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SB-1369 Energy: green electrolytic hydrogen.(2017-2018)

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Date Published: 08/06/2018 02:00 PM
SB1369:v94#DOCUMENT

Amended  IN  Assembly  August 06, 2018
Amended  IN  Assembly  June 27, 2018
Amended  IN  Assembly  June 13, 2018
Amended  IN  Senate  May 02, 2018
Amended  IN  Senate  April 11, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1369


Introduced by Senator Skinner
(Coauthor: Senator Hertzberg)

February 16, 2018


An act to add Section 25604 to the Public Resources Code, and to add Section 936 to amend Section 400 of, and to add Section 400.2 to, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1369, as amended, Skinner. Energy: 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.

The Warren-Alquist State Energy Resources Conservation and Development Act establishes the State Energy Resources Conservation and Development Commission (Energy Commission). Existing law requires the Energy Commission to carry out technical assessment studies on all forms of energy and energy-related problems, in order to influence federal research and development priorities and to be informed on future energy options and their impact, including, among other things, the use of hydrogen as an energy form.

The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board (state board) as the state agency responsible for monitoring and regulating sources emitting greenhouse gases and requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit to be achieved by 2020 equivalent to the statewide greenhouse gas emissions levels in 1990, and to ensure that statewide emissions of greenhouse gases are reduced to at least 40% below the statewide greenhouse gas emissions limit no later than December 31, 2030.
This bill would require the Energy Commission, state board, in consultation with the PUC and the State Air Resources Board (state board), PUC, to develop up to 3 green electrolytic hydrogen pilot projects meeting certain criteria by January 1, 2021, to produce green electrolytic hydrogen, as defined, and to evaluate methods for reducing the cost and energy intensity of producing that hydrogen. The bill would require that the pilot projects be funded from moneys that are dedicated for research and development pursuant to the Electric Program Investment Charge Fund. by the state board, to the extent funding is available.

Existing law requires the PUC to adopt a process for each load-serving entity, defined as including electrical corporations, electric service providers, and community choice aggregators, to file for approval an integrated resource plan and a schedule for periodic updates to the plan to ensure that load-serving entities accomplish specified objectives. 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 local publicly owned electric utility integrated resource plans and any updates be filed with the Energy Commission, and requires the Energy Commission to review the plans and plan updates and, if the Energy Commission determines a plan or plan update is deficient, to provide recommendations to correct the deficiencies.

The California Global Warming Solutions Act of 2006 establishes the state board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases and requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit to be achieved by 2020, equivalent to the statewide greenhouse gas emissions levels in 1990. Amendments to the act require the state board to ensure that statewide emissions of greenhouse gases are reduced to at least 40% below the statewide greenhouse gas emissions limit no later than December 31, 2030.

This bill would require the PUC, when evaluating an integrated resource plan filed after January 1, 2021, by a load-serving entity, and the Energy Commission, when reviewing an integrated resource plan filed after January 1, 2021, by a local publicly owned electric utility, to consider the existing and potential uses for green electrolytic hydrogen in meeting the statewide greenhouse gas emissions limits approved by the state board, including the procurement of green electrolytic hydrogen for energy storage and to displace the use of fossil fuels in the electrical industry.

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, increasing the use of large- and small-scale energy storage with a variety of technologies.
This bill would specify green electrolytic hydrogen as one of these energy storage technologies to be targeted for increased use.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Green electrolytic hydrogen, which is hydrogen gas produced through electrolysis, has become more available and cost effective due to the successful development of new low-cost renewable energy resources, like solar and wind.
(b) Green electrolytic hydrogen production optimizes valuable eligible renewable energy resources, particularly intermittently generated electricity by converting electricity to green electrolytic hydrogen.
(c) Green electrolytic hydrogen will be an important resource to assist the state to maximize intermittent electricity generation and energy storage for short-term, long-term, and seasonal storage applications in the future, as the electrical systems integrates higher levels of intermittent low-cost electricity from eligible renewable energy resources.
(d) California’s goals for reducing emissions of greenhouse gases can be served by utilizing, to the maximum extent possible, eligible renewable energy resources either directly to serve consumers of electricity or indirectly through green electrolytic hydrogen production to replace existing natural gas applications, including displacing natural gas, gasoline, or other fossil fuel-derived gases for electric generation, heating sources, transportation fuels, and other industrial practices.
(e) Green electrolytic hydrogen can assist with reducing emissions of greenhouse gases by leveraging the success of the California Renewables Portfolio Standard Program to further reduce emissions of greenhouse gases and criteria air pollutants from other sectors, including the gas and transportation sectors, as an important next step for deeper decarbonization across all economic sectors to meet the state’s overall goals for reducing emissions of greenhouse gases.
(f) Electrification is an established pathway for reducing emissions of greenhouse gases in California, and green electrolytic hydrogen will contribute to the electrification of more energy loads across the power generation, industrial, heating and transportation sectors.
(g) Green electrolytic hydrogen is an effective means of displacing natural gas use for generation of electricity and leveraging available capacity in the transmission and distribution system.
(h) Utilizing existing energy infrastructure to produce produce, store, or use green electrolytic hydrogen will benefit consumers by avoiding new, redundant, and excess energy infrastructure and optimizing the use of current system investments.

SEC. 2.

 Section 25604 is added to the Public Resources Code, to read:

25604.
 (a) For purposes of this section, “green electrolytic hydrogen” means hydrogen gas produced through electrolysis and does not include hydrogen gas manufactured using steam reforming or some any other conversion technology that produces hydrogen from a fossil fuel feedstock.
(b) The commission, State Air Resources Board, in consultation with the Public Utilities Commission and the State Air Resources Board, Commission, shall develop up to three green electrolytic hydrogen pilot projects by January 1, 2021, to produce green electrolytic hydrogen and to evaluate methods for accomplishing both of the following:
(1) Reducing the costs of producing green electrolytic hydrogen.
(2) Reducing the energy intensity associated with the production of green electrolytic hydrogen.
(c) A pilot project shall meet the following criteria:
(1) Have a capacity no greater than five megawatts, unless the commission determines that higher usage is appropriate.

(2)Utilize electricity from zero-carbon electricity resources. For these purposes, a “zero-carbon electricity resource” means a facility that produces electricity in a manner that does not produce emissions of greenhouse gases.

(3)

(2) Facilitate reductions in emissions of greenhouse gases and criteria air pollutants.

(4)

(3) Produce electrical system benefits and reduce fossil fuel derived natural gas usage.
(d) The pilot projects shall be distributed among various load-serving entities, as defined in Section 380 of the Public Utilities Code.
(e) The pilot projects shall only be funded from moneys that are dedicated for research and development pursuant to Chapter 8.1 (commencing with Section 25710). by the state board, to the extent funding is available.

SEC. 3.Section 636 is added to the Public Utilities Code, to read:
636.

(a)For purposes of this section, “green electrolytic hydrogen” means hydrogen gas produced through electrolysis and does not include hydrogen gas manufactured using steam reforming or some other conversion technology that produces hydrogen from a fossil fuel feedstock.

(b)The commission, when evaluating an integrated resource plan filed after January 1, 2021, by a load-serving entity pursuant to Section 454.52, shall consider existing and potential uses for green electrolytic hydrogen in meeting the statewide greenhouse gas emissions limits approved by the State Air Resources Board, including the procurement of green electrolytic hydrogen for energy storage and to displace the use of fossil fuels in the electrical industry.

(c)The Energy Commission, when reviewing an integrated resource plan filed after January 1, 2021, by a local publicly owned electric utility pursuant to Section 9622, shall consider existing and potential uses for green electrolytic hydrogen in meeting the statewide greenhouse gas emissions limits approved by the State Air Resources Board, including the procurement of green electrolytic hydrogen for energy storage and to displace the use of fossil fuels in the electrical industry.

SEC. 3.

 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) 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.
(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 his or her 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. 4.

 Section 400.2 is added to the Public Utilities Code, to read:

400.2.
 For the purposes of this article, “green electrolytic hydrogen” means hydrogen gas produced through electrolysis and does not include hydrogen gas manufactured using steam reforming or any other conversion technology that produces hydrogen from a fossil fuel feedstock.