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SB-662 Energy: transportation sector: hydrogen.(2019-2020)

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Date Published: 06/25/2020 09:00 PM
SB662:v96#DOCUMENT

Amended  IN  Assembly  June 25, 2020
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 Section 43869 of the Health and Safety Code, and to amend Sections 237.5, 400, 400.3, 740.3, 740.8, and 740.12 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 662, as amended, Archuleta. Green electrolytic Energy: transportation sector: 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. For these purposes, “green electrolytic hydrogen” is defined as hydrogen gas produced through electrolysis and not from fossil fuel.

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 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. purposes.
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 green electrolytic 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. renewable hydrogen when used directly as a transportation fuel in fuel cell electric vehicles, if the hydrogen meets specified renewable content requirements. The bill would require the PUC, in consultation with the state board and the Energy Commission, to authorize gas corporations to file applications for investments in programs to accelerate widespread transportation electrification to advance specified environmental objectives. The bill would require the PUC to approve, or modify and approve, programs and investments in transportation electrification, including hydrogen and hydrogen-related distribution, pipelines, and make-ready infrastructure for hydrogen, utilizing a reasonable cost recovery mechanism if they are consistent with the specified environmental objectives, do not unfairly compete with nonutility enterprises, include performance accountability measures, and are in the interest of ratepayers, as defined.
Existing law generally designates the state board as the state agency with the primary responsibility for the control of vehicular air pollution and requires the state board, in partnership with the Energy Commission and in conjunction with other state agencies, to develop and adopt a state plan to increase the use of alternative fuels, as defined. Existing law requires the state board to adopt regulations that will ensure that, in any year immediately following a 12-month period in which the mass of hydrogen fuel dispensed for transportation purposes in California exceeds 3,500 metric tons, no less than 33.3% of the hydrogen produced or dispensed in California for motor vehicles be made from eligible renewable energy resources, as defined.
This bill would require those regulations to require that, on a statewide basis, not less than 33.3% of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen, as defined. The bill would require that the renewable hydrogen percentage be increased to 44% by December 31, 2024, 52% by December 31, 2027, 60% by December 31, 2030, and would require that by December 31, 2045, 100% of the hydrogen produced or dispensed in California for motor vehicles be either renewable hydrogen or clean hydrogen produced using zero-carbon resources.
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.

 (a) This act shall be known, and may be cited, as the Hydrogen Transportation Electrification Act of 2020.
(b) The Legislature finds and declares all of the following:
(1) Hydrogen fuel cell electric vehicles are electrically driven vehicles that produce zero emissions of greenhouse gases, criteria air pollutants, or toxic air contaminants.
(2) Hydrogen fuel cell electric vehicles are a commercially available, one-for-one replacement technology for conventional, petroleum-fueled vehicles in heavy-, medium-, and light-duty applications.
(3) Hydrogen fuel cell electric vehicles will be critical components in achieving the state’s air quality and climate change goals through successful implementation of laws and regulations, including, but not limited to, the Innovative Clean Transit regulations (Article 4.3 (commencing with Section 2023) of Chapter 1 of Division 3 of Title 13 of the California Code of Regulations), the Zero-Emission Airport Shuttle Regulation (Subarticle 14 (commencing with Section 95690.1) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations), the Zero-Emission Vehicle Program (Sections 1962.2 and 1962.3 of Title 13 of the California Code of Regulations), the In-Use Off-Road Diesel-Fueled Fleets Regulation (Article 4.8 (commencing with Section 2449) of Chapter 9 of Division 3 of Title 13 of the California Code of Regulations), the commercial harbor craft regulations (Section 2299.5 of Title 13 of, and Section 93118.5 of Title 17 of, the California Code of Regulations), the State Air Resources Board’s proposed revisions to Title 13 of the California Code of Regulations known as the Proposed Advanced Clean Trucks Regulation, the state implementation plan required by the Clean Air Act (42 U.S.C. Sec. 7401 et seq.), the scoping plan adopted by the State Air Resources Board pursuant to Section 38561 of the Health and Safety Code, the short-lived climate pollutant reduction strategy adopted by the State Air Resources Board pursuant to Chapter 4.2 (commencing with Section 39730) of Part 2 of Division 26 of the Health and Safety Code and Chapter 13.1 (commencing with Section 42652) of Part 3 of Division 30 of the Public Resources Code, and reducing emissions of greenhouse gases to 40 percent below 1990 levels by 2030.
(4) The production of hydrogen has many pathways, each with distinct potential benefits and cobenefits that promote California’s existing public health and environmental quality goals, including, but not limited to, reducing the carbon intensity of transportation fuels, reducing emissions of greenhouse gases, including emissions of short-lived climate pollutants, and improving air quality by reducing emissions of criteria air pollutants from both vehicles and fuel production facilities.
(5) Hydrogen transportation fuel currently has a higher renewable content than average California grid electricity and it is technologically and economically feasible to further decarbonize hydrogen transportation fuel at the same pace as electricity under The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018).
(6) Ensuring that renewable standards for hydrogen transportation fuel align with those set forth by the state for electricity under The 100 Percent Clean Energy Act of 2018 will ensure that hydrogen transportation fuel is at least as clean and renewable as electricity in the state.

SEC. 2.

 Section 43869 of the Health and Safety Code is amended to read:

43869.
 (a) The state board shall, no later than July 1, 2008, develop and, after at least two public workshops, adopt hydrogen fuel regulations to ensure the following:
(1) That state funding for the production and use of hydrogen fuel, as described in the California Hydrogen Highway Blueprint Plan, contributes to the reduction of greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. The regulations, at a minimum, shall do all of the following:
(A) Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle fueled by hydrogen from fueling stations that receive state funds are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.
(B) (i) Require that, on a statewide basis, no less than 33.3 percent of the hydrogen produced for, or dispensed by, fueling stations that receive state funds be made from eligible renewable energy resources as defined in Section 399.12 of the Public Utilities Code.
(ii) If the state board determines that there is insufficient availability of hydrogen fuel from eligible renewable resources to meet the 33.3-percent requirement of this subparagraph, the state board may, after at least one public workshop and on a one-time basis, reduce the requirement by an amount, not to exceed 10 percentage points, that the state board determines is necessary to result in a renewable percentage requirement for hydrogen fuel that is achievable.
(iii) If the executive officer of the state board determines that it is not feasible for a public transit operator to use hydrogen fuel made from eligible renewable resources, the executive officer may exempt the operator from the requirements of this subparagraph for a period of not more than five years and may extend the exemption for up to five additional years.
(C) Prohibit hydrogen fuel producers from counting as a renewable energy resource, pursuant to clause (i) of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the renewables portfolio standard obligation, as required by Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.
(D) Require that all hydrogen fuel dispensed from fueling stations that receive state funds be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.
(E) Require that well-to-tank emissions of relevant toxic air contaminants for hydrogen fuel dispensed from fueling stations that receive state funds be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions be greater than the emissions from gasoline on an energy equivalent basis.
(F) Require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.
(G) Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities constructed for small demonstration or temporary purposes. The exemption may be extended on a case-by-case basis upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.
(2) That, in any year immediately following a 12-month period in which the mass of hydrogen fuel dispensed for transportation purposes in California exceeds 3,500 metric tons, the production and direct use of hydrogen fuels for motor vehicles in the state, including, but not limited to, any hydrogen highway network that is developed pursuant to the California Hydrogen Highway Blueprint Plan, contributes to a reduced dependence on petroleum, as well as reductions in greenhouse gas emissions, criteria air pollutant emissions, and toxic air contaminant emissions. For the purpose of this paragraph, the regulations, at a minimum, shall do all of the following:
(A) Require that, on a statewide basis, well-to-wheel emissions of greenhouse gases for the average hydrogen-powered vehicle in California are at least 30 percent lower than emissions for the average new gasoline vehicle in California when measured on a per-mile basis.
(B) (i) Require that, on a statewide basis, no less than 33.3 percent of the hydrogen produced or dispensed in California for motor vehicles be made from eligible renewable energy resources as defined in Section 399.12 of the Public Utilities Code. renewable hydrogen, as defined in Section 95481 of Title 17 of the California Code of Regulations.
(ii) Require that, by December 31, 2024, on a statewide basis, no less than 44 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(iii) Require that, by December 31, 2027, on a statewide basis, no less than 52 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(iv) Require that, by December 31, 2030, on a statewide basis, no less than 60 percent of the hydrogen produced or dispensed in California for motor vehicles be renewable hydrogen.
(v) Require that, by December 31, 2045, on a statewide basis, 100 percent of the hydrogen produced or dispensed in California for motor vehicles be either renewable hydrogen or clean hydrogen produced using zero-carbon resources, as that term is used in Section 454.53 of the Public Utilities Code.
(C) Prohibit hydrogen fuel producers from counting as a renewable energy resource, for purposes of subparagraph (B), any electricity produced from sources previously procured by a retail seller and verifiably counted by the retail seller towards meeting the requirements established by the California Renewables Portfolio Standard Program, as set forth in Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code.
(D) Require that all hydrogen fuel dispensed in California for motor vehicles be generated in a manner so that local well-to-tank emissions of nitrogen oxides plus reactive organic gases are at least 50 percent lower than well-to-tank emissions of the average motor gasoline sold in California when measured on an energy equivalent basis.
(E) Require that well-to-tank emissions of relevant toxic air contaminants from hydrogen fuel produced or dispensed in California be reduced to the maximum extent feasible at each site when compared to well-to-tank emissions of toxic air contaminants of the average motor gasoline fuel on an energy equivalent basis. In no case shall the toxic emissions from hydrogen fuel be greater than the toxic emissions from gasoline on an energy equivalent basis.
(F) Authorize the state board, after at least one public workshop, to grant authority to the executive officer of the state board to exempt from this paragraph, for a period of no more than five years, hydrogen dispensing facilities that dispense an average of no more than 100 kilograms of hydrogen fuel per month. The exemption may be extended on a case-by-case basis by the executive officer upon a finding that the extension will not harm public health. The executive officer may limit the total number of exemptions by geographic region, including by air district, but the average annual mass of hydrogen dispensed statewide from exempted facilities shall not exceed 10 percent of the total mass of hydrogen fuel dispensed for transportation purposes in the state.
(G) Authorize the state board, if it determines that reporting is necessary to facilitate enforcement of the requirements of this paragraph, to require that providers of hydrogen fuel for transportation in the state report to the state board the annual mass of hydrogen fuel dispensed and the method by which the dispensed hydrogen was produced and delivered.
(b) Notwithstanding paragraph (2) of subdivision (a), the state board may increase the 3,500-metric-ton threshold in paragraph (2) of subdivision (a) by no more than 1,500 metric tons if at least one of the following requirements is met:
(1) The 3,500-metric-ton threshold is first met prior to January 1, 2011.
(2) The state board determines that the 3,500-metric-ton threshold has been met primarily due to hydrogen fuel consumed in heavy duty vehicles.
(3) The state board determines at a public hearing that increasing the threshold would accelerate the deployment of hydrogen fuel cell vehicles in the state.
(c) The state board, in consultation with other relevant agencies as appropriate, shall review the renewable resource requirements adopted pursuant to this section every four years and shall increase the renewable resource percentage requirements if it determines that it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that is consistent with this section.
(d) The state board shall review the emission requirements adopted pursuant to this section every four years and shall strengthen the requirements if it determines it is technologically feasible to do so and will not substantially hinder the development of hydrogen as a transportation fuel in a manner that otherwise is consistent with this section.
(e) The state board shall produce and periodically update a handbook to inform and educate motor vehicle manufacturers, hydrogen fuel producers, hydrogen service station operators, and other interested parties on how to comply with the requirements set forth in this section. This handbook shall be made available on the agency’s Internet Web site internet website on or before July 1, 2009.
(f) The Secretary for Environmental Protection shall convene the California Environmental Protection Agency’s Environmental Justice Advisory Committee at least once annually to solicit the committee’s comments on the production and distribution of hydrogen fuel in the state.
(g) The Secretary for Environmental Protection, in consultation with the state board, shall recommend to the Legislature and the Governor, on or before January 1, 2010, incentives that could be offered to businesses within the hydrogen fuel industry and consumers to spur the development of clean sources of hydrogen fuel.
(h) Unless the context requires otherwise, the definitions set forth in this subdivision govern the construction of this section:
(1) “Well-to-tank emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery into the fuel tank of a consumer vehicle.
(2) “Well-to-wheel emissions” means emissions resulting from production of a fuel, including resource extraction, initial processing, transport, fuel production, distribution and marketing, and delivery and use in a consumer vehicle.

SECTION 1.SEC. 3.

 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. renewable hydrogen, as defined in Section 43869 of the Health and Safety Code, that has a renewables content that is equal to or greater than the eligible renewable energy resource procurement requirements of Sections 399.15, 399.30, and 454.53, when the hydrogen is used directly as a transportation fuel in fuel cell electric vehicles.

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.SEC. 4.

 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. 5.

 Section 740.3 of the Public Utilities Code is amended to read:

740.3.
 (a) The commission, in cooperation with the Energy Commission, the State Air Resources Board, air quality management districts and air pollution control districts, regulated electrical and electrical corporations, gas corporations, and the motor vehicle industry, shall evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electricity electricity, hydrogen, and natural gas to fuel low-emission vehicles. Policies to be considered shall include both of the following:
(1) The sale-for-resale and the rate-basing of low-emission vehicles and supporting equipment equipment, such as batteries for electric vehicles and vehicles, compressor stations for natural gas fueled vehicles. vehicles, and pipelines, distribution, and make-ready infrastructure for the use of hydrogen as a transportation fuel.
(2) The development of statewide standards for electric vehicle charger connections and compressed natural gas vehicle fueling connections, including installation procedures and technical assistance to installers.
(b) The commission shall hold public hearings as part of its effort to evaluate and implement the new policies considered in subdivision (a).
(c) The commission’s policies authorizing utilities to develop equipment or infrastructure needed for electricity-powered electricity-powered, hydrogen fuel cell electricity-powered, and natural gas-fueled low-emission vehicles shall ensure that the costs and expenses of those programs are not passed through to electrical or gas ratepayers unless the commission finds and determines that those programs are in the ratepayers’ interest. The commission’s policies shall also ensure that utilities do not unfairly compete with nonutility enterprises.

SEC. 4.SEC. 6.

 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.SEC. 7.

 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 electric 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 electric 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 and hydrogen 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) As part of a separate proceeding from those initiated pursuant to subdivision (b), the commission, in consultation with the State Air Resources Board and the Energy Commission, shall authorize gas corporations to file applications for investments in programs to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, 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 gas 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 hydrogen and hydrogen-related pipelines, distribution, and make-ready infrastructure for hydrogen, via a reasonable cost recovery mechanism if they are consistent with this section, do not unfairly compete with nonutility enterprises, as required by Section 740.3, include performance accountability measures, and are in the interests of ratepayers as defined in Section 740.8.

(c)

(d) 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)

(e) 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.SEC. 8.

 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.