 --> 00:31:59.980 have a problem with gas. We have a problem 00:31:59.980 --> 00:32:01.411 with the carbon that's attached to the pipe 00:32:01.423 --> 00:32:02.899 right now. And so if you can figure out ways 00:32:02.899 --> 00:32:08.999 of reducing it overall, reducing the size of the pipe, of reducing the blend 00:32:08.999 --> 00:32:10.874 of the pipe, those are sort of the strategy 00:32:10.886 --> 00:32:12.859 that we need to think of. So all the comments 00:32:12.859 --> 00:32:16.408 that I make now are sort of in that framework. 00:32:16.420 --> 00:32:19.299 I hope. There's a couple of things on 00:32:19.299 --> 00:32:21.914 cost effectiveness that I wanted to mention. 00:32:21.926 --> 00:32:24.669 The Commission, about two months ago, released 00:32:24.669 --> 00:32:31.299 an update to the Leak Detection Rules for the gas LBCs, and it specifically 00:32:31.299 --> 00:32:33.888 had the societal cost of methane as part of 00:32:33.900 --> 00:32:36.619 the cost effectiveness solution. And not just 00:32:36.619 --> 00:32:39.090 a societal cost of carbon. And so if we're thinking 00:32:39.102 --> 00:32:41.489 about well, what's the overall cost effectiveness 00:32:41.489 --> 00:32:43.506 for thinking about carbon? We can't just have 00:32:43.518 --> 00:32:45.370 it be the social cost of carbon. It needs 00:32:45.370 --> 00:32:48.835 to be a societal cost of methane. And that's 00:32:48.847 --> 00:32:52.169 going to better align with the actual fuel 00:32:52.169 --> 00:32:54.535 that we're transporting through this. This 00:32:54.547 --> 00:32:56.980 is not about the waste of the combustion at 00:32:56.980 --> 00:32:58.508 the end of the pipe. This is about what's 00:32:58.520 --> 00:33:00.169 going through the pipe right now, so we need 00:33:00.169 --> 00:33:04.377 to have the metric match the fuel that we're 00:33:04.389 --> 00:33:08.609 talking about. I also wanted to make certain 00:33:08.609 --> 00:33:11.453 that we, you know, as we're thinking about all 00:33:11.465 --> 00:33:14.320 of this, we have now set up a price signal for 00:33:14.320 --> 00:33:16.813 the utilities to go after leaks in not just 00:33:16.825 --> 00:33:19.330 high consequence areas, but big leaks, even 00:33:19.330 --> 00:33:22.363 if they're in low consequence areas. And I 00:33:22.375 --> 00:33:25.419 want to make certain that if we're setting 00:33:25.419 --> 00:33:27.752 up a new standard of new cost effectiveness that 00:33:27.764 --> 00:33:29.870 we're not tilting the scale of that balance 00:33:29.870 --> 00:33:33.113 in anyway. So just as sort of a general principle, we 00:33:33.125 --> 00:33:36.320 have spent throughout, you know, the last four years 00:33:36.320 --> 00:33:39.328 since the leak detection rules came out in 00:33:39.340 --> 00:33:42.289 January 2015 we've really been trying to 00:33:42.289 --> 00:33:44.537 orient the utilities on leak detection rules 00:33:44.549 --> 00:33:47.009 properly. And I don't want to upset that balance 00:33:47.009 --> 00:33:49.158 with what this program is, and with the cost 00:33:49.170 --> 00:33:51.139 effectiveness that is there. So headline 00:33:51.139 --> 00:33:53.945 message number one. CO2E and really thinking 00:33:53.957 --> 00:33:56.650 about the cost effectiveness of methane, I 00:33:56.650 --> 00:34:01.318 think is the most important. For how do we 00:34:01.330 --> 00:34:06.119 establish the procurement targets? I wanted 00:34:06.119 --> 00:34:10.580 to maybe tell a ten second analogy here, which 00:34:10.592 --> 00:34:14.590 was, when we first started thinking about 00:34:14.590 --> 00:34:18.376 cap and trade in AB32 implementation. You know, 00:34:18.388 --> 00:34:21.790 2006, 2007 time frame. I'm looking at Sam 00:34:21.790 --> 00:34:23.407 because he and I were doing a lot of these 00:34:23.419 --> 00:34:25.200 conversations together at the time. We thought 00:34:25.200 --> 00:34:27.601 2020 was impossible. We thought that those 00:34:27.613 --> 00:34:29.970 goals were never gonna happen. We thought 00:34:29.970 --> 00:34:33.752 that it was, it maybe directionally will get 00:34:33.764 --> 00:34:37.980 somewhere close. And look at how much has changed 00:34:37.980 --> 00:34:39.870 because of those guiding visions and guiding 00:34:39.882 --> 00:34:41.700 principles that were out there. We hit our 00:34:41.700 --> 00:34:45.038 2020 goals with essentially zero fanfare. 00:34:45.050 --> 00:34:48.640 Four years early. We figured out how to kind 00:34:48.640 --> 00:34:51.019 of turn the tanker and turn the ship. And so part 00:34:51.031 --> 00:34:53.230 of the setup I have for the procurement goals 00:34:53.230 --> 00:34:58.150 here is you know, let's not be afraid to start 00:34:58.162 --> 00:35:02.570 turning the tanker a little bit, and turn 00:35:02.570 --> 00:35:05.476 to the procurement targets. And I really liked the 00:35:05.488 --> 00:35:08.120 slide that you put up with your blue and your 00:35:08.120 --> 00:35:11.088 green categories. I think there's a couple 00:35:11.100 --> 00:35:14.010 of places that I would want to flesh that 00:35:14.010 --> 00:35:17.254 out. The source of the bio methane, you know, as 00:35:17.266 --> 00:35:20.390 you sort of said wet versus dry. I think there 00:35:20.390 --> 00:35:22.306 are some good sources. I think there's some 00:35:22.318 --> 00:35:24.290 great sources, and I think there's some that 00:35:24.290 --> 00:35:26.919 are probably, we don't want to be thinking 00:35:26.931 --> 00:35:29.571 about. It would be really easy if we could 00:35:29.571 --> 00:35:31.607 just say that there was an existing green E 00:35:31.619 --> 00:35:33.620 standard out there and we could just point 00:35:33.620 --> 00:35:35.446 to that and say, Hey, Commission, go ahead and 00:35:35.458 --> 00:35:37.140 adopt that it doesn't exist yet. You know, 00:35:37.140 --> 00:35:40.258 there's lots of things that are sort of emerging, and 00:35:40.270 --> 00:35:43.110 I think we need to be okay with that uncertainty 00:35:43.110 --> 00:35:45.153 at this moment, directionally start heading 00:35:45.165 --> 00:35:47.220 somewhere and then have the Commission have 00:35:47.220 --> 00:35:49.598 enough flexibility in whatever program is 00:35:49.610 --> 00:35:52.000 established here to say, as new standards 00:35:52.000 --> 00:35:54.252 emerge that we all sort of agree that this is 00:35:54.264 --> 00:35:56.380 what we're going to keep tightening things 00:35:56.380 --> 00:35:59.607 up. And I think to your point a few moments ago 00:35:59.619 --> 00:36:02.520 of how do we start figuring out what's the 00:36:02.520 --> 00:36:05.087 wreck equivalent of a biomethane procurement? 00:36:05.099 --> 00:36:07.790 What's the equivalent? How do we start tracking 00:36:07.790 --> 00:36:09.929 and trading? What's the Regis equivalent? I 00:36:09.941 --> 00:36:12.140 think that's all really important, and those 00:36:12.140 --> 00:36:14.130 rules need to get figured out. But we need 00:36:14.142 --> 00:36:16.190 to figure out what's the product first that 00:36:16.190 --> 00:36:19.460 we are really talking about? SB1440 also has 00:36:19.472 --> 00:36:22.390 a lot of information in there about the 00:36:22.390 --> 00:36:26.003 location of these sources, of, you know, how much 00:36:26.015 --> 00:36:29.640 is in state and out of state. And I guess the one 00:36:29.640 --> 00:36:32.407 piece of commentary that I wanted to put 00:36:32.419 --> 00:36:35.470 onto that. What's in the laws is in the law. 00:36:35.470 --> 00:36:38.038 We're obviously gonna have to interpret some 00:36:38.050 --> 00:36:40.400 things. I think there's a lot of lessons 00:36:40.400 --> 00:36:42.908 learned from the renewable portfolio standard 00:36:42.920 --> 00:36:45.220 that we can use, but we have to recognize 00:36:45.220 --> 00:36:48.123 fundamentally that a wire and a pipe are different. 00:36:48.135 --> 00:36:50.601 And how we regulate the product in the pipe 00:36:50.601 --> 00:36:53.680 is just fundamentally different than the electron. 00:36:53.692 --> 00:36:56.540 So it's not an exact copy and paste. We should 00:36:56.540 --> 00:36:59.280 kind of learn from the best practices, but 00:36:59.292 --> 00:37:01.980 recognize that you know the gas commodity 00:37:01.980 --> 00:37:04.337 price itself is a fundamentally deregulated 00:37:04.349 --> 00:37:06.610 product, and so we need to figure out the 00:37:06.610 --> 00:37:09.705 procurement targets for this accordingly. 00:37:09.717 --> 00:37:12.380 And last but not least, on question 00:37:12.380 --> 00:37:14.709 number four, How do we go abhout figuring out some 00:37:14.721 --> 00:37:16.970 of the targets and goals and what the strategies 00:37:16.970 --> 00:37:20.212 might be? As I just sort of said, I think 00:37:20.224 --> 00:37:23.400 we should use the RPS as a template, and 00:37:23.400 --> 00:37:26.489 the main template out of the RPS really was 00:37:26.501 --> 00:37:29.250 the idea of competitive solicitations. 00:37:29.250 --> 00:37:31.933 And the most important part of that, from my 00:37:31.945 --> 00:37:34.520 mind, was twofold. One. We were not trying 00:37:34.520 --> 00:37:37.399 to compare renewable natural gas to the cost 00:37:37.411 --> 00:37:40.110 of conventional gas. Jamie had this exact 00:37:40.110 --> 00:37:42.293 point at the beginning of her talk. And I 00:37:42.305 --> 00:37:44.500 think that's a really important idea that 00:37:44.500 --> 00:37:51.610 cost effectiveness and what this market is. It is RNG versus RNG. It's not RNG 00:37:51.610 --> 00:37:54.499 versus conventional fossil gas. It would be 00:37:54.511 --> 00:37:57.280 amazing at those two had equivalent price 00:37:57.280 --> 00:37:59.324 points and equivalent markets and equivalent, you 00:37:59.336 --> 00:38:01.310 know, we're not there yet, so let's not pretend 00:38:01.310 --> 00:38:05.808 that they are. The second is, the second observation 00:38:05.820 --> 00:38:09.990 about competitive solicitations is that it gives 00:38:09.990 --> 00:38:13.639 the utilities some sort of flexibility to 00:38:13.651 --> 00:38:17.050 have a diversity of portfolio choices. 00:38:17.050 --> 00:38:19.744 I think it is probably, the market is too nascent 00:38:19.756 --> 00:38:22.570 at this point to say, oh, we're gonna do everything 00:38:22.570 --> 00:38:25.034 from in state Dairies and nothing else. I 00:38:25.046 --> 00:38:27.580 just don't think that makes sense. I think 00:38:27.580 --> 00:38:30.216 that's a bad portfolio management perspective, 00:38:30.228 --> 00:38:32.650 and I think we need to be able to pick and 00:38:32.650 --> 00:38:36.318 choose some things. At the same time, well, one 00:38:36.330 --> 00:38:40.010 other observation on competitive solicitations. 00:38:40.010 --> 00:38:42.961 Within the RPS context, and we do this in 00:38:42.973 --> 00:38:46.500 traditional procurement as while for electricity, 00:38:46.500 --> 00:38:48.917 we have the ability for non market participants, 00:38:48.929 --> 00:38:51.210 whether they are ratepayer advocacy groups or 00:38:51.210 --> 00:38:54.169 your friendly environmental advocacy organization 00:38:54.181 --> 00:38:56.380 or somebody else to folks who do not 00:38:56.380 --> 00:38:59.106 have a market interest to be able to look behind 00:38:59.118 --> 00:39:01.520 the curtain and see what the solicitations 00:39:01.520 --> 00:39:03.996 are and be able to give guidance back to the 00:39:04.008 --> 00:39:06.330 utility to say, You know what? That's not 00:39:06.330 --> 00:39:08.973 a good deal. There's some red herring here, 00:39:08.985 --> 00:39:11.520 or this makes a lot of sense. You need to 00:39:11.520 --> 00:39:15.842 go forward. We give you, you know, our blessing. 00:39:15.854 --> 00:39:19.480 The idea behind that was a train pre-vet 00:39:19.480 --> 00:39:22.828 what these contracts look like before you 00:39:22.840 --> 00:39:26.280 actually start signing the contracts. I do 00:39:26.280 --> 00:39:28.673 think there needs to be some consideration 00:39:28.685 --> 00:39:31.090 about how do these contracts actually come 00:39:31.090 --> 00:39:35.194 before the Commission for ultimate approval. 00:39:35.206 --> 00:39:39.230 The Commission made the policy choice to do 00:39:39.230 --> 00:39:42.702 an advice letter process for the actual RPS 00:39:42.714 --> 00:39:46.040 contracts themselves. And I think we need 00:39:46.040 --> 00:39:48.933 to think about does that make sense, do applications 00:39:48.945 --> 00:39:51.630 make sense, and what's sort of the best parallel 00:39:51.630 --> 00:39:55.568 strategy for gas procurement today? The gas 00:39:55.580 --> 00:39:59.620 utilities do gas hedging and gas procurement 00:39:59.620 --> 00:40:01.834 really differently. And so we need to think 00:40:01.846 --> 00:40:04.021 out how do we transport the system that we 00:40:04.021 --> 00:40:07.697 feel really comfortable with onto the gas 00:40:07.709 --> 00:40:11.660 system? But I don't want to lose the ability 00:40:11.660 --> 00:40:14.988 for these non market participants to help 00:40:15.000 --> 00:40:18.260 guide and shape the initial procurement. 00:40:18.260 --> 00:40:21.503 And the last observation that I wanted to make, 00:40:21.515 --> 00:40:24.430 now that I've just extolled the virtues of 00:40:24.430 --> 00:40:26.978 competitive solicitations and sort of how we 00:40:26.990 --> 00:40:29.380 helped shape and guide those, I recognize 00:40:29.380 --> 00:40:32.759 that there's a lot of new market participants 00:40:32.771 --> 00:40:35.720 who are wanting to develop RNG, who are 00:40:35.720 --> 00:40:39.483 going to be very small developers, and they're not 00:40:39.495 --> 00:40:42.900 going to have the ability to really negotiate 00:40:42.900 --> 00:40:48.104 fairly against a utility or against a market. And 00:40:48.116 --> 00:40:52.810 that happens also in traditional electricity 00:40:52.810 --> 00:40:55.992 procurement that we have the ability for small 00:40:56.004 --> 00:40:59.470 market participants who meet eligibility standards 00:40:59.470 --> 00:41:02.482 to be able to sign some sort of contract. You 00:41:02.494 --> 00:41:05.190 just mentioned the bio remap proceeding? 00:41:05.190 --> 00:41:07.314 There are other feed and tarrif proceedings 00:41:07.326 --> 00:41:09.510 that are out there in the electricity world. 00:41:09.510 --> 00:41:11.892 That's a federal program that's been authorized, 00:41:11.904 --> 00:41:14.250 called the Under Perfect, called the Qualifying 00:41:14.250 --> 00:41:21.370 Facilities Program. I am not by any means suggesting that we should have a 00:41:21.370 --> 00:41:23.909 purpose style program for renewable natural 00:41:23.921 --> 00:41:26.530 gas. But I do think we should think out what 00:41:26.530 --> 00:41:29.643 is the ability of, once we've identified what 00:41:29.655 --> 00:41:32.780 type of product that we're actually feel good 00:41:32.780 --> 00:41:35.140 about and feel comfortable with, what are sort of 00:41:35.152 --> 00:41:37.430 the standard term lengths and the standard tees 00:41:37.430 --> 00:41:42.667 and sees, putting out a standard offer contract, 00:41:42.679 --> 00:41:46.750 or at least a pro forma that's pretty 00:41:46.750 --> 00:41:49.407 heavily thought out, and then really been, 00:41:49.419 --> 00:41:52.150 all of you having been, negotiated is maybe 00:41:52.150 --> 00:41:54.254 some timeline deliverables and some price. 00:41:54.266 --> 00:41:56.480 You know, that's probably going to go a long 00:41:56.480 --> 00:42:00.796 ways to getting stuff going really quickly. 00:42:00.808 --> 00:42:04.940 The last observation, with that, I think, 00:42:04.940 --> 00:42:08.477 eventually, we will start seeing a market price 00:42:08.489 --> 00:42:11.521 that is beyond California for RNG. Right 00:42:11.521 --> 00:42:13.493 now, there's some of this information that's 00:42:13.505 --> 00:42:15.180 out there from the LCFS. But it's not 00:42:15.180 --> 00:42:17.488 really robust enough. I wouldn't feel good 00:42:17.500 --> 00:42:19.820 enough taking anything for procurement for 00:42:19.820 --> 00:42:23.092 core customers to that point at this point, 00:42:23.104 --> 00:42:26.090 but I think the Commission should start 00:42:26.090 --> 00:42:29.833 thinking out how do we develop what the gas 00:42:29.845 --> 00:42:33.770 price is for an RNG product in a standardized 00:42:33.770 --> 00:42:36.394 way and publishing and making that information 00:42:36.406 --> 00:42:38.930 as transparent as possible, so that way, new 00:42:38.930 --> 00:42:40.540 entrants can start saying, you know what? 00:42:40.552 --> 00:42:42.251 Yeah, this makes sense. We should start. We 00:42:42.251 --> 00:42:44.379 can compete in this as well. So those were 00:42:44.391 --> 00:42:46.580 some of my initial thoughts. I look forward 00:42:46.580 --> 00:42:49.003 to hearing what everyone else has to say, and I 00:42:49.015 --> 00:42:51.500 probably have a lot more questions than answers. 00:42:51.500 --> 00:42:53.324 Thank you very much. 00:42:53.349 --> 00:42:56.236 Alright, I'm gonna follow Jamie's lead and step up here. 00:43:08.325 --> 00:43:10.325 Sam Wade from the Coalition 00:43:10.350 --> 00:43:12.685 for Renewable Natural Gas. And just by way 00:43:12.697 --> 00:43:14.990 of background, I used to run California's 00:43:14.990 --> 00:43:17.136 low carbon fuel standard program. So I'm gonna 00:43:17.148 --> 00:43:19.260 try and explain that model a little bit more. 00:43:19.260 --> 00:43:21.248 Obviously, the Commission is very familiar 00:43:21.260 --> 00:43:23.120 with the RPS and feed and tariff model, 00:43:23.120 --> 00:43:25.126 but I think there's some things we can 00:43:25.138 --> 00:43:27.580 easily port over from the LCFS and that will 00:43:27.580 --> 00:43:30.588 be helpful in this regard. So let me just 00:43:30.600 --> 00:43:33.620 start with a little bit about who we are. 00:43:33.620 --> 00:43:36.224 We're a trade association for the renewable 00:43:36.236 --> 00:43:39.090 natural gas industry, and the renewable natural 00:43:39.090 --> 00:43:41.180 gas industry has really grown a lot over the 00:43:41.192 --> 00:43:43.200 last few years, based on programs like the 00:43:43.200 --> 00:43:44.984 low carbon fuel standard and the renewable 00:43:44.996 --> 00:43:46.751 fuels gender at the federal level. And we 00:43:46.751 --> 00:43:49.298 now have a very large membership that's 00:43:49.310 --> 00:43:52.460 competing for our common good to try and bring 00:43:52.460 --> 00:43:58.560 as much RNG as possible to market on. And our coalition represents 95% of the 00:43:58.560 --> 00:44:01.461 RNG in the US right now. And we were also the 00:44:01.473 --> 00:44:04.260 sponsors of SB 1440. We thank Senator Wayso 00:44:04.260 --> 00:44:06.474 for his continued leadership on this issue. 00:44:06.486 --> 00:44:08.510 We agree that it's time to move forward 00:44:08.510 --> 00:44:10.914 on this, and it's pretty critical that we 00:44:10.926 --> 00:44:13.400 move quickly because of all the importance 00:44:13.400 --> 00:44:17.243 of addressing SLCP in a timely fashion that 00:44:17.255 --> 00:44:20.760 Julia mentioned. Here's our membership. 00:44:20.760 --> 00:44:22.920 We have quite a few so I'll just sort of skip 00:44:22.932 --> 00:44:25.010 past them, and we do have a lot of academic 00:44:25.010 --> 00:44:27.531 members as well because we believe taking a 00:44:27.543 --> 00:44:29.960 long term view on this issue is critical, 00:44:29.960 --> 00:44:33.210 and getting the best thoughts from these leading 00:44:33.222 --> 00:44:36.550 universities is a big part of how we do business. 00:44:36.550 --> 00:44:38.820 So this is a little bit of a repeat of what 00:44:38.832 --> 00:44:41.010 Jamie said, but I think it's important to 00:44:41.010 --> 00:44:43.396 emphasize. Overall, we've been successful 00:44:43.408 --> 00:44:45.920 in reducing greenhouse gas emissions in the 00:44:45.920 --> 00:44:49.912 state in line with our AB32 goals. But one 00:44:49.924 --> 00:44:54.580 exception to that is waste methane from organics. 00:44:54.580 --> 00:44:57.217 And that has actually been an increasing 00:44:57.229 --> 00:45:00.330 problem, as shown by CARB's Emissions inventory 00:45:00.330 --> 00:45:03.040 here. And so I think a lot of folks in Sacramento 00:45:03.052 --> 00:45:05.720 recognized this and passed a slew of legislation 00:45:05.720 --> 00:45:08.838 related to it. CARB wrote the SLCP plan. But 00:45:08.850 --> 00:45:11.980 unfortunately, you know, passing legislation 00:45:11.980 --> 00:45:14.117 is not enough. You have to move all the way 00:45:14.129 --> 00:45:16.180 to regulation to make it real and to have 00:45:16.180 --> 00:45:19.006 an impact on the markets for these products. 00:45:19.018 --> 00:45:21.540 So we have, as folks have already said, 00:45:21.540 --> 00:45:23.618 that low carbon fuel standard is a strong 00:45:23.630 --> 00:45:25.820 driver, but it's only focused on use of RNG 00:45:25.820 --> 00:45:28.555 in the transportation sector. We've also 00:45:28.567 --> 00:45:31.380 have CalRecycle in the process of pushing 00:45:31.380 --> 00:45:33.465 things to market through their organic waste 00:45:33.477 --> 00:45:35.620 reduction regulation. But what we really need 00:45:35.620 --> 00:45:37.668 is a renewable natural gas standard that 00:45:37.680 --> 00:45:39.891 provides an incentive to use RNG in all the 00:45:39.891 --> 00:45:42.924 other end uses that Jamie talked about. So 00:45:42.936 --> 00:45:45.980 let's talk a little bit more about how the 00:45:45.980 --> 00:45:48.454 LCFS evaluates the greenhouse gas performance 00:45:48.466 --> 00:45:50.520 of RNG projects. Just so we're all on 00:45:50.520 --> 00:45:54.658 the same page on that side of things. So this 00:45:54.670 --> 00:45:58.640 is a slide from CARBs website, and it walks 00:45:58.640 --> 00:46:01.241 through each of the steps in making RNG from a 00:46:01.253 --> 00:46:03.700 landfill. And it has everything denominated 00:46:03.700 --> 00:46:07.453 in terms of grams of carbon dioxide equivalent 00:46:07.465 --> 00:46:11.230 per unit of energy or mega joulles of the gas. 00:46:11.230 --> 00:46:14.667 So the landfill recovery is not that intensive. 00:46:14.679 --> 00:46:17.840 One gram per mega joulle is associated with 00:46:17.840 --> 00:46:20.453 the energy needed to collect the gas at the 00:46:20.465 --> 00:46:23.150 system, but upgrading it is energy intensive 00:46:23.150 --> 00:46:25.138 and requires 32 grams of mega joulles. Some 00:46:25.150 --> 00:46:27.150 of that is burning fossil gas. Some of that 00:46:27.150 --> 00:46:30.397 is using electricity to run the cleanup system. 00:46:30.409 --> 00:46:33.940 Then moving the gas to market takes some emissions, 00:46:33.940 --> 00:46:36.448 both because of energy needed to compress 00:46:36.460 --> 00:46:38.980 and move the gas to the pipes, as well as 00:46:38.980 --> 00:46:41.134 some leakage along the way, which obviously 00:46:41.146 --> 00:46:43.460 folks are trying to minimize but still exists. 00:46:43.460 --> 00:46:45.318 And then, in the case of transportation fueling, 00:46:45.330 --> 00:46:47.010 you have a compression step to get it up to 00:46:47.010 --> 00:46:49.330 the pressure you need to put it into the vehicles 00:46:49.342 --> 00:46:51.580 and then you have the actual efficiency impacts 00:46:51.580 --> 00:46:53.647 of the vehicles themselves, which are slightly 00:46:53.659 --> 00:46:55.650 less efficient than a diesel engine. So this 00:46:55.650 --> 00:46:58.666 is the way that the LCFS takes a life cycle 00:46:58.678 --> 00:47:01.430 approach and assigns a carbon intensity 00:47:01.430 --> 00:47:03.767 score to an individual RNG project. Now, 00:47:03.779 --> 00:47:06.300 this is just a exhibit on example here, and 00:47:06.300 --> 00:47:08.748 it's actually a relatively high emitting 00:47:08.760 --> 00:47:11.400 landfill. But I wanted to show this because 00:47:11.400 --> 00:47:13.703 it's actually really easy to take this scoring 00:47:13.715 --> 00:47:15.980 and immediately adapt it to be ready for uses 00:47:15.980 --> 00:47:21.990 or other end uses. So all we need to do is to chop off these last two steps 00:47:21.990 --> 00:47:28.940 and you have a CI, sort of, to the end of pipe, right? So that is the framework 00:47:28.940 --> 00:47:31.957 that we think will make sense as we move forward 00:47:31.969 --> 00:47:34.750 with SB1440 implementation because as others 00:47:34.750 --> 00:47:37.058 have already said, you know, there is a difference 00:47:37.070 --> 00:47:38.980 between the greenhouse gas performance of 00:47:38.980 --> 00:47:42.548 different types of RNG projects. So again, 00:47:42.560 --> 00:47:46.390 this is also from CARBs website, and it shows 00:47:46.390 --> 00:47:48.726 the carbon intensity of all fuels, and you 00:47:48.738 --> 00:47:51.140 can see the most carbon negative fuels. The 00:47:51.140 --> 00:47:54.267 best greenhouse gas performance is RNG right 00:47:54.279 --> 00:47:56.930 now, and these highly carbon negative 00:47:56.930 --> 00:48:01.549 projects have reductions of up to 500% relative to 00:48:01.561 --> 00:48:06.010 fossil fuel because of their methane destruction 00:48:06.010 --> 00:48:09.270 benefits. And so it does make sense to try and target those and get those taken 00:48:09.270 --> 00:48:12.258 care of. So now I'm gonna dive into some of 00:48:12.270 --> 00:48:15.270 the questions related to cost effectiveness 00:48:15.270 --> 00:48:17.668 on, and I think what you'll see at the end 00:48:17.680 --> 00:48:20.090 of day is that from a variety of different 00:48:20.090 --> 00:48:23.590 metrics, RNG is cost effective, especially 00:48:23.602 --> 00:48:26.950 bio methane portion of the RNG universe. 00:48:26.950 --> 00:48:29.499 So this is from CARBs scoping plan that was 00:48:29.511 --> 00:48:32.130 already mentioned, and basically they define 00:48:32.130 --> 00:48:35.181 cost effectiveness as the reduction, the 00:48:35.193 --> 00:48:38.480 relative cost per metric ton of a reduction 00:48:38.480 --> 00:48:41.067 strategy compared to other reduction strategies. 00:48:41.079 --> 00:48:43.360 So it's not about how expensive is the RNG 00:48:43.360 --> 00:48:45.764 relative to fossil gas or anything like that. 00:48:45.776 --> 00:48:48.140 It's how expensive are the various abatement 00:48:48.140 --> 00:48:50.678 strategies that CARBs looking at to hit these 00:48:50.690 --> 00:48:53.130 statutorily required goals relative to each 00:48:53.130 --> 00:48:56.038 other. And just to draw out a few numbers. At 00:48:56.050 --> 00:48:58.970 the time, in 2017, they were looking at a 50% 00:48:58.970 --> 00:49:02.765 RPS, and that was estimated to be about $175 per 00:49:02.777 --> 00:49:06.351 metric ton. The short-lived climate pollutant 00:49:06.351 --> 00:49:09.365 strategy, which includes most of the bio methane 00:49:09.377 --> 00:49:12.280 work, came in a 25, so significantly more cost 00:49:12.280 --> 00:49:14.270 effective than getting to 50% RPS. Now, SB100 00:49:14.282 --> 00:49:16.110 has already come in and said we need to go 00:49:16.110 --> 00:49:19.433 to 60. They evaluated that at $250 per ton, I 00:49:19.445 --> 00:49:22.780 believe, with some behind the meter PV thrown 00:49:22.780 --> 00:49:25.893 in there too. And then they also included a 00:49:25.905 --> 00:49:29.030 look at a 5% renewable natural gas standard 00:49:29.030 --> 00:49:31.855 that was estimated at a very high cost, 1500 00:49:31.867 --> 00:49:34.640 per metric ton. But with a wide uncertainty 00:49:34.640 --> 00:49:37.136 band. And the way that that modeling was 00:49:37.148 --> 00:49:39.900 done by the consulting firm E3 was basically 00:49:39.900 --> 00:49:43.206 assuming that that was set by creating 00:49:43.218 --> 00:49:47.060 hydrogen from electricity and injecting it 00:49:47.060 --> 00:49:49.719 into the pipeline. So that high marginal cost 00:49:49.731 --> 00:49:52.750 number is not associated with bio methane projects. 00:49:52.750 --> 00:49:55.734 It's derived from assuming power to gas to 00:49:55.746 --> 00:49:59.020 pipeline injection, right? And so I think that 00:49:59.020 --> 00:50:00.961 some people got confused by that and said, 00:50:00.973 --> 00:50:02.880 Oh, man, look at this line item. RNG must 00:50:02.880 --> 00:50:05.153 be too expensive to go forward with, and that's 00:50:05.165 --> 00:50:07.260 clearly not the case. So we wanted to clear 00:50:07.260 --> 00:50:09.355 that up on the outset. And actually, the 00:50:09.367 --> 00:50:11.680 firm that did this work, E3 has continued to 00:50:11.680 --> 00:50:14.118 do work for the state. And they have actually 00:50:14.130 --> 00:50:16.420 gotten a little bit more open minded about 00:50:16.420 --> 00:50:18.436 some of the power to gas stuff as well and 00:50:18.448 --> 00:50:20.570 the hydrogen blending. So in the most recent 00:50:20.570 --> 00:50:23.316 work that they've done, they created a RNG 00:50:23.328 --> 00:50:26.150 cost curve. Shown in green is all the lower 00:50:26.150 --> 00:50:28.971 cost bio methane stuff, and then you have 00:50:28.983 --> 00:50:32.220 purple is hydrogen, and then you have synthetic 00:50:32.220 --> 00:50:34.913 natural gas from taking some of the biogenic 00:50:34.925 --> 00:50:37.210 C02 at some projects and combining it 00:50:37.210 --> 00:50:39.902 with hydrogen. And then you have pure synthetic 00:50:39.914 --> 00:50:42.280 natural gas from air capture. So that's a 00:50:42.280 --> 00:50:45.452 full supply curve of all RNG options. And 00:50:45.464 --> 00:50:48.420 they had an optimistic and pessimistic 00:50:48.420 --> 00:50:50.956 scenario. The conservative scenario was very 00:50:50.968 --> 00:50:53.460 similar to their original estimate from the 00:50:53.460 --> 00:50:55.610 scoping plan, and their more optimistic. 00:50:55.622 --> 00:50:57.890 Scenario has a significant cost decline in 00:50:57.890 --> 00:51:00.012 these other more advanced technologies. But 00:51:00.024 --> 00:51:02.110 in all cases, they're pretty sure that the 00:51:02.110 --> 00:51:04.213 bio methane is cost effective and it needs 00:51:04.225 --> 00:51:06.340 to be used. And so this is included in the 00:51:06.340 --> 00:51:09.141 draft IPER from the California Energy Commission. 00:51:09.153 --> 00:51:11.740 CARBs well aware of this work. We really feel 00:51:11.740 --> 00:51:13.908 like the state has done the work already to 00:51:13.920 --> 00:51:16.000 show that RNG is cost effective, and it's 00:51:16.000 --> 00:51:19.850 part of the strategy moving forward to hit our goals. 00:51:19.850 --> 00:51:21.984 ICF is another consulting firm that's 00:51:21.996 --> 00:51:24.490 done similar work, and it's been included 00:51:24.490 --> 00:51:27.729 in some of these state documents in the past. 00:51:27.741 --> 00:51:30.780 This is a curve purely for bio methane but 00:51:30.780 --> 00:51:33.748 it held, it contains a helpful ordinal ranking of 00:51:33.760 --> 00:51:36.860 what types of feedstocks are more or less expensive 00:51:36.860 --> 00:51:39.843 on a dollar per MMBtu basis. So starting from 00:51:39.855 --> 00:51:42.720 the left, landfill gas is usually the least 00:51:42.720 --> 00:51:45.000 cost because you already have to install a 00:51:45.012 --> 00:51:47.410 capture system at most landfills. And so all 00:51:47.410 --> 00:51:50.302 you're doing is really building the upgrading. 00:51:50.314 --> 00:51:52.910 Wastewater. Similar requirement. Usually. 00:51:52.910 --> 00:51:56.916 Then you get in to MSW separation and diverted 00:51:56.928 --> 00:52:00.690 organics to AD. Then dairy manure, and then 00:52:00.690 --> 00:52:03.717 forest and ag residue, usually to gasification 00:52:03.729 --> 00:52:06.250 as Juliasaid. So that's sort of what I 00:52:06.250 --> 00:52:08.954 think of as lower costs to higher costs 00:52:08.966 --> 00:52:12.030 just within the bio methane space. And you 00:52:12.030 --> 00:52:13.708 know it's helping a look at this curve and 00:52:13.720 --> 00:52:15.370 see that you know, the high cost is up on 00:52:15.370 --> 00:52:18.059 the order of $4 per mmbtu, which sounds expensive 00:52:18.071 --> 00:52:20.340 relative to fossil gas. But when you look 00:52:20.340 --> 00:52:22.843 at it on a dollar per metric ton abated basis, 00:52:22.855 --> 00:52:25.370 as I'll show you in a second here, it actually 00:52:25.370 --> 00:52:28.361 could be quite competitive with other things. 00:52:28.373 --> 00:52:31.050 I would also say that this work from ICF 00:52:31.050 --> 00:52:33.777 relied on, for their feed stock portion of things, 00:52:33.789 --> 00:52:36.420 on some work done by the American Gas Foundation 00:52:36.420 --> 00:52:38.803 in 2011 which was a little dated. And they've 00:52:38.815 --> 00:52:41.210 actually been in the process of updating that 00:52:41.210 --> 00:52:43.221 work, and they plan to publish it very shortly. 00:52:43.233 --> 00:52:45.130 We just had our annual conference this week, 00:52:45.130 --> 00:52:47.406 and we heard from ICF on the new study and 00:52:47.418 --> 00:52:49.760 their plan to publish, I believe next week. 00:52:49.760 --> 00:52:51.847 So, unfortunately I didn't have time to, couldn't 00:52:51.859 --> 00:52:54.000 get it in yet, but we'll certainly be including it 00:52:54.000 --> 00:52:56.528 in a written comments. Their updated estimates 00:52:56.540 --> 00:52:58.810 there. Because we do think that will be a 00:52:58.810 --> 00:53:00.666 very excellent work, work and little look 00:53:00.678 --> 00:53:02.590 across the whole country, which is helpful 00:53:02.590 --> 00:53:06.235 because we do have members across the whole 00:53:06.247 --> 00:53:09.820 country. So, as I said, when you translate 00:53:09.820 --> 00:53:13.128 this to, like a dollar per metric ton, comparison 00:53:13.140 --> 00:53:15.730 RNG can look really cost effective. So 00:53:15.730 --> 00:53:18.718 remember I said that 50% RPS number in the 00:53:18.730 --> 00:53:21.730 scoping plan was like $175 per metric ton. 00:53:21.730 --> 00:53:23.949 If you take the carbon intensity scoring 00:53:23.961 --> 00:53:26.410 from the LCFS. You have fossil gas at around 00:53:26.410 --> 00:53:30.907 76, our landfill example was 49, organics, Julia 00:53:30.919 --> 00:53:35.060 had some numbers up there. It's around zero. 00:53:35.060 --> 00:53:37.589 It could be slightly negative. Could be slightly 00:53:37.601 --> 00:53:40.090 positive. And then a dairy example is negative. 00:53:40.090 --> 00:53:42.990 It could be up to negative 250 but we'll have 00:53:43.002 --> 00:53:45.850 negative 150 here just for conservativeness. 00:53:45.850 --> 00:53:48.636 So taking those carbon intensity scores you 00:53:48.648 --> 00:53:51.510 can calculate how many greenhouse gases were 00:53:51.510 --> 00:53:54.925 abated for mega joulle, translate that to ah 00:53:54.937 --> 00:53:58.440 amount abated per metric ton and then compare 00:53:58.440 --> 00:54:00.765 that to the costs from the cost curves that 00:54:00.777 --> 00:54:03.060 I just showed you. And you can see that at 00:54:03.060 --> 00:54:06.063 these costs, you know, if landfills are at 00:54:06.075 --> 00:54:09.300 around eight and diverted organics are around 00:54:09.300 --> 00:54:11.809 17, and even this is a very expensive dairy 00:54:11.821 --> 00:54:14.400 project up at 45. All these things are still 00:54:14.400 --> 00:54:18.155 cost effective relative to even that 50% RPS 00:54:18.167 --> 00:54:21.850 number that we had in the scoping plan. And 00:54:21.850 --> 00:54:23.581 we're gone well beyond that with RPS now. 00:54:23.593 --> 00:54:25.420 We're, you know, we're shooting for really, 00:54:25.420 --> 00:54:27.842 really aggressive RPS goals. So the state, 00:54:27.854 --> 00:54:30.231 when you, when they do this up to CARB in 00:54:30.231 --> 00:54:32.389 Sacramento across abatement strategies. They're 00:54:32.401 --> 00:54:34.390 trying to make sure they're using the least 00:54:34.390 --> 00:54:38.864 cost options. Bio methane is definitely in 00:54:38.876 --> 00:54:43.570 the money at this point. Another way to look 00:54:43.570 --> 00:54:46.343 at this is purely on energy basis. Just how 00:54:46.355 --> 00:54:49.140 much are you paying per unit of energy? And 00:54:49.140 --> 00:54:52.097 you can compare that to the historical prices 00:54:52.109 --> 00:54:54.820 paid for renewable power at the outset of 00:54:54.820 --> 00:54:57.785 the RPS. And it was, you know, on the order 00:54:57.797 --> 00:55:00.910 of $150 per megawatt hour, some were slightly 00:55:00.910 --> 00:55:02.854 higher, some were slightly lower. The green 00:55:02.866 --> 00:55:04.910 circles are California. So we definitely paid 00:55:04.910 --> 00:55:12.480 a lot for that 550 megawatt plant. So at the outset, solar was expensive and the 00:55:12.480 --> 00:55:15.454 cost came down over time. Purely on energy 00:55:15.466 --> 00:55:18.800 basis, $150 per megawatt hours is equivalent to 00:55:18.800 --> 00:55:23.216 $44 per MMBtu of gas. So what, we've already 00:55:23.228 --> 00:55:27.360 paid this amount of it for energy to meet 00:55:27.360 --> 00:55:29.743 our renewables goals. We're asking for the same 00:55:29.755 --> 00:55:31.900 treatment on the renewable gas side to get 00:55:31.900 --> 00:55:34.478 the industry started and to move us forward. 00:55:34.490 --> 00:55:37.080 We're not saying it has to be $44 per mmbtu, 00:55:37.080 --> 00:55:41.936 but we're saying that whole supply curve 00:55:41.948 --> 00:55:47.290 cost less than the early solar PPA sign. And 00:55:47.290 --> 00:55:49.732 so because of the fact that most experts agree 00:55:49.744 --> 00:55:51.990 that this stuff is cost effective, you see 00:55:51.990 --> 00:55:54.320 bio methane used in long term studies of how 00:55:54.332 --> 00:55:56.570 to decarbonize the California economy. And 00:55:56.570 --> 00:55:58.716 I mentioned the work done by E3 and the 00:55:58.728 --> 00:56:01.440 University of California Irvine that's recently 00:56:01.440 --> 00:56:03.867 been published working with the CEC. Tthe 00:56:03.879 --> 00:56:06.260 Energy Futures Initiative also took those 00:56:06.260 --> 00:56:08.886 ICF supply curves and used them in their 00:56:08.898 --> 00:56:11.730 analysis of how to meet California's goals. 00:56:11.730 --> 00:56:14.073 And both studies basically said the same thing. 00:56:14.085 --> 00:56:16.390 You need to use a lot of bio methane, probably 00:56:16.390 --> 00:56:18.626 almost all of it available to California, 00:56:18.638 --> 00:56:20.940 and you need to use it across all sectors. 00:56:20.940 --> 00:56:26.240 And so the slide here from the E3 study, you know, shows it's used in every 00:56:26.240 --> 00:56:31.360 sector and every scenario, you have more or less of these other types of RNG. But 00:56:31.360 --> 00:56:34.026 the bio methane is used. Similar results over 00:56:34.038 --> 00:56:36.600 in the EFI work with significant greenhouse 00:56:36.600 --> 00:56:39.386 gas reductions shown from the bio methane 00:56:39.398 --> 00:56:42.330 contribution. And then when you look at it, 00:56:42.330 --> 00:56:44.705 how much RNG do they sort of assume is 00:56:44.717 --> 00:56:47.480 feasible? EFI work said they think we need 00:56:47.480 --> 00:56:51.197 to get to about 10% by 2030 or that was 00:56:51.209 --> 00:56:55.320 the example number they used, and E3 said 00:56:55.320 --> 00:56:57.855 it's possible, or should, we should be thinking, 00:56:57.867 --> 00:57:00.310 even in the case of very high electrification, 00:57:00.310 --> 00:57:02.973 of getting to 25% by 2050. So I mean, these 00:57:02.985 --> 00:57:05.600 are significant blending levels, and we're 00:57:05.600 --> 00:57:08.333 nowhere near started on this yet. So we have 00:57:08.345 --> 00:57:11.090 to have a new policy like the one that we're 00:57:11.090 --> 00:57:15.422 talking about today to get us moving. So just 00:57:15.434 --> 00:57:19.400 to sum up, you know, is, sum up the first 00:57:19.400 --> 00:57:21.680 part of my presentation. Sorry, we've been 00:57:21.692 --> 00:57:23.930 thinking about this a long time. The cost 00:57:23.930 --> 00:57:25.992 effectiveness portion of things. We really 00:57:26.004 --> 00:57:28.270 feel like RNG is cost effective from a variety 00:57:28.270 --> 00:57:31.509 of different perspectives relative to other 00:57:31.521 --> 00:57:34.550 strategies. And I think folks are always 00:57:34.550 --> 00:57:37.164 very interested in will RNG get, you know, 00:57:37.176 --> 00:57:39.680 less expensive over time as the industry 00:57:39.680 --> 00:57:41.657 scales, as we sort of showed that cost decline 00:57:41.669 --> 00:57:43.700 for solar. We hope so, but we won't know unless 00:57:43.700 --> 00:57:46.134 we begin to actually deploy it at commercial 00:57:46.146 --> 00:57:48.591 scale. And, you know, we're gonna do it here 00:57:48.591 --> 00:57:51.218 in California. We're gonna do it across the 00:57:51.230 --> 00:57:53.750 West Coast as I'll get into here shortly. 00:57:53.750 --> 00:57:57.474 So, you know, what tools should be used to promote 00:57:57.486 --> 00:58:00.710 utility procurement? We think that a lot of 00:58:00.710 --> 00:58:03.413 the greenhouse gas carbon intensity scoring could 00:58:03.425 --> 00:58:05.760 be moved right in. And let me just explain 00:58:05.760 --> 00:58:11.370 that a little bit more. So the way the LCFS works is it sets a declining carbon 00:58:11.370 --> 00:58:14.310 intensity target for each year, and the same 00:58:14.322 --> 00:58:17.340 thing could be done for renewable gas. Right? 00:58:17.340 --> 00:58:20.237 You have a fossil gas baseline, a little 00:58:20.249 --> 00:58:23.370 over 76, and the RNG that's out there right 00:58:23.370 --> 00:58:26.229 now is much better than that. The average 00:58:26.241 --> 00:58:28.770 is around 39 in the LCFS program. So 00:58:28.770 --> 00:58:31.185 the RNG is gonna be better than this declining 00:58:31.197 --> 00:58:33.470 target every year. And it's gonna generate, 00:58:33.470 --> 00:58:35.508 you know, some sort of credit or recognition 00:58:35.520 --> 00:58:37.570 in the accounting system. And the fossil gas 00:58:37.570 --> 00:58:39.939 will be worse. So it'll generate deficits 00:58:39.951 --> 00:58:42.331 or some sort of obligation on the utility 00:58:42.331 --> 00:58:44.859 to buy more RNG. So we think that same concept 00:58:44.871 --> 00:58:47.410 that's used successfully in the transportation 00:58:47.410 --> 00:58:50.661 sector can be used in other sectors as well. 00:58:50.673 --> 00:58:53.790 This example is a quantitative example. It 00:58:53.790 --> 00:58:58.011 shows about a 5% decline in carbon intensity 00:58:58.023 --> 00:59:02.350 out to 2030 using a 10% blend of RNG by 2030. 00:59:02.350 --> 00:59:05.227 So that's the way I think about it is that 00:59:05.239 --> 00:59:08.060 you know you can get close to a reduction 00:59:08.060 --> 00:59:11.008 of 5% in carbon intensity from a 10% blend 00:59:11.020 --> 00:59:13.980 if that's the type of RNG that's currently 00:59:13.980 --> 00:59:16.550 been serving transportation, which is mostly 00:59:16.562 --> 00:59:19.030 been landfill. If you get the dairy stuff, 00:59:19.030 --> 00:59:21.660 other things going, it's going to be even 00:59:21.672 --> 00:59:24.000 easier to get that type of reduction 00:59:24.000 --> 00:59:29.705 with a smaller amount of gas. So we think 00:59:29.717 --> 00:59:35.570 that it's really critical that this policy 00:59:35.570 --> 00:59:38.453 provide the ability to incent both bio methane, 00:59:38.465 --> 00:59:41.360 in the near term, and in the longer term, these 00:59:41.360 --> 00:59:44.147 other ways of making renewable natural gas. 00:59:44.159 --> 00:59:46.830 And that's because we don't know if we're 00:59:46.830 --> 00:59:49.041 gonna be able to electrify and cut demand 00:59:49.053 --> 00:59:51.170 at the rate that E3 and others predict. 00:59:51.170 --> 00:59:53.166 We hope we can, but we don't know that for 00:59:53.178 --> 00:59:55.280 sure. And so they had two scenarios. In both 00:59:55.280 --> 00:59:58.395 cases, they used a bunch of bio methane, but, 00:59:58.407 --> 01:00:01.330 and you see a big decline in the amount of 01:00:01.330 --> 01:00:06.470 gas used in their scenarios. But in the non electrification scenario, you see a 01:00:06.470 --> 01:00:08.746 large amount of synthetic natural gas and 01:00:08.758 --> 01:00:11.210 hydrogen used, right? And we have to be open 01:00:11.210 --> 01:00:13.413 to that possibility with this policy. And 01:00:13.425 --> 01:00:15.640 this policy needs to be ready to help out 01:00:15.640 --> 01:00:17.728 and provide incentive for that. You know, 01:00:17.740 --> 01:00:19.840 if these aggressive electrification goals 01:00:19.840 --> 01:00:22.240 aren't met. So you know, these things aren't 01:00:22.252 --> 01:00:24.610 directly in competition in this policy yet. 01:00:24.610 --> 01:00:26.635 Maybe they could be. That would be sort of a 01:00:26.647 --> 01:00:28.730 stretch goal for us. If you could have direct 01:00:28.730 --> 01:00:31.036 competition between electrification and RNG, 01:00:31.048 --> 01:00:33.520 that would probably promote lease cost outcome. 01:00:33.520 --> 01:00:35.148 But if we're not gonna go down that road, 01:00:35.160 --> 01:00:36.840 we at least want this policy to be open to 01:00:36.840 --> 01:00:40.431 these other ways of making RNG in the long 01:00:40.443 --> 01:00:43.710 term. So just quickly, I like touch on 01:00:43.710 --> 01:00:46.898 what other states are doing. We've been pretty 01:00:46.910 --> 01:00:49.770 successful in getting utility procurement 01:00:49.770 --> 01:00:52.185 legislation related to RNG passed in the 01:00:52.197 --> 01:00:54.860 last few sessions. And so we have bills that 01:00:54.860 --> 01:00:57.832 promote utilities using RNG in all of these 01:00:57.844 --> 01:01:00.421 Western states right now, and they're 01:01:00.421 --> 01:01:02.985 all being implemented at the same time, and, 01:01:02.997 --> 01:01:05.230 so I'm a little busy covering that, but 01:01:05.230 --> 01:01:07.294 it's really exciting because we all have the 01:01:07.306 --> 01:01:09.520 opportunity to work together and to collaborate 01:01:09.520 --> 01:01:12.218 and to get to a solution where all of our 01:01:12.230 --> 01:01:14.940 goals are met. Right? And so just to give 01:01:14.940 --> 01:01:17.949 a little bit more specifics around that, we 01:01:17.961 --> 01:01:21.050 have the Oregon Senate bill that just passed 01:01:21.050 --> 01:01:24.034 has a really aggressive targets, about 5% 01:01:24.046 --> 01:01:26.900 starting in 2020 and 30% by 2045 of RNG 01:01:26.900 --> 01:01:28.863 blending. And remember with, and you know, 01:01:28.875 --> 01:01:31.080 that's sort of on the order of that 25% that E3 01:01:31.080 --> 01:01:34.199 said we might need by 2050. So at least everybody's 01:01:34.211 --> 01:01:36.740 saying sort of the same numbers. And then 01:01:36.740 --> 01:01:39.827 up in British Columbia, they're saying a 15% 01:01:39.839 --> 01:01:42.870 blend by 2030, so even more aggressive than 01:01:42.870 --> 01:01:47.048 that EFI work had for California. I'd say 01:01:47.060 --> 01:01:51.350 another really interesting example towatch 01:01:51.350 --> 01:01:53.987 is the federal work being done by Environment 01:01:53.999 --> 01:01:56.590 and Climate Change Canada. Up there, they've 01:01:56.590 --> 01:01:59.049 adopted the concept of an LCFS and taking 01:01:59.061 --> 01:02:01.590 that from California and said, We're gonna 01:02:01.590 --> 01:02:04.058 do it for transportation, for sure. But we 01:02:04.070 --> 01:02:06.780 also want to add gaseous and solid fuels right 01:02:06.780 --> 01:02:09.012 afterwards, and we want to do that with the 01:02:09.024 --> 01:02:11.320 same carbon intensity framework. So they're, 01:02:11.320 --> 01:02:14.202 what they're proposing matches what we believe 01:02:14.214 --> 01:02:17.170 is a smart policy, where you do this accounting 01:02:17.170 --> 01:02:19.701 in the same system. And an RNG project 01:02:19.713 --> 01:02:22.590 knows where it stands with respect to its 01:02:22.590 --> 01:02:24.832 greenhouse gas benefits and its equivalent 01:02:24.844 --> 01:02:27.150 across all end uses. And then the incentive 01:02:27.150 --> 01:02:29.153 in each end use could maybe be higher or lower. 01:02:29.165 --> 01:02:30.970 If it turns out it's harder to decarbonize 01:02:30.970 --> 01:02:33.815 transport than the gas system or vice versa. 01:02:33.827 --> 01:02:36.430 Right? So but having a project only have 01:02:36.430 --> 01:02:38.828 to go through one set of carbon intensity 01:02:38.840 --> 01:02:41.480 scoring or one set of evaluation of if you're 01:02:41.480 --> 01:02:43.604 good or not relative to another project would 01:02:43.616 --> 01:02:45.660 be helpful to our members who already spent 01:02:45.660 --> 01:02:48.404 a lot of time, you know, and effort going 01:02:48.416 --> 01:02:51.500 through this evaluation for the LCFS purposes. 01:02:51.500 --> 01:02:54.397 So let me just summarize one more time. RNG is 01:02:54.409 --> 01:02:57.380 definitely cost effective right now, especially 01:02:57.380 --> 01:02:59.153 bio methane portion of those supply curves. 01:02:59.165 --> 01:03:00.950 I've not seen anybody do estimates that say 01:03:00.950 --> 01:03:03.700 it's not cost effective relative to deep penetration 01:03:03.712 --> 01:03:06.110 of renewable power and other really important 01:03:06.110 --> 01:03:13.140 technologies. High penetration of ???? for example, and we have to do it to hit 01:03:13.140 --> 01:03:21.050 our statutory mandated goals. You know, 1440, SB32, SB1383. They're all 01:03:21.050 --> 01:03:23.743 saying the same things. We have to get moving. 01:03:23.755 --> 01:03:26.000 Aligning the accounting with the LCFS, 01:03:26.000 --> 01:03:29.118 I believe, eliminates any concerns about high 01:03:29.130 --> 01:03:31.920 carbon RNG. It is possible to do certain 01:03:31.920 --> 01:03:34.100 combinations of technologies that would end up 01:03:34.112 --> 01:03:36.210 with the not so great emissions performance. 01:03:36.210 --> 01:03:38.401 But I don't think anybody is seriously considering 01:03:38.413 --> 01:03:40.270 that commercially right now. And if we set 01:03:40.270 --> 01:03:42.592 up the right incentives, they won't consider it. 01:03:42.604 --> 01:03:44.890 And then finally, communicating with leadership 01:03:44.890 --> 01:03:47.233 in these other jurisdictions that are starting 01:03:47.245 --> 01:03:49.350 to do this is critical. But historically, 01:03:49.350 --> 01:03:51.524 California has been the leader on these types 01:03:51.536 --> 01:03:53.580 of programs and has done the best job with 01:03:53.580 --> 01:04:01.672 him. And so we have to get in the game and get started. Thank you. 01:04:01.697 --> 01:04:04.570 Thanks, Sam. All right, Dr. Reed. 01:04:10.085 --> 01:04:13.098 Thank you very much. I am Jeff 01:04:13.110 --> 01:04:16.135 Reed. I'm the chief scientist for renewable 01:04:16.160 --> 01:04:18.489 fuels and energy storage at U. C. Irvine. I'm 01:04:18.501 --> 01:04:20.740 also serving as the chair of the California 01:04:20.740 --> 01:04:22.248 Hydrogen Business Council. So I'm here today 01:04:22.260 --> 01:04:23.780 primarily representing the Hydrogen Business 01:04:23.780 --> 01:04:36.298 Council, and I have some slides on the way. I always 01:04:36.310 --> 01:04:49.550 have slides. I brought them to my christening, I think. 01:04:49.550 --> 01:04:59.090 Huh? Window symbol. I guess while we're waiting, I would say, points I'm gonna 01:04:59.090 --> 01:05:02.125 cover have a pretty good degree of commonality 01:05:02.137 --> 01:05:04.990 with some with what's been said to date. So 01:05:04.990 --> 01:05:07.958 I will try not to be too redundant on those topics, 01:05:07.970 --> 01:05:10.720 other than maybe to provide a bit of additional 01:05:10.720 --> 01:05:14.631 perspective. But also, I'll be talking a little 01:05:14.643 --> 01:05:18.240 bit more about hydrogen. Also electro fuels 01:05:18.240 --> 01:05:21.298 in general. So methane can also be made through 01:05:21.310 --> 01:05:24.380 electrolytic pathways. So the subject of SB1440 01:05:24.380 --> 01:05:28.096 is bio methane. So it's specifically 01:05:28.108 --> 01:05:32.560 focused on pathways from organic material 01:05:32.560 --> 01:05:36.234 to renewable fuel. In this case, methane. 01:05:36.246 --> 01:05:40.020 So not by mandate of legislation. But when 01:05:40.020 --> 01:05:42.460 we talk about expanding the supply portfolio 01:05:42.472 --> 01:05:44.760 for renewable gas and meeting our overall 01:05:44.760 --> 01:05:48.536 goals for carbon reduction for short lived 01:05:48.548 --> 01:05:52.160 and long lived GHG pollutants, expanding 01:05:52.160 --> 01:05:54.742 the supply portfolio is important, so while 01:05:54.754 --> 01:05:57.230 not mandated, we would certainly suggests 01:05:57.230 --> 01:06:00.877 that the considerations of the proceeding 01:06:00.889 --> 01:06:04.810 expand to include hydrogen as we go. So this 01:06:04.810 --> 01:06:07.826 goes beyond blending standards, which is 01:06:07.838 --> 01:06:10.940 important but also would get into whether 01:06:10.940 --> 01:06:14.071 hydrogen, as a blend stock, could be considered 01:06:14.083 --> 01:06:17.160 as an eligible fuel under whatever procurement 01:06:17.160 --> 01:06:29.603 program comes into place. Well, I don't have a 01:06:29.615 --> 01:06:41.540 copy of my slides. I made them this morning, 01:06:41.540 --> 01:06:44.359 so I don't really know what they say. So, 01:06:44.371 --> 01:06:47.270 actually, I do have a copy of some of them. 01:06:47.270 --> 01:06:49.461 So in terms of cost effectiveness, the first 01:06:49.473 --> 01:06:51.920 question, I've kind of combined my considerations 01:06:51.920 --> 01:06:54.185 on questions one and two first, and I think 01:06:54.197 --> 01:06:56.370 this is consistent with what you've heard 01:06:56.370 --> 01:06:58.966 to this point, is that an overarching 01:06:58.978 --> 01:07:02.220 principle would be the cost of effectiveness 01:07:02.220 --> 01:07:04.655 is based on the lowest unit costs to achieve 01:07:04.667 --> 01:07:06.950 an incremental reduction in short or long 01:07:06.950 --> 01:07:09.825 lived climate pollutants. This is referred 01:07:09.837 --> 01:07:12.590 to as marginal abatement costs. And this 01:07:12.590 --> 01:07:16.383 should be based on full cycle carbon emissions. 01:07:16.395 --> 01:07:20.200 Additionally, and not related to carbon per se, 01:07:20.200 --> 01:07:23.513 or carbon only, but the cost should be net of 01:07:23.525 --> 01:07:26.850 various things, including other environmental 01:07:26.850 --> 01:07:28.912 benefits that make accrue. So if there are 01:07:28.924 --> 01:07:30.950 criteria pollutant benefits, if there are 01:07:30.950 --> 01:07:32.768 resiliency benefits, others. So then your 01:07:32.780 --> 01:07:34.610 cost metric should include those and then 01:07:34.610 --> 01:07:37.650 be denominated by the amount of carbon reduced 01:07:37.662 --> 01:07:40.520 on a full cycle basis. What you've heard in 01:07:40.520 --> 01:07:44.182 some of the prior presentations as well is 01:07:44.194 --> 01:07:48.210 that the next best cost option or the marginal 01:07:48.210 --> 01:07:50.514 abatement cost, however, you want to look at 01:07:50.526 --> 01:07:52.790 this, is application and pathway dependent. 01:07:52.790 --> 01:07:55.273 So, for example, low carbon fuel standard 01:07:55.285 --> 01:07:57.780 credits today are trading in the range of 01:07:57.780 --> 01:08:01.687 $200 which is more than 10 times what a, quote, 01:08:01.699 --> 01:08:05.210 vanilla AB32 credit trades for. And that's 01:08:05.210 --> 01:08:07.624 because in one case you're specifically looking 01:08:07.636 --> 01:08:09.860 at carbon reduction for transportation. And 01:08:09.860 --> 01:08:12.008 then the other case, you're looking across 01:08:12.020 --> 01:08:14.130 all application areas saying, Where can I 01:08:14.130 --> 01:08:18.208 get my least expensive next unit of carbon? So can 01:08:18.220 --> 01:08:22.230 we go back to the prior slide? Who's controlling? 01:08:22.230 --> 01:08:24.263 Me or you? Yeah. So I just wanted to say this 01:08:24.275 --> 01:08:26.319 is part of what I was saying. An introduction 01:08:26.319 --> 01:08:30.654 is that there are a lot of ways in which renewable 01:08:30.666 --> 01:08:34.160 gaseous fuel can be created. This figure 01:08:34.160 --> 01:08:36.924 shows the primary ones. The two big categories 01:08:36.936 --> 01:08:39.889 that are commercial today would be using organics 01:08:39.889 --> 01:08:42.300 as feedstock and the other would be using 01:08:42.312 --> 01:08:44.851 Renewable electricity as feedstock. There's 01:08:44.851 --> 01:08:47.468 ongoing research and development, which in 01:08:47.480 --> 01:08:50.109 future could allow production of renewable 01:08:50.109 --> 01:08:52.327 fuel directly from sunlight that's referred 01:08:52.339 --> 01:08:54.569 to his artificial photosynthesis, so that's 01:08:54.569 --> 01:08:57.520 also a electrochemical process. But it uses photons 01:08:57.532 --> 01:09:00.040 directly without going through electricity. 01:09:00.040 --> 01:09:03.515 So part of the message is that over time, we 01:09:03.527 --> 01:09:06.859 need to expand our renewable gas portfolio 01:09:06.859 --> 01:09:09.362 to include all these sources because that 01:09:09.374 --> 01:09:11.949 will help with cost minimization. Also, as 01:09:11.949 --> 01:09:15.957 you've heard in some forums and reflected in 01:09:15.969 --> 01:09:19.900 some of the presentations we've seen today, 01:09:19.900 --> 01:09:22.460 supply of organic material to create renewable 01:09:22.472 --> 01:09:24.989 gas is not unlimited. It has a large resource 01:09:24.989 --> 01:09:27.364 potential, but not enough, for example, to 01:09:27.376 --> 01:09:30.040 displace all of the natural gas we're currently 01:09:30.040 --> 01:09:33.138 using. If you bring in the solar and wind 01:09:33.150 --> 01:09:36.630 energy pathways, however, that cap on resource 01:09:36.630 --> 01:09:39.684 potential is removed. And, although not literally 01:09:39.696 --> 01:09:42.210 infinite, those resources provide enough 01:09:42.210 --> 01:09:44.891 potential to provide all current uses of 01:09:44.903 --> 01:09:47.859 energy in California. If we wanted to do so, 01:09:47.859 --> 01:09:50.495 and have plenty of raw resource potential to 01:09:50.507 --> 01:09:53.449 spare. Another point I'd like to make here at the 01:09:53.449 --> 01:09:55.632 outset is that because of our focus here on 01:09:55.644 --> 01:09:57.989 short lived climate pollutants, it's important 01:09:57.989 --> 01:10:01.833 to consider that, if we use hydrogen is a blend 01:10:01.845 --> 01:10:05.219 stock on the natural gas system, it has a 01:10:05.219 --> 01:10:09.027 pro rata contribution and reduction to emissions 01:10:09.039 --> 01:10:12.469 from the natural gas system. So most of the 01:10:12.469 --> 01:10:15.305 pathways were talking about achieve their short 01:10:15.317 --> 01:10:17.809 lived climate pollutant reductions on the 01:10:17.809 --> 01:10:21.388 supply end, so at the feedstock end of the 01:10:21.400 --> 01:10:25.409 process where, by eliminating methane emissions 01:10:25.409 --> 01:10:27.772 from those materials as they decompose, harvesting 01:10:27.784 --> 01:10:29.739 that, controlling the emissions and using 01:10:29.739 --> 01:10:32.304 it for fuel. In the case of hydrogen, however, 01:10:32.316 --> 01:10:34.619 because it itself is not a global warming 01:10:34.619 --> 01:10:38.791 gas, the extent to which it replaces conventional 01:10:38.803 --> 01:10:42.150 gas has a direct benefit on natural gas 01:10:42.150 --> 01:10:44.400 system emissions on whatever that marginal 01:10:44.412 --> 01:10:46.780 impact is. So while we don't typically think 01:10:46.780 --> 01:10:49.290 of hydrogen as a short lived climate pollution 01:10:49.302 --> 01:10:51.610 reduction technique, it actually does have 01:10:51.610 --> 01:10:55.168 this effect. And it's not insignificant when 01:10:55.180 --> 01:10:58.750 you do the math. So getting back to the sort 01:10:58.750 --> 01:11:01.980 of list. I think, so, we were talking about 01:11:01.992 --> 01:11:04.719 marginal abatement costs, full cycle 01:11:04.719 --> 01:11:07.589 carbon emissions being the right way to look 01:11:07.601 --> 01:11:10.290 at carbon effect, cost effectiveness. But 01:11:10.290 --> 01:11:13.303 it's important to also think about the fact 01:11:13.315 --> 01:11:16.340 that this is specific to application. So if 01:11:16.340 --> 01:11:18.532 we say what's the lowest cost of getting the 01:11:18.544 --> 01:11:20.699 next ton of greenhouse gas? That cost would 01:11:20.699 --> 01:11:24.406 be reflected in the current cost of carbon 01:11:24.418 --> 01:11:28.050 credits under the AB32 programs, so maybe 01:11:28.050 --> 01:11:30.715 $15 a ton. If, on the other hand, we say, 01:11:30.727 --> 01:11:33.659 what's the marginal abatement costs of carbon 01:11:33.659 --> 01:11:35.935 coming from transportation? We know that number 01:11:35.947 --> 01:11:37.949 is more like 200. And if I say well, what 01:11:37.949 --> 01:11:41.962 is the marginal abatement costs or next cheapest 01:11:41.974 --> 01:11:45.670 method of decarbonizing space heat at night? 01:11:45.670 --> 01:11:47.714 We don't know, but I think that's a pretty high 01:11:47.726 --> 01:11:49.610 number. So when we come to this procurement 01:11:49.610 --> 01:11:53.329 for core customers, I think we should be thinking 01:11:53.341 --> 01:11:56.550 about fundamentally renewable gas as a way 01:11:56.550 --> 01:11:59.841 of addressing the most difficult to decarbonize 01:11:59.853 --> 01:12:02.949 activities. And looking at our avoided costs 01:12:02.949 --> 01:12:05.085 or marginal abatement costs for those specific 01:12:05.097 --> 01:12:07.199 things, which would include heating, cooking, 01:12:07.199 --> 01:12:09.859 water heating in existing buildings. So existing 01:12:09.871 --> 01:12:12.380 building stock and you would include retrofit 01:12:12.380 --> 01:12:15.873 costs and things like that in those calculations. 01:12:15.885 --> 01:12:19.179 Renewable generation and process heat, and so, 01:12:19.179 --> 01:12:22.282 for example, the value of renewable gas as 01:12:22.294 --> 01:12:25.409 a fuel for peak generation is much higher, 01:12:25.409 --> 01:12:28.338 for example, than the AB32 price since, you 01:12:28.350 --> 01:12:31.559 know, that type of resources already, you know, 01:12:31.559 --> 01:12:34.880 25, 30 cents a kilowatt hour, so all of that 01:12:34.892 --> 01:12:38.150 needs to be taken into account. I think the 01:12:38.150 --> 01:12:41.470 other thing is time horizon and technical 01:12:41.482 --> 01:12:45.210 maturity is important. We've seen very clearly 01:12:45.210 --> 01:12:47.620 in the renewable portfolio standard program in 01:12:47.632 --> 01:12:49.900 the storage procurement, under the electric 01:12:49.900 --> 01:12:53.101 utility programs, that current costs of those, 01:12:53.113 --> 01:12:56.599 when those programs started. So Sam was presenting 01:12:56.599 --> 01:12:59.577 that, you know, in the early days of RPS, 01:12:59.589 --> 01:13:02.579 it was 15 cents a kilowatt hour or so, so 01:13:02.579 --> 01:13:04.969 there was a perspective at that point in time, 01:13:04.981 --> 01:13:07.230 although it wasn't rigorously factored into 01:13:07.230 --> 01:13:10.396 any kind of glide path, that although those 01:13:10.408 --> 01:13:13.370 resources, the renewable resources, were 01:13:13.370 --> 01:13:15.542 expensive at the time, that they would in fact 01:13:15.554 --> 01:13:17.599 come down and cost over time, and that has, 01:13:17.599 --> 01:13:20.470 in fact, happened. Storage is at the beginning 01:13:20.482 --> 01:13:23.119 of that process, so we can't identify that 01:13:23.119 --> 01:13:25.972 it's meeting the cost trajectories that people 01:13:25.984 --> 01:13:28.849 think it, it will, but certainly the potential 01:13:28.849 --> 01:13:32.223 is there. So when we look at these standards, I 01:13:32.235 --> 01:13:35.550 think a forward looking perspective, including 01:13:35.550 --> 01:13:38.258 the value downstream of creating markets, 01:13:38.270 --> 01:13:41.119 now, to launch these technologies and begin 01:13:41.119 --> 01:13:44.420 to scale them has to be part of the consideration. 01:13:44.432 --> 01:13:47.290 The other point is that where firm mandates 01:13:47.290 --> 01:13:49.993 exists, state policy in the past has basically 01:13:50.005 --> 01:13:52.719 been to define cost effectiveness as the least 01:13:52.719 --> 01:13:55.925 cost way of meeting an objective. So under 01:13:55.937 --> 01:13:59.230 the overall AB32 program cost effectiveness 01:13:59.230 --> 01:14:01.623 and in the short lived climate pollutant strategy, 01:14:01.635 --> 01:14:03.710 where you saw Sam presenting some material, 01:14:03.710 --> 01:14:05.714 basically they're saying for attacking different 01:14:05.726 --> 01:14:07.659 types of carbon emissions, what's the cheapest 01:14:07.659 --> 01:14:10.612 way to address it? And that, by definition, is 01:14:10.624 --> 01:14:13.400 cost effective in that kind of a framework. 01:14:13.400 --> 01:14:16.662 So if we view the 40% short lived Climate Pollutant 01:14:16.674 --> 01:14:19.760 Reduction goal for policy purposes as a mandate, 01:14:19.760 --> 01:14:23.457 then cost effectiveness is defined as the 01:14:23.469 --> 01:14:27.619 cheapest way to get there. Lastly, co benefits 01:14:27.619 --> 01:14:30.191 and there are quite a few for many of the 01:14:30.203 --> 01:14:33.280 renewable gas pathways. But co-benefits on things 01:14:33.280 --> 01:14:36.424 like risk reduction through technology 01:14:36.436 --> 01:14:40.340 diversity And because this is a storeable set 01:14:40.340 --> 01:14:44.118 of resources, there potential improvement 01:14:44.130 --> 01:14:48.010 in reliability and resiliency, so gas grid 01:14:48.010 --> 01:14:51.070 operation is often not disrupted at times 01:14:51.082 --> 01:14:54.300 that the electric grid operation may be so, 01:14:54.300 --> 01:14:57.687 there are definite resiliency benefits. Additionally, 01:14:57.699 --> 01:15:00.469 renewable natural gas or renewable forms of 01:15:00.469 --> 01:15:03.196 methane and hydrogen is a blend stock, although 01:15:03.208 --> 01:15:05.719 not in every type of conversion technology, 01:15:05.719 --> 01:15:08.608 but in most reduced NOX emissions. And so 01:15:08.620 --> 01:15:11.590 there are other co benefits that should be 01:15:11.590 --> 01:15:14.173 considered. That's the cost effectiveness. So 01:15:14.185 --> 01:15:16.780 this illustrates a little bit this discussion 01:15:16.780 --> 01:15:19.946 around marginal abatement costs. This happens 01:15:19.958 --> 01:15:22.929 to be for system gas emissions. So this is 01:15:22.929 --> 01:15:25.932 developed by ACISF. This is published 01:15:25.944 --> 01:15:29.530 material, but it basically tells you that, 01:15:29.530 --> 01:15:31.406 in the early days of AB32, there was an 01:15:31.418 --> 01:15:33.499 abatement cost curve that was widely used 01:15:33.499 --> 01:15:36.468 as well, and it shows you that things like energy 01:15:36.480 --> 01:15:39.460 efficiency in many cases actually have a negative 01:15:39.460 --> 01:15:42.170 abatement costs. So if the value of the energy 01:15:42.182 --> 01:15:44.730 saved exceeds the cost of achieving it, you 01:15:44.730 --> 01:15:46.624 get negative abatement costs. And so obviously 01:15:46.636 --> 01:15:48.380 you want to start, that's the left side of 01:15:48.380 --> 01:15:51.467 this. The green ones mean you're making money 01:15:51.479 --> 01:15:54.510 by plugging these sources of emissions. Over 01:15:54.510 --> 01:15:58.054 on the right, then, are different ways in which 01:15:58.066 --> 01:16:01.400 the system can be made a tighter, as Michael 01:16:01.400 --> 01:16:04.913 was talking about. Now the most expensive 01:16:04.925 --> 01:16:08.449 abatement technique in this set is $7 and 01:16:08.449 --> 01:16:12.587 it might be more like 15 or something higher 01:16:12.599 --> 01:16:16.380 for renewable natural gas to provide, to 01:16:16.380 --> 01:16:19.368 serve end uses. So does that mean that's not cost 01:16:19.380 --> 01:16:22.260 effective? The conversation no, because there's 01:16:22.260 --> 01:16:26.247 nothing you can do when gas system emissions 01:16:26.259 --> 01:16:30.170 impacts the fuel cycle emissions, right? So 01:16:30.170 --> 01:16:32.722 they're separate things. To meet the AB32 01:16:32.734 --> 01:16:35.360 goals, we have to address them all. And so 01:16:35.360 --> 01:16:37.831 it's only a question of time. So it's sort 01:16:37.843 --> 01:16:40.210 of a question of whether you only do low 01:16:40.210 --> 01:16:42.325 marginal cost things to start with and wait 01:16:42.337 --> 01:16:44.610 until some later date to do the more expensive 01:16:44.610 --> 01:16:47.954 ones. To this point, State of California has 01:16:47.966 --> 01:16:51.099 chosen to address particular applications 01:16:51.099 --> 01:16:53.111 up front because of their magnitude. That 01:16:53.123 --> 01:16:55.340 includes renewable electricity, which was not 01:16:55.340 --> 01:16:59.063 the lowest marginal abatement cost thing to 01:16:59.075 --> 01:17:02.640 do. Transportation, also among the higher 01:17:02.640 --> 01:17:06.303 marginal abatement costs. So thinking now, 01:17:06.315 --> 01:17:09.989 speaking of, you know, the forward looking 01:17:09.989 --> 01:17:14.419 perspective, we do see that all of the renewable 01:17:14.431 --> 01:17:18.510 gas production pathways are forecast to show 01:17:18.510 --> 01:17:20.874 significant amounts of cost reduction over the 01:17:20.886 --> 01:17:23.010 coming years. So this is 20, current 2030 01:17:23.010 --> 01:17:25.996 and 2050. All of these technologies have some 01:17:26.008 --> 01:17:28.810 degree of learning effect. The less mature 01:17:28.810 --> 01:17:30.577 ones, particular electrolysis have a lot of 01:17:30.589 --> 01:17:32.409 cost reduction potential because they're not 01:17:32.409 --> 01:17:36.420 as mature. This finger also points up an interesting 01:17:36.432 --> 01:17:40.380 thing, which is when you look at the raw conversion 01:17:40.380 --> 01:17:43.342 costs, the wet organic pathways converted through 01:17:43.354 --> 01:17:46.030 AD are a bit more expensive. That's just the 01:17:46.030 --> 01:17:49.475 nature of the technology and the typical scale, 01:17:49.487 --> 01:17:52.511 but they also have lower carbon intensity 01:17:52.511 --> 01:17:55.238 in general, particularly the dairy pathways. 01:17:55.250 --> 01:17:58.050 So when you bring in carbon credit, now, this 01:17:58.050 --> 01:18:00.393 is for hydrogen, so, but that's not relevant 01:18:00.405 --> 01:18:02.550 because if you convert these to methane, 01:18:02.550 --> 01:18:05.260 these relative numbers are almost exactly the 01:18:05.272 --> 01:18:07.699 same. But it just shows you that whereas 01:18:07.699 --> 01:18:10.807 there's a pretty big difference in the 01:18:10.819 --> 01:18:14.349 gross costs of production, when you bring 01:18:14.349 --> 01:18:16.984 in carbon values, not by design, but just sort 01:18:16.996 --> 01:18:19.699 of by circumstance of these feedstock pathways, 01:18:19.699 --> 01:18:22.632 they begin to normalize. So at a $50 per ton 01:18:22.644 --> 01:18:25.719 carbon credit the pathways become very similar 01:18:25.719 --> 01:18:32.119 in their net costs. At $100 credit, you can see how much of a favorable impact 01:18:32.119 --> 01:18:34.698 there is in the dairy pathway, and that would 01:18:34.710 --> 01:18:37.300 be, becomes much more attractive financially. 01:18:37.300 --> 01:18:41.167 Let alone $200 a ton. What that tells us, 01:18:41.179 --> 01:18:44.780 I think, is that we wanted pursue the 01:18:44.780 --> 01:18:47.263 development opportunity in dairy with full force, 01:18:47.275 --> 01:18:49.420 but recognizing that's, that's one portion 01:18:49.420 --> 01:18:52.096 of supply curve, and to get where we need to go, 01:18:52.108 --> 01:18:54.850 we need to address the entire supply curve. So on 01:18:54.850 --> 01:18:56.976 the other question of how we should consider 01:18:56.988 --> 01:18:59.030 procurement targets and the development of 01:18:59.030 --> 01:19:02.561 goals. First, and Sam presented some of these, 01:19:02.573 --> 01:19:05.889 we need to take a rigorous and quantitative 01:19:05.889 --> 01:19:09.450 looking supply curves. So and that involves 01:19:09.462 --> 01:19:13.440 continuing to update and refine our perspectives 01:19:13.440 --> 01:19:16.196 on cost forecasting. So the E3 work that 01:19:16.208 --> 01:19:19.110 was mentioned, a big part of that was, was 01:19:19.110 --> 01:19:24.900 working collaboration with UCI on where we think the costs are going. And 01:19:24.900 --> 01:19:28.339 actually so there are certainly scenarios where 01:19:28.351 --> 01:19:31.659 those costs trajectories are quite favorable. 01:19:31.659 --> 01:19:33.929 So it's that and then it's also competing 01:19:33.941 --> 01:19:36.440 uses. We don't want to create scarcity, which 01:19:36.440 --> 01:19:40.424 spikes prices by setting a renewable gas procurement 01:19:40.436 --> 01:19:43.829 standard obligation on the part of utilities 01:19:43.829 --> 01:19:46.610 that exceeds the supply available in the market at 01:19:46.622 --> 01:19:49.360 points in time. So this has to have some rigorous 01:19:49.360 --> 01:19:52.446 forward planning on quantities and costs to make 01:19:52.458 --> 01:19:55.239 sure that that works. And also there should 01:19:55.239 --> 01:19:57.971 probably be some off ramps or things like 01:19:57.983 --> 01:20:00.989 that in case scarcities occur. There are some 01:20:00.989 --> 01:20:04.161 provisions in the bio mat tariff, for example, 01:20:04.173 --> 01:20:07.289 of postponement of the procurement obligation 01:20:07.289 --> 01:20:12.570 if certain price points aren't met. And so then, 01:20:12.582 --> 01:20:17.119 the point I missed the bullets there was, 01:20:17.119 --> 01:20:18.937 I think there's a view that should be big 01:20:18.949 --> 01:20:20.909 enough to be material. We have bold goals to 01:20:20.909 --> 01:20:22.920 address. So maybe 5% of core procurement to 01:20:22.932 --> 01:20:24.910 start with or maybe even a little bit more 01:20:24.910 --> 01:20:28.383 than that. So it shouldn't material, but also 01:20:28.395 --> 01:20:31.880 at least going into the program, not so large 01:20:31.880 --> 01:20:36.832 that it's gonna have a major impact on customer 01:20:36.844 --> 01:20:41.290 bills. So then on to procurement strategy. 01:20:41.290 --> 01:20:45.480 The last question. So I think we all agree that 01:20:45.492 --> 01:20:49.519 RPS procurement process has been a successful 01:20:49.519 --> 01:20:52.077 model, in my opinion, very successful. And 01:20:52.089 --> 01:20:54.719 the stakeholder engagement that Michael was 01:20:54.719 --> 01:20:57.447 talking about is referred to as a procurement 01:20:57.459 --> 01:21:00.139 review group. So that's part of the approval 01:21:00.139 --> 01:21:02.480 process for these contracts. I think that's 01:21:02.492 --> 01:21:04.739 been a functional process. There was fear 01:21:04.739 --> 01:21:07.280 going in, perhaps, that it would stall things 01:21:07.292 --> 01:21:09.679 and create a lot of difficulty to meet the 01:21:09.679 --> 01:21:11.919 procurement obligation. I think it's turned out 01:21:11.931 --> 01:21:13.949 pretty well, and the approval of contracts 01:21:13.949 --> 01:21:16.988 have been pretty timely. I think you know, 01:21:17.000 --> 01:21:20.050 on an energy equivalent basis, many of the 01:21:20.050 --> 01:21:22.179 renewable fuels contracts may be smaller, so 01:21:22.191 --> 01:21:24.190 we have to be attentive to the ability of 01:21:24.190 --> 01:21:26.910 the different groups to process this in setting 01:21:26.922 --> 01:21:29.369 up, for example, an advice letter process. 01:21:29.369 --> 01:21:32.305 I think this program would be crushed before 01:21:32.317 --> 01:21:35.199 it started if you had application for every 01:21:35.199 --> 01:21:38.388 contract. So companion programs should be 01:21:38.400 --> 01:21:41.600 considered as well. I know in some of the 01:21:41.600 --> 01:21:43.417 considerations, the idea would be, okay, the 01:21:43.429 --> 01:21:45.340 utility has a mandate to procure this material 01:21:45.340 --> 01:21:47.784 and use it for these high to, hard to address 01:21:47.796 --> 01:21:50.039 applications for core customers. However, 01:21:50.039 --> 01:21:52.802 under an optional tariff, let's say, if somebody 01:21:52.814 --> 01:21:55.420 wanted to pay more than the procurement price 01:21:55.420 --> 01:21:58.331 to use it at some point in time for generation 01:21:58.343 --> 01:22:01.079 in a time of, say, temporary low renewables 01:22:01.079 --> 01:22:03.662 production or any other thing, or if a transportation 01:22:03.674 --> 01:22:05.789 customer wanted to pay more, those could be 01:22:05.789 --> 01:22:07.666 made available under voluntary tariffs. And 01:22:07.678 --> 01:22:09.610 that would offset the cost of core customers 01:22:09.610 --> 01:22:12.427 but still provide the function of stimulating 01:22:12.439 --> 01:22:15.329 the market and providing contractual certainty 01:22:15.329 --> 01:22:19.136 to developers on their revenue side. The 01:22:19.148 --> 01:22:23.340 eligibility should be expanded from day one, 01:22:23.340 --> 01:22:26.106 if possible, but certainly as soon as possible 01:22:26.118 --> 01:22:28.659 to include all renewable gas pathways. And 01:22:28.659 --> 01:22:30.331 I think, as has been discussed, as well, 01:22:30.343 --> 01:22:32.110 other things to consider would be standard 01:22:32.110 --> 01:22:34.856 offer feed in tarrif. Perhaps that's for small 01:22:34.868 --> 01:22:37.449 projects. And although it's a controversial 01:22:37.449 --> 01:22:40.703 point, I personally think utility owned facilities 01:22:40.715 --> 01:22:43.340 should be allowed as they are under RPS, 01:22:43.340 --> 01:22:46.387 not by individual decision of the utility, 01:22:46.399 --> 01:22:49.530 but there is vision for an electric utility 01:22:49.530 --> 01:22:52.393 to put forward its own project into the procurement 01:22:52.405 --> 01:22:55.059 process and have that assessed alongside others 01:22:55.059 --> 01:22:57.607 on a competitive basis. In the event that, you 01:22:57.619 --> 01:23:00.070 know, developer interest in certain sectors, 01:23:00.070 --> 01:23:03.283 certain feedstocks or certain technologies is 01:23:03.295 --> 01:23:06.310 not as much as might be desired for policy 01:23:06.310 --> 01:23:10.766 reasons, the utilities could step in and 01:23:10.778 --> 01:23:15.790 provide an important role in that. So I don't 01:23:15.790 --> 01:23:18.179 have a ton to say about this, other than the 01:23:18.191 --> 01:23:20.699 fact that, at least as it relates to hydrogen, 01:23:20.699 --> 01:23:25.239 we had at UCI under CEC sponsorship have recently completed a roadmap related 01:23:25.239 --> 01:23:28.883 hydrogen, and you can see that if you're designing 01:23:28.895 --> 01:23:32.050 sector specific programs, the importance of 01:23:32.050 --> 01:23:34.628 doing that in the context of a broader view 01:23:34.640 --> 01:23:37.229 of what the demand for the fuels will be if 01:23:37.229 --> 01:23:39.288 it's a fuels program. So you, in this case you 01:23:39.300 --> 01:23:41.150 have light duty vehicles, heavy duty, and 01:23:41.150 --> 01:23:44.496 then you see heat generation and storage at about 01:23:44.508 --> 01:23:47.530 25% of the total, then refining and ammonia. 01:23:47.530 --> 01:23:50.871 So, you know, if we're to set standards for 01:23:50.883 --> 01:23:54.389 these industries individually, the quantities 01:23:54.389 --> 01:23:56.904 and the expectations on costs have to be in the 01:23:56.916 --> 01:23:59.179 context of all the other application areas 01:23:59.179 --> 01:24:01.749 as well. So in the current RNG market, I think 01:24:01.761 --> 01:24:04.289 we all know it's all going to transportation. 01:24:04.289 --> 01:24:09.989 So we're now looking to find rational ways to 01:24:10.001 --> 01:24:15.340 expand that into other sectors. Thank you. 01:24:15.340 --> 01:24:19.418 Thank you very much. All right. And Janice, go for it. 01:24:23.443 --> 01:24:27.059 Hello? All right, hey, everyone. 01:24:27.059 --> 01:24:29.890 So my name is Janice. I'm a director at 01:24:29.902 --> 01:24:33.400 Generate Capital. I don't have any slides. And 01:24:33.400 --> 01:24:35.781 I'm just gonna go straight into questions 01:24:35.793 --> 01:24:38.300 and hope we have a little more time to have 01:24:38.300 --> 01:24:40.286 discussions here. That's what, I know what 01:24:40.298 --> 01:24:42.249 Jamie wanted, so I'm gonna listen to her. 01:24:42.249 --> 01:24:46.096 So, you know, quick background of what 01:24:46.108 --> 01:24:50.880 Generate Capital does. So we are an investor. 01:24:50.880 --> 01:24:53.842 We are equity investors in all types of 01:24:53.854 --> 01:24:57.590 renewable and sustainable infrastructure. So we 01:24:57.590 --> 01:25:00.693 invest in everything from energy storage. 01:25:00.705 --> 01:25:03.969 We do a lot of clean transportation, solar, 01:25:03.969 --> 01:25:08.193 and I work on the Organic Waste Team. And within 01:25:08.205 --> 01:25:12.440 the Organic Waste Team, we have several projects 01:25:12.440 --> 01:25:15.300 that we are owners and operators for. So I 01:25:15.312 --> 01:25:18.250 wear two hats. We both invest, but we also 01:25:18.250 --> 01:25:20.447 put it in our portfolio and operate it with 01:25:20.459 --> 01:25:22.719 our developers. So I have a couple different 01:25:22.719 --> 01:25:25.489 perspectives from there, and within our 01:25:25.501 --> 01:25:28.639 organic waste portfolio, we have digesters 01:25:28.639 --> 01:25:31.810 that are food waste digesters, manure digesters. 01:25:31.822 --> 01:25:34.550 We have wastewater treatment. Small scale 01:25:34.550 --> 01:25:37.393 wastewater treatment projects. We're one of 01:25:37.405 --> 01:25:40.130 the largest investors in organic waste to 01:25:40.130 --> 01:25:43.897 energy in North America. So I've been 01:25:43.909 --> 01:25:48.300 doing this work for almost four years now 01:25:48.300 --> 01:25:51.017 and have seen a lot of the of the market develop 01:25:51.029 --> 01:25:53.590 and hoping that I can share some of what I've 01:25:53.590 --> 01:26:01.229 seen and learned here so that we can incorporate it into SB 1440. So I think, 01:26:01.229 --> 01:26:05.440 I'm going to answer the questions kind of in a roundabout way, but, you know, 01:26:05.440 --> 01:26:11.519 hopefully get to answers that satisfy you, Jamie. So when we all talk about 01:26:11.519 --> 01:26:13.546 cost effectiveness, I think everyone on the 01:26:13.558 --> 01:26:15.550 panel here had really great points talking 01:26:15.550 --> 01:26:20.940 about, you know, what is the cost of the abatement technologies and ranking that 01:26:20.940 --> 01:26:23.246 doesn't make sense. You know, I think from 01:26:23.258 --> 01:26:25.469 an investor's point of view, a different 01:26:25.469 --> 01:26:27.890 way to look at it is that cost effect, cost 01:26:27.902 --> 01:26:30.280 effectiveness isn't static. So what we see 01:26:30.280 --> 01:26:32.556 today on these marginal abatement costs curves, 01:26:32.568 --> 01:26:34.760 what we see, and Sam brought up a really good 01:26:34.760 --> 01:26:37.718 point in that, right now, as it is, the technologies, 01:26:37.730 --> 01:26:40.150 they do make sense, so that's a great place 01:26:40.150 --> 01:26:42.697 to start. But I think from our perspective, 01:26:42.709 --> 01:26:45.210 it's not static. It's changing. So what is 01:26:45.210 --> 01:26:48.666 the role of regulation in making it the most 01:26:48.678 --> 01:26:52.300 cost effective later? How do we enable markets 01:26:52.300 --> 01:26:55.754 to do and work their magic so that technologies 01:26:55.766 --> 01:26:59.159 that don't necessarily make sense now or maybe 01:26:59.159 --> 01:27:01.666 on the more expensive side now can actually come 01:27:01.678 --> 01:27:03.940 down the cost curve a lot more effectively? 01:27:03.940 --> 01:27:06.687 Or not even come down the cost curve but 01:27:06.699 --> 01:27:09.659 enable other types of financial mechanisms, 01:27:09.659 --> 01:27:12.837 like leverage, like debt, like you know, other 01:27:12.849 --> 01:27:15.699 types of free trade incentives across the 01:27:15.699 --> 01:27:19.781 world. How do we enable those benefactors 01:27:19.793 --> 01:27:23.789 to come in and drive the market? So, you 01:27:23.789 --> 01:27:26.739 know, stepping back. You know what, what makes 01:27:26.751 --> 01:27:29.460 sense for us when we look at an investment 01:27:29.460 --> 01:27:32.510 into an organic waste project? Well, the, you 01:27:32.522 --> 01:27:35.650 look at your revenue streams and how you bring 01:27:35.650 --> 01:27:38.409 large scale institutional investors is by making, 01:27:38.421 --> 01:27:40.749 you know, it contractable. Like investors 01:27:40.749 --> 01:27:43.496 don't want to invest in things that aren't 01:27:43.508 --> 01:27:46.460 reliable. All right, that's so, unreliability 01:27:46.460 --> 01:27:49.253 equals more risk equals more expensive, like I 01:27:49.265 --> 01:27:52.309 don't care of that, like, technology is inherently 01:27:52.309 --> 01:27:55.496 cheap. If I can't rely on the revenues coming 01:27:55.508 --> 01:27:58.360 in, like, I don't want invest in it. You 01:27:58.360 --> 01:28:00.148 know, I will invest in the thing that's more 01:28:00.160 --> 01:28:01.840 expensive if it's more reliably there. If 01:28:01.840 --> 01:28:04.932 I know that I could get, like, a line of 01:28:04.944 --> 01:28:08.199 sight to what my my return is. And so when 01:28:08.199 --> 01:28:11.276 I think about SB1440 the potential to create, 01:28:11.288 --> 01:28:14.310 you know, long term contracts, that's really 01:28:14.310 --> 01:28:19.539 appealing for us. Long term contracts as in, you know, 15 year, 20 year, what we 01:28:19.539 --> 01:28:21.427 did with power purchase agreements to the 01:28:21.439 --> 01:28:23.430 renewable portfolio standard. Let's imitate 01:28:23.430 --> 01:28:26.690 that and put it to the portfolio center for 01:28:26.702 --> 01:28:29.900 gas. And that's how renewable energy, kind 01:28:29.900 --> 01:28:32.164 of, the market was able to be created cause 01:28:32.176 --> 01:28:34.349 there was a this bedrock, this foundation 01:28:34.349 --> 01:28:37.789 of revenue contracts that, that investors 01:28:37.801 --> 01:28:40.760 could depend on. So, you know, long 01:28:40.760 --> 01:28:45.242 term contracts is one thing. Steady policy, you 01:28:45.254 --> 01:28:49.280 know, definitely is another. This is where 01:28:49.280 --> 01:28:52.729 you know, when we think about talking, you 01:28:52.741 --> 01:28:55.880 know, think about how we want to write 01:28:55.880 --> 01:28:58.033 the regulation, making sure that there is a 01:28:58.045 --> 01:29:00.260 long term kind of component and that there's 01:29:00.260 --> 01:29:04.557 no wavering of if the the governor changes, 01:29:04.569 --> 01:29:08.389 you know, that doesn't change how this 01:29:08.389 --> 01:29:14.749 policy is written. I think if we take a look at the low carbon fuel standard and 01:29:14.749 --> 01:29:17.963 so Generate Capital this past year, you know, 01:29:17.975 --> 01:29:20.920 went into the little carbon fuel standard 01:29:20.920 --> 01:29:25.813 in a really big way. We now own the United 01:29:25.825 --> 01:29:30.159 States largest LCFS generating credit 01:29:30.159 --> 01:29:38.929 project. We own the Fair Oaks Dairies, in LCFS. So why do we do that? Well, 01:29:38.929 --> 01:29:42.282 we didn't, we didn't invest in the renewable 01:29:42.294 --> 01:29:45.510 fuel standards. You know, the rings market 01:29:45.510 --> 01:29:48.281 before, because it was just very unreliable, 01:29:48.293 --> 01:29:51.199 even though, you know, it's, there was a price 01:29:51.199 --> 01:29:53.807 on those rooms, their projects readily available. 01:29:53.819 --> 01:29:56.019 We didn't do that because there was a lot 01:29:56.019 --> 01:30:01.559 of kind of a question mark around what the the EPA was going to do with RFS. 01:30:01.559 --> 01:30:04.595 So we looked at it. We said, Yes. You know, 01:30:04.607 --> 01:30:07.239 it makes sense from an economic basis 01:30:07.239 --> 01:30:09.459 based on today's credits, but the uncertainty 01:30:09.471 --> 01:30:11.800 of where those credits will be in in two years, 01:30:11.800 --> 01:30:17.329 five years, 10 years. We can do that, so we walked away, but then, you know, in 01:30:17.329 --> 01:30:19.812 2019, when the low carbon fuel standard was 01:30:19.824 --> 01:30:22.489 renewed, it was extended, there was just a lot 01:30:22.489 --> 01:30:25.883 more certainty around where that market would 01:30:25.895 --> 01:30:29.079 be in the long term. And so we said, Okay, 01:30:29.079 --> 01:30:31.543 you know, RFS doesn't really work. LCFS, maybe 01:30:31.555 --> 01:30:34.030 there's something here. We looked at a further 01:30:34.030 --> 01:30:36.403 we said, OK, I think this has the foundations 01:30:36.415 --> 01:30:38.800 of what we're looking for. There's, you know, 01:30:38.800 --> 01:30:40.589 even though there's no long term contracts, 01:30:40.601 --> 01:30:42.401 I think you know there's, there might be in 01:30:42.401 --> 01:30:44.498 the future, and so that it got us a lot 01:30:44.510 --> 01:30:46.889 more comfortable with that. That's just an 01:30:46.889 --> 01:30:49.426 example of how, like, an institution investor 01:30:49.438 --> 01:30:51.820 like ours can get comfortable with market. 01:30:51.820 --> 01:30:54.553 So think about that, and we're gonna be part of 01:30:54.565 --> 01:30:57.139 the comment period and how kind of investors 01:30:57.139 --> 01:30:59.353 can partake in this. But, you know, the long 01:30:59.365 --> 01:31:01.739 term nature of stability is just really, really 01:31:01.739 --> 01:31:05.875 important. The other thing I want to touch 01:31:05.887 --> 01:31:09.650 on is, so, 13, SB1383 is here to stay. 01:31:09.650 --> 01:31:12.959 Like, it's, we have to meet it. A big part of 01:31:12.971 --> 01:31:16.219 how we meet it is reducing methane emissions 01:31:16.219 --> 01:31:20.263 from organic waste, from wastewater, dairies. 01:31:20.275 --> 01:31:23.979 Right now, there's a market for dairy RNG 01:31:23.979 --> 01:31:28.122 through the Low Carbon Fuel Standard and and 01:31:28.134 --> 01:31:32.289 CNG vehicles. Unfortunately, the CNG vehicle 01:31:32.289 --> 01:31:35.759 market is very small, and it's getting crowded 01:31:35.771 --> 01:31:38.809 out. So dairy RNG being the low CI score 01:31:38.809 --> 01:31:41.588 fuel source that it is, they're probably gonna 01:31:41.600 --> 01:31:44.510 find a market in the CNG vehicles in California. 01:31:44.510 --> 01:31:46.873 Great. But you know, what do you do with landfill 01:31:46.885 --> 01:31:49.070 gas? What do you do with wastewater treatment 01:31:49.070 --> 01:31:51.778 projects? What do you do with organic waste 01:31:51.790 --> 01:31:54.571 projects and those that create bio gas? It's 01:31:54.571 --> 01:31:57.028 not going to be able to get into the CNG 01:31:57.040 --> 01:31:59.570 market unless you increase the CNG market 01:31:59.570 --> 01:32:02.443 in California, which is difficult, has its 01:32:02.455 --> 01:32:05.340 challenges. So if we don't create a market 01:32:05.340 --> 01:32:08.707 for that other type of bio gas. We're just 01:32:08.719 --> 01:32:12.019 not gonna meet our 1383 goals like simple 01:32:12.019 --> 01:32:14.425 as that, so if we want to do it, we need to 01:32:14.437 --> 01:32:16.690 start thinking about how do we make, you 01:32:16.690 --> 01:32:19.082 know, I think 1440 is great. It's laying, 01:32:19.094 --> 01:32:21.670 kind of, the foundation's there, but we need 01:32:21.670 --> 01:32:23.379 to do it quickly. Otherwise, we're just 01:32:23.391 --> 01:32:25.289 not going to meet those goals, right? And 01:32:25.289 --> 01:32:29.137 infrastructure takes a long time to build, 01:32:29.149 --> 01:32:33.099 to get the market moving. We work with lots 01:32:33.099 --> 01:32:35.953 of developers across the United States. The 01:32:35.965 --> 01:32:38.700 level of, I mean, I love, love the bio-gas 01:32:38.700 --> 01:32:40.894 industry. I'm a part of it. But you know, 01:32:40.906 --> 01:32:43.060 it's not the most sophisticated industry 01:32:43.060 --> 01:32:45.045 out there. If you compare it to energy storage 01:32:45.057 --> 01:32:46.969 and solar and some of these other, more kind 01:32:46.969 --> 01:32:50.799 of sexier industries, there's a level of sophistication 01:32:50.811 --> 01:32:53.829 that needs to, like, ramp up. And you can't 01:32:53.829 --> 01:32:57.101 do that unless you give the market signals 01:32:57.113 --> 01:33:00.550 and the reason for sophisticated, more, more 01:33:00.550 --> 01:33:02.819 not only more energy developers, but, like, more 01:33:02.831 --> 01:33:04.880 sophisticated kind of mindsets to, kind of, 01:33:04.880 --> 01:33:10.670 come into the sector. So, you know, urge you all to, let's keep moving. 01:33:10.670 --> 01:33:16.139 Let's do this quicker because it takes time to get the groundswell of talent 01:33:16.139 --> 01:33:18.891 and thinking here and then, you know, 01:33:18.903 --> 01:33:22.190 permitting and construction That all takes 01:33:22.190 --> 01:33:26.842 time, too. Want to address also, this concept 01:33:26.854 --> 01:33:30.909 of, like, RNG versus electricity that's 01:33:30.909 --> 01:33:33.297 that's being talked about. I know it's not 01:33:33.309 --> 01:33:35.820 directly, maybe, applicable to the questions 01:33:35.820 --> 01:33:39.038 on the board here, but, so, Generate Capital 01:33:39.050 --> 01:33:42.639 invests in both electricity and renewable natural 01:33:42.639 --> 01:33:45.402 gas. We fund, you know, electric bus, we're the 01:33:45.414 --> 01:33:47.900 leasing program behind one of the electric 01:33:47.900 --> 01:33:51.435 bus manufacturers in the United States or 01:33:51.447 --> 01:33:55.079 that operate in the United States. We like 01:33:55.079 --> 01:33:58.655 electricity infrastructure or EV infrastructure. 01:33:58.667 --> 01:34:02.329 But that being said, it's not, you know, there's, 01:34:02.329 --> 01:34:05.212 that's solves part of the problem. There's 01:34:05.224 --> 01:34:07.849 a lot of industrial energy use through 01:34:07.849 --> 01:34:11.371 the thermal needs. There is a CNG market for 01:34:11.383 --> 01:34:14.760 heavy duty vehicles that's there, and when 01:34:14.760 --> 01:34:17.724 we think about kind of, how complex the 01:34:17.736 --> 01:34:21.170 energy system is and the range of solutions 01:34:21.170 --> 01:34:23.872 that we want to fund and that we think is the 01:34:23.884 --> 01:34:26.539 most appropriate for different applications, 01:34:26.539 --> 01:34:28.811 I think, you know, bio gas and and renewable 01:34:28.823 --> 01:34:30.600 natural gas definitely has a place 01:34:30.600 --> 01:34:33.152 to play. We're not an advocacy group of trying 01:34:33.164 --> 01:34:35.619 to cherry pick one or the other. We just are 01:34:35.619 --> 01:34:37.580 really looking at the numbers. And, like, 01:34:37.592 --> 01:34:39.659 what is the most efficient use of different 01:34:39.659 --> 01:34:42.739 energy sources, and, you know, bio gas is 01:34:42.751 --> 01:34:45.769 just an obvious place to play in thermal 01:34:45.769 --> 01:34:50.560 need, and some, you know, heavy duty vehicles. 01:34:50.572 --> 01:34:54.659 The last thing that I wanted to address 01:34:54.659 --> 01:35:01.190 is that, you know, I was speaking at, at Verge, which is the corporate social 01:35:01.190 --> 01:35:03.817 responsibility conference last month. And I spoke 01:35:03.829 --> 01:35:06.099 on a panel about thermal, kind of, thermal 01:35:06.099 --> 01:35:09.215 needs and sustainability, and I was just, like, 01:35:09.227 --> 01:35:12.290 very surprised by the amount of big corporates 01:35:12.290 --> 01:35:15.870 out in the audience that were really knowledgeable 01:35:15.882 --> 01:35:18.559 about renewable natural gas. And were 01:35:18.559 --> 01:35:21.832 desperately asking kind of the community of 01:35:21.844 --> 01:35:24.979 bio gas developers to sell them their bio 01:35:24.979 --> 01:35:27.508 gas. Because right now, there's just not that 01:35:27.520 --> 01:35:29.840 much around. So I wanted to make everyone 01:35:29.840 --> 01:35:32.129 aware that, like, we're not just sitting in 01:35:32.141 --> 01:35:34.389 this, like, niche here of, you know, we're 01:35:34.389 --> 01:35:36.728 not working in a silo with just a few people 01:35:36.740 --> 01:35:39.090 in this room that are, like, that care about 01:35:39.090 --> 01:35:42.106 bio gas. There's actually an entire community 01:35:42.118 --> 01:35:45.080 out there that, including, you know, Fortune 01:35:45.080 --> 01:35:47.738 500 companies that are looking for a way to 01:35:47.750 --> 01:35:50.360 reduce their carbon emissions. And they've 01:35:50.360 --> 01:35:53.808 been able to do that through Rex on the electricity 01:35:53.820 --> 01:35:56.880 side. But they, there's not, there's just not 01:35:56.880 --> 01:35:59.388 that amount of volume on the thermal side 01:35:59.400 --> 01:36:01.920 that needs to be addressed. So maybe, you 01:36:01.920 --> 01:36:06.391 know, SB1440 that can help the corporates 01:36:06.403 --> 01:36:10.459 address that need as well. That's it. 01:36:10.459 --> 01:36:13.195 Awesome. This was such a wonderful 01:36:13.207 --> 01:36:16.170 panel. All right, we're gonna move into the discussion 01:36:16.170 --> 01:36:18.277 portion as we're moving. I want everybody 01:36:18.289 --> 01:36:20.610 stand up. Get the blood running to your head. 01:36:20.610 --> 01:36:23.253 We're gonna do a stretch break. Come down 01:36:23.265 --> 01:36:25.920 to the microphone, ask your questions. Be 01:36:25.920 --> 01:36:29.262 prepared. Thank our illustrious speakers. 01:36:29.274 --> 01:36:32.389 Thank you, Janice. This is the time we 01:36:32.389 --> 01:36:38.550 get to talk about this. Get that blood in your 01:36:38.562 --> 01:36:44.210 head. All right, who is coming down first? 01:36:44.210 --> 01:36:48.823 Okay, here comes somebody. Thank you very 01:36:48.835 --> 01:36:53.459 much. Please introduce yourself. Tell you 01:36:53.459 --> 01:36:59.362 tell us where you're from, ask your question and we've got. 01:36:59.387 --> 01:37:02.510 I'm Matt Gustave for North Justice. And 01:37:02.510 --> 01:37:04.583 Jamie, this is actually first for you. I'm 01:37:04.595 --> 01:37:06.679 new to the proceeding. I was unclear what, 01:37:06.679 --> 01:37:09.462 what's going on from here. There's comments on scope 01:37:09.474 --> 01:37:11.900 at this point. And then what next from there? 01:37:11.900 --> 01:37:14.037 So the next steps part of the 01:37:14.049 --> 01:37:15.965 conversation will come later. I promise. 01:37:15.990 --> 01:37:17.320 I won't be here. So could I get a preview? 01:37:17.320 --> 01:37:19.389 Submit your comments on January 10. 01:37:19.414 --> 01:37:21.340 I don't know what they're about 01:37:21.340 --> 01:37:23.271 because it's says scope. Or are they substance? 01:37:23.296 --> 01:37:24.960 You can submit whatever kind of comments you want. 01:37:24.960 --> 01:37:26.873 I'll you follow up with you, then. 01:37:26.898 --> 01:37:27.511 Perfect. Okay, 01:37:27.535 --> 01:37:30.469 A couple questions, Sam, this might be for you. 01:37:30.469 --> 01:37:34.026 Wait. Ground rules were one question 01:37:34.038 --> 01:37:37.002 per person. And then, we'll go back. Sorry. 01:37:37.027 --> 01:37:39.180 Yeah. In terms 01:37:39.179 --> 01:37:42.135 of the environment attributes of bio methane. 01:37:42.147 --> 01:37:44.599 My understanding is, Washington State 01:37:44.599 --> 01:37:47.928 Bear purchased and retired in Oregon. I think 01:37:47.940 --> 01:37:51.499 they're, it ????? by the utility as some kind of 01:37:51.499 --> 01:37:54.912 credit to the cost of procurement. It's stifling 01:37:54.924 --> 01:37:57.999 in California. What happens? What are folks 01:37:57.999 --> 01:38:01.048 views on how environment attributes should be dealt with? 01:38:01.073 --> 01:38:02.730 Yeah, I think the real critical 01:38:02.730 --> 01:38:05.027 thing is that the environmental attribute needs 01:38:05.039 --> 01:38:07.011 to be retired for one end use, and there 01:38:07.011 --> 01:38:09.756 needs to be a robust system for tracking that, 01:38:09.768 --> 01:38:12.349 ensuring no double counting, and right now, 01:38:12.349 --> 01:38:15.183 within the LCFS, the way CARB approaches 01:38:15.195 --> 01:38:18.249 this is there's only 100 or so RNG projects 01:38:18.249 --> 01:38:20.314 that are pipeline interconnected. And they have 01:38:20.326 --> 01:38:22.230 a team of enforcement staff that works with 01:38:22.230 --> 01:38:24.828 each of those projects to know exactly which 01:38:24.840 --> 01:38:27.449 transportation fleets they're matching it to 01:38:27.449 --> 01:38:30.127 and ensuring there's no double counting across 01:38:30.139 --> 01:38:33.229 multiple end uses, and they're doing that well within 01:38:33.229 --> 01:38:35.565 the California vehicle fleet and the fleet 01:38:35.577 --> 01:38:37.979 of suppliers that are serving it right now. 01:38:37.979 --> 01:38:40.101 But as the number of RNG projects grows, 01:38:40.113 --> 01:38:42.300 we really need a registry very similar to 01:38:42.300 --> 01:38:44.659 what we've already seen for renewable power, 01:38:44.671 --> 01:38:46.989 right? Like the Regis example out here. And 01:38:46.989 --> 01:38:49.345 the Midwestern renewable energy tracking system 01:38:49.357 --> 01:38:51.429 is currently built something, and they're 01:38:51.429 --> 01:38:53.273 launching it in January for renewable thermal 01:38:53.285 --> 01:38:55.019 products. And we've been involved in that, 01:38:55.019 --> 01:38:57.825 we're very, very supportive of, you know, 01:38:57.837 --> 01:39:00.789 absolute transparency about the environment 01:39:00.789 --> 01:39:03.383 attributes and ensuring there's no double claims. 01:39:03.408 --> 01:39:05.199 That would mean RNG procured under 01:39:05.199 --> 01:39:08.641 this program could not be used for LCFS or other programs. 01:39:08.666 --> 01:39:10.099 Yeah, I think it's about 01:39:10.099 --> 01:39:12.325 the end use, right? If you're assigning it to 01:39:12.337 --> 01:39:14.429 a truck, you can also say that same amount 01:39:14.429 --> 01:39:17.812 of RNG went into a building, right? Or a cement plant. 01:39:17.837 --> 01:39:19.350 Okay. And then how would 01:39:19.349 --> 01:39:21.803 you mitigate market power concerns here, given you 01:39:21.815 --> 01:39:24.039 may have some kind of percentage requirement, 01:39:24.039 --> 01:39:26.061 a limited amount of suppliers that would then 01:39:26.073 --> 01:39:28.019 be able to bid pretty much anything to meet 01:39:28.019 --> 01:39:31.272 some kind of goal? What would be the sideboards on that? 01:39:31.297 --> 01:39:33.269 Sure. Well, one option would be to 01:39:33.269 --> 01:39:35.203 provide a price cap in the program that's 01:39:35.215 --> 01:39:37.300 protective of consumer interest. And I think 01:39:37.300 --> 01:39:39.454 the LCFS just recently adopted a firmer 01:39:39.466 --> 01:39:41.909 version of that in their program. So we're 01:39:41.909 --> 01:39:43.634 supportive of that. We're not trying to gouge 01:39:43.646 --> 01:39:45.270 the California consumer here. We're trying 01:39:45.270 --> 01:39:47.413 to create a competitive marketplace. And that's, 01:39:47.425 --> 01:39:49.360 I think, another reason to open it up to, I 01:39:49.360 --> 01:39:50.768 mean, the language of 1440 doesn't fully 01:39:50.780 --> 01:39:52.270 allow this right now, but to open it up to 01:39:52.270 --> 01:39:55.023 all supply that's out there in North America. 01:39:55.035 --> 01:39:57.739 You know, you have more potential options at 01:39:57.739 --> 01:39:59.709 that point, and you're less likely to be held 01:39:59.721 --> 01:40:01.530 captive by a limited number of suppliers. 01:40:01.530 --> 01:40:04.365 Could I also respond to that? So 01:40:04.377 --> 01:40:07.520 SB1440 is focused on in state supply, but I disagree 01:40:07.520 --> 01:40:09.788 with the premise of your question. We have 01:40:09.800 --> 01:40:12.079 hundreds of dairies. We have the potential 01:40:12.079 --> 01:40:14.552 for hundreds of projects using forests and 01:40:14.564 --> 01:40:17.280 agricultural and other vegetative waste. We're 01:40:17.280 --> 01:40:20.273 gonna need one to two hundred projects to take the diverted 01:40:20.285 --> 01:40:22.840 organic waste that's currently going to landfills. 01:40:22.840 --> 01:40:25.329 We have 500 wastewater treatment facilities, 01:40:25.341 --> 01:40:27.730 300 plus landfills. There are plenty of in 01:40:27.730 --> 01:40:30.205 state projects to create a competitive market. 01:40:30.217 --> 01:40:32.599 I don't disagree with, you know, it may make 01:40:32.599 --> 01:40:35.237 sense to have price caps and other price protection 01:40:35.249 --> 01:40:37.440 mechanism, but I think the premise of your 01:40:37.440 --> 01:40:40.065 question isn't accurate. Even for the in state 01:40:40.077 --> 01:40:42.489 supply. There are more than 1000 potential 01:40:42.489 --> 01:40:44.799 suppliers. That is more than enough market 01:40:44.811 --> 01:40:47.510 participants to create good, healthy competition. 01:40:47.510 --> 01:40:49.885 And we put the price cap on bio mat. 01:40:49.910 --> 01:40:53.249 There isn't a price cap on the bio mat. There was 01:40:53.249 --> 01:40:55.942 a price point that triggered a Commission 01:40:55.954 --> 01:40:58.659 review. There is no hard price cap in the 01:40:58.659 --> 01:41:01.570 bio mat, and nothing in the legislation suggested 01:41:01.582 --> 01:41:04.389 there should be one. So it's just not accurate. 01:41:04.389 --> 01:41:07.846 I mean, I do think, we need to 01:41:07.858 --> 01:41:11.610 figure out a way that we can all say with a straight 01:41:11.610 --> 01:41:13.208 face that the gas that is being procured is 01:41:13.220 --> 01:41:14.829 part of this program is just and reasonable 01:41:14.829 --> 01:41:18.159 for the customer? And, I share a lot of the 01:41:18.171 --> 01:41:21.969 concerns about market power, market manipulation. 01:41:21.969 --> 01:41:23.822 I think there's lots of ways to mitigate it. 01:41:23.834 --> 01:41:25.699 I think ,even beyond price point, your price 01:41:25.699 --> 01:41:28.382 caps, I think how you handle the solicitations, 01:41:28.394 --> 01:41:30.809 what the traunches are, what the best bids 01:41:30.809 --> 01:41:32.708 are, like.,there's lots of ways of doing, and 01:41:32.720 --> 01:41:34.630 I think it depends fundamentally on what your 01:41:34.630 --> 01:41:37.300 framework is if you're doing competitive 01:41:37.312 --> 01:41:40.059 solicitations, if you're doing a standard 01:41:40.059 --> 01:41:41.618 outwork contract, if you're doing something 01:41:41.630 --> 01:41:43.130 pegged to the price of of gas, with maybe 01:41:43.130 --> 01:41:45.453 X percent added, and we'll determine, like, 01:41:45.465 --> 01:41:47.800 there's lots of ways of figuring it out. So 01:41:47.800 --> 01:41:49.799 I think we need to first decide what's the 01:41:49.811 --> 01:41:52.010 procurement strategy. And then we make certain 01:41:52.010 --> 01:41:55.228 from there, how do we figure out the, the, you 01:41:55.240 --> 01:41:58.469 know, are the standards, right? Are we getting 01:41:58.469 --> 01:42:01.277 the gas that we want? Are we trying it correctly? 01:42:01.289 --> 01:42:03.940 And then we also figure out, make certain that 01:42:03.940 --> 01:42:06.091 the market concerns are addressed. 01:42:06.116 --> 01:42:09.570 Actually, can I address that as well? I think this is 01:42:09.570 --> 01:42:11.823 pretty important. So, with the Low Carbon Fuel 01:42:11.835 --> 01:42:14.099 Center, we were actually, we submitted comments 01:42:14.099 --> 01:42:19.377 supporting price caps. So, counter intuitive. 01:42:19.389 --> 01:42:23.989 You know, we need to have the customers 01:42:23.989 --> 01:42:26.492 in California supported and not think of us as 01:42:26.504 --> 01:42:29.019 the bad guy. Really, we don't want instability 01:42:29.019 --> 01:42:31.133 in the policy, and we don't want any type of 01:42:31.145 --> 01:42:33.130 backlash to happen. And so if we can take 01:42:33.130 --> 01:42:36.183 stability through different types of mechanisms to 01:42:36.195 --> 01:42:39.079 protect, you know, to protect the policy, that, 01:42:39.079 --> 01:42:41.243 that's good for us as well. 01:42:41.268 --> 01:42:45.650 Great. Tom Henz, Seal Team Bio Gas. This is for Julia 01:42:45.650 --> 01:42:49.548 Leven. For the RPS that you had outlined, what is 01:42:49.560 --> 01:42:53.469 the percentage of dairies that you're calculating 01:42:53.469 --> 01:42:59.703 that could participate with the current infrastructure of the I. O U's? 01:42:59.728 --> 01:43:02.300 I'm not assuming a particular 01:43:02.300 --> 01:43:05.096 percentage one way or the other. I was just 01:43:05.108 --> 01:43:07.789 presenting what the technically available 01:43:07.789 --> 01:43:10.601 organic waste feedstock is, and this is actually 01:43:10.613 --> 01:43:13.380 to back up, I think, Michael may have mentioned 01:43:13.380 --> 01:43:15.936 this in his opening comments, about, I'm assuming 01:43:15.948 --> 01:43:18.260 we're talking about bio methane from organic 01:43:18.260 --> 01:43:20.837 waste and not purpose grown crops and other 01:43:20.849 --> 01:43:23.320 potential sources that I think have fewer 01:43:23.320 --> 01:43:25.508 environmental benefits and don't reduce short 01:43:25.520 --> 01:43:27.481 lived carbon. And so our focus of the Bio 01:43:27.481 --> 01:43:29.536 Energy Association California is on technically 01:43:29.548 --> 01:43:31.400 available organic waste, and the potential 01:43:31.400 --> 01:43:33.947 from the dairy sector is high. I don't know 01:43:33.959 --> 01:43:36.401 how many dairies that will be in the long 01:43:36.401 --> 01:43:38.444 run. Some of that will go with, and I agree 01:43:38.456 --> 01:43:40.510 with the comments, there do need to be some 01:43:40.510 --> 01:43:43.269 sort of cost control, but technology will also 01:43:43.281 --> 01:43:46.170 change, and I think if you bring in gasification 01:43:46.170 --> 01:43:48.593 in addition to anaerobic digestion, that also 01:43:48.605 --> 01:43:51.039 opens up the potential to get to much smaller 01:43:51.039 --> 01:43:53.201 dairies. So I don't really know the full answer 01:43:53.213 --> 01:43:55.070 to your question. It is a good question. 01:43:55.070 --> 01:43:57.117 I think in the process that we should be 01:43:57.129 --> 01:43:59.150 looking at that because right now there's less than 01:43:59.150 --> 01:44:02.036 15% being considered. I just want to add that, 01:44:02.048 --> 01:44:04.699 if we also want to put in the framework to 01:44:04.699 --> 01:44:07.754 allow extending for the IOUs to work with mid 01:44:07.766 --> 01:44:10.500 market players that have existing assets 01:44:10.500 --> 01:44:13.715 on the ground, time is our enemy for greenhouse 01:44:13.727 --> 01:44:16.820 gases, and why don't we use existing leverage 01:44:16.820 --> 01:44:19.273 resources that are in place both for the 01:44:19.285 --> 01:44:22.290 electrification projects as well as gasification. 01:44:22.290 --> 01:44:24.581 There's existing gathering lines. From the 01:44:24.593 --> 01:44:26.789 current IOUs, there's probably less than 01:44:26.789 --> 01:44:29.860 two or 300 that would be economically available. 01:44:29.872 --> 01:44:32.829 But if you add in the existing gathering lines 01:44:32.829 --> 01:44:35.568 of depleted gas gathering fields and things 01:44:35.580 --> 01:44:38.269 like that, that could easily increase that 01:44:38.269 --> 01:44:40.596 number dramatically. And again. If you had 01:44:40.608 --> 01:44:43.110 100% of the dairies, you would be looking at, 01:44:43.110 --> 01:44:46.189 probably, of that 40% from the ag sector, 01:44:46.201 --> 01:44:49.440 you'd be looking at probably five or 10% of 01:44:49.440 --> 01:44:55.033 our greenhouse gases goal reduction and at 01:44:55.045 --> 01:45:00.780 the cost efficiency that Dr Reed mentioned, 01:45:00.780 --> 01:45:02.712 I think it would be very good. So my comments 01:45:02.724 --> 01:45:04.710 were is that we need to use existing resources 01:45:04.710 --> 01:45:06.828 wherever possible, and dairies are the lowest 01:45:06.840 --> 01:45:08.969 hanging fruit. And I do like the gasification 01:45:08.969 --> 01:45:12.140 of the other agricultural waste as well. Thank you. 01:45:12.165 --> 01:45:14.519 Could I just make a comment related to 01:45:14.519 --> 01:45:17.657 that? That I forgot to mention earlier? I 01:45:17.669 --> 01:45:20.969 worked on the original RPS legislation, and 01:45:20.969 --> 01:45:23.007 it's been hugely successful in some ways, not 01:45:23.019 --> 01:45:24.890 so much in others. But the biggest reason 01:45:24.890 --> 01:45:26.838 has been successful is the RPS itself. But 01:45:26.850 --> 01:45:28.809 the RPS didn't work in a vacuum. It worked 01:45:28.809 --> 01:45:31.639 in combination with billions of dollars, and 01:45:31.651 --> 01:45:34.620 that is billion with a B, of other incentives, 01:45:34.620 --> 01:45:36.578 including federal stimulus, money, tax incentives. 01:45:36.590 --> 01:45:38.289 The public goods charge, which is now known 01:45:38.289 --> 01:45:40.947 as the Electricity Program Investment Charge. 01:45:40.959 --> 01:45:43.570 Numerous incentives for interconnection. The 01:45:43.570 --> 01:45:45.521 new Solar Homes Partnership, the Million 01:45:45.533 --> 01:45:47.639 Solar Roofs. I mean, I could just go on and 01:45:47.639 --> 01:45:50.215 on and on about all the other incentives. So I 01:45:50.227 --> 01:45:52.650 think when we look at a procurement program 01:45:52.650 --> 01:45:55.351 for bio methane, we also have to look a coupling 01:45:55.363 --> 01:45:57.800 it with additional incentives. You need the 01:45:57.800 --> 01:46:00.629 carrot and the stick to be successful, and 01:46:00.641 --> 01:46:03.349 I mean, the RPS is a really good example 01:46:03.349 --> 01:46:06.174 of that, and no offense whatsoever to Sam. 01:46:06.186 --> 01:46:08.760 He's done a yeoman's work on the LCFS. 01:46:08.760 --> 01:46:10.946 But there's a reason why the RPS took off so 01:46:10.958 --> 01:46:13.010 much more quickly. And to this day it has 01:46:13.010 --> 01:46:15.143 been much more successful. And it's because 01:46:15.155 --> 01:46:17.349 it was coupled with a lot of other financial 01:46:17.349 --> 01:46:20.012 incentives. It didn't happen by itself. And 01:46:20.024 --> 01:46:22.699 so I think if we want to be successful with 01:46:22.699 --> 01:46:24.593 procurement, we also need to look at financial 01:46:24.605 --> 01:46:26.349 incentives to make it happen more quickly, 01:46:26.349 --> 01:46:31.241 especially related to short lived climate pollutants, given the urgency, 01:46:31.266 --> 01:46:33.050 Thank you. Alright. Next up. 01:46:33.050 --> 01:46:36.280 I am Marcel Hapburger with The 01:46:36.292 --> 01:46:39.340 Utility Reform Network. I have a question, but 01:46:39.340 --> 01:46:41.588 I actually, if I may just respond, I would 01:46:41.600 --> 01:46:44.070 strongly disagree, Julia, with your assessment 01:46:44.070 --> 01:46:46.860 of the RPS. There are the major federal tax 01:46:46.872 --> 01:46:49.610 credits, which also applies to some extent 01:46:49.610 --> 01:46:52.043 to other projects. But there were not, the 01:46:52.055 --> 01:46:54.329 whole point of the RPS was to eliminate 01:46:54.329 --> 01:46:56.802 the major state subsidy and credit for 01:46:56.814 --> 01:46:59.954 development of large scale renewable projects. 01:46:59.979 --> 01:47:03.129 Let's talk about how much the Public Goods 01:47:03.141 --> 01:47:06.139 Charge, or I was a Commissioner at the CEC when we got 01:47:06.139 --> 01:47:09.153 $300 million of federal stimulus money. It 01:47:09.165 --> 01:47:12.190 all went into solar and wind project. What 01:47:12.190 --> 01:47:14.195 the RPS was supposed operate by itself, but 01:47:14.207 --> 01:47:16.179 it didn't. The reality is, we've continued 01:47:16.179 --> 01:47:19.849 to put billions of dollars of subsidies into 01:47:19.861 --> 01:47:23.870 renewable power. There's a clear record of that. 01:47:23.895 --> 01:47:26.099 Okay, we won't debate it right 01:47:26.111 --> 01:47:28.460 now. You know, my question, and I know, I'm going to 01:47:28.460 --> 01:47:32.005 try and keep it to one question. But it's really 01:47:32.017 --> 01:47:35.719 about the marginal abatement curves for technology 01:47:35.719 --> 01:47:39.055 and the issue of converting, especially dairy 01:47:39.067 --> 01:47:42.269 bio methane to electricity versus injecting 01:47:42.269 --> 01:47:44.987 to pipeline. And so there's a couple of 01:47:44.999 --> 01:47:48.570 subcomponents and I'll just throw him out. Respond 01:47:48.570 --> 01:47:51.756 however you wish. What, my fundamental question 01:47:51.768 --> 01:47:54.499 is whether some of the technology supply 01:47:54.499 --> 01:47:56.599 curves and marginal abatement curves 01:47:56.611 --> 01:47:59.250 consider, that you presented, whether those 01:47:59.250 --> 01:48:02.792 considered the interconnection costs and 01:48:02.804 --> 01:48:06.619 because we've been a little troubled by the 01:48:06.619 --> 01:48:10.843 very high interconnection costs for the pilots, 01:48:10.855 --> 01:48:15.090 and I'm curious how the pipeline interconnection 01:48:15.090 --> 01:48:18.858 costs compared to conversion to electricity 01:48:18.870 --> 01:48:22.650 and interconnecting to their grid costs for 01:48:22.650 --> 01:48:27.575 dispersed dairies in the state, and whether 01:48:27.587 --> 01:48:32.749 what's driving the programs are actual supply 01:48:32.749 --> 01:48:35.848 curves or whether they're being driven by the 01:48:35.860 --> 01:48:38.769 high value of the LCFS and the possibility 01:48:38.769 --> 01:48:45.204 of using the gas for a, as a substitute for transportation fuels. 01:48:45.229 --> 01:48:47.349 Others can comment on 01:48:47.349 --> 01:48:50.300 this, but I believe that, in order of cost, 01:48:50.312 --> 01:48:53.409 if you're talking about dairy buying methane, 01:48:53.409 --> 01:48:55.105 the cheapest thing to do is capture and flare. 01:48:55.117 --> 01:48:56.680 The next cheapest thing to do is inject it 01:48:56.680 --> 01:48:59.443 in the pipeline, and most expensive is to 01:48:59.455 --> 01:49:02.229 create electricity with it on site. Which 01:49:02.229 --> 01:49:06.143 one you do depends on, really, for the electricity. 01:49:06.155 --> 01:49:09.401 And RNG is what's the value of the product 01:49:09.401 --> 01:49:13.069 that relates to the credit values for Rex 01:49:13.081 --> 01:49:16.499 versus LCFS. Capturing flare generates 01:49:16.499 --> 01:49:19.530 our box AB32 credits. But if you're just 01:49:19.542 --> 01:49:22.659 talking about pure unsubsidized abatement 01:49:22.659 --> 01:49:24.613 costs, capture and flares the cheapest. However, 01:49:24.625 --> 01:49:26.350 it has other environmental attributes such 01:49:26.350 --> 01:49:29.823 that no one is really saying, let's do that. 01:49:29.848 --> 01:49:33.219 So I think, like, when I've looked at dairies 01:49:33.219 --> 01:49:36.119 in California, it's actually more, it's cheaper 01:49:36.131 --> 01:49:38.679 to go electricity. So when you're looking 01:49:38.679 --> 01:49:44.429 at an engine versus a bio gas upgrading system. Bio gas upgrading systems are 01:49:44.429 --> 01:49:53.070 much more expensive. And you need, you need enough mass of volume in order to 01:49:53.070 --> 01:49:55.993 create the, enough gas for the bio gas upgrading 01:49:56.005 --> 01:49:59.059 system. So there's an element of, like, grouping. 01:49:59.059 --> 01:50:05.749 You have to truck other, the manure into a central facility to capture that gas. 01:50:05.749 --> 01:50:09.201 so I think, like, so, we actually really liked 01:50:09.213 --> 01:50:12.530 bio mat. And it was a shame that bio mat, we 01:50:12.530 --> 01:50:16.083 couldn't get there early enough. Electricity 01:50:16.095 --> 01:50:18.789 is great because you can generate 01:50:18.789 --> 01:50:20.774 small amounts and you can put it back to the 01:50:20.786 --> 01:50:22.739 farm. You can put it into the grid. Bio mat 01:50:22.739 --> 01:50:28.020 was great, cause they provided a pretty good price per kilowatt hour for it. 01:50:28.020 --> 01:50:29.995 The unfortunate part is, to your point, 01:50:30.007 --> 01:50:32.300 about the interconnection, it's, and I like 01:50:32.300 --> 01:50:34.720 your question, is just it's not as easy because 01:50:34.732 --> 01:50:36.860 it depends on where your farm is located. 01:50:36.860 --> 01:50:39.438 Is your farm located near a natural gas injection 01:50:39.450 --> 01:50:41.729 point? Is your farm big enough to even have 01:50:41.729 --> 01:50:44.643 natural gas to make it make sense? Or do you have 01:50:44.655 --> 01:50:47.289 to put it into a central collection facility 01:50:47.289 --> 01:50:50.207 and group like 5 to 10 dairies together? Sso 01:50:50.219 --> 01:50:52.889 if you can do that, if you can meet, kind 01:50:52.889 --> 01:50:56.233 of the hard hurdle for natural gas or bio gas 01:50:56.245 --> 01:50:59.310 to renewable natural gas, then that makes 01:50:59.310 --> 01:51:01.559 sense. If you're a smaller dairy, you might 01:51:01.571 --> 01:51:03.780 want to make electricity. If you're closer 01:51:03.780 --> 01:51:06.380 to an interconnection point. And if you're 01:51:06.392 --> 01:51:08.579 not, then you have me might have to 01:51:08.579 --> 01:51:11.223 pay, like, millions of dollars to get an 01:51:11.235 --> 01:51:14.150 interconnection point on your site, and then 01:51:14.150 --> 01:51:17.292 that blows the economic. So it just, it really 01:51:17.304 --> 01:51:20.190 depends on where you are, how big you are. 01:51:20.190 --> 01:51:24.144 And you know, what you're trying to do I could make sense. 01:51:24.169 --> 01:51:25.619 I also wanted to add. 01:51:25.619 --> 01:51:27.510 Not all projects are going to be as expensive 01:51:27.522 --> 01:51:29.300 as the dairy digestive cluster projects. I 01:51:29.300 --> 01:51:31.784 mean, that is partly because they're clusters 01:51:31.796 --> 01:51:34.400 of 10 or more dairies, and so part of the costs 01:51:34.400 --> 01:51:36.914 are the gathering lines and connecting the 01:51:36.926 --> 01:51:39.510 products to each other, as Janice said. But 01:51:39.510 --> 01:51:41.377 some of it also has to do with how far they 01:51:41.389 --> 01:51:43.310 are from the pipeline. There have been other 01:51:43.310 --> 01:51:45.183 projects more in the urban sector that have 01:51:45.195 --> 01:51:47.079 been less expensive on interconnection side 01:51:47.079 --> 01:51:49.462 for the volume of bio gas that they're producing. 01:51:49.474 --> 01:51:51.630 But I think one of the fundamental questions 01:51:51.630 --> 01:51:54.587 of a procurement program is does that assume 01:51:54.599 --> 01:51:57.699 the bio gas has to go in the pipeline? I don't 01:51:57.699 --> 01:52:00.406 think the legislation says that explicitly. 01:52:00.418 --> 01:52:03.199 I've sort of been assuming that. But I think 01:52:03.199 --> 01:52:05.172 that is a question that the Commission and 01:52:05.184 --> 01:52:07.400 stakeholders need to consider. Does procurement 01:52:07.400 --> 01:52:09.771 necessarily mean it goes in the pipeline? 01:52:09.783 --> 01:52:12.449 Because there are cases, as Janice said, where 01:52:12.449 --> 01:52:15.173 if you're next to a power line or your dear 01:52:15.185 --> 01:52:17.920 a substation that could use the bio gas for 01:52:17.920 --> 01:52:20.877 grid stability purposes in the fuel cell. 01:52:20.889 --> 01:52:24.000 There are a lot of end uses of bio methane. 01:52:24.000 --> 01:52:27.065 Let me just say that we're supportive 01:52:27.077 --> 01:52:29.880 of all sustainable enduse applications for the bio 01:52:29.880 --> 01:52:32.858 methane resource, including power. But what we 01:52:32.870 --> 01:52:35.670 really think, you know, sort of the impetus 01:52:35.670 --> 01:52:38.365 for 1440 is there is no incentive to use 01:52:38.377 --> 01:52:41.150 that resource for heating applications or 01:52:41.150 --> 01:52:42.971 for industrial applications right now. So 01:52:42.983 --> 01:52:44.860 we're trying to fill in a missing piece. I 01:52:44.860 --> 01:52:47.573 mean, there is an incentive to use it in power. 01:52:47.585 --> 01:52:50.309 It's the RPS, and its bio mat and other things. 01:52:50.309 --> 01:52:52.742 You know that, before bio-mat is small and 01:52:52.754 --> 01:52:55.199 these resources have been that competitive 01:52:55.199 --> 01:52:59.179 in RPS historically. But you know, those types of things, at least, are out there 01:52:59.179 --> 01:53:01.850 for all other end uses of fossil gas. There's 01:53:01.862 --> 01:53:04.429 no incentive, really, right now, beyond the 01:53:04.429 --> 01:53:07.367 cap and trade price to use RNG there. 01:53:07.392 --> 01:53:10.051 Thank you. Next question, please. 01:53:10.076 --> 01:53:11.099 Hi, My name 01:53:11.099 --> 01:53:13.866 is Julia Jordan. I'm with Leadership Council 01:53:13.878 --> 01:53:16.349 for Justice and Accountability. And, we 01:53:16.349 --> 01:53:18.625 work with communities in the San Joaquin Valley 01:53:18.637 --> 01:53:20.639 and Eastern Coachella Valleys, and I kind 01:53:20.639 --> 01:53:23.925 of wanted to infuse this conversation with 01:53:23.937 --> 01:53:26.929 a little bit of, sort of a perspective 01:53:26.929 --> 01:53:29.491 from community impacts and sort of the implications 01:53:29.503 --> 01:53:31.780 of bio methane procurement, specifically from 01:53:31.780 --> 01:53:35.993 dairies, in terms of that. So, you know, the 01:53:36.005 --> 01:53:40.230 Central Valley Dairy Monitoring report, this 01:53:40.230 --> 01:53:43.750 year, released, found that all dairies that were 01:53:43.762 --> 01:53:47.150 monitored under that program were contributing 01:53:47.150 --> 01:53:50.775 to ground water contamination from nitrates and 01:53:50.787 --> 01:53:54.349 that the majority of that is from specifically 01:53:54.349 --> 01:53:57.773 land application of manure rather than actually 01:53:57.785 --> 01:54:01.150 the lagoon storage. And, you know, in addition 01:54:01.150 --> 01:54:03.899 to that, I'm wondering, you know, when we're 01:54:03.911 --> 01:54:06.550 thinking about cost effectiveness for this 01:54:06.550 --> 01:54:09.581 program inwhat ways are things like water quality 01:54:09.593 --> 01:54:12.150 impacts that are going to affect drinking 01:54:12.150 --> 01:54:14.534 water and communities that are living 01:54:14.546 --> 01:54:17.330 near dairies and other kinds of water and 01:54:17.330 --> 01:54:19.888 air quality impacts that might not be accounted 01:54:19.900 --> 01:54:22.309 for here. How could those be integrated into 01:54:22.309 --> 01:54:27.045 our thought of as a calculus in determining 01:54:27.057 --> 01:54:30.402 the impacts of these programs? 01:54:30.427 --> 01:54:33.100 So the language 01:54:33.099 --> 01:54:35.756 of SB1440 is focuses on the cost effectiveness 01:54:35.768 --> 01:54:38.380 of the greenhouse gas and short lived climate 01:54:38.380 --> 01:54:40.299 pollutnat reductions. But I totally agree with 01:54:40.311 --> 01:54:42.159 you. I think this program should look at the 01:54:42.159 --> 01:54:45.305 broad range of potential benefits and impacts and 01:54:45.317 --> 01:54:48.159 really try to maximize all the environmental 01:54:48.159 --> 01:54:51.574 benefits for water quality, air quality, wildfire 01:54:51.586 --> 01:54:54.739 reduction, et cetera. So I don't know if that 01:54:54.739 --> 01:54:57.954 answers your question, but I agree with you that bio 01:54:57.966 --> 01:55:01.010 energy or bio gas, biomethane can provide a broad 01:55:01.010 --> 01:55:03.810 range of benefits done correctly, and that that, 01:55:03.822 --> 01:55:06.519 while short lived climate pollutant greenhouse 01:55:06.519 --> 01:55:08.592 gas reduction are the focus of SB4040. We 01:55:08.604 --> 01:55:10.689 should be looking beyond that and consider 01:55:10.689 --> 01:55:15.275 those other benefits in the cost effectiveness equation. 01:55:15.300 --> 01:55:17.849 You need the green light on. 01:55:17.849 --> 01:55:19.619 There are provisions in some programs, 01:55:19.631 --> 01:55:21.550 like the California Department of Food and Agricultural 01:55:21.550 --> 01:55:24.734 Grant program for dairies considers location 01:55:24.746 --> 01:55:27.729 in disadvantaged communities as a factor. 01:55:27.729 --> 01:55:29.888 One thing that's important, I think that we, 01:55:29.900 --> 01:55:32.070 kind of, we're trying to work through in the 01:55:32.070 --> 01:55:34.641 renewable hydrogen road map that we've just 01:55:34.653 --> 01:55:37.119 completed for the CEC is that things like 01:55:37.119 --> 01:55:40.764 job creation are very good in terms of community 01:55:40.776 --> 01:55:44.059 impacts, congestion and noise and emissions 01:55:44.059 --> 01:55:46.487 aren't, so. I think there's actually a need 01:55:46.499 --> 01:55:48.939 for engagement and some actual quantitative 01:55:48.939 --> 01:55:51.924 research on how one should balance things 01:55:51.936 --> 01:55:55.219 like economic development and green jobs with 01:55:55.219 --> 01:55:58.165 some other local impacts. And the communities 01:55:58.177 --> 01:56:01.070 need to weigh in on, you know, more traffic, 01:56:01.070 --> 01:56:05.282 more jobs. How do we find the balance? 01:56:05.307 --> 01:56:10.381 One thought that I have, to the best of 01:56:10.381 --> 01:56:14.537 my memory, SB1440 doesn't have any prioritization 01:56:14.549 --> 01:56:18.300 for, well, there's lots of language in there 01:56:18.300 --> 01:56:21.228 about in state. It doesn't say anything about if the 01:56:21.240 --> 01:56:23.959 project happens to be located in a disadvantaged 01:56:23.959 --> 01:56:27.399 community or other specific locations. Just 01:56:27.411 --> 01:56:31.019 because it's not stated, it doesn't mean that 01:56:31.019 --> 01:56:33.199 the Commission should consider it. And I think 01:56:33.211 --> 01:56:35.309 that's one of the things that I sort of, you 01:56:35.309 --> 01:56:37.799 know, want to put out there. It sort of depends 01:56:37.811 --> 01:56:40.260 on what procurement method that they're using. 01:56:40.260 --> 01:56:42.682 And how do you prioritize these things? Should 01:56:42.694 --> 01:56:45.179 special preference be given or not? Do you have 01:56:45.179 --> 01:56:47.940 to be a criterion score? We don't generally 01:56:47.952 --> 01:56:50.789 do that in other gas procurement, but that's 01:56:50.789 --> 01:56:53.552 because, as Jamie alluded to most gas procurement 01:56:53.564 --> 01:56:55.729 occurs from out of state, so we should 01:56:55.729 --> 01:56:57.412 think about it. 01:56:57.437 --> 01:56:59.989 And I'd just say, unfortunately, 01:57:00.001 --> 01:57:02.460 the existence of a digester in a disadvantaged 01:57:02.460 --> 01:57:05.042 community is sort of in itself not quite the 01:57:05.054 --> 01:57:07.590 right way, I think, to think about benefits 01:57:07.590 --> 01:57:10.187 to those communities. And, in addition, 01:57:10.199 --> 01:57:13.209 right, the water quality concerns come from 01:57:13.209 --> 01:57:17.409 these are large and over time consolidated trend 01:57:17.421 --> 01:57:21.719 of dairies in the Central Valley that contributes 01:57:21.719 --> 01:57:27.940 to that problem. So really thinking about, you know, what is something like 01:57:27.940 --> 01:57:30.881 doubling down on the digestor technology? How 01:57:30.893 --> 01:57:33.590 does that really, does that actually help 01:57:33.590 --> 01:57:36.693 in those kinds of considerations of other 01:57:36.705 --> 01:57:39.969 impacts and just keeping that, you know, in 01:57:39.969 --> 01:57:42.543 as a strong and focal point of this 01:57:42.555 --> 01:57:45.880 conversation, that there is a lot happening 01:57:45.880 --> 01:57:48.284 in a dairy operation that goes far beyond, 01:57:48.296 --> 01:57:50.769 you know, the implementation of a digester. 01:57:50.769 --> 01:57:54.617 Which are in themselves gonna be accessible only to the largest areas. 01:57:54.642 --> 01:57:55.900 Yeah, I think 01:57:55.900 --> 01:57:58.223 you bring up a really good point. I want to just 01:57:58.235 --> 01:58:00.380 address, like, the nitrogen loading example. 01:58:00.380 --> 01:58:05.133 So that is not something that I think is is 01:58:05.145 --> 01:58:09.910 really in the purview of the digester, kind 01:58:09.910 --> 01:58:12.602 of, procurement, per se. It's really in the 01:58:12.614 --> 01:58:15.010 permitting. And so when you go and you 01:58:15.010 --> 01:58:17.458 permit a digester, you have to make sure that 01:58:17.470 --> 01:58:19.769 there is no contamination, and if there is 01:58:19.769 --> 01:58:22.917 contamination, you get fined. And so I would 01:58:22.929 --> 01:58:26.159 say that, like, to the extent that developers 01:58:26.159 --> 01:58:28.382 are working with permitting agencies and how 01:58:28.394 --> 01:58:30.530 stringent those permitting agencies are is 01:58:30.530 --> 01:58:33.248 how you address your problem. You know, 01:58:33.260 --> 01:58:36.269 the dairies are there. They're there. For 01:58:36.269 --> 01:58:39.059 the most part, digesters aren't going to 01:58:39.071 --> 01:58:42.010 create new dairy farms. What they're going 01:58:42.010 --> 01:58:44.693 to do is they're gonna enable dairy farms to 01:58:44.705 --> 01:58:47.400 act more profitably. So the nitrogen loading 01:58:47.400 --> 01:58:49.799 issues that you're facing right now would 01:58:49.811 --> 01:58:52.280 have been an issue regardless of digesters 01:58:52.280 --> 01:58:55.850 and the process of anaerobic digestion 01:58:55.862 --> 01:59:00.199 doesn't really either exacerbate or decrease 01:59:00.199 --> 01:59:01.728 nitrogen. That's just something that just 01:59:01.740 --> 01:59:03.280 stays in throughout the entire process of 01:59:03.280 --> 01:59:05.569 anaerobic digestion. So I think, you know, 01:59:05.581 --> 01:59:07.829 to the point of, you know, how do we help 01:59:07.829 --> 01:59:11.272 with those issues? It's just bringing more 01:59:11.284 --> 01:59:14.900 sophistication to development. It's bringing 01:59:14.900 --> 01:59:16.607 more stringency from the permitting agencies 01:59:16.619 --> 01:59:18.300 to address your problem. That's how I think 01:59:18.300 --> 01:59:20.138 we attack, tackle it. 01:59:20.163 --> 01:59:23.310 Yeah. Thank you. Next question, please. 01:59:23.335 --> 01:59:25.650 I wanna, sorry, this is Sam Shawak 01:59:25.650 --> 01:59:27.383 with Bloom Energy. I wanted to piggyback, 01:59:27.395 --> 01:59:29.140 actually, on that question, that was sort 01:59:29.140 --> 01:59:30.938 of a question of co-benefits. And how do you 01:59:30.950 --> 01:59:32.760 account for those on the production end? And 01:59:32.760 --> 01:59:35.802 I wanted to ask a question about co benefits 01:59:35.814 --> 01:59:38.800 around reducing criteria air pollutants and 01:59:38.800 --> 01:59:41.243 grid service's resiliency on the end uses. 01:59:41.255 --> 01:59:43.710 And get your thoughts on how that could be 01:59:43.710 --> 01:59:46.206 incorporated in the specific print procurement 01:59:46.218 --> 01:59:48.619 mechanism. Right? Is that prioritization for 01:59:48.619 --> 01:59:51.608 end uses that are non combustion and don't result 01:59:51.620 --> 01:59:54.320 in any criteria air pollutants? Is that some 01:59:54.320 --> 01:59:56.923 sort of accounting within a CI value, as Sam, 01:59:56.935 --> 01:59:59.380 you suggested it could be incorporated, so 01:59:59.380 --> 02:00:02.475 I'd love just your top level thoughts on how that 02:00:02.487 --> 02:00:05.469 might be incorporated into 1440 implementation. 02:00:05.469 --> 02:00:08.764 Yeah, sure. You know, as the sponsors 02:00:08.776 --> 02:00:12.150 of 1440, of course, We were interested in this idea 02:00:12.150 --> 02:00:16.048 of trying to incent multiple different technologies 02:00:16.060 --> 02:00:19.670 based on their full greenhouse gas performance, 02:00:19.670 --> 02:00:22.006 including the end use. But we didn't know 02:00:22.018 --> 02:00:24.199 how to work it into the bill. We would 02:00:24.199 --> 02:00:25.973 love to explore it with the PUC. I mean, I did 02:00:25.985 --> 02:00:27.619 try and put a little bit in my slides, you 02:00:27.619 --> 02:00:30.323 know, sort of if you're doing a fullLCFS 02:00:30.335 --> 02:00:33.050 analog, you also think about the end use. 02:00:33.050 --> 02:00:34.791 But then you have to track the end use. Some 02:00:34.803 --> 02:00:36.479 utilities may not be willing to go to that 02:00:36.479 --> 02:00:39.082 level of complexity, but it's true that the 02:00:39.094 --> 02:00:41.709 end use does matter for co benefits. So you 02:00:41.709 --> 02:00:45.809 know when you want to show that your use of RNG is producing co benefits, you do 02:00:45.809 --> 02:00:50.484 need to think about the end use as well. 02:00:50.509 --> 02:00:55.730 You know, that's tough, certainly on a single 02:00:55.730 --> 02:00:59.158 project basis. You know, these sort of internalization 02:00:59.170 --> 02:01:01.860 of environmental or social costs is easier 02:01:01.860 --> 02:01:03.872 to get your hands around, I think, when you're 02:01:03.884 --> 02:01:05.821 saying, you know, does the program, does the 02:01:05.821 --> 02:01:08.556 procurement mandate, you know, make sense 02:01:08.568 --> 02:01:11.380 as a bucket? So potentially you could say, 02:01:11.380 --> 02:01:15.194 I mean, you could have, carve out minimum volumes 02:01:15.206 --> 02:01:18.650 for certain applications. That gets a little 02:01:18.650 --> 02:01:21.684 tricky, right? But I think the other way to 02:01:21.696 --> 02:01:24.880 view that is that, so if you're a distributed 02:01:24.880 --> 02:01:26.436 gen resource like a fuel cell and you have 02:01:26.448 --> 02:01:27.980 criteria benefits and you have resiliency 02:01:27.980 --> 02:01:31.562 benefits and you have grid benefits, you may 02:01:31.574 --> 02:01:34.769 have to monetize those outside the fuel 02:01:34.769 --> 02:01:36.094 procurement piece. 02:01:36.119 --> 02:01:38.201 So, Sam, it's a, it's a really 02:01:38.213 --> 02:01:40.070 interesting question. I think tracking 02:01:40.070 --> 02:01:43.108 individual end use is folly. I think, I think 02:01:43.120 --> 02:01:46.369 it's gonna just be too hard and too complicated. 02:01:46.369 --> 02:01:49.194 The billing systems aren't set up that way, but we 02:01:49.206 --> 02:01:52.099 can think about it from a goal setting perspective. 02:01:52.099 --> 02:01:55.132 We know within Jamie's blue box of the core 02:01:55.144 --> 02:01:58.050 customers, we have a pretty good sense of 02:01:58.050 --> 02:02:01.247 what the end uses are within that. And so even 02:02:01.259 --> 02:02:04.400 if we, if we're figuring out the overall goal 02:02:04.400 --> 02:02:07.057 is we might be able to weight that accordingly, 02:02:07.069 --> 02:02:09.349 to say, ?????. But we want to be able to 02:02:09.349 --> 02:02:11.719 cover X amount of the total end uses in this 02:02:11.731 --> 02:02:14.060 area and this much here and this much here. 02:02:14.060 --> 02:02:16.642 And that's how we get to the overall total 02:02:16.654 --> 02:02:19.369 that we then peanut butter across the entire 02:02:19.369 --> 02:02:21.883 core customer base. Because there is no such, 02:02:21.895 --> 02:02:24.420 just like in the renewable portfolio, there's 02:02:24.420 --> 02:02:27.279 no such thing as a green electron. There is no 02:02:27.291 --> 02:02:30.039 such thing as you, the green molecule that's 02:02:30.039 --> 02:02:32.469 going through the pipeline. It's all blended 02:02:32.481 --> 02:02:34.760 out. So I think we might want to approach 02:02:34.760 --> 02:02:37.662 this from a goal setting perspective as opposed 02:02:37.674 --> 02:02:40.467 to a tracking end use co benefit perspective. 02:02:40.492 --> 02:02:42.369 I would agree. 02:02:42.369 --> 02:02:45.057 I think it's if if we're really gonna take 02:02:45.069 --> 02:02:47.769 the program to scale, it's hard to make it 02:02:47.769 --> 02:02:49.846 about project by project. On the other hand, 02:02:49.858 --> 02:02:51.900 this is where incentives could come in. And 02:02:51.900 --> 02:02:54.762 I think that there should be added incentives for 02:02:54.774 --> 02:02:57.360 projects that avoid combustion, for projects 02:02:57.360 --> 02:02:59.507 that maximize benefits for air quality or 02:02:59.519 --> 02:03:01.729 water quality or wildfire reduction things 02:03:01.729 --> 02:03:04.134 like that. So it may not be in the procurement 02:03:04.146 --> 02:03:06.769 mechanism itself, as in hopefully, some additional 02:03:06.769 --> 02:03:08.777 incentives that are coupled with it, because 02:03:08.789 --> 02:03:10.719 I do think we want to get to the cleanest, 02:03:10.719 --> 02:03:13.414 most beneficial end uses. But doing that 02:03:13.426 --> 02:03:16.199 through individual projects is not really 02:03:16.199 --> 02:03:20.305 not going to manage when we need to take this to upscale fast. 02:03:20.330 --> 02:03:22.130 Yeah, I can just add from 02:03:22.130 --> 02:03:24.430 my experience with LCFS. Like, matching, you 02:03:24.442 --> 02:03:26.909 know, two end fleets is very, very complicated. 02:03:26.909 --> 02:03:29.068 And that's such a smaller amount of gas than 02:03:29.080 --> 02:03:31.250 we're talking about in this type of program, 02:03:31.250 --> 02:03:33.246 so it would be very difficult. 02:03:33.271 --> 02:03:37.170 Okay, before your next question, I just want you to know, 02:03:37.170 --> 02:03:39.683 I propose we do all the questions and break 02:03:39.695 --> 02:03:42.219 at 1230. I will give you an hour for lunch. 02:03:42.219 --> 02:03:44.170 We'll have the utilities work at 1230. Is 02:03:44.182 --> 02:03:46.239 that an acceptable plan for everybody who's 02:03:46.239 --> 02:03:49.167 waiting to ask their questions? We got one 02:03:49.179 --> 02:03:52.119 for yes. Anybody else for yes? Okay, we'll 02:03:52.119 --> 02:03:54.133 go with Yes. Next up. Thank you. 02:03:54.158 --> 02:03:57.909 Thank you for your time this morning. Roger Lindemann, 02:03:57.909 --> 02:03:59.802 attorney with the UC Berkeley Environmental 02:03:59.814 --> 02:04:01.459 Law Clinic. We represent the Central 02:04:01.459 --> 02:04:03.658 California Asthma Collaborative in this proceeding 02:04:03.670 --> 02:04:05.880 where we've been advocating for more consideration 02:04:05.880 --> 02:04:08.451 of local public health impacts and following 02:04:08.463 --> 02:04:10.989 off of the spot on comments from Leadership 02:04:10.989 --> 02:04:13.670 Council for Justice and Accountability, I 02:04:13.682 --> 02:04:16.439 did want to revisit the cost effectiveness 02:04:16.439 --> 02:04:20.890 issue and glad that most of you, sorry, some of 02:04:20.902 --> 02:04:25.179 you, most of you do mention the consideration 02:04:25.179 --> 02:04:27.969 of environmental or societal cost. How do you 02:04:27.981 --> 02:04:30.539 propose that? And quickly to follow up on 02:04:30.539 --> 02:04:32.922 Dr. Reed's comment about engagement, we have 02:04:32.934 --> 02:04:35.489 requested in prior phases of this proceeding to 02:04:35.489 --> 02:04:38.916 have a workshop or hearing on this matter in 02:04:38.928 --> 02:04:42.519 communities, or in Adak, where these digestive 02:04:42.519 --> 02:04:45.285 facilities will be located in, so definitely 02:04:45.297 --> 02:04:47.889 have to push that points and ask one more 02:04:47.889 --> 02:04:50.053 time. We look forward to commenting more on this, 02:04:50.065 --> 02:04:52.110 but again would like to hear your perspective, 02:04:52.110 --> 02:04:55.811 and finally just illustrate that it is consistent 02:04:55.823 --> 02:04:59.090 with the state's climate policy to consider 02:04:59.090 --> 02:05:02.654 the implication off GHG reduction strategies on 02:05:02.666 --> 02:05:06.019 DAX, another low income communities, rolling 02:05:06.019 --> 02:05:09.459 communities of color. But your proposals though, 02:05:09.471 --> 02:05:12.429 we do look forward to commenting further. 02:05:12.429 --> 02:05:17.653 I'll just say that I'm not in charge, 02:05:17.665 --> 02:05:22.320 but I think having workshops in other places is 02:05:22.320 --> 02:05:25.178 a possibility. I would advise you to put 02:05:25.190 --> 02:05:28.340 that request in your comments, please. Like, 02:05:28.340 --> 02:05:30.218 right, that would great. 02:05:30.243 --> 02:05:32.839 You know, there is this 02:05:32.851 --> 02:05:35.459 question of, you know, sort of complexity 02:05:35.459 --> 02:05:37.608 and what's a pretty small program and things 02:05:37.620 --> 02:05:39.829 like that. But it certainly would be possible 02:05:39.829 --> 02:05:43.222 to within an ordinary solicitation procurement 02:05:43.234 --> 02:05:46.639 program have more than one metric, which would 02:05:46.639 --> 02:05:51.000 be cost. So as I mentioned the CDFA dairy 02:05:51.012 --> 02:05:55.489 digester grant program has some provisions 02:05:55.489 --> 02:05:59.358 So you, you know, in the RPS program, cost 02:05:59.370 --> 02:06:03.071 has been the dominant factor, but that's 02:06:03.071 --> 02:06:05.584 not the only evaluation factor, in that, those 02:06:05.596 --> 02:06:07.959 procurement teams, I mean, there's a lot of 02:06:07.959 --> 02:06:10.442 stuff in there around warranties and other 02:06:10.454 --> 02:06:13.239 provisions in the term structure and everything 02:06:13.239 --> 02:06:15.572 else. It would be possible, potentially to 02:06:15.584 --> 02:06:17.929 put in some scoring preferences would be a 02:06:17.929 --> 02:06:21.231 way to do that. Then it wouldn't be as onerous, 02:06:21.243 --> 02:06:24.280 perhaps because the project proposals would 02:06:24.280 --> 02:06:27.243 have to document and validate that they meet 02:06:27.255 --> 02:06:30.229 certain criteria specified in the evaluation 02:06:30.229 --> 02:06:33.406 criteria in the request for offers. 02:06:33.431 --> 02:06:38.489 That's like similar to the permitting response, though 02:06:38.489 --> 02:06:41.592 it's sort of after the fact, but not in the 02:06:41.604 --> 02:06:44.790 initial determination of cost effectiveness. 02:06:44.815 --> 02:06:46.890 I thin, at a program 02:06:46.890 --> 02:06:50.071 level, it's actually much easier, right? I mean, 02:06:50.083 --> 02:06:52.820 if you just took these different uses and 02:06:52.820 --> 02:06:56.338 renewable gas to, at a portfolio level, apply 02:06:56.350 --> 02:07:00.110 some evaluation of health benefits and community 02:07:00.110 --> 02:07:02.974 impacts, more and more in the air quality 02:07:02.986 --> 02:07:05.930 arena, those health impacts are being more 02:07:05.930 --> 02:07:07.968 and more quantified or denominated in financial 02:07:07.980 --> 02:07:09.860 value. That makes it easier to include them 02:07:09.860 --> 02:07:13.611 in a scoring mechanism, develop it for the other 02:07:13.623 --> 02:07:17.309 things. But I think in deciding, you know, what 02:07:17.309 --> 02:07:20.383 qualifies, what quantities the are, if there's 02:07:20.395 --> 02:07:23.219 any special incentive for one or the other 02:07:23.219 --> 02:07:26.703 form of application, that could be done before 02:07:26.715 --> 02:07:29.840 the fact or factored into a solicitation. 02:07:29.840 --> 02:07:33.112 I'm not sure that the cost effectiveness 02:07:33.124 --> 02:07:36.349 test is the right place to address other environmental 02:07:36.349 --> 02:07:39.876 impacts. And I would say projects that are 02:07:39.888 --> 02:07:43.510 gonna feed into this procurement program if 02:07:43.510 --> 02:07:46.539 there's going to be one, should have to ensure 02:07:46.551 --> 02:07:49.269 that they don't provide any net impact or 02:07:49.269 --> 02:07:52.516 some sort of more of a standard to ensure that 02:07:52.528 --> 02:07:55.579 there's no net impact for local air quality 02:07:55.579 --> 02:07:59.008 or local water quality things like that, because 02:07:59.020 --> 02:08:01.829 I think it's really hard to to shoehorn 02:08:01.829 --> 02:08:04.198 environmental protection into a cost benefit 02:08:04.210 --> 02:08:06.539 analysis. It gets really complicated really 02:08:06.539 --> 02:08:08.827 fast. But I do think any sort of program 02:08:08.839 --> 02:08:11.587 procurement program has to address those issues. 02:08:11.612 --> 02:08:14.879 I'd like to hear from the gentleman from EDF 02:08:14.891 --> 02:08:18.170 who had the societal cost of methane proposal on the table. 02:08:18.170 --> 02:08:23.913 You know, I think there's ways 02:08:23.925 --> 02:08:29.419 of doing this. And I think the point that 02:08:29.419 --> 02:08:33.231 I was trying to make was, if you're going 02:08:33.243 --> 02:08:37.249 to do some sort of carbon adder, don't have 02:08:37.249 --> 02:08:39.775 it be a carbon adder, have it be a methane adder. 02:08:39.787 --> 02:08:41.969 But I mean, it's a really basic point, but 02:08:41.969 --> 02:08:44.949 I actually think it's really important because 02:08:44.961 --> 02:08:47.699 we kind of escape past it in terms of what 02:08:47.699 --> 02:08:50.545 other ways can we use cost effectiveness to account 02:08:50.557 --> 02:08:53.360 for environmental cobenefits, for other pollution, 02:08:53.360 --> 02:08:57.568 for all sorts of other stuff. Luckily, we 02:08:57.580 --> 02:09:01.699 don't have to make a lot of this up from 02:09:01.699 --> 02:09:04.142 scratch, that the Commission has very robust 02:09:04.154 --> 02:09:06.719 cost effectiveness protocols kind of in place. 02:09:06.719 --> 02:09:09.248 I think the question really is what can we 02:09:09.260 --> 02:09:11.920 copy and paste from what's already out there 02:09:11.920 --> 02:09:14.591 and then apply it onto this. And a lot of 02:09:14.603 --> 02:09:17.350 those are demand side management programs. 02:09:17.350 --> 02:09:21.392 But I think they could easily be converted 02:09:21.404 --> 02:09:25.270 over. One other point maybe calling upon 02:09:25.270 --> 02:09:30.079 something that Julia said, I do think we should 02:09:30.091 --> 02:09:34.409 think out, there's a threshold question in 02:09:34.409 --> 02:09:37.019 this program of what is or is not cost effective 02:09:37.031 --> 02:09:39.599 in terms of setting a goal or setting a target? 02:09:39.599 --> 02:09:41.938 And we don't want to be establishing a goal or 02:09:41.950 --> 02:09:44.150 a target for bio methane if it's wildly out 02:09:44.150 --> 02:09:46.366 of control on a cost basis, since we need 02:09:46.378 --> 02:09:48.659 to think about it that way. But then, once 02:09:48.659 --> 02:09:51.809 we think about that threshold, then we have to 02:09:51.821 --> 02:09:54.849 figure out how do we pick the right projects 02:09:54.849 --> 02:09:57.920 that give us all the benefits and sort of maximize 02:09:57.932 --> 02:10:00.531 the investment as much as we can? And then 02:10:00.531 --> 02:10:03.451 I think that's, to Dr Reed's point, did I get 02:10:03.463 --> 02:10:06.650 your last name? Yes? Um, I think that's the point 02:10:06.650 --> 02:10:08.864 of what? Of the scoring criteria for how you 02:10:08.876 --> 02:10:11.300 actually pick the projects, whether it's through 02:10:11.300 --> 02:10:13.714 solicitation through an SOC or through 02:10:13.726 --> 02:10:16.790 something else. So I don't want us to conflate 02:10:16.790 --> 02:10:20.263 what's the cost effectiveness barrier or hurdle 02:10:20.275 --> 02:10:23.760 in terms of establishing, should the Commission 02:10:23.760 --> 02:10:25.995 establish a goal, should the Commission establish 02:10:26.007 --> 02:10:28.030 a a target? And then how do we maximize that 02:10:28.030 --> 02:10:34.196 investment and kind of get all the best bang for the buck? 02:10:34.221 --> 02:10:37.540 Thanks. We're gonna keep going. 02:10:37.540 --> 02:10:41.161 Hello. My name is Giorgio Connely. I'm 02:10:41.173 --> 02:10:44.619 a Economics Major at UC Davis. I wanted to first thank 02:10:44.619 --> 02:10:47.699 all of you for being here. I really appreciate it. 02:10:47.711 --> 02:10:50.560 The stuff you added to this discussion. Thanks 02:10:50.560 --> 02:10:53.796 again for Jamie for leading this a great workshop. 02:10:53.808 --> 02:10:56.420 My specific question is, with respect to 02:10:56.420 --> 02:11:03.960 Julie Levens opening remarks, and you said that if we don't tackle this 02:11:03.960 --> 02:11:07.572 climate change issue, there's gonna be catastrophic 02:11:07.584 --> 02:11:10.650 changes. And I'm glad to be in the state of 02:11:10.650 --> 02:11:13.020 California where we're on the leading 02:11:13.032 --> 02:11:15.800 edge of this, but a lot of the country is 02:11:15.800 --> 02:11:18.817 not doing this. And, Dr Reed, you mention 02:11:18.829 --> 02:11:21.930 path dependence, which indicates that, you 02:11:21.930 --> 02:11:24.969 know, the further we start acting on this 02:11:24.981 --> 02:11:28.249 well, then, you know, the harder it is going 02:11:28.249 --> 02:11:34.499 to be to correct it. And so can you talk about some of those catastrophic changes 02:11:34.499 --> 02:11:37.854 and also how hard it would be to correct if 02:11:37.866 --> 02:11:41.079 we do not start acting on this quickly as 02:11:41.079 --> 02:11:45.302 a nation. And, Ms Tran as an investor, 02:11:45.314 --> 02:11:50.440 you're concerned about costs, and ultimately 02:11:50.440 --> 02:11:53.926 consumers are gonna be paying for the cost. 02:11:53.938 --> 02:11:57.039 And so how is important? How important 02:11:57.039 --> 02:12:00.077 is it for you in your industry that we do 02:12:00.089 --> 02:12:03.139 this quickly? Will that have an impact on 02:12:03.139 --> 02:12:09.173 the long term cost for consumers for energy? Thank you. 02:12:09.198 --> 02:12:13.159 So there was a lot in that question. 02:12:13.159 --> 02:12:15.507 I'm just gonna focus on impacts in California 02:12:15.519 --> 02:12:17.930 because we're already experiencing them. We've 02:12:17.930 --> 02:12:20.986 seen a dramatic shift in marine species, which 02:12:20.998 --> 02:12:23.739 affects fisheries industry, affects ocean 02:12:23.739 --> 02:12:26.289 ecosystems. We've seen increased fluctuation 02:12:26.301 --> 02:12:28.919 in rainfall. You know, we have worse flooding 02:12:28.919 --> 02:12:31.782 in El Nino years. We've had longer, more severe 02:12:31.794 --> 02:12:34.309 droughts. We have invasive species on the 02:12:34.309 --> 02:12:36.846 land and the water that are moving north because 02:12:36.858 --> 02:12:39.199 of climate change. And then we have wildfire 02:12:39.199 --> 02:12:41.503 and increased temperatures which have already 02:12:41.515 --> 02:12:43.780 killed people in California and are directly 02:12:43.780 --> 02:12:48.900 attributable to climate change. And we've barely scratched the surface. It 02:12:48.900 --> 02:12:51.371 is going to get so much worse so fast now. 20 02:12:51.383 --> 02:12:53.920 years ago, I worked for the Union of Concerned 02:12:53.920 --> 02:12:56.550 Scientists and they predicted what, how climate 02:12:56.562 --> 02:12:59.369 change would impact California by 2080. Everything 02:12:59.369 --> 02:13:02.083 they've predicted would happened in 2080 has 02:13:02.095 --> 02:13:04.820 already happened and worse, and I think that 02:13:04.820 --> 02:13:07.703 that is going to be the trend going forward. So 02:13:07.715 --> 02:13:10.550 this is where the cost effectiveness question. 02:13:10.550 --> 02:13:13.258 I agree with all the recommendations to compare to 02:13:13.270 --> 02:13:15.989 other short lived climate pollutant and greenhouse 02:13:15.989 --> 02:13:18.516 gas mitigation measures. But there's a whole 02:13:18.528 --> 02:13:21.010 another component of this, which is what is 02:13:21.010 --> 02:13:24.145 the failure to act cost? So like in the Forest 02:13:24.157 --> 02:13:27.170 Bio mat program on the electricity side, two 02:13:27.170 --> 02:13:29.845 years ago, the utility said over and over again, 02:13:29.857 --> 02:13:32.270 wildfire's not a ratepayer issue. Utilities 02:13:32.270 --> 02:13:35.377 shouldn't have to. Ironic, isn't it? I mean, 02:13:35.389 --> 02:13:38.369 it has been a ratepayer issue for decades. 02:13:38.369 --> 02:13:40.408 The only thing that's changed recently is the 02:13:40.420 --> 02:13:42.249 magnitude because of climate change. And 02:13:42.249 --> 02:13:45.079 I think while the focus here is short lived climate 02:13:45.091 --> 02:13:47.659 pollution reductions, there are a lot of other 02:13:47.659 --> 02:13:50.714 benefits of these projects. And so I do think 02:13:50.726 --> 02:13:53.860 we need to look at the broad range of benefits 02:13:53.860 --> 02:13:55.967 and impacts and minimize those. But I don't 02:13:55.979 --> 02:13:58.001 think there's any question that the costs 02:13:58.001 --> 02:14:00.681 of climate change are so much higher than the 02:14:00.693 --> 02:14:03.150 cost of mitigation, including bio methane 02:14:03.150 --> 02:14:05.422 procurement. 02:14:05.447 --> 02:14:08.792 Not sure if this exactly 02:14:08.804 --> 02:14:12.239 it's the question you were asking. But, you 02:14:12.239 --> 02:14:14.263 know, in terms of, I think you asked about, you 02:14:14.275 --> 02:14:16.099 know, if you're going down a certain path, 02:14:16.099 --> 02:14:20.419 how much it costs to shift, part of what I was talking about is just gasification 02:14:20.419 --> 02:14:22.593 is a pathway, AD is a pathway, electrolysis 02:14:22.605 --> 02:14:24.940 is a pathway. They all carry different carbon 02:14:24.940 --> 02:14:27.098 intensities. But I think to address what I 02:14:27.110 --> 02:14:29.229 think you're asking is to the extent that 02:14:29.229 --> 02:14:32.649 these different pathways are viable, all of 02:14:32.661 --> 02:14:36.170 the ones I showed, there may be others. It's 02:14:36.170 --> 02:14:38.755 important, in my view, to pursue all of them 02:14:38.767 --> 02:14:41.249 to a reasonable degree, piloting and doing 02:14:41.249 --> 02:14:45.116 things to develop early markets and help them 02:14:45.128 --> 02:14:49.429 scale. Because that creates a technology diversity 02:14:49.429 --> 02:14:52.379 that provides the same diversification benefits 02:14:52.391 --> 02:14:55.229 that diversification of a financial portfolio 02:14:55.229 --> 02:14:58.628 provides. It's not quantitatively analyzed 02:14:58.640 --> 02:15:02.050 in the same way, usually, you know, if we, 02:15:02.050 --> 02:15:04.844 are going down a path that's over focused 02:15:04.856 --> 02:15:07.729 on a few technology pathways, and they hit 02:15:07.729 --> 02:15:09.781 a glitch in terms of their cost glide path 02:15:09.793 --> 02:15:11.809 not being what we hoped and were stuck at 02:15:11.809 --> 02:15:13.656 least from a cost perspective. We could even 02:15:13.668 --> 02:15:15.610 be stuck from a perspective of not technically 02:15:15.610 --> 02:15:20.103 being able to meet some of the climate goals 02:15:20.115 --> 02:15:24.219 at the time points plan. Having an issue 02:15:24.219 --> 02:15:26.817 related to a lack of diversity and technology 02:15:26.829 --> 02:15:29.269 will at minimum cost you time. And I think 02:15:29.269 --> 02:15:32.422 if it's unavoidable, fine. But I think it is, 02:15:32.434 --> 02:15:35.530 at least, that risk can be mitigated through 02:15:35.530 --> 02:15:39.313 policy and things like the renewable gas standard 02:15:39.325 --> 02:15:42.969 where, you might argue, you know, we have these 02:15:42.969 --> 02:15:45.569 difficult to decarbonize applications, but we 02:15:45.581 --> 02:15:48.250 don't have to address them until 2030. Waiting 02:15:48.250 --> 02:15:51.724 amplifies the risk of not being able to address 02:15:51.736 --> 02:15:55.440 them in a timely manner, a great deal, so arguably 02:15:55.440 --> 02:15:57.989 more cost effective to put some investment 02:15:58.001 --> 02:16:00.800 into them up front, have them ready and either 02:16:00.800 --> 02:16:05.684 scale their readiness scale when they're needed. 02:16:05.709 --> 02:16:10.169 I would just add with respect. Sorry, Janice. With respect 02:16:10.169 --> 02:16:13.389 to other jurisdictions not taking action 02:16:13.401 --> 02:16:16.949 yet. I do believe that that's why California 02:16:16.949 --> 02:16:19.591 leadership is so important. And developing a 02:16:19.603 --> 02:16:22.139 model that could be exported easily should 02:16:22.139 --> 02:16:24.377 be another goal of this process, because we've 02:16:24.389 --> 02:16:26.400 always said we can't solve the problem by 02:16:26.400 --> 02:16:28.923 ourselves here in California. But we are very 02:16:28.935 --> 02:16:31.360 good at coming up with smart policy design. 02:16:31.360 --> 02:16:34.069 And so I think that should be a goal and renewable 02:16:34.081 --> 02:16:36.429 natural gas is actually something that many 02:16:36.429 --> 02:16:38.562 parts of the country are interested in 02:16:38.574 --> 02:16:41.170 because of the closed waste cycle portion of 02:16:41.170 --> 02:16:44.159 things. And soI think that that's worth highlighting 02:16:44.171 --> 02:16:46.889 too. This is a type of greenhouse gas abatement 02:16:46.889 --> 02:16:49.933 that is attractive even in some very red 02:16:49.945 --> 02:16:53.300 states. And so, you know, we want to see the 02:16:53.300 --> 02:16:56.538 rules around those actions uniform across 02:16:56.550 --> 02:16:59.800 the country. So our members don't have to 02:16:59.800 --> 02:17:03.173 comply with 50 different versions of things, 02:17:03.185 --> 02:17:06.420 and so that we can hope, hopefully achieve 02:17:06.420 --> 02:17:12.057 the least cost path to deploying all these projects quickly. 02:17:12.082 --> 02:17:14.460 Yeah, really quick on the 02:17:14.460 --> 02:17:16.833 transfer of price to consumers. This is why we 02:17:16.845 --> 02:17:19.230 support, like, an LCFS, this is why we support 02:17:19.230 --> 02:17:21.928 The price cap. The reality is that renewable 02:17:21.940 --> 02:17:24.529 natural gas, bio gas in general, will just 02:17:24.529 --> 02:17:28.136 never meet all of California's, like, natural 02:17:28.148 --> 02:17:31.689 gas demand. There's just too much of it. And 02:17:31.689 --> 02:17:33.080 so I think in the best case scenario, maybe 02:17:33.092 --> 02:17:34.399 we can do, I don't know what the numbers 02:17:34.399 --> 02:17:38.205 are, but a portion of it. So then it comes 02:17:38.217 --> 02:17:42.301 down to how does that increase price actually 02:17:42.301 --> 02:17:45.371 tip the point where a customer even cares or 02:17:45.383 --> 02:17:48.260 notices? You know, there's a lot of taxes 02:17:48.260 --> 02:17:50.373 that you see when you go to the pump. That 02:17:50.385 --> 02:17:52.510 doesn't stop you from driving. But at some 02:17:52.510 --> 02:17:54.919 point, you know, it could tip the scale, and 02:17:54.931 --> 02:17:57.460 there could be, you know, a revolt. So I think 02:17:57.460 --> 02:18:00.127 you know where we're coming from. We're so far 02:18:00.139 --> 02:18:02.590 away from that, like, ultimate penetration 02:18:02.590 --> 02:18:05.361 of gas to really matter to the consumer. We're 02:18:05.373 --> 02:18:07.859 not too worried about that, but you know, 02:18:07.859 --> 02:18:11.437 like a price cap prevents that or some types 02:18:11.449 --> 02:18:14.800 of market manipulation type of mechanisms 02:18:14.800 --> 02:18:18.971 could stop that. And we support that. 02:18:18.996 --> 02:18:20.202 Thank you. 02:18:20.227 --> 02:18:23.819 Next, please. Thank you. Very. 02:18:23.819 --> 02:18:28.623 Did you wanna weigh in on that, Michael? (inaudible from off-mic) Great. 02:18:28.635 --> 02:18:33.979 (inaudible from off-mic) That is a great encouraging moat. Next question please. 02:18:33.979 --> 02:18:36.373 Thank you. I'll try to be quick. My 02:18:36.385 --> 02:18:39.000 name is Hassan and Earth Justice, also. My first, 02:18:39.000 --> 02:18:42.097 or I guess I'll just ask one question. But 02:18:42.109 --> 02:18:44.929 yeah, I was thinking a little bit about 02:18:44.929 --> 02:18:47.295 the comments from Leadership Council and how 02:18:47.307 --> 02:18:49.580 we could put in place safeguards to ensure 02:18:49.580 --> 02:18:52.118 that we're not creating profit streams for 02:18:52.130 --> 02:18:54.679 industries that we want to move away from. 02:18:54.679 --> 02:18:57.683 But I guess a more precise question I have is 02:18:57.695 --> 02:19:01.170 thinking about the boundaries of cost effectiveness. 02:19:01.170 --> 02:19:03.683 How would we or do you, do you have any thoughts 02:19:03.695 --> 02:19:06.219 about how we would integrate costs, for example, 02:19:06.219 --> 02:19:09.022 the subsidies to the dairy industry, like, 02:19:09.034 --> 02:19:11.979 it's not a cost that we place on bio methane 02:19:11.979 --> 02:19:15.138 production, but it's a cost that the state 02:19:15.150 --> 02:19:18.099 pays to the source that creates the bio 02:19:18.099 --> 02:19:20.762 or the methane pollution. Along with other 02:19:20.774 --> 02:19:23.200 kinds of pollution. So, is there a way 02:19:23.200 --> 02:19:25.646 we could integrate, for example, the dairy 02:19:25.658 --> 02:19:28.059 industry in California has a 33% producer 02:19:28.059 --> 02:19:31.740 support estimate. It means, like, 33% of its 02:19:31.752 --> 02:19:35.609 revenue, relies on taxpayer money or policies. 02:19:35.609 --> 02:19:38.893 So are those sorts of things going to be accounted 02:19:38.905 --> 02:19:41.620 for in a cost effectiveness estimator? Is 02:19:41.620 --> 02:19:44.637 there a way that we could try to bring in the 02:19:44.649 --> 02:19:47.349 impacts and the costs that the taxpayers 02:19:47.349 --> 02:19:57.280 and ratepayers pay into the assessment of how cost effective abatement? 02:19:57.305 --> 02:20:00.590 I'll get it? There 02:20:00.590 --> 02:20:03.937 was a lot in there, s I'll try my best. I 02:20:03.949 --> 02:20:07.229 think the place to do it is not actually 02:20:07.229 --> 02:20:10.154 in cost effectiveness. I think it's in the 02:20:10.166 --> 02:20:13.239 goal establishment. If you're wanting to say 02:20:13.239 --> 02:20:16.778 that within the goals of where you're procuring 02:20:16.790 --> 02:20:19.750 RNG from for this program, you can then 02:20:19.750 --> 02:20:22.611 specify we want x percent coming from this, 02:20:22.623 --> 02:20:25.170 we already have in state requirements, 02:20:25.170 --> 02:20:27.349 versus out of state requirements as part of the 02:20:27.361 --> 02:20:29.370 program, legislatively. You can place other 02:20:29.370 --> 02:20:31.954 requirements on it as well, and then you let 02:20:31.966 --> 02:20:34.620 utilities do procurement work. So if you want 02:20:34.620 --> 02:20:36.743 a certain amount to be dairies or to not be 02:20:36.755 --> 02:20:38.890 dairies, you know, I think that's something 02:20:38.890 --> 02:20:41.478 that you comment on and let the Commission 02:20:41.490 --> 02:20:44.030 give the direction back to the utilities. 02:20:44.030 --> 02:20:46.782 But I don't think it should be a cost effectiveness 02:20:46.794 --> 02:20:49.080 thing because I think that's gonna distort 02:20:49.080 --> 02:20:54.800 the overall market in ways that we aren't gonna predict. 02:20:54.825 --> 02:20:57.610 Quickly, too, I think there 02:20:57.610 --> 02:21:02.599 would be a lot of jurisdictional challenges for 02:21:02.611 --> 02:21:07.300 that for the CPUC to seek to kind of somehow 02:21:07.300 --> 02:21:09.772 address subsidies that come from other non 02:21:09.784 --> 02:21:12.210 jurisdictional regions in terms of a host 02:21:12.210 --> 02:21:15.475 or a platform for a project. So I would think 02:21:15.487 --> 02:21:18.550 those issues need to be dealt with through 02:21:18.550 --> 02:21:24.990 the venues that provide those subsidies. 02:21:25.015 --> 02:21:33.630 Slightly different perspective. I do think in looking 02:21:33.630 --> 02:21:37.221 cost effectiveness, we should look at all state 02:21:37.233 --> 02:21:40.310 subsidies as part of the equation, maybe 02:21:40.310 --> 02:21:42.476 beyond other state agencies that would be 02:21:42.488 --> 02:21:44.770 outside the purview of the Public Utilities 02:21:44.770 --> 02:21:47.430 Commission. But I do think for dairy projects, 02:21:47.442 --> 02:21:49.830 for diverted organic waste projects, some 02:21:49.830 --> 02:21:51.900 forest projects. They are getting subsidies 02:21:51.912 --> 02:21:53.899 from other agencies. So that and they and 02:21:53.899 --> 02:21:56.334 they are mostly coming from cap and trade 02:21:56.346 --> 02:21:58.909 revenue. So those revenues are also part of 02:21:58.909 --> 02:22:01.355 the state's climate change program, or the 02:22:01.367 --> 02:22:03.710 cap and trade program. So I do think it 02:22:03.710 --> 02:22:05.694 needs to be considered somehow, but I don't 02:22:05.706 --> 02:22:07.520 honestly know the right way to do that. 02:22:07.545 --> 02:22:10.115 Thank you. okay. Working a 02:22:10.127 --> 02:22:12.528 hit. Our last question is really quick. 02:22:12.553 --> 02:22:14.189 All right, I'll make this 02:22:14.189 --> 02:22:17.023 quick. Thanks for being here. I'm Dieter Smiley. 02:22:17.035 --> 02:22:19.590 I work in the CPUC's Energy Division on the 02:22:19.590 --> 02:22:22.791 renewable portfolio standards team. I think this is 02:22:22.803 --> 02:22:25.830 really interesting, great opportunity to address 02:22:25.830 --> 02:22:27.542 some of the non core customer, specifically 02:22:27.554 --> 02:22:29.200 in the heart to decarbonize sectors, like 02:22:29.200 --> 02:22:32.126 industrial and agricultural. I wanted to ask 02:22:32.138 --> 02:22:34.880 you what are the greatest barriers within 02:22:34.880 --> 02:22:38.618 industrial, the industrial sector, that this legislation 02:22:38.630 --> 02:22:41.590 could potentially address, and then, kind of 02:22:41.590 --> 02:22:43.511 in keeping with that, you think a sector 02:22:43.523 --> 02:22:45.739 specific? You kinda touch on this in answering 02:22:45.739 --> 02:22:49.243 Sam's question. But could a sector specific 02:22:49.255 --> 02:22:52.770 policy in this program be used for the pros 02:22:52.770 --> 02:22:55.946 and cons within that as we kinda go forawrd? So, 02:22:55.958 --> 02:22:59.080 the two, the first one is just my own curiosity? 02:22:59.080 --> 02:23:04.042 I'll start by saying, I think that RNG 02:23:04.054 --> 02:23:08.930 is a great way to decarbonize, long lived capital 02:23:08.930 --> 02:23:11.657 stock that industrial facilities have on that 02:23:11.669 --> 02:23:14.170 run on natural gas right now, right? It's 02:23:14.170 --> 02:23:17.583 a drop in substitute fuel that can be use 02:23:17.595 --> 02:23:21.020 quickly by industrial applications and in 02:23:21.020 --> 02:23:22.941 some of these industrial applications, you 02:23:22.953 --> 02:23:25.020 know, to get to the type of processes control 02:23:25.020 --> 02:23:27.333 that they need to have. This is still one 02:23:27.345 --> 02:23:29.780 of the best options is to combust a methane 02:23:29.780 --> 02:23:33.020 molecule. So it should be a renewable methane 02:23:33.032 --> 02:23:35.859 molecule. But, you know, sort of on top 02:23:35.859 --> 02:23:38.592 of that consideration, what we see right now 02:23:38.604 --> 02:23:41.470 is the transport sector's heavily incentivized 02:23:41.470 --> 02:23:43.993 to use RNG. There's some incentive in the 02:23:44.005 --> 02:23:46.359 power sector, and then all these other 02:23:46.359 --> 02:23:49.598 end uses have very little incentive. And we would 02:23:49.610 --> 02:23:52.470 love to fill that in with one comprehensive 02:23:52.470 --> 02:23:55.975 program, rather than 100 little carve outs 02:23:55.987 --> 02:23:59.340 or going sector by sector. So, you know, 02:23:59.340 --> 02:24:01.848 and that was the intent behind 1440, I think, 02:24:01.860 --> 02:24:04.380 was to provide at least some incentive to use 02:24:04.380 --> 02:24:12.081 renewable natural gas across all end uses of fossil gas. 02:24:12.106 --> 02:24:15.729 Okay, let's go to the next 02:24:15.729 --> 02:24:17.262 question. 02:24:17.287 --> 02:24:19.665 Sean Edmond. I'm with Orstead. 02:24:19.677 --> 02:24:21.860 We are a partially state owned utility in 02:24:21.859 --> 02:24:25.047 Europe, recently been expanded into the U. S. 02:24:25.059 --> 02:24:28.120 Market. And my question is very positive to 02:24:28.120 --> 02:24:31.224 see a lot of the initiatives that California's 02:24:31.236 --> 02:24:34.020 putting forward, including, like, SB1440. 02:24:34.020 --> 02:24:36.275 My question is, while I'm glad to see that 02:24:36.287 --> 02:24:38.449 renewable hydrogen is also included, I'm 02:24:38.449 --> 02:24:40.562 kind of surprised to see that there isn't 02:24:40.574 --> 02:24:42.800 much in the way of guidance around how much 02:24:42.800 --> 02:24:45.253 injection standards around renewable hydrogen 02:24:45.265 --> 02:24:47.569 would be acceptable. Because, in our view, 02:24:47.569 --> 02:24:50.182 and what we're currently doing in Europe is 02:24:50.194 --> 02:24:52.760 both renewable hydrogen, through dedicated 02:24:52.760 --> 02:24:55.075 pipe and through mass balance and blending. 02:24:55.087 --> 02:24:57.520 That was what we have determined to be a very 02:24:57.520 --> 02:24:59.856 cost effective approach to starting to get 02:24:59.868 --> 02:25:02.270 more renewable gas into the system. Is that 02:25:02.270 --> 02:25:05.008 something that applies here? And if it does, 02:25:05.020 --> 02:25:07.770 how would we look at it? And under part four 02:25:07.770 --> 02:25:10.521 of the questions, procurement strategy, is contract 02:25:10.533 --> 02:25:12.870 for difference, a mechanism that would also 02:25:12.870 --> 02:25:14.405 be considered. 02:25:14.430 --> 02:25:16.810 Those were great comments that 02:25:16.822 --> 02:25:19.010 you're gonna want to write down and submit 02:25:19.010 --> 02:25:21.850 into the proceeding on January 10th when everybody 02:25:21.862 --> 02:25:24.490 submits their comments. I would also say check 02:25:24.490 --> 02:25:26.823 out Phase 4 where we set a time line for our 02:25:26.835 --> 02:25:28.920 preliminary hydrogen injection standard 02:25:28.920 --> 02:25:31.082 for 12 months. It's coming. Make sure you're 02:25:31.094 --> 02:25:33.220 on the service list. So you get information 02:25:33.220 --> 02:25:35.921 as it comes out. That doesn't answer your question 02:25:35.933 --> 02:25:38.380 specifically. But that's how I'm gonna answer 02:25:38.380 --> 02:25:41.945 it right now. Okay, we'll talk more. Next question, please. 02:25:41.970 --> 02:25:43.609 Yeah. Brennan Brophy, First 02:25:43.609 --> 02:25:46.430 Solar were from the largest solar manufacturers 02:25:46.442 --> 02:25:48.979 in Western Hemisphere. We built about 1\/3 02:25:48.979 --> 02:25:51.157 of the utility scale solar in California. I 02:25:51.169 --> 02:25:53.210 just wanted to echo Dr Reed's comment on 02:25:53.210 --> 02:25:56.370 the importance of including all the renewable 02:25:56.382 --> 02:25:59.279 gases in addition to bio methane. So it's 02:25:59.279 --> 02:26:03.107 interesting that is a virtual, a virtuous cycle 02:26:03.119 --> 02:26:06.479 where, as we reach higher penetrations of 02:26:06.479 --> 02:26:09.904 renewable energy, the curtailment of renewable 02:26:09.916 --> 02:26:13.060 plants provides an opportunity to make gas 02:26:13.060 --> 02:26:16.121 And that. If that's an additional outlet for 02:26:16.133 --> 02:26:19.479 those plants, it makes those plants economically 02:26:19.479 --> 02:26:24.385 viable. Whereas with a lot of containment, they may not be. Thank you. 02:26:24.410 --> 02:26:26.020 Thank you, Tom. You 02:26:26.020 --> 02:26:29.665 want to say your thing before we leave? All 02:26:29.677 --> 02:26:33.250 right. Okay. So it is 1235. I will see you 02:26:33.250 --> 02:26:41.000 back here at 130. We're gonna start with the utility panel. More questions, more 02:26:41.000 --> 02:26:45.521 answers, more discussion. Then you'll be 02:26:45.533 --> 02:26:50.840 dismissed. Thank you very much. See you at 130.