Dive Brief:

• California regulators are considering whether to dismiss an application filed by state utilities that proposes a hydrogen blending demonstration program, as an initial move toward establishing a statewide hydrogen injection standard for the gas system.
• In a proposed decision that the California Public Utilities Commission (CPUC) can vote on July 15 at the earliest, regulators raised concerns that the utilities' initial proposal for an estimated $31.8 million demonstration project is unclear on the scope of work, timing and costs, and expressed unwillingness to hand them a "blank check," despite the importance of the research.
• The decision would, however, leave the door open for the utilities — which include Southern California Gas (SoCalGas) and Pacific Gas & Electric (PG&E) — to file a new proposal for such a program. "The hydrogen roadmap is in early stages and we will continue to support research and development around the impact of hydrogen-natural gas blends on gas system assets and customer equipment," PG&E spokesperson Melissa Subbotin said in an emailed statement, adding that the utility supports keeping the application open. 

Dive Insight:

PG&E, SoCalGas, San Diego Gas & Electric (SDG&E) and Southwest Gas Corporation's joint application to the commission came in response to regulators' request that they propose tariff changes that would include, among other things, a preliminary injection standard for renewable hydrogen.

However, the utilities eventually concluded that they would need to conduct more research to recommend a hydrogen injection standard and proposed a demonstration program, to be run by SoCalGas and SDG&E, which would study how different levels of hydrogen blending affect their pipelines. 

The utilities proposed dividing the program into three phases: the first, beginning in March 2022, would include blending hydrogen into a small part of SoCalGas' isolated plastic distribution system, and increase the percentage over five years. The second phase would test hydrogen blending in mixed plastic and steel pipelines, while the third would focus on transmission steel pipelines. The entire effort is projected to cost $31.8 million.

But in the proposed decision, Administrative Law Judge Scarlett Liang-Uejio recommended dismissing the application, while leaving the door open for the utilities to file a more thorough request in the future. One concern is that the proposed project might overlap with two other hydrogen injection initiatives ongoing in California — a technical study being conducted by the University of California, Riverside, which would also take a look at the impact of hydrogen injection in natural gas pipelines, and funding set aside by the California Energy Commission (CEC) for a hydrogen blending pilot. 

The proposed decision also points to gaps in the utilities' application, including the fact that the latter two phases of the demonstration program, which are supposed to begin in early 2023, have not yet been planned by the utilities. The administrative law judge also questioned authorizing the utilities to spend $31.8 million — which could later be passed on to ratepayers — on the project without well-defined cost estimates and plans.

The proposed decision does, however, include guidance for the utilities to file a new request for funds to study hydrogen blending, after collaborating with the CEC and University of California, Riverside. The new plan would need to include a detailed timeline, budget and details for the program and, if possible, complete the program within two or three years. 

"This isn't the commission slamming the door on hydrogen research — they're just saying that the utilities don't have a blank check, and they expect some minimum coordination in place to make sure ratepayer money would be spent wisely," Sara Gersen, clean energy senior attorney with Earthjustice, said.

The utilities planned to kick off the demonstration project with a 1% hydrogen blend in plastic distribution pipeline, and potentially ramp that up to 20% over time — which, because of hydrogen's energy density, would correspond to a gas that gets 7% of its energy content from hydrogen, said Gersen.

"There's no real plan for the other 93%," Gersen added.

PG&E is continuing to explore multiple options for decarbonizing its system, including the potential use of hydrogen, according to Subbotin.

"Blending hydrogen with natural gas is one of many promising innovations that, in addition to decarbonizing the gas system, could enable PG&E and other companies to offer hard-to-electrify sectors ways to reduce their carbon footprint," she added.