CPUC Decision Cautiously Authorizes Steps Forward On Pipeline Hydrogen and Clarifies Biomethane Reporting Requirements

On December 19, 2022 the California Public Utilities Commission (CPUC) issued Decision 22-12-057 addressing key issues identified in Phase 4 of the proceeding focused on standards for injection of biomethane and hydrogen into the natural gas pipeline system. The decision authorizes consolidated reporting requirements for biomethane, adopts a standard definition of “clean renewable hydrogen,” and orders development of new pilot projects to further evaluate injection standards for clean renewable hydrogen.

Biomethane Reporting

As a result of recent legislative and regulatory initiatives to expand biomethane production, transportation, and procurement by utilities, the CPUC has recognized the need to establish new biomethane reporting requirements and coordinate them with existing reporting. Decision 22-12-057 orders utilities to combine previous and new reporting requirements into a single report that will be filed annually beginning on May 1, 2024. The annual reports will include:

  • Details of actual biomethane procurement levels
  • Ratepayer bill impacts
  • Incremental capital infrastructure and/or operations and maintenance costs for the prior year compared to the estimated levels that were approved in utility biogas procurement plans
  • Impacts on disadvantaged communities
  • Related vehicle emissions
  • Emissions regarding carbon monoxide, carbon dioxide, and hydrogen sulfide
  • Water and air quality impacts from a state or local regulatory agency on nearby communities
  • Air and water pollution and purpose-grown crops control standards attestation
  • Waste byproducts used
  • Methane leaks and related information

Hydrogen Injection Standards

Recognizing advances in hydrogen technologies and anticipated future demand for clean hydrogen to fuel generation and transportation, the CPUC released a study earlier this year conducted by UC Riverside assessing the safety of injecting hydrogen into existing natural gas pipelines. The UC Riverside study found that hydrogen blending into the state’s natural gas pipeline infrastructure can help accelerate the transition towards the use of clean hydrogen as a fuel and energy storage medium and help the state meet a number of climate and air quality goals. However, the study concluded that risks increase as hydrogen blending approaches five percent by volume. The study recommended further “real world” demonstrations under safe and controlled conditions to determine the appropriate blend percentage to mitigate operational risks, ensure public safety, durability and integrity of the pipeline network, and prevent negative impacts to appliances.

Decision 22-12-057 adopts the UC Riverside study’s recommendation of further testing through hydrogen injection pilot projects. Specifically:

  • The gas utilities will file a joint application within the next two years for testing hydrogen blended into natural gas at concentrations above the existing trigger level of 0.1 percent in increasing increments from one to five to twenty percent. The pilot should include a proposed methodology for performing a system impact analysis that can ensure that any hydrogen blend will not pose a risk to the common carrier pipeline system.
  • A workshop to be held within the next six months will enable stakeholders to provide input on the design and implementation of the pilot projects. The pilot project applications will include a stakeholder engagement plan describing ongoing opportunities for input and participation by interested parties.
  • Any proposed pilot project must demonstrate that the applicant can reliably detect leakage of any hydrogen, methane, or blends.
  • Any proposed pilot project will include new or revised heating values, as necessary to reflect the impact of hydrogen blending.
  • Pilot projects should evaluate hydrogen injection at blends between 0.1 and five percent, and between five and twenty percent.
  • Pilot projects must be designed to facilitate measurement, monitoring, reporting, and independent technical assessment.

The decision also adopts a consensus recommendation of participants in the proceeding that the definition of “clean renewable hydrogen” should be consistent with the federal standard for hydrogen production incentives recently approved as part of the Inflation Reduction Act. That definition is:

Hydrogen which is produced through a process that results in a lifecycle (i.e., well-to-gate) GHG emissions rate of not greater than 4 kilograms of CO2e per kilogram of hydrogen produced and does not use fossil fuel as either a feedstock or production energy source.

The decision does not adopt a new injection standard, opting instead for the pilots described above. However, it does adopt new lower and upper action levels of 1% and 5% respectively as a safety measure in addition to the current 0.1 percent trigger established by the utilities’ renewable gas interconnection tariffs.

Contact: Brian Biering or Lynn Haug