The company hopes to deliver up to 3 billion cubic feet of clean-burning natural gas a year to PG&E, enough to power 50,000 homes a day.
"We want to harness the gas and energy of the manure that cows produce and turn it into a revenue source," said Bakersfield attorney David Albers, founder and president of BioEnergy Solutions.
The company plans to cover existing manure holding areas at dairies to trap methane gas created when cow manure breaks down. The gas will be cleaned, or "scrubbed," to meet PG&E standards and then transported to the utility through natural gas pipelines.
Albers said several details about the plan, such as selecting which existing equipment will be used, still need to be worked out.
But he said the company "should be producing gas into a pipeline this summer."
The plan to convert animal waste into natural gas or biogas underscores the growth in local renewable energy programs. Ethanol plants are planned in Delano and Wasco, and at least three groups have expressed interest in building biodiesel plants in Kern County.
"Renewable energy is the next big thing," said Christina Varner, a business developer with the Kern Economic Development Corp. who specializes in renewable energy. "Kern County has the potential to be the center for it."
BioEnergy Solutions, a subsidiary of American Dairy Parks LLC, claims its system can cut a dairy's methane emissions by as much as 70 percent.
Dave Warner, director of permit services in the Fresno office of the San Joaquin Valley Air Pollution Control District, said the system would be more environmentally friendly than digesters used to help dairies create their own power.
Warner said the technology would reduce small amounts of ozone-harming pollution, but would do more to control the escape of greenhouse gases. He compared the overall effect on the Central Valley's poor air quality to a drop in the bucket.
"We need every drop," Warner said. "It is fairly important. But it will take a million of these small things to help the overall air quality."
The BioEnergy Solutions process could help dairies come into compliance with a rule adopted in June by the air control district, regulating confined animal facilities at dairies with more than 1,000 milk cows, Warner said.
It may also help PG&E meet a state requirement to have 20 percent of its power under contract from renewable sources by 2010.
PG&E environmental communications manager Keely Wachs said renewable energy accounts for just less than 12 percent of PG&E's total energy delivered to customers. Biomass - renewable energy sources that include plant matter, wood and waste materials - accounts for only about 4 percent of the total energy delivered to PG&E customers, Wachs said.
"Biomass is a huge component to our renewable energy program," Wachs said. "It is a tremendous source of clean energy. Not only does it burn cleanly, but it is removing methane from the valley. We are thrilled to continue to meet our renewables goals through this partnership."
Neither Albers nor Wachs would disclose the financial terms of the agreement, but Albers said the fixed price is for "above market rates."
BioEnergy Solutions will design, build and maintain the systems on each farm and sell the gas to PG&E. The landowners will receive a share of the revenue created.
The first dairy to start using the program will be third-generation dairyman Albers' own Vintage Dairy in Fresno County.
Albers said he doesn't have any contracts in place with other dairies yet, but he said he has been talking to prospective dairies and is confident he will get enough takers.
"It's really simple," Albers said. "Dairies already have all their manure going to a central location. We will build something at that location. All we are doing is capturing the gas that is produced by the breakdown of the manure. Really we are just collecting gas and providing a revenue stream for the dairies. And all of us win because there's a reduction of greenhouse gases."