7 Market Gap Analysis and Potential Utility Role SegmentMarket Characteristics Gaps and BarriersPotential Utility Role General  Number of reference installations for pipeline biomethane is very small  European market much more mature  Capital crunch impacting all segments  Opportunity for utilities to support early market development  Proposals need to address ratepayer risk, competitive issues and regulatory timeline WWTFs  Generally knowledgeable about energy matters but not pipeline injection – significant interest in exploring  Many have on-site gen and air emissions issues  Many looking at fuel cell alternatives  Do not want to market gas  Strong credit  Educate on pipeline option  Get initial commercial pilots done quickly using contracts approved by the Commission  Utility owns and operates conditioning facilities and contracts with host for capacity – host owns the gas  Compatible with developer or host participation Dairies  Not in the energy business and don't want to be  Air emission and water quality issues are the dominant concerns  Want end-to-end solution  Weak credit  Educate on pipeline option  Undertake detailed engineering studies on a few clusters  Utility-lead consortium for commercial pilot project(s)  CEC and CPUC support to address technical and commercial risks Large Digester Projects  Capital availability/credit strength a major issue  Many open to utility participation in projects – particularly for conditioning  File project applications using Utility Owned Generation model on project-specific basis
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