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The agreement of the gas purchase with Microgy, Inc. will deliver up to 8,000 Mcf (1,000 Cubic Feet) of pipeline quality renewable natural gas every day. The methane gas, captured from cow manure, will be generated by Microgy's facilities in California.

Mircrogy plans to construct four production facilities on the site of large dairy farms in California and interconnect those systems to PG&E's extensive gas pipeline network. In addition to producing renewable energy, each of these facilities can produce significant greenhouse gas benefits by capturing methane from cow manure.

Roy Kuga,  PG&E vice president of energy supply, said:
"Biogas is a triple win for California. It delivers clean, renewable energy to our customers, improves the air quality of the communities we serve and provides farmers with a new revenue stream that would otherwise go unutilised."

Cow power is the newest and most innovative way PG&E is realising its renewable energy goals. As Microgy constructs state-of-the-art gas-generating facilities on dairy farms across the central valley, California consumers will benefit from a new source of renewable, environmentally-friendly energy. PG&E is also exploring other projects that will demonstrate the viability of converting biomethane to pipeline quality gas for use in power plants.

PG&E currently supplies 12 percent of its energy from qualifying renewable sources under California's Renewable Portfolio Standard (RPS) programme. With more than 50 percent of the energy PG&E delivers to its customers coming from generating sources that emit no carbon dioxide, PG&E provides among the cleanest energy in the nation. PG&E continues to aggressively add renewable resources and is on target to exceed 20 percent under contract or delivered by 2010.