SENATE BILL NO. 138

February 16, 2021, Introduced by Senator OUTMAN and referred to the Committee on Energy and Technology.

"Clean and renewable energy and energy waste reduction act,"

by amending sections 7 and 9 (MCL 460.1007 and 460.1009), as amended by 2016 PA 342, and by adding part 8.

the people of the state of michigan enact:

Sec. 7. As used in this act:

(a) "Gasification" means the thermochemical process performed by a gasification facility.

(b) (a) "Gasification facility" means a facility located in this state that, using a thermochemical process that does not involve direct combustion, produces synthesis gas, composed of carbon monoxide and hydrogen, from carbon-based feedstocks (such as coal, petroleum coke, wood, biomass, hazardous waste, medical waste, industrial waste, and solid waste, including, but not limited to, municipal solid waste, electronic waste, and waste described in section 11514 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.11514,) and that uses the synthesis gas or a mixture of the synthesis gas and methane to generate electricity for commercial use. Gasification facility includes the transmission lines, gas transportation lines and facilities, and associated property and equipment specifically attributable to such a facility. Gasification facility includes, but is not limited to, an integrated gasification combined cycle facility and a plasma arc gasification facility.

(c) (b) "Incremental costs of compliance" means the net revenue required by an electric provider to comply with the renewable energy standard, calculated as provided under section 47.

(d) (c) "Independent transmission company" means that term as defined in section 2 of the electric transmission line certification act, 1995 PA 30, MCL 460.562.

(e) (d) "Integrated gasification combined cycle facility" means a gasification facility that uses a thermochemical process, including high temperatures and controlled amounts of air and oxygen, to break substances down into their molecular structures and that uses exhaust heat to generate electricity.

(f) (e) "Integrated pyrolysis combined cycle facility" means a pyrolysis facility that uses exhaust heat to generate electricity.

(g) (f) "LEED" means the leadership Leadership in energy Energy and environmental design Environmental Design green building rating system developed by the United States Green Building Council.

(h) (g) "Load management" means measures or programs that target equipment or behavior to result in decreased peak electricity demand such as by shifting demand from a peak to an off-peak period.

(i) (h) "Megawatt", "megawatt hour", or "megawatt hour of electricity", unless the context implies otherwise, includes the steam equivalent of a megawatt or megawatt hour of electricity.

(j) (i) "Modified net metering" means a utility billing method that applies the power supply component of the full retail rate to the net of the bidirectional flow of kilowatt hours across the customer interconnection with the utility distribution system, during a billing period or time-of-use pricing period. A negative net metered quantity during the billing period or during each time-of-use pricing period within the billing period reflects net excess generation for which the customer is entitled to receive credit under section 177(4). Under modified net metering, standby charges for distributed generation customers on an energy rate schedule shall be equal to the retail distribution charge applied to the imputed customer usage during the billing period. The imputed customer usage is calculated as the sum of the metered on-site generation and the net of the bidirectional flow of power across the customer interconnection during the billing period. The commission shall establish standby charges under modified net metering for distributed generation customers on demand-based rate schedules that provide an equivalent contribution to utility system costs. A charge for net metering and distributed generation customers established pursuant to section 6a of 1939 PA 3, MCL 460.6a, shall not be recovered more than once. This subdivision is subject to section 177(5).

Sec. 9. As used in this act:

(a) "Natural gas provider" means an investor-owned business engaged in the sale and distribution at retail of natural gas within this state whose rates are regulated by the commission.

(b) "Pet coke" means a solid carbonaceous residue produced from a coker after cracking and distillation from petroleum refining operations.

(c) "Plasma arc gasification facility" means a gasification facility that uses a plasma torch to break substances down into their molecular structures.

(d) "Provider" means an electric provider or a natural gas provider.

(e) "PURPA" means the public utility regulatory policies act of 1978, Public Law 95-617.

(f) "Pyrolysis" means the thermochemical decomposition process performed by a pyrolysis facility.

(g) (f) "Pyrolysis facility" means a facility that effects thermochemical decomposition at elevated temperatures without the participation of oxygen, from carbon-based feedstocks including, but not limited to, coal, wood, biomass, industrial waste, or solid waste, but not including pet coke, hazardous waste, coal waste, or scrap tires. Pyrolysis facility includes the transmission lines, gas transportation lines and facilities, and associated property and equipment specifically attributable to the facility. Pyrolysis facility includes, but is not limited to, an integrated pyrolysis combined cycle facility.

PART 8

RENEWABLE NATURAL GAS

Sec. 221. As used in this part:

(a) "Biogas" means gas that is generated from biomass through anaerobic digestion, gasification, pyrolysis, or other technology.

(b) "Renewable natural gas" means biogas that has been processed to be interchangeable with conventional natural gas and meet pipeline quality standards or transportation fuel grade requirements.

Sec. 223. (1) The commission shall develop and periodically update an inventory of biogas and renewable natural gas resources available to this state. The inventory shall include, but need not be limited to, the following:

(a) A list of the potential biogas and renewable natural gas sources in this state and the estimated potential production quantities available at each source.

(b) An estimate of the energy content of listed potential biogas and renewable natural gas sources.

(c) An estimate of the range of conversion technologies available to this state for renewable natural gas production, such as anaerobic digestion and gasification.

(d) A list of biogas production sites in this state that includes both of the following:

(i) The location of each site.

(ii) An assessment of the supply-chain infrastructure associated with each site.

(2) The commission shall utilize the inventory under subsection (1) and any other relevant information as considered necessary by the commission to develop and periodically update estimates of each of the following:

(a) The quantity of renewable natural gas that could be produced in this state and delivered for use as transportation fuel in the form of compressed natural gas or liquefied natural gas.

(b) The quantity of renewable natural gas that could be produced in this state and delivered for use by residential, commercial, or industrial consumers of natural gas.

(d) The potential for renewable natural gas in this state to improve air quality.

(e) The technical, market, policy, and regulatory barriers to developing and utilizing renewable natural gas in this state.

(3) The commission shall appoint an advisory committee to assist in developing and periodically updating the inventory required by this section. The committee shall include, but not be limited to, persons familiar with the renewable natural gas industry. The committee shall make recommendations to the commission on all of the following:

(a) Identifying and removing barriers to producing and utilizing biogas and renewable natural gas in this state as a means of maximizing improvements in air quality and reductions in greenhouse gas emissions.

(b) Policies to promote renewable natural gas.

(4) By January 1, 2022, the commission shall develop the initial inventory required by subsection (1) and submit a report on the initial inventory to the standing committees of the senate and house of representatives with primary responsibility for energy and environmental issues.

Enacting section 1. This amendatory act takes effect 90 days after the date it is enacted into law.