Bill Text: CA SB1369 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Energy: green electrolytic hydrogen.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2018-09-19 - Chaptered by Secretary of State. Chapter 567, Statutes of 2018. [SB1369 Detail]

Download: California-2017-SB1369-Amended.html

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 Chapter 8.5 (commencing with Section 2847) to Part 2 of Division 1 of Section 25604 to the Public Resources Code, and to add Section 936 to the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1369, as amended, Skinner. Energy: 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.
This bill would require the State Energy Resources Conservation and Development Commission (Energy Commission), Energy Commission, in consultation with the PUC and the State Air Resources Board (state board), to develop up to 3 green electrolytic hydrogen pilot projects meeting certain criteria by January 1, 2021, to produce green electrolytic hydrogen, as defined. 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 and not be recovered directly from ratepayers, except for moneys that the PUC, prior to January 1, 2019, authorized to be recovered for the purpose of research and development. pursuant to the Electric Program Investment Charge Fund.
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, state board, when evaluating an integrated resource plan filed after January 1, 2021, by a load-serving entity, and the Energy Commission 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, when evaluating an integrated resource plan adopted by a load-serving entity or local publicly owned electric utility after January 1, 2019, board, including the procurement of green electrolytic hydrogen for energy storage and to displace the use of fossil fuels in the electrical industry, and to adopt policies and incentives to increase the deployment of green electrolytic hydrogen projects, as appropriate. industry.
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 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 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 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 other conversion technology that produces hydrogen from a fossil fuel feedstock.
(b) The commission, in consultation with the Public Utilities Commission and the State Air Resources Board, 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) Facilitate reductions in emissions of greenhouse gases and criteria air pollutants.
(4) 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).

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. 2.Chapter 8.5 (commencing with Section 2847) is added to Part 2 of Division 1 of the Public Utilities Code, to read:
8.5.Green Electrolytic Hydrogen
1.Definitions
2847.

For purposes of this chapter, the following terms have the following meanings:

(a)“Eligible renewable energy resource” means a source of electrical generation that is 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).

(b)“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. A project to produce “green electrolytic hydrogen” shall do at least one of the following:

(1)Reduce emissions of greenhouse gases.

(2)Utilize electricity from zero-carbon electricity resources.

(3)Utilize electricity generated for management of the electrical grid to facilitate integration of renewable and zero-carbon electricity.

(c)“Integrated resource plan” means an integrated resource plan filed by a load-serving entity for approval by the commission pursuant to Section 454.52 or an integrated resource plan adopted by a local publicly owned electric utility and filed with the Energy Commission pursuant to Section 9622.

(d)“ISO” means the Independent System Operator or a successor multistate independent system operator.

(e)“Load-serving entity” has the same meaning as defined in Section 380.

(f)“Renewable electricity” means electricity that is generated by an eligible renewable energy resource within the meaning of the California Renewables Portfolio Standard (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1).

(g)“State board” means the State Air Resources Board.

(h)“Zero-carbon electricity” means electricity that is generated in a manner that does not produce emissions of greenhouse gases.

2.Green Electrolytic Hydrogen Pilot Program
2848.

(a)The Energy Commission, in consultation with the commission and the state board, shall develop up to three green electrolytic hydrogen pilot projects by January 1, 2021, to produce green electrolytic hydrogen.

(b)The pilot projects shall meet the following criteria:

(1)Each shall use no more than five megawatts, unless the commission determines that higher usage is appropriate.

(2)Together, they shall achieve reasonable geographic diversity.

(3)They shall be distributed among various load-serving entities.

(4)They shall facilitate reductions in emissions of greenhouse gases and criteria air pollutants.

(5)They shall produce electrical system benefits and reduce fossil fuel derived natural gas usage.

(c)The pilot projects shall only be funded from moneys that are dedicated for research and development and shall not be recovered directly from ratepayers, except for moneys that the commission, prior to January 1, 2019, authorized to be recovered for the purpose of research and development.

3.Integrated Resource Planning and Electrification
2849.

The commission, the state board, and the Energy Commission shall do both of the following:

(a)Consider existing and potential uses for green electrolytic hydrogen in meeting the statewide greenhouse gas emissions limits approved by the state board when evaluating an integrated resource plan adopted by a load-serving entity or local publicly owned electric utility after January 1, 2019, including the procurement of green electrolytic hydrogen for energy storage and to displace the use of fossil fuels in the electrical industry.

(b)Adopt policies and incentives to increase the deployment of green electrolytic hydrogen projects, as appropriate.

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