Biomethane procurement targets.

Senator Grayson's biomethane procurement legislation modifies California's renewable natural gas framework by revising eligibility requirements and establishing a timeline for utilities to recover infrastructure investments through rates. The bill allows biomethane delivered via common carrier pipelines to qualify by meeting either existing environmental criteria or demonstrating greenhouse gas reductions through conventional natural gas displacement, rather than requiring both conditions.

The legislation directs the Public Utilities Commission to authorize rate recovery by June 2026 for utility investments in biomethane infrastructure, including interconnection equipment between natural gas pipelines and biomethane generation facilities. These investments must provide direct benefits like safety, reliability, or emissions reductions while remaining cost-effective for ratepayers. The bill maintains the commission's existing authority to set procurement targets for gas corporations and core transport agents based on their proportional market share.

For biomethane projects displacing conventional natural gas, the bill requires compliance with federal prevailing wage and apprenticeship standards established in the 2022 Inflation Reduction Act. The legislation preserves the commission's ability to allocate environmental attributes between parties and allows core transport agents to partner with gas corporations to meet procurement obligations, provided costs are appropriately distributed.