California has authorized Sempra Energy’s two state utilities to begin a three-year voluntary pilot program that would offer renewable natural gas (RNG) to residential and small commercial/industrial customers.

Southern California Gas Co. (SoCalGas) and San Diego Gas and Electric Co. (SDG&E) were approved to begin the $2 million demonstration by the California Public Utilities Commission (CPUC). Regulators did not act on a broader settlement between the utilities with 17 stakeholders; the pilot includes elements of the agreement.

“We start with the program proposed in the settlement because it provides a good structure and reasonably addresses numerous issues,” CPUC stated. The order outlines requirements for RNG procurement, measuring carbon intensity, rate cost recovery...