BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 1008 Hearing Date: 6/16/2015
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|Author: |Quirk |
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|Version: |2/26/2015 As Introduced |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|Nidia Bautista |
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SUBJECT: Public utilities: sale of hydrogen to public as a motor
vehicle fuel.
DIGEST: This bill would provide 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 solely because of that
ownership, operation, or sale.
ANALYSIS:
Existing law:
1)Establishes the California Public Utilities Commission (CPUC)
with five members appointed by the Governor and confirmed by
the Senate and empowers the CPUC to regulate privately owned
public utilities. Provides that the CPUC may fix rates,
establish rules, examine records, issue subpoenas, and other
powers over the utilities it regulates. Specifies that the
Legislature may prescribe that additional classes of private
corporations or other persons are public utilities. (Article
XII California Constitution)
2)Defines a public utility as every common carrier, gas
corporation, electrical corporation, water corporation, toll
bridge corporation, pipeline corporation, telegraph
corporation, sewer system corporation and heat corporation,
where the service is performed for, of the commodity is
delivered to, the public or any portion thereof. Provides that
when any public utility performs a service or delivers a
commodity to the public or any portion thereof for which any
AB 1008 (Quirk) Page 2 of ?
compensation or payment shall be subject to the jurisdiction,
control, and regulation of the CPUC. (Public Utilities Code
§216)
3)Establishes that the ownership or operation of a facility that
sells compressed natural gas at retail to the public for use
only as a motor vehicle fuel, and the selling of compressed
natural gas at retail from the facility 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)
4)Establishes that ownership, control, operation or management
of a facility that supplies electricity to the public only for
the use to charge light duty plug-in vehicles does not make
the corporation or person a public utility within the meaning
of this section solely because of that ownership, control,
operation, or management. (Public Utilities Code §216)
This bill would provide 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 solely because of that ownership,
operation, or sale.
Background
The California Global Warming Solutions Act of 2006, enacted by
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.
With the transportation sector representing roughly 40% of the
state's greenhouse gas emissions, increasing the use of zero
emission vehicles (ZEV), such as hydrogen fuel cell vehicles
(FCEVs), is expected to play a significant role in reducing
California's greenhouse gas emissions and provide improved local
air quality. In 2012, the ARB began implementing the Advanced
Clean Cars program which seeks 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
AB 1008 (Quirk) Page 3 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.
Hydrogen fuel cell electric vehicles. 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. Since the vehicle is primarily
fueled with pure hydrogen, there are no pollutants emitted into
the atmosphere, only water and heat.
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 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.
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 ZEVs on California
roadways by 2025.
In 2014, the Legislature passed and the Governor signed SB 1275
(De León, Chapter 530, Statutes of 2014) which codified a goal
of one million zero and near-zero emission vehicles on
California's roads by 2023.
California currently has 13 research hydrogen fueling stations,
nine 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 (Núñez, Chapter 750, Statutes of 2007).
Is a bill needed? AB 1008 would include hydrogen fueling
stations among the list of types of facilities exempted from the
definition of a public utility. In the case of electricity and
natural gas fueling facilities which are currently exempted,
they represent a commodity that is also supplied by a privately
owned public utility regulated by the CPUC. A similar exemption
may not be needed for hydrogen since there is no existing
AB 1008 (Quirk) Page 4 of ?
privately owned public utility that provides hydrogen as a
commodity to the public. However, the author and supporters
argue that such an exemption is needed to give investors greater
certainty and increase private investment in hydrogen fueling
stations.
Prior/Related Legislation
AB 118 (Núñez, Chapter 750, Statutes of 2007), created the
Alternative and Renewable Fuel and Vehicle Technology Program
(ARFVTP) and authorized CEC to spend up to $120 million per year
for over seven years (from 2008-2015) to develop, demonstrate,
and deploy innovative technologies to transform California's
fuel and vehicle types.
AB 631 (Ma, Chapter 480, Statutes of 2011), exempted from the
definition of a public utility a facility that supplies
electricity to the public only for use to charge light-duty
plug-in electric vehicles.
AB 8 (Perea, Chapter 401, Statutes of 2013), extended the sunset
imposed to 2024 for several fee programs, including the ARFVTP.
Required CEC to allocate $20 million annually until 2024 to fund
hydrogen-fueling charging stations, not to exceed 20% of the
monies appropriated by the Legislature from the ARFVTP Fund,
until there are at least 100 publicly available hydrogen-fueling
stations in California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: No Local: No
ASSEMBLY VOTES:
Assembly Floor (80-0)
Assembly Utilities and Commerce Committee(14-0)
SUPPORT:
California Hydrogen Business Council
Center for Transportation and the Environment
First Element Fuel Inc.
Natural Resources Defense Council
OPPOSITION:
AB 1008 (Quirk) Page 5 of ?
None received
ARGUMENTS IN SUPPORT: The author's office states that the
ambiguity in how hydrogen will be regulated is a concern for
investors interested in developing hydrogen fueling
infrastructure. The author argues that the certainty provided by
this bill when adopted will enable investors to prepare and
establish a credible, privately funded business case to scale
the market.
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