An act to amend Sections 651 and 784.2 of the Public Utilities Code, relating to energy.
SB 377 would revise California’s biomethane procurement framework for gas corporations and core transport agents. It changes the eligibility rules for biomethane delivered through a common carrier pipeline by requiring that it meet either of two existing conditions, rather than both, and it adds a new qualifying environmental benefit: the displacement of conventional natural gas that reduces greenhouse gas emissions. The bill also directs the Public Utilities Commission (PUC), by June 1, 2026, to allow recovery in rates for certain utility investments that connect natural gas infrastructure to biomethane generation and collection equipment, including interconnection and gathering-line infrastructure for dairy cluster projects.
The measure is framed as a climate and affordability bill. Its findings state that California should reduce fossil gas use, lower project timelines and costs, and make it easier for utilities to invest in renewable natural gas interconnections. It also notes that utility rate-basing of interconnections would avoid a tax treatment that applies to private biomethane projects, which the bill’s author argues would lower procurement costs for utilities and save ratepayers money. In practical terms, SB 377 would strengthen the state’s support for biomethane as a resource for meeting greenhouse gas reduction goals while shifting more of the associated infrastructure costs into utility rates.
In terms of state law, SB 377 amends Public Utilities Code Sections 651 and 784.2. It preserves the PUC’s role in setting biomethane procurement targets in consultation with the State Air Resources Board, but makes the procurement rules more flexible for common-carrier pipeline deliveries and expands the list of environmental benefits that can qualify biomethane for procurement programs. It also converts what had been a discretionary PUC consideration about rate recovery for biomethane-related infrastructure into a mandatory requirement by a specified date. The bill would affect gas corporations, core transport agents, biomethane developers, and utility ratepayers.
The overall sentiment reflected in the bill text is supportive of biomethane development, utility investment, and greenhouse gas reduction. There is no recorded committee transcript or vote history in the provided materials, so there is no documented public debate to indicate opposition or support beyond the bill’s stated policy rationale. The absence of recorded votes or hearing discussion limits the ability to assess broader legislative sentiment, but the introduced and amended language suggests the bill was advanced as a pro-biomethane, pro-infrastructure measure.
The main point of contention implied by the bill is cost allocation. Supporters would likely emphasize lower interconnection costs, faster project development, and climate benefits, while critics could focus on whether ratepayers should bear the cost of utility infrastructure for biomethane projects and whether the expanded eligibility rules could broaden procurement beyond the most direct California environmental benefits. Another possible issue is whether the bill weakens prior safeguards by allowing common-carrier biomethane to qualify under either injection-location criteria or environmental-benefit criteria, rather than requiring both.
SB 377 would amend the Public Utilities Code to broaden biomethane procurement eligibility and require the PUC to permit rate recovery for specified biomethane interconnection and gathering-line investments by June 1, 2026. It would affect the rules governing gas corporations and core transport agents, expand the environmental-benefit test for biomethane procurement, and make utility rate-basing of certain biomethane infrastructure mandatory rather than optional. The bill would also create a state-mandated local program in the event of enforcement actions under the Public Utilities Act, while declaring that no reimbursement is required.
The bill appears generally favorable toward biomethane development, utility infrastructure investment, and greenhouse gas reduction, with an emphasis on affordability for ratepayers. The legislative findings present the measure as a way to reduce costs and speed deployment of renewable natural gas projects. No committee transcript or vote record was provided, so there is no direct evidence of opposition or support from hearings; however, the bill’s structure and findings indicate a pro-development, pro-climate policy orientation.
The likely contention centers on who pays for biomethane infrastructure and how broadly biomethane should qualify for procurement programs. Ratepayer advocates or consumer-focused critics may question mandatory rate recovery for utility investments and whether those costs are prudent and directly beneficial to all classes of ratepayers. Environmental or regulatory skeptics may also question the relaxation of common-carrier pipeline eligibility standards and the addition of conventional natural gas displacement as a qualifying environmental benefit, arguing that the bill could expand procurement eligibility beyond the most clearly California-specific environmental outcomes.