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SB-733 Gas corporations: renewable gas procurement.(2021-2022)

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Date Published: 06/30/2022 04:00 AM
SB733:v95#DOCUMENT

Amended  IN  Assembly  June 29, 2022
Amended  IN  Assembly  June 23, 2022
Amended  IN  Assembly  June 13, 2022
Amended  IN  Senate  April 19, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 733

Introduced by Senator Hueso

February 19, 2021

An act to amend the heading of Article 10 (commencing with Section 650) of Chapter 3 of Part 1 of Division 1 of, and to add Sections 652 and 653 to, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 733, as amended, Hueso. Gas corporations: renewable gas procurement.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including gas corporations. Existing law requires the commission, in consultation with the State Air Resources Board, to consider adopting specific biomethane procurement targets or goals for each gas corporation, as specified. Existing law requires that the commission, before establishing biomethane procurement targets or goals, find that the targets or goals are cost-effective means of achieving the reductions in emissions of short-lived climate pollutants and other greenhouse gases forecast pursuant to specified laws and that the targets or goals comply with all applicable state and federal laws.
Existing law authorizes the commission to establish rules and to fix the rates and charges for all public utilities, subject to control by the Legislature, and requires that the rates and charges of a public utility be just and reasonable. Existing law requires the commission and the State Energy Resources Conservation and Development 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, including green electrolytic hydrogen, as defined.
This bill would require the commission to open a new proceeding, or a new phase of an existing proceeding, to consider establishing procurement goals for renewable hydrogen, as defined, and consider requiring each gas corporation and core transport agent to annually procure a proportionate share of renewable hydrogen to meet those goals. The bill would require the commission to make specified findings before establishing renewable hydrogen procurement targets or goals. The bill would also require the commission to evaluate whether authorizing a gas corporation to recover in its rate base expenses incurred from investments in infrastructure to interconnect facilities producing biomethane, renewable hydrogen, or both, is just and reasonable, as specified.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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.

 The heading of Article 10 (commencing with Section 650) of Chapter 3 of Part 1 of Division 1 of the Public Utilities Code is amended to read:
Article  10. Renewable Gas Procurement

SEC. 2.

 Section 652 is added to the Public Utilities Code, to read:

652.
 (a) For purposes of this section, article, “renewable hydrogen” means any of the following: hydrogen where all energy inputs and feedstock used in the production and delivery of the hydrogen are consistent with the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3). Any electricity used shall be from an eligible renewable energy resource, as defined in Section 399.12. Any nonelectric energy input or feedstock shall be from a source included in paragraph (1) of subdivision (a) of Section 25741 of the Public Resources Code.

(1)Green electrolytic hydrogen, as defined in Section 400.2.

(2)Hydrogen derived from biomethane.

(3)Hydrogen derived from the noncombustion thermal conversion of any of the following materials when separated from other waste:

(A)Agricultural crop residue.

(B)Bark or lawn, yard, and garden clippings.

(C)Leaves, silvicultural residue, forest thinnings, and tree and brush prunings.

(D)Wood, wood chips, and wood waste.

(E)Nonrecyclable pulp or nonrecyclable paper materials.

(F)Livestock waste.

(G)Municipal sewage sludge or biosolids.

(4)Hydrogen derived from splitting water by any process that receives only renewable energy as the primary input, including, but not limited to, direct photochemical conversion using solar energy.

(5)Any other process yielding hydrogen from only renewable inputs, as determined by the commission.

(b) The commission shall open a new proceeding, or a new phase of an existing proceeding, to do all of the following:
(1) Consider establishing renewable hydrogen procurement goals for each gas corporation and core transport agent.
(2) Consider requiring each gas corporation and core transport agent to annually procure a proportionate share of renewable hydrogen to meet the procurement goals established pursuant to paragraph (1).
(3) Before establishing renewable hydrogen procurement targets or goals, the commission shall make the following findings:
(A) The targets or goals are a cost-effective means of achieving the forecasted reduction in the emissions of short-lived climate pollutants pursuant to Section 39730.5 of the Health and Safety Code and other greenhouse gases pursuant to Division 25.5 (commencing with Section 38500) of the Health and Safety Code.
(B) The targets or goals comply with all applicable state and federal laws.
(C) The safety risk of using renewable hydrogen in pipelines will be appropriately regulated, mitigated, and monitored. Projects Hydrogen shall not use be transported in pipelines until the commission acts to set safety standards and the pipelines meet those standards.
(D) Combustion end uses that may be affected by the addition of hydrogen to pipelines are appropriately regulated and controlled to avoid increased emissions of oxides of nitrogen or any other air pollutant.

SEC. 3.

 Section 653 is added to the Public Utilities Code, to read:

653.
 (a) The commission, in furtherance of the goals of Sections 399.24 and 651, shall evaluate whether authorizing a gas corporation to recover in its rate base expenses incurred from investments in infrastructure to interconnect facilities producing biomethane, renewable hydrogen, or both, from the point of receipt to the pipeline system is just and reasonable.
(b) As part of the evaluation pursuant to subdivision (a), the commission may shall consider to what extent a gas corporation’s investments in infrastructure and its potential recovery of expenses impact the unit price of biomethane or renewable hydrogen, the effect on the gas corporation’s customer rates and bills, the impact on market competition, competition with nonutility enterprises, the ability to achieve state greenhouse gas reduction goals, and other relevant impacts, effects, or considerations determined by the commission.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.