Agricultural Biomass to Energy Program

Summary

The Agricultural Biomass to Energy Program (AgBio Program) was created to help improve the air quality in California's agricultural areas by reducing the amount of agricultural fuels that are open-field burned. Senate Bill 704 (SB 704, Florez, Statutes of 2003, Chapter 480), enacted into law on September 22, 2003, directs the Energy Commission to design and implement the program, which includes providing financial incentives to eligible biomass facilities for each green ton of qualified agricultural biomass purchased and converted into energy by the facility from July 1, 2003 through June 30, 2004. The financial incentive is fixed at $10 per green ton. Only facilities whose qualified agricultural biomass purchases exceed by at least 10 percent their five-year average of qualified purchases prior to July 1, 2000, are eligible to receive any funding. The AgBio Program is funded under SB 704 with funds redirected from the Renewable Resources Trust Fund. Those funds are collected from the ratepayers of the three largest investor-owned utilities (IOU) in California to support existing, new, and emerging renewable electricity generation technologies. Funding for the program of $6 million will be provided. A biomass facility eligible for the incentive would be a power plant that combusts organic materials not derived from fossil fuels to generate electricity. Qualified Agricultural Biomass (QAB) are agricultural residues that are purchased after July 1, 2003, that historically have been open-field burned in the jurisdiction of the air district from which the agricultural residues are derived, as determined by the air district, excluding urban and forest wood products, that include either of the following: -Field and seed crop residues, including but not limited to, straws from rice and wheat. -Fruit and nut crop residues, including, but not limited to, orchard and vineyard pruning and removals. Facilities eligible for the incentive must meet the following requirements: -Be located in California; -As of July 1, 2003, converted and continues to convert QAB to electrical energy; -Permitted with best available control technology (BACT) to reduce emissions, as determined by the Air District in which the facility is located; -Emissions control equipment is in good working order and in compliance with its operating permit -Is not receiving banked Emission Reduction Credits for QAB for which the facility is requesting incentive payments; and -Increased its purchases of QAB by at least 10 percent as compared to the average annual tonnage purchased in the five years of operation prior to the implementation of the AgBio Program in July 2000.