BILL ANALYSIS Ó
AB 1008
Page 1
Date of Hearing: April 13, 2015
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Anthony Rendon, Chair
AB 1008
(Quirk) - As Introduced February 26, 2015
SUBJECT: Public utilities: sale of hydrogen to public as a
motor vehicle fuel
SUMMARY: This bill clarifies that the ownership or operation of a
facility that sells hydrogen for use only as a motor vehicle
fuel is not a public utility. Specifically, this bill:
a)Clarifies existing law to make clear that the ownership or
operation of a facility that sells hydrogen at retail to the
public for use only as a motor vehicle fuel, does not make the
corporation or person a public utility.
EXISTING LAW:
1)The State Constitution permits the Public Utilities Commission
to fix rates and establish rules for all public utilities and
includes the furnishing power as a public utility, subject to
control by the Legislature.
2)Defines a "public utility" to include every common carrier,
toll bridge corporation, pipeline corporation, gas
corporation, electrical corporation, telephone corporation,
telegraph corporation, water corporation, sewer system
AB 1008
Page 2
corporation and heat corporation, where the service is
performed for, or the commodity is delivered to, the public
for any compensation or payment. (Public Utilities Code 216)
3)Specifies that the ownership or operation of a facility that
employs cogeneration technology or produces power from other
than a conventional power source or the ownership or operation
of a facility which employs landfill gas technology is not a
public utility solely because of the ownership or operation of
that facility. (Public Utilities Code 216)
4)Specifies that any corporation or person engaged directly or
indirectly in developing, producing, transmitting,
distributing, delivering, or selling any form of heat derived
from geothermal or solar resources or from cogeneration
technology to any privately owned or publicly owned public
utility, or to the public or any portion thereof, is not a
public utility solely by reason of engaging in any of those
activities. (Public Utilities Code 216)
5)Specifics that the ownership or operations of a facility that
sells compressed natural gas at retail to the public for use
only as a motor vehicle fuel, does not make the corporation or
person a public utility solely because of that ownership,
operation, or sale. (Public Utilities Code 216)
6)Specifies that ownership or operation of a facility that is an
exempt wholesale generator is not a public utility solely due
to the ownership or operation of that facility. (Public
Utilities Code 216)
7)Specifies the ownership, control, operation, or management of
an electric plant used for direct transactions or
participation directly or indirectly in direct transactions as
AB 1008
Page 3
permitted, is not a public utility solely because of that
ownership, participation or sale. (Public Utilities Code 216)
8)Specifies that the ownership, control, operation, or
management of a facility that supplies electricity to the
public only use to charge light duty plug-in electric vehicles
is not a public utility solely because of that ownership,
control, operation, or management. (Public Utilities Code 216)
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's statement: "California's interest in hydrogen Fuel
Cell Electric Vehicles (FCEVs) is not new. These technologies
have had limited adoption rate and consumer market adoption
penetration because of a lack of vehicle availability and
fueling infrastructure. With numerous vehicle manufactures
beginning to sell FCEVs and as more FCEV options become
available in the near future, the fuel infrastructure is
essential to supporting these technologies. Accelerating the
use of hydrogen FCEVs in the state of California will assist
in putting more zero-emission vehicles on the road."
2)Background: The California Global Warming Solutions Act of
2006, enacted by Assembly Bill (AB) 32, tasked the Air
Resources Board (ARB) to adopt rules and regulations that
would reduce greenhouse gas emission in the state to 1990
levels by 2020. With it, the Legislature acknowledged the
adverse impacts and threat global warming poses to the
economic wellbeing, public health, natural resources, and
environment of California and took an active step towards
mitigating its effect.
Increasing the use of zero emission vehicles (ZEV), such as
AB 1008
Page 4
hydrogen fuel cell vehicles, will play a significant role in
reducing California's greenhouse gas and smog emissions to
standards set forth by AB 32. In 2012, the ARB implemented the
Advanced Clean Cars program which seek to rapidly increase the
number of ZEV technologies, such as hydrogen fuel cells and
battery electric vehicles. The ARB estimates that by
mid-century, 87% of cars on the road will need to be full ZEVs
which would put California on the path to reducing greenhouse
gas emissions by 80% by 2050.
3)Hydrogen Fuel Cell Electric Vehicles: Hydrogen FCEVs are
fueled with hydrogen gas stored on the vehicle. Hydrogen gas
passes through a fuel cell that mixes the gas with oxygen to
generate electric currents that run the vehicle. Because the
vehicle is primarily fueled with pure hydrogen no pollutants
is emitted, only water and heat.
4)Hydrogen Stations: In April 2004, Governor Schwarzenegger
issued Executive Order S-07-04, which created the California
Hydrogen Highway Network (CaH2Net). The mission of CaH2Net was
to support a transition to assure that the state had hydrogen
fueling stations in place to meet the demand of fuel cells and
other hydrogen vehicle technologies being placed on California
roads. CaH2Net convened stakeholders and developed a blueprint
plan that described the actions needed to create hydrogen
highways.
Subsequently in March 2012, Governor Brown issued Executive
Order B-16-2012 to facilitate the rapid commercialization of
ZEVs and in February 2013, he issued a ZEV Action Plan which
created a roadmap towards achieving 1.5 million zero-emission
vehicles on California roadways by 2025.
California currently has 13 research hydrogen fueling
stations, 9 public stations and an additional 18 that have
been funded and are expected to become operational in the next
few years. Funding for hydrogen infrastructure is provided by
the California Energy Commission (CEC) through funding
authorized by AB 118 (Nunez) Chapter 750, Statutes of 2007.
AB 1008
Page 5
In May 2014, the CEC announced it will invest nearly $40
million in hydrogen refueling stations to further accelerate
the development of publically accessible hydrogen refueling
stations in order to promote the use of zero emission fuel
cell vehicles.
1)Provides clarity for hydrogen: Under current law, a person or
a business that sells compressed natural gas for use only as a
motor vehicle fuel, is not a public utility solely because of
that ownership, operation, or sale. According to the author
"the ambiguity in how hydrogen will be regulated is a concern
for investors interested in developing hydrogen fueling
infrastructure. These investors need certainty that hydrogen
used for transportation will be treated like natural gas and
electricity used for transportation." This bill would remove
the ambiguity in current law and clarifies that hydrogen sold
for the purpose of being use as a motor vehicle fuel is not
regulated as a public utility.
REGISTERED SUPPORT / OPPOSITION:
Support
California Hydrogen Business Council
Opposition
None on file
AB 1008
Page 6
Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083