BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1709
                                                                  Page  1

          Date of Hearing:   June 28, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                    SB 1709 (Kelley) - As Amended:  May 16, 2000 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            10-0 (Consent)

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill clarifies that providers of digestive gas technologies  
          are exempt from regulation by the Public Utilities Commission  
          (PUC) by exempting such providers from the definition of an  
          electrical corporation.

           FISCAL EFFECT  

          The PUC indicates negligible fiscal impact.

           COMMENTS  

           1)Background  .  Digester gas is the methane (natural gas) that  
            comes from the treatment or decomposition of organic  
            materials.  Water treatment plants and sewage treatment  
            facilities are the major sources of digester gas.  Methane gas  
            in the digester process can be disposed of in one of three  
            ways:  it can be vented into the atmosphere, burnt in a flare,  
            or used to generate electricity.  

           2)Purpose  .  The Association of California Water Agencies  
            indicates that this bill is intended to make it economical for  
            them to use the methane gas to generate electricity.  The  
            sponsor notes that several water treatment facilities capture  
            gas that would otherwise be burned and released into the open  
            air and, using digester gas technology, are instead generating  
            electrical power for their own use and for sale to others.  
            This bill also provides that biofuel produced as digester gas  
            would be exempted from the definition of an electrical  
            corporation so long as the electricity is generated for  
            specified purposes.








                                                                  SB 1709
                                                                  Page  2


           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081