BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1008|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 1008
Author: Quirk (D)
Introduced:2/26/15
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 10-0, 6/16/15
AYES: Hueso, Fuller, Cannella, Hertzberg, Hill, Lara, Leyva,
McGuire, Morrell, Wolk
NO VOTE RECORDED: Pavley
ASSEMBLY FLOOR: 80-0, 4/20/15 (Consent) - See last page for
vote
SUBJECT: Public utilities: sale of hydrogen to public as a
motor vehicle fuel
SOURCE: Author
DIGEST: This bill provides 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,
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Page 2
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, or 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
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 provides 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 (Núńez and Pavley, Chapter 488, Statutes of 2006), tasked
the Air Resources Board (ARB) to adopt rules and regulations
AB 1008
Page 3
that would reduce greenhouse gas emission in the state to 1990
levels by 2020. With AB 32, 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 electric
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 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.
FCEVs. 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
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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 (Núńez, Chapter 750, Statutes of 2007).
Is a bill needed? AB 1008 includes hydrogen fueling stations
among the list of facilities exempted from the definition of a
public utility. Current law exempts both electricity and natural
gas fueling facilities for vehicles from the definition of a
public utility. However, electricity and natural gas facilities
use 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 privately
owned public utility that provides hydrogen as a commodity to
the public. The author and supporters argue that such an
exemption is needed to give investors greater certainty that
hydrogen stations won't be regulated as a utility in the future
and, thereby, encourage increased private investment in
hydrogen-fueling stations.
Prior/Related Legislation
AB 118 (Núńez, 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,
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until there are at least 100 publicly available hydrogen-fueling
stations in California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/16/15)
California Hydrogen Business Council
Center for Transportation and the Environment
FirstElement Fuel Inc.
Natural Resources Defense Council
OPPOSITION: (Verified6/16/15)
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.
ASSEMBLY FLOOR: 80-0, 4/20/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
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Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
6/17/15 15:48:14
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