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SB-662 Green electrolytic hydrogen.(2019-2020)

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Date Published: 04/30/2019 09:00 PM
SB662:v97#DOCUMENT

Amended  IN  Senate  April 30, 2019
Amended  IN  Senate  April 11, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 662


Introduced by Senator Archuleta
(Coauthors: Senators Jones and Stern)
(Coauthor: Assembly Member Mayes)

February 22, 2019


An act to amend Sections 237.5, 400, 400.3, 740.8, and 740.12 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 662, as amended, Archuleta. Green electrolytic hydrogen.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law requires the PUC and the State Energy Resources Conservation and Development Commission (Energy Commission) to undertake specified actions to advance the state’s clean energy and pollution reduction objectives, including, where feasible, cost effective, and consistent with other state policy objectives, to increase the use of large- and small-scale energy storage with a variety of technologies, including green electrolytic hydrogen, defined as hydrogen gas produced through electrolysis and not from fossil fuel, targeted energy efficiency, demand response, eligible renewable energy resources or other renewable and nonrenewable technologies with zero or lowest feasible emissions of greenhouse gases, criteria pollutants, and toxic air contaminants onsite to protect system reliability.
This bill would additionally require the PUC and Energy Commission to take into account opportunities to increase grid-responsive production of green electrolytic hydrogen for use in the transportation sector.
Existing law requires the PUC, State Air Resources Board (state board), and Energy Commission to consider green electrolytic hydrogen as an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would include use of green electrolytic hydrogen as an alternative transportation fuel as a potential other another potential use for these purposes and would provide that grid-responsive production of green electrolytic hydrogen using excess or low-cost renewable generation and the use of that hydrogen as a mechanism of energy storage to displace the use of fossil fuels to generate electricity and as a transportation fuel are clean energy and pollution reduction objectives and technologies of this state.
The Charge Ahead California Initiative, administered by the State Air Resources Board (state board), among other things, requires the state board to identify and adopt appropriate policies, rules, or regulations to remove regulatory disincentives preventing certain retail sellers of electricity from facilitating the achievement of greenhouse gas emission reductions in nonelectrical industry sectors through increased investments in transportation electrification.
Existing law, enacted as part of the Clean Energy and Pollution Reduction Act of 2015, requires the PUC, in consultation with the Energy Commission and state board, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification, as defined, to achieve specified results. The PUC is required to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, through a reasonable cost recovery mechanism, if they meet specified requirements.
This bill would revise the definition of “transportation electrification” for this purpose to include the use of electricity from sources of green electrolytic hydrogen for use hydrogen, produced as specified, as a transportation fuel. The bill would authorize the PUC to consider proposed programs and investments by an electrical corporation in hydrogen fueling infrastructure and the production of green electrolytic hydrogen as a transportation fuel, via a reasonable cost recovery mechanism, if they meet specified requirements.
Existing law requires that the governing board of a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves specified objectives. Existing law requires that the integrated resource plan address procurement of, among other things, transportation electrification and a diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.
By expanding the definition of transportation electrification the bill would expand the matter that a local publicly owned electric utility must consider when updating an integrated resource plan, thereby imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 237.5 of the Public Utilities Code is amended to read:

237.5.
 “Transportation electrification” means the use of electricity from external sources, including the electrical grid, to power, in whole or in part, vehicles, vessels, trains, boats, or other equipment that are mobile sources of air pollution and greenhouse gases and the related programs and charging, fueling, and propulsion infrastructure investments to enable and encourage this use of electricity. Transportation electrification also includes green electrolytic hydrogen, as defined in Section 400.2, when used as a transportation fuel. For this purpose, green electrolytic hydrogen may not use any feedstock that is a fossil fuel or that causes, creates, or increases emissions of greenhouse gases, criteria air pollutants, or toxic air contaminants, nor may the generation of the electricity used to create the green electrolytic hydrogen cause, create, or increase emissions of greenhouse gases, criteria air pollutants, or toxic air contaminants in a higher amount relative to the generation of the electricity provided to bundled-service customers of electrical corporations.

SEC. 2.

 Section 400 of the Public Utilities Code is amended to read:

400.
 The commission and the Energy Commission shall do all of the following in furtherance of meeting the state’s clean energy and pollution reduction objectives:
(a) Take into account the use of distributed generation to the extent that it provides economic and environmental benefits in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(b) (1) Take into account the opportunities to decrease costs and increase benefits, including pollution reduction and grid integration, using renewable and nonrenewable technologies with zero or lowest feasible emissions of greenhouse gases, criteria pollutants, and toxic air contaminants onsite in proceedings associated with meeting the objectives.
(2) Take into account opportunities to increase grid-responsive production of green electrolytic hydrogen for use in the transportation sector.
(c) Where feasible, authorize procurement of resources to provide grid reliability services that minimize reliance on system power and fossil fuel resources and, where feasible, cost effective, and consistent with other state policy objectives, increase the use of large- and small-scale energy storage with a variety of technologies, including green electrolytic hydrogen, targeted energy efficiency, demand response, including, but not limited to, automated demand response, eligible renewable energy resources, or other renewable and nonrenewable technologies with zero or lowest feasible emissions of greenhouse gases, criteria pollutants, and toxic air contaminants onsite to protect system reliability.
(d) (1) Review technology incentive, research, development, deployment, and market facilitation programs overseen by the commission and the Energy Commission and make recommendations to advance state clean energy and pollution reduction objectives and provide benefits to disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(2) The Energy Commission shall review technology incentive, research, development, deployment, and market facilitation programs operating in California and overseen by academia and the private and nonprofit sectors, and make recommendations to advance state clean energy and pollution reduction objectives and provide benefits to disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(e) To the extent feasible and consistent with the state and federal constitutions, give first priority to the manufacture and deployment of clean energy and pollution reduction technologies that create employment opportunities in California, including high wage, highly skilled employment opportunities, and increased investment in the state.
(f) Establish a publicly available tracking system to provide up-to-date information at least once annually on progress toward meeting the clean energy and pollution reduction goals of the Clean Energy and Pollution Reduction Act of 2015.
(g) (1) Establish a disadvantaged community advisory group consisting of representatives from disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code. The disadvantaged community advisory group shall review and provide advice on programs proposed to achieve clean energy and pollution reduction and determine whether those proposed programs will be effective and useful in disadvantaged communities.
(2) Each member of the disadvantaged community advisory group shall receive per diem and shall be reimbursed for travel and other necessary expenses incurred in the performance of the member’s duties under this section. The total amount of money expended for panel expenses pursuant to this paragraph shall not exceed one hundred thousand dollars ($100,000) per year.
(3) For the purposes of paragraph (2), per diem, travel and other necessary expenses shall be funded equally by the commission and the Energy Commission.

SEC. 3.

 Section 400.3 of the Public Utilities Code is amended to read:

400.3.
 The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage, and shall consider other potential uses of green electrolytic hydrogen, including its use as an alternative transportation fuel. Grid-responsive production of green electrolytic hydrogen using excess or low-cost renewable generation and the use of that hydrogen as a mechanism of energy storage to displace the use of fossil fuels to generate electricity and as a transportation fuel are clean energy and pollution reduction objectives and technologies of this state.

SEC. 4.

 Section 740.8 of the Public Utilities Code is amended to read:

740.8.
 As used in Section 740.3 or 740.12, “interests” of ratepayers, short- or long-term, mean direct benefits that are specific to ratepayers, consistent with both of the following:
(a) Safer, more reliable, or less costly gas or electrical service, consistent with Section 451, including electrical service that is safer, more reliable, or less costly due to either improved use of the electric system or improved integration of renewable energy generation.
(b) Any one of the following:
(1) Improvement in energy efficiency of travel.
(2) Reduction of health and environmental impacts from air pollution.
(3) Reduction of greenhouse gas emissions related to electricity and natural gas production and use.
(4) Increased use of alternative fuels, including green electrolytic hydrogen for the transportation sector.
(5) Creating high-quality jobs or other economic benefits, including in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.

SEC. 5.

 Section 740.12 of the Public Utilities Code is amended to read:

740.12.
 (a) (1) The Legislature finds and declares all of the following:
(A) Advanced clean vehicles, including battery electric and hydrogen fuel cell vehicles, and fuels are needed to reduce petroleum use, to meet air quality standards, to improve public health, and to achieve greenhouse gas emissions reduction goals.
(B) Widespread transportation electrification is needed to achieve the goals of the Charge Ahead California Initiative (Chapter 8.5 (commencing with Section 44258) of Part 5 of Division 26 of the Health and Safety Code).
(C) Widespread transportation electrification requires increased access for disadvantaged communities, low- and moderate-income communities, and other consumers of zero-emission and near-zero-emission vehicles, including battery electric and hydrogen fuel cell vehicles, and increased use of those vehicles in those communities and by other consumers to enhance air quality, lower greenhouse gases emissions, and promote overall benefits to those communities and other consumers.
(D) Reducing emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050 will require widespread transportation electrification.
(E) Widespread transportation electrification requires electrical corporations to increase access to the use of electricity as a transportation fuel.
(F) Widespread transportation electrification should stimulate innovation and competition, enable consumer options in charging and fueling equipment and services, attract private capital investments, and create high-quality jobs for Californians, where technologically feasible.
(G) Deploying electric vehicles should assist in grid management, integrating generation from eligible renewable energy resources, and reducing fuel costs for vehicle drivers who charge in a manner consistent with electrical grid conditions.
(H) Deploying electric vehicle charging and hydrogen fueling infrastructure and producing green electrolytic hydrogen for use in the transportation sector should facilitate increased sales of zero-emission vehicles by making charging and hydrogen fueling easily accessible and should provide the opportunity to access electricity as a fuel that is cleaner and less costly than gasoline or other fossil fuels in public and private locations.
(I) According to the State Alternative Fuels Plan analysis by the Energy Commission and the State Air Resources Board, light-, medium-, and heavy-duty vehicle electrification results in approximately 70 percent fewer greenhouse gases emitted, over 85 percent fewer ozone-forming air pollutants emitted, and 100 percent less petroleum used. These reductions will become larger as renewable generation increases.
(2) It is the policy of the state and the intent of the Legislature to encourage transportation electrification as a means to achieve ambient air quality standards and the state’s climate goals. Agencies designing and implementing regulations, guidelines, plans, and funding programs to reduce greenhouse gas emissions shall take the findings described in paragraph (1) into account.
(b) (1) The commission, in consultation with the State Air Resources Board and the Energy Commission, shall direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative (Chapter 8.5 (commencing with Section 44258) of Part 5 of Division 26 of the Health and Safety Code), and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050. Programs proposed by electrical corporations shall seek to minimize overall costs and maximize overall benefits. The commission shall approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, via a reasonable cost recovery mechanism if they are consistent with this section, do not unfairly compete with nonutility enterprises as required under Section 740.3, include performance accountability measures, and are in the interests of ratepayers as defined in Section 740.8.
(2) The commission may consider proposed programs and investments in hydrogen fueling infrastructure and the production of green electrolytic hydrogen as a transportation fuel via a reasonable cost recovery mechanism if they are safe, cost-effective for ratepayers, do not result in duplicative transportation electrification investments, are consistent with this section, do not unfairly compete with nonutility enterprises as required under Section 740.3, include performance accountability measures, and are in the interests of ratepayers as defined in Section 740.8.
(c) The commission shall review data concerning current and future electric transportation adoption and charging and fueling infrastructure utilization prior to authorizing an electrical corporation to collect new program costs related to transportation electrification in customer rates. If market barriers unrelated to the investment made by an electric corporation prevent electric transportation from adequately utilizing available charging and fueling infrastructure, the commission shall not permit additional investments in transportation electrification without a reasonable showing that the investments would not result in long-term stranded costs recoverable from ratepayers.
(d) This section applies to an application to the commission for transportation electrification programs and investments if one of the following conditions is met:
(1) The application is filed on or after January 1, 2016.
(2) The application is filed before January 1, 2016, but has an evidentiary hearing scheduled on or after July 1, 2016.

SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.