The California Public Utilities Commission (CPUC) took another step deeper Thursday into California’s manure-to-methane potential in the state’s agriculture-rich central valley, approving a 10-year contract between Pacific Gas and Electric Co. (PG&E) and Microgy Inc. for up to 2.8 Bcf of “renewable natural gas.” (RNG) The vote of the five-member CPUC was unanimous.

“Deliveries from this contract are reasonably priced, and the contract price is fully recoverable in rates during the life of the contract, subject to the commission review of PG&E’s administration of the contract,” the CPUC said. “This resolution finds that certain material filed under seal pursuant to the Public Utilities Code [Section 583] should be kept confidential to ensure that market-sensitive data does not influence the behavior of bidders in future renewable portfolio standard [RPS] solicitations.”

Microgy, a farm waste energy producer and subsidiary of Environmental Power Corp., is a New Hampshire-based producer of biogas and waste coal power projects. Supplies will come from four Microgy facilities in California. Initial deliveries are to begin in August 2010.

Under a deal signed in October, PG&E will purchase the RNG from four production facilities that Microgy will build on large dairy farms, interconnecting those systems to the utility’s extensive natural gas pipeline network serving the northern and central portions of California. Along with the renewable energy benefits, the utility said the dairy-based facilities produce “significant” greenhouse gas benefits.

PG&E signed another big manure-to-methane deal Feb 12, inking a second 10-year deal for up to 3 Bcf of RNG annually from BioEnergy Solutions. As with the Microgy deal, the price and other terms of the agreement were kept confidential (see Daily GPI, Feb. 13).

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