Biomethane Monetary Incentive Program

In 2015, pursuant to California Public Utilities Commission (CPUC) Decision 15-06-029, the CPUC adopted the biomethane interconnector monetary incentive program1. The objective of the program is to encourage the development of biomethane projects that are interconnected to the utilities’ gas pipeline systems. The initial incentive program contributed up to 50 percent of the interconnection costs, with a cap of $1.5 million per project. The statewide funding for the monetary incentive program was capped at $40 million.

On September 24, 2016, the interconnector monetary incentive program was modified when Gov. Jerry Brown signed AB 2313 into law.  The senate bill increased the maximum funding for this incentive program up to $3 million per project. This bill also allowed for dairy cluster projects, defined as three or more dairies in close proximity, to include gathering line costs as a qualifying interconnection expense, and increased the maximum incentive for these projects to $5 million per project.

D.19-12-009 implemented an Incentive Reservation System for the biomethane monetary incentive program established as part of D.15-06-029. This Incentive Reservation System allows project developers to reserve incentive funds during the development phase of a project and receive the funds once the project is interconnected and operating.

The CPUC authorized an additional $40 million in funding from gas utility Cap-and-Trade auction proceeds, bringing total funding to $80 million. The collective allocation of the additional $40 million in additional incentive spending is distributed across each of California four large gas utilities’ service territories consistent with each gas utility’s respective percentage of their combined CARB allocation of Cap-and-Trade allowances:

  • SoCalGas: $19,704,000 (49.26 percent of $40 million)
  • PG&E: $16,936,000 (42.34 percent of $40 million)
  • SDG&E: $2,708,000 (6.77 percent of $40 million)
  • SWG: $652,000 (1.63 percent of $40 million)

The monetary incentive is available to eligible Biomethane Interconnectors until December 31, 2026, or until the program has exhausted its available funds.  The program is described in detail in SoCalGas’ Rule 45.

Biomethane Interconnection Incentive Reservation

SoCalGas has been authorized to provide an incentive towards the cost of a biomethane or renewable natural gas (RNG) interconnection. This incentive is for 50% of the qualifying costs, up to $3 million; or, up to $5 million for a dairy cluster of at least three dairy digesters. Further information, including the definition of a qualifying cost, may be found in Tariff Rule 45.

In order to reserve your incentive, please complete the Incentive Reservation form.

Please note that this Advice Letter was filed jointly with the gas utilities in California (SoCalGas, SDG&E, PG&E and Southwest Gas); therefore, you will see references to other utilities; and, was authorized by the PUC in D19-12-009*.

Applications are now open; however, the Detailed Engineering Study must be fully funded and executed before the CPUC will award a reservation.

When you have completed the application, email it to Upon receipt of your application, SoCalGas will verify that a Detailed Engineering Study has been fully executed and funded. Upon verification, your application will be delivered to the Energy Division of the California Public Utilities Commission and placed on the reservation queue.

If you need assistance, please contact your SoCalGas representative, or email your question to

1This program is funded by California utility customers and administered by Southern California Gas Company (SoCalGas®) under the auspices of the California Public Utilities Commission. Program funds, including any funds utilized for rebates or incentives, will be allocated on a first-come, first-served basis until such funds are no longer available. This program may be modified or terminated without prior notice
The information contained herein is made available solely for informational purposes. Although SoCalGas has used reasonable efforts to assure the accuracy of the information at the time of its inclusion, no express or implied representation is made that it is free from error or suitable for any particular use or purpose. SoCalGas assumes no responsibility for any use thereof by you, and you should discuss decisions related to this subject with your own advisors and experts.