Bill Text: CA SB1075 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Hydrogen: green hydrogen: emissions of greenhouse gases.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Passed) 2022-09-16 - Chaptered by Secretary of State. Chapter 363, Statutes of 2022. [SB1075 Detail]
Download: California-2021-SB1075-Amended.html
There The California Clean Hydrogen Hub Fund is hereby created in the State Treasury the California Clean Hydrogen Hub Fund for the purpose of implementing the objectives and provisions of this article. The fund shall be administered by the bank.
Bill Title: Hydrogen: green hydrogen: emissions of greenhouse gases.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Passed) 2022-09-16 - Chaptered by Secretary of State. Chapter 363, Statutes of 2022. [SB1075 Detail]
Download: California-2021-SB1075-Amended.html
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Amended
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Senate
May 19, 2022 |
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Amended
IN
Senate
May 04, 2022 |
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Amended
IN
Senate
April 07, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Senate Bill
No. 1075
| Introduced by Senator Skinner (Coauthors: Senators Archuleta, Eggman, Hertzberg, Hueso, Min, and Newman) |
February 15, 2022 |
An act to add Article 6.8 (commencing with Section 63048.300) to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to add Sections 38561.8 and 39619.9 to the Health and Safety Code, to add Section 25742 to, and to add and repeal Section 25307 of, the Public Resources Code, and to amend Sections 399.12 and 400.3 of the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1075, as amended, Skinner.
Hydrogen: green hydrogen: emissions of greenhouse gases.
(1) The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank in the Governor’s Office of Business and Economic Development, that is governed by a board of directors. The Bank Act, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities.
This bill would create the California Clean Hydrogen Hub Fund within the State Treasury, and make Treasury under the administration of the I-Bank. The bill would authorize
the moneys in the fund available for expenditure,
fund, upon appropriation by the Legislature. The bill would require the I-Bank to administer the fund and would authorize the I-Bank to provide grants to public, private, and nonprofit businesses and entities for the support
of projects in California that demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen, as specified. Legislature, to be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale. The bill would require the I-Bank to prepare, and the I-Bank board to approve, criteria, priorities, and guidelines for the provision of grants under the fund in line with specified priorities and requirements of the federal Infrastructure Investment and Jobs Act as well as specified state goals.
This bill would require the Governor to appoint, by April 1, 2023, a Clean Hydrogen Hub Director to coordinate efforts
related to clean hydrogen production, processing, delivery, storage, and end use in California. The bill would require the I-Bank, in administering the California Clean Hydrogen Hub Fund, to coordinate with the director and relevant state agencies.
(2) The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (state board) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030.
This bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and Public Utilities Commission (PUC), to prepare an evaluation posted to the state board’s internet website by June 1, 2024, that includes specified information
relative to the deployment, development, and use of hydrogen. The bill would require the state board, in making this evaluation, to consult with the California Workforce Development Board and labor and workforce organizations.
(3) Existing law requires the Energy Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state.
This bill would require the Energy Commission, as part of the 2023 and 2025 editions of the integrated energy policy report, to study and model potential growth for hydrogen and its role in decarbonizing, as defined, the electrical and transportation sectors of the economy, and helping to achieve specified goals.
(4) Existing law requires the PUC, state board, and Energy Commission to
consider green electrolytic hydrogen an eligible form of energy storage, and to consider other potential uses of green electrolytic hydrogen.
This bill would require the PUC, state board, and Energy Commission to consider other potential uses of green electrolytic hydrogen specifically in all of their decarbonization strategies, as defined.
(5) Existing law establishes the California Renewables Portfolio Standard Program, which requires the PUC to implement annual procurement targets for the procurement of eligible renewable energy resources, which is defined as an electrical generating facility that meets the definition of “renewable electrical generation facility” subject to certain conditions, for all retail sellers, as defined, and requires local publicly owned electric utilities to adopt and implement a renewable energy resources procurement plan to achieve the targets and goals of the
program.
This bill would require the Energy Commission to consult with the Public Utilities Commission and the state board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a “renewable electrical generation facility.”
This bill would require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen and would authorize the use of the recommendations to the Legislature to inform the oversight and administration of their respective hydrogen programs and eligibility rules.
This bill would also require the state board, by June 1, 2024, in conjunction with the Energy Commission and the PUC, to
(A) provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for the programs under each state entity’s jurisdiction, (B) jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen, and (C) calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
(a) The Legislature finds and declares all of the following:(1) Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2) California has set ambitious targets to reduce the effects of climate change by reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3) In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4) Hydrogen also has the ability to significantly reduce diesel emissions from goods movement, which particularly impacts low-income communities living near ports and freeways. In 1998, the State Air Resources Board identified diesel particulate matter as a toxic air contaminant based on published evidence of a relationship between diesel exhaust exposure and lung cancer, and diesel pollution
also leads to noncancer health effects, such as premature death, hospitalizations, and emergency department visits for exacerbated chronic heart and lung disease, including asthma, increased respiratory symptoms, and decreased lung function in children. Hydrogen fuel cell buses and trucks emit zero harmful tailpipe emissions, their only tailpipe emission being water.
(5) California has also set targets to reduce short-lived climate pollutants by 2030, including targets to reduce black carbon emissions by 50 percent and methane emissions by 40 percent. Short-lived climate pollutants account for nearly 45 percent of global warming, and can be harmful to human health. Capturing and productively using methane, and productively using wood waste, to displace fossil fuel use to generate electricity and for transportation fuel can
help eliminate short-lived climate pollutants while also reducing harmful exposure to diesel particulate matter and other air quality pollutants.
(6) California’s leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy resources and fuels, including supporting a rapid decline in prices for electricity generated by eligible renewable energy resources such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar generation dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019. Creating similar market conditions scaling green hydrogen demand will help scale supply chains and achieve similar cost
reductions for green hydrogen and its derivatives.
(7) Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by using electricity generated by eligible renewable energy resources to split water, is poised to experience similar cost declines over the next decade. However, the scaling up of current technologies alone will not be sufficient to meet the nation’s green hydrogen cost targets or to provide durable advantages for ratepayers and research is still necessary to produce hydrogen from renewable feedstock at a cost of $1 per kilogram.
(8) Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize
sectors, including cement and steel production, industry, thermal powerplants, agriculture, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, rail, shipping, mining, and aviation, and accelerate progress towards the state’s climate, clean air, and clean energy goals.
(9) Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed electrical generation and better integrating eligible renewable energy resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and putting renewable generation of electricity to use to decarbonize many other sectors of the economy.
(10) Green hydrogen offers an opportunity to reduce emissions of greenhouse gases, criteria air
pollutants, and toxic air contaminants and improve the health of local communities located close to existing industrial hydrogen uses, including oil refining, production of ammonia, and other industrial chemical uses.
(11) Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; net-zero or net-negative carbon chemicals, fuels, and polymers that can be produced when green hydrogen is combined with captured carbon dioxide; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup
generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(12) California has been a national and global leader in hydrogen market and policy development for 20 years, with leading policies to support the development and deployment of fuel cell vehicles, hydrogen refueling stations, and clean hydrogen supplies.
(13) Continuing to support the build out of hydrogen infrastructure and end uses, particularly in sectors of the economy that are otherwise difficult to decarbonize with renewable resources available today, will ensure that as green hydrogen production increases, these sectors are prepared to shift to green hydrogen.
(14) The hydrogen industry, and likewise the green hydrogen industry, are well positioned to offer new opportunities to for developing and employing California’s skilled and trained workforce. Additionally, many potential end uses of hydrogen, such as powerplants, and freight, airline, and shipping vessels, which today generally run off of fossil fuels, already employ large numbers of unionized employees who could continue to work at these facilities when repowered with hydrogen or green hydrogen. California’s policies regarding growing the hydrogen economy should include a deep emphasis on developing and utilizing skilled and trained workers, to ensure that the
availability of well-paid jobs with good benefits remains a top priority in California.
(15) Several countries developed national hydrogen strategies that include goals for electrolyzer deployment and green hydrogen production and use. For example, Chile has a goal of 5 GW of electrolyzer capacity under development by 2025, Germany has a goal of 10 GW of electrolyzers by 2030, and the European Union has set a goal of 40 GW of electrolyzers in the Union and 40 GW in neighboring regions by 2030.
(16) The Lawrence Livermore National Laboratory report, “Getting to Neutral,” highlights gasification of biomass to hydrogen as the most promising strategy for achieving negative carbon emissions in California. The report finds that building about 50-100 facilities in
California to utilize existing biomass waste streams would generate nearly 4 million tons of hydrogen per year and avoid or remove more carbon dioxide emissions than emitted from all passenger vehicles in California combined, at costs on par with those under California’s Cap-and-Trade program.
(17) The federal Infrastructure and Investment Jobs Act (Public Law 117-58) includes $8 billion to support at least four regional clean hydrogen hubs across the United States aligned with the Hydrogen Shot priority of reducing the costs of producing clean hydrogen to $2 per kilogram by 2026, including at least one demonstrating clean hydrogen production from fossil fuels, one from nuclear, and one from renewables. The act also requires the hubs to demonstrate a diversity of hydrogen end uses, including in electric power generation, industrial
operations, residential heating, and transportation. The act allocates another $1 billion to support research, development, and deployment across multiple electrolysis technologies.
(18) The United States Department of Energy has subsequently identified nine regional clean hydrogen clusters, including California. California is the only state identified as a cluster itself, while the other eight include regions or combinations of states.
(19) The United States Department of Energy has also called for clean hydrogen hubs to include historically marginalized and disadvantaged communities in the hub decisionmaking process and benefits. California is a national leader in enacting energy policies that enable energy and environmental justice.
(19)
(20) California offers unique and attractive opportunities to deploy clean hydrogen and its derivatives at scale from a variety of renewable and clean energy resources, including biomass, offshore wind, solar, and other resources, in and around ports and other industrial clusters and ahead of the 2028 Olympics, and across a variety of end use applications, including agriculture, aviation, heavy-duty trucks, industrial applications, power plants, rail, shipping, and others. Deploying hydrogen at scale in industrial applications and along freight corridors, in particular, will help improve air quality in disadvantaged and low-income communities, that are disproportionately impacted by the impacts of air pollution and climate change.
(b) It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing and new renewable resources into the electrical grid; support forest management, short-lived climate pollutant and waste management
goals; create jobs; and provide new clean technology to decarbonize challenging sectors.
(c) It is further the intent of the Legislature to advance policies related to clean hydrogen in order to attract federal funding for a regional and statewide investments in renewable energy focused clean hydrogen hub in California. through a California-based clean hydrogen hub. The policies will further solidify California’s decades of global leadership related to hydrogen and further demonstrate and scale
production, processing, delivery, storage, and end use of clean hydrogen across California, including hydrogen produced from a diversity of renewable feedstocks.
SEC. 2.
Article 6.8 (commencing with Section 63048.300) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:Article 6.8. California Clean Hydrogen Hub Fund
63048.300.
For purposes of this article, the following definitions apply:(a) “Clean hydrogen” means hydrogen produced from renewable energy resources consistent with the standard set forth in Section 16166(b)(1)(B) of Title 42 of the United States Code, or as that standard is revised by the bank consistent with the determination made by the Secretary of the United States Department of Energy pursuant to Section 16166(b)(2) of Title 42 of the United States Code.
(b) “Director” means the Clean Hydrogen Hub Director appointed pursuant to Section 63048.303.
(c) “Fund” means the California Clean Hydrogen Hub Fund created pursuant to Section 63048.301.
63048.301.
(a) (1)(2) The fund shall be separate from any other fund or account created
under this division.
(3) Moneys in the fund, including any moneys received from a federal appropriation, are available for expenditure only upon appropriation by the Legislature.
Legislature, and may be used to provide grants for clean hydrogen projects developed in California, to match federal funds granted to a regional clean hydrogen hub pursuant to Section 16161a of Title 42 of the United States Code, or to fund or match research grants that may be necessary to meet the goal of affordably producing hydrogen from renewable feedstock at scale.
(b)The bank shall administer the fund to provide grants for clean hydrogen projects developed in California consistent with Section 63048.302.
(c)
(b) In administering the fund, the bank shall coordinate with the director and relevant state agencies, including those specifically named in subdivision (b) of Section 63048.303.
(d)
(c) The bank shall prepare, and the bank board shall approve by majority vote of the board, criteria, priorities, and guidelines for the provision of grants under the fund, in line with the priorities and requirements of the federal Infrastructure Investment and Jobs Act relating to hydrogen (Subtitle (B) (commencing with Section 40311) of Title II of Division D of Public Law 117-58), as well as the
state’s goals and planning documents related to, among others, equity, climate change, air quality, zero-emission vehicles, transit, goods movement, zero carbon energy, natural and working lands, short-lived climate pollutants, and forest, agricultural, and municipal waste management.
(e)
(d) The bank shall consider applications for grants as they are received, on an ongoing basis, so long as there remain moneys available within the fund to provide that grant.
(f)
(e) (1) On or before October 1, 2023, and annually thereafter, the bank shall prepare and submit to the Governor, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Legislative Analyst’s Office a report containing fund activity for the preceding fiscal year ending June 30. The report shall include at least both of the following:
(A) Information on individual projects receiving funding, including the type and amount of funding received, project description, total project cost, and project location.
(B) A description of the contribution of funded projects to the state’s climate policy
objectives and clean hydrogen production and use goals established in subparagraph (B) of paragraph (1) of subdivision (a) of Section 63048.302.
(2) The report shall be posted on the bank’s internet website.
(3) The report shall be presented to the bank board at its final public meeting of the calendar year in which the report was prepared. If the bank board holds no public meetings following the submission of the report, the report shall be presented to the bank board at its next available public meeting.
63048.302.
(a) (1) The bank shall only provide grants from moneys in the fund to support projects in California that do both of the following:(A) Demonstrate and scale the production, processing, delivery, storage, and end use of clean hydrogen.
(B) Advance progress toward a goal to produce or use 15,000 tons per day of clean hydrogen in California by 2030.
(2) In selecting projects to receive grants under this article, the bank shall prioritize projects that do either
any of the following:
(A) Maximize the use of renewable feedstocks or renewable energy resources and zero-carbon resources pursuant to Section 454.53 of the Public Utilities Code.
(B) Help achieve economies of scale and reduce the cost of clean hydrogen production from renewable feedstocks or renewable energy resources and zero-carbon resources.
(C) Advance state greenhouse gas emission reduction goals.
(D) Maximize socioeconomic, workforce, equity, and health benefits.
(b) The bank may provide grants from moneys in the fund to support projects located throughout the state, including demonstration and scaling of multiple technologies and strategies to produce, process, deliver, store, and use clean hydrogen. The bank shall strive to obtain geographic diversity in its grant disbursal.
(c) Public, private, and nonprofit businesses and entities shall be eligible to receive grants from moneys in the fund. These entities and businesses include, but are not limited to, universities, municipalities, port, airport and transit authorities, public and investor-owned utilities, community choice aggregators, hydrogen project developers, industrial facility operators, airlines, railroads and shipping companies, industry-led consortia,
national laboratories, and nonprofit organizations.
(d) The bank shall award grants from moneys in the fund in a manner that prioritizes and leverages investment from the private sector related to the production, processing, delivery, storage, and end use of clean hydrogen.
63048.303.
(a) The Governor shall, by April 1, 2023, appoint a Clean Hydrogen Hub Director to coordinate efforts related to clean hydrogen production, processing, delivery, storage, and end use in California.(b) The director shall consult with and coordinate clean hydrogen-related efforts with the federal government, the Independent System Operator, the University of California, and relevant state agencies, including, but not limited to, the Natural Resources Agency, California Environmental Protection Agency, State Energy Resources Conservation and Development Commission, State Air Resources
Board, Public Utilities Commission, Department of Resources Recycling and Recovery, Department of Water Resources, Transportation Agency, California Transportation Commission, Department of Transportation, and Governor’s Office of Business and Economic Development.
(c) The director shall consult with and coordinate efforts of local jurisdictions, including cities, counties, transit agencies and port authorities, as well as public and private utilities and other businesses to advance the objectives of this article, and shall work where possible to achieve geographic diversity and statewide benefits from hydrogen investments.
SEC. 3.
Section 38561.8 is added to the Health and Safety Code, to read:38561.8.
(a) For purposes of this section, “decarbonize” means to reduce or eliminate associated emissions of greenhouse gases.(b) The state board, in consultation with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall prepare an evaluation posted to the state board’s internet website by June 1, 2024. The evaluation shall include, but not be limited to, all the following:
(1) Policy recommendations to accelerate the production and use of hydrogen, and specifically to accelerate the production and use of green hydrogen, in the state to help achieve the state’s climate,
clean energy, and clean air objectives. The policy
recommendations shall include recommendations on how to overcome market barriers and accelerate progress in green hydrogen production, scaling and use, including through the use of public-private partnerships, demonstration projects undertaken by public, private, or nonprofit entities, or a combination thereof, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, public health, workforce, and equity benefits resulting from increased utilization of green hydrogen.
(2) A description of strategies supporting hydrogen infrastructure, including needed infrastructure for production, processing, delivery, storage, and end uses in difficult-to-decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This
description shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(3) A description of the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the state’s climate, clean energy, and clean air objectives.
(4) An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green
hydrogen. The state board shall also consult with the Independent System Operator in the preparation of the analysis.
(5) An estimate of the amount of reduced emissions of greenhouse gases and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios, the costs associated with using green hydrogen, and the associated health and environmental impacts of prioritizing the development of various forms of hydrogen, when compared to other alternatives.
(c) In developing the evaluation pursuant to subdivision (b), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state-approved apprenticeship programs that train workers to construct, install,
and maintain hydrogen infrastructure.
SEC. 4.
Section 39619.9 is added to the Health and Safety Code, to read:39619.9.
By June 1, 2024, the state board, in conjunction with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall do all of the following:(a) Jointly develop recommendations to the Legislature on definitions for different categories of hydrogen, and potential end uses for those categories of hydrogen. These categories may include green hydrogen, zero-carbon hydrogen, renewable hydrogen, and low-carbon hydrogen. The state entities may use the recommendations to the Legislature to inform their oversight and administration of their respective hydrogen programs and eligibility rules. In developing these definitions, the state entities
shall consider all of the following:
(1) The technological processes, feedstocks, process energy, and other inputs used to create the hydrogen, and the environmental and public health impacts of these processes, feedstocks, process energy, and other inputs.
(2) Requirements applicable to an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
(3) Methods for tracking and validating incremental electrical generation that emits no greenhouse gases and is used to produce electrolytic hydrogen in a manner that prevents resource shuffling pursuant to
subdivision (a) of Section 454.53 of the Public Utilities Code.
(4) The emissions of greenhouse gases associated with hydrogen pathways, as measured by their life-cycle carbon dioxide intensity.
(b) Provide guidance to the Legislature on which categories of hydrogen may be used to meet eligibility requirements for those programs under each state entity’s jurisdiction. In developing this guidance, the agencies shall consider cobenefits from the hydrogen production and end use, including, but not limited to, job creation, economic development, electrical grid integration, management of organic materials, support of disadvantaged communities, maintaining affordable public utility rates and transportation fuels for California residents and businesses, and progress toward meeting
other state goals.
(c) Jointly develop prohibitions against double counting of environmental attributes associated with production, distribution, and use of hydrogen.
(d) Calculate life-cycle carbon dioxide intensity values for hydrogen pathways that reflect the fuels, feedstocks, and production processes used for their production. The state entities shall use common values as part of any programs under their respective jurisdictions for purposes of emissions accounting and eligibility determinations.
SEC. 5.
Section 25307 is added to the Public Resources Code, to read:25307.
(a) For purposes of this section, “decarbonizing” means reducing or eliminating associated emissions of greenhouse gases.(b) As part of the 2023 and 2025 editions of the integrated energy policy report, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve the goals set forth in The 100 Percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter
547 of the Statutes of 2015).
(c) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
SEC. 6.
Section 25742 is added to the Public Resources Code, to read:25742.
The commission shall consult with the Public Utilities Commission and the State Air Resources Board to develop a definition of renewable hydrogen that, when used in an electrical generating facility, would enable the facility to meet the definition of a “renewable electrical generation facility” set forth in Section 25741.SEC. 7.
Section 399.12 of the Public Utilities Code is amended to read:399.12.
For purposes of this article, the following terms have the following meanings:(a) “Conduit hydroelectric facility” means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(b) “Balancing authority” means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(c) “Balancing authority area” means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(d) “California balancing authority” is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State
of California.
(e) “Eligible renewable energy resource” means an electrical generating facility that meets the definition of a “renewable electrical generation facility” in Section 25741 of the Public Resources Code, or an electrical generating facility using renewable hydrogen, as determined by the Energy Commission pursuant to Section 25742 of the Public Resources Code, subject to the following:
(1) (A) An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable
energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(B) Notwithstanding subparagraph (A), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(C) A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted
pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a “renewable electrical generation facility” as defined in Section 25741 of the Public Resources Code.
(D) (i) A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be
deemed to have procured electricity from a given unit as of December 31, 2005.
(ii) Notwithstanding clause (i), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(iii) The amendments made to this subdivision by the act adding this subparagraph are intended to clarify
existing law and apply from December 10, 2011.
(2) (A) A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(B) Subparagraph (A) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(f) “Procure” means to acquire through ownership or contract.
(g) “Procurement entity” means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section
399.13.
(h) (1) “Renewable energy credit” means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2) “Renewable energy credit” includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of
biomass or biogas fuels.
(3) (A) Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i) The
facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii) The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii) The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B) Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the
requirements of subparagraph (A) or (D) of paragraph (1) of subdivision (e).
(C) Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (B) of paragraph (1) of subdivision (e).
(D) Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contracts entered into before January 1, 2017.
(i) “Renewables portfolio standard” means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(j) “Retail seller” means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1) An electrical corporation, as defined in Section 218.
(2) A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard program subject to the same terms and conditions applicable to an electrical
corporation.
(3) An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article. This paragraph does not impair a contract entered into between an electric service provider and a retail customer prior to the suspension of direct access by the commission pursuant to Section 80110 of the Water Code.
(4) “Retail seller” does not include any of the following:
(A) A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources
acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C) A local publicly owned electric utility.
(k) “WECC” means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.
