BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1008


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          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  








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            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  








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            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  








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            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.   








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            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











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          Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083