California's PG&E agrees to buy manure-generated power

California electric utility giant Pacific Gas & Electric Co. signed an agreement Oct. 12 to buy biogas generated from manure at California dairies.

PG&E signed the deal with Microgy, Inc., a subsidiary of Environmental Power Corporation, to deliver renewable natural gas. The agreement

That would be enough to power 50,000 homes, she said.

Microgy plans to construct production facilities on four large dairy farms in California and interconnect those systems to PG&E's extensive gas pipeline network, said Chiu. She said the price paid for the dairy-generated power was not being disclosed.

Chiu said the first of the four biogas sites will be connected to Joseph Gallo Farms, a large dairy complex near Atwater. It's made up of five dairies and 17,000 milking cows.

Carl Morris, general manager of Joseph Gallo Farms, confirmed that the dairy had signed an agreement with Microgy. "We'll supply the manure, and Microgy will get the biogas cleaned and put into the PG&E pipeline," Morris said. "We're teaming up with Microgy to handle the project and project costs."

Although Joseph Gallo Farms already operates its own methane digester, Morris said Microgy would build another digester onsite using a different technology from the dairy's existing one.

Morris said there were still "lots of interim steps" to be completed before the project goes online. They would include getting permit approval from various county, water and air quality boards. Gallo said that would take several months.

"This is only a pilot program," Chiu said. "If it's successful and produces reliable renewable energy, then we see great potential in it."

"The state of California is both the largest dairy producer and the largest energy consumer in the United States," said Rich Kessel, president and CEO of Environmental Power. "This agreement is an important step toward developing an important renewable energy source from California's vital agricultural sector."

"We're excited about the opportunity this presents to make these renewable energy projects work economically for both dairies and utilities," said Michael Marsh, CEO of Western United Dairymen. "This is a market-based solution, which we prefer over mandates."

PG&E serves 15 million people in the northern and central sections of the state. Microgy builds, owns and operates anaerobic digestion and energy production facilities that use agricultural and food by-product waste to create biogas.