PG&E officials said the utility signed a deal with Microgy Inc., a subsidiary of Portsmouth, N.H.-based Environmental Power Corp., to buy enough biomethane to power an estimated 50,000 homes.
The agreement represents the PG&E's first purchase of natural gas generated from cow patties. Manure-derived methane could make up a larger share of the San Francisco-based utility's electricity supply if the pilot project is successful, said spokeswoman Darlene Chiu.
The deal could help increase the percentage of PG&E's electricity generated from clean, renewable sources such as wind and solar. Currently, about 12 percent of its electricity comes from renewables. Under state law, state utilities are required to boost that percentage to 20 percent by 2010.
Microgy Inc. plans to build four plants to convert manure into biomethane on large dairy farms in California. Those plants will be connected to PG&E's network of natural gas pipelines.
"The state has no shortage of dairy manure, and it can now be cost-effectively converted into cow power," said Allen Dusault, biofuels project director for the environmental group, Sustainable Conservation. "That makes good environmental and economic sense."