Before the Public Utilities Commission of the State of California Comments of Southern California Gas Company

Home , Southwest Gas

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA FILED 06/24/21 04:24 PM Application of Southern California Gas Company (U904G), San Diego Gas & Electric Company (U902G), Pacific Gas and Electric Application 20-11-004 Company (U39G), and Southwest Gas (Filed November 20, 2020) Corporation (U905G) Regarding Hydrogen- Related Additions or Revisions to the Standard Renewable Gas Interconnection Tariff.

COMMENTS OF SOUTHERN CALIFORNIA GAS COMPANY (U904 G), SAN DIEGO GAS & ELECTRIC COMPANY (U902G), PACIFIC GAS AND ELECTRIC COMPANY (U39G), AND SOUTHWEST GAS CORPORATION (U905G) ON PROPOSED DECISION DISMISSING APPLICATION

ISMAEL BAUTISTA, JR. JONATHAN D. PENDLETON ELLIOTT S. HENRY Attorney for: Attorneys for: PACIFIC GAS AND ELECTRIC COMPANY SOUTHERN CALIFORNIA GAS COMPANY Law Department SAN DIEGO GAS & ELECTRIC COMPANY 77 Beale Street, B30A 555 West Fifth Street, Suite 1400, GT14E7 San Francisco, California 94105 Los Angeles, California 90013 Telephone: (415) 973-2916 Telephone: (213) 231-5978 Facsimile: (415) 973-5520 Facsimile: (213) 629-9620 E-Mail: [email protected] E-Mail: [email protected]

ANDREW HALL

Attorney for: SOUTHWEST GAS CORPORATION 8360 South Durango Drive, LVD-110 Las Vegas, Nevada 89113 Telephone: (702) 364-3227 Facsimile: (702) 346-3446 June 24, 2021 E-Mail: [email protected]

1 / 23 TABLE OF CONTENTS

Page

I. Comments ...... 1

A. Requiring the Joint Utilities to Resubmit a New Application Would Be Inefficient and Likely Delay Progress, While Supplementing the Application Would Be More Appropriate ...... 3 B. Supplementing the Application Allows the Joint Utilities to Provide Additional Detail on the PG&E and Southwest Gas Memo Account and SoCalGas and SDG&E’s Estimated Program Costs, Which Do Not Require a Budget and Exceed the Scope of Existing RD&D Funding ...... 6 C. Memorandum Accounts Are Not “Blank Checks” ...... 7

D. The Joint IOUs Have Been Collaborating with the CEC and UCR ...... 8

E. Pilot Demonstration Projects Yield Benefits to All of the Joint Utilities ...... 11

F. SoCalGas and SDG&E Appreciate the Suggestions for the Program ...... 12

II. CONCLUSION ...... 13

2 / 23

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Gas Company (U904G), San Diego Gas & Electric Company (U902G), Pacific Gas and Electric Company (U39G), and Southwest Gas Application 20-11-004 Corporation (U905G) Regarding Hydrogen- (Filed November 20, 2020) Related Additions or Revisions to the Standard Renewable Gas Interconnection Tariff

Pursuant to Rule 14.3 of the California Public Utilities Commission’s (CPUC or Commission) Rules of Practice and Procedure, Southern California Gas Company (SoCalGas), San Diego Gas & Electric Company (SDG&E), Pacific Gas and Electric Company (PG&E), and Southwest Gas Corporation (Southwest Gas) (collectively, the Joint Utilities) respectfully provide comments in response to Administrative Law Judge Liang-Uejio’s Proposed Decision (Proposed Decision) issued on June 4, 2021 to dismiss Application (A.) 20-11-004 (Application).1 I. COMMENTS The Proposed Decision correctly acknowledges that “effective, efficient, and timely progress” is necessary “towards achieving the safe and optimal use of renewable hydrogen, a goal which we fully support.”2 The Joint Utilities could not agree more. The Proposed Decision’s dismissal of the Application, however, fails to support this critical goal and it is based on multiple factual, legal, and technical errors identified below. The Joint Utilities request that the Commission withdraw the Proposed Decision and direct the Joint Utilities to submit supplemental testimony to augment the Application with additional information to address

1 Pursuant to Rule 1.8(d) of the Commission’s Rules of Practice and Procedure, SoCalGas has been authorized to submit these Comments on behalf of the Joint Utilities. 2 Proposed Decision at 2. 1

3 / 23 “uncertainties of the Program relative to duplication with already funded research, scope of work, timing, costs, and cost recovery3” raised in the Proposed Decision. The Joint Utilities further take this opportunity to correct statements in the Proposed Decision regarding certain items and assert: x Chapter 4 of the Application presents a strong technical roadmap outlining key hydrogen blending considerations for the distinct components of the California natural gas system and it would be unproductive and inefficient to disallow this testimony into the record; x The Hydrogen Blending Demonstration Program (Program) does have clear outlined goals and takes into account lessons learned from previously funded research;4 x The Joint Utilities have been collaborating with University of California, Riverside (UCR) as part of the Technical Advisory Committee;5 x The Joint Utilities have been collaborating with the California Energy Commission (CEC) in the hydrogen natural gas blending solicitation6 and will continue to collaborate on hydrogen research; x The Program will not lead to “unreasonable duplication;”7 x Completion of the UCR study will not resolve many of the technical considerations that must be addressed prior to establishing a hydrogen injection standard as noted in the Chapter 4 testimony submitted by the Joint Utilities; and x The Program will yield benefits to all of the Joint Utilities.

3 Id. at 19. 4 At p. 21, the Proposed Decision states, “A better use of time is to first define clear goals and objectives in coordination with the existing studies.” 5 Id. at 22. 6 Both PG&E and SoCalGas presented at the CEC Hydrogen Blending Scoping workshop held March 18, 2021, submitted comments on the scoping workshop and had conversations with them in advance of the workshop to help guide the research. See https://www.energy.ca.gov/event/workshop/2021-03/scoping- workshop-upcoming-solicitation-regarding-pilot-test-and. 7 Proposed Decision at 11.

4 / 23 The Proposed Decision erroneously presupposes “a seeming contradiction”8 that the Joint Utilities “cannot rely on studies conducted by UCR, CEC, or others as being applicable to their individual systems.” On the contrary, the Joint Utilities see the work being done by UCR, CEC and others as collaborative and critical to establishing an injection standard. The Joint Utilities are part of the UCR study’s Technical Advisory Committee,9 and the CEC pilot may be executed in one of the Joint Utility service territories. SoCalGas and SDG&E’s Program is a complementary, critical component and will strengthen the research being performed by UCR and the CEC. Reliance on the UCR study alone (a) will be insufficient because it does not involve blending in a pipeline system, (b) does not include any utility operational staff for hands on experience, (c) does not provide an opportunity for “lessons learned” to help establish operating standards across utilities, and (d) does not address many of the technical concerns from a safety and integrity perspective as outlined in Chapter 4 of the Joint Utility testimony. Similarly, because project selection for the CEC’s demonstration program will not be announced until June 2022, the Joint Utilities do not yet know the type of project(s) the CEC will fund; however, because the CEC is aware of the Application, the CEC and the Joint Utilities can take steps to not duplicate and rather complement their efforts. Therefore, dismissing the Application would not only be based on a myriad of factual, legal, and technical errors, it would also delay the Program, which is designed to substantially further and support California’s climate goals.

Requiring the Joint Utilities to Resubmit a New Application Would Be Inefficient and Likely Delay Progress, While Supplementing the Application Would Be More Appropriate Finding of Fact (FOF) 26 states that “[k]eeping the Application open is both inefficient and likely to lead to even longer delay than dismissing the Application with guidance to Joint Utilities regarding minimal requirements for a new proposal.” The Joint Utilities disagree with this statement, particularly because Chapter 4 is a strong technical document outlining the current understanding of hydrogen blending considerations for the California natural gas system and should remain part of the record, and not required to be submitted again later. The Proposed

8 PD at 17 states, “We are also concerned with a seeming contradiction in the Joint Applicants’ advocacy.” 9 Finding of Fact 15 “The Joint Utilities are a part of the Technical Advisory Committee for the Riverside Study.”

5 / 23 Decision also states “continuing this proceeding may actually cause a longer delay because we find the Joint Utilities’ planning for the Program is incomplete. We agree with UCAN that research studies without clear goals and objectives are unlikely to yield effective, useful results.10” The purported lack of “clear goals and objectives” is incorrect because the Program did have clear goals as presented in testimony Chapter 3. These explicit goals include (1) establishing hydrogen blending demonstration workflow, including data acquisition to set integrity management approach, (2) setting standards for polyethylene (PE) plastic and mixed material distribution networks, and (3) data acquisition on steel that would feed into integrity management analysis to set a standard for a transmission network.11

The Commission Should Direct the Utilities to Provide Supplemental Information

The Joint Utilities appreciate that the Proposed Decision recognizes the desire to move forward quickly with hydrogen blending-related research.12 The Joint Utilities respectfully request that the Application not be dismissed without allowing the Joint Utilities to supplement the Application and allow the Joint Utilities an opportunity to address concerns raised in the Proposed Decision related to Program uncertainty. The Joint Utilities disagree with the Proposed Decision that “the most efficient approach is to dismiss this Application” and that “[a] new, more complete, application will permit more effective, efficient, and timely progress toward achieving the safe and optimal use of renewable hydrogen.”13 Rather, withdrawing the Proposed Decision and allowing the Joint Utilities to provide supplemental information would be the most efficient use of time and resources instead of filing a new Application. Issuing a Decision that requires the Joint Utilities to submit a new application not only leads to inefficiency and delay due to duplication of procedural steps (including a protest period, potential hearing(s), re-noticing, etc.), but also further delays the process of making hydrogen blending a reality in the quest to decarbonize California. Withdrawing the Proposed Decision or significantly delaying

10 Proposed Decision at 20. 11 Application, Chap. 3 at 5, Figure 1 (Program Overview and Integration with Research and Hydrogen Injection Standard). 12 R.13-02-008 Phase 4A SB 1440 Staff Proposal issued June 3, 2021 noted at footnote 9 “While hydrogen-related considerations were an additional focus of the Phase 4 scoping memo, this Staff Proposal solely addresses SB 1440 implementation. Hydrogen-related considerations will be a focus of R.13-02-008 after SB 1440 implementation is complete”. 13 Proposed Decision at 9.

6 / 23 consideration of the same, and allowing the Joint Utilities to supplement the Application to provide more clarity, would be the best-case scenario. This allows for collaboration and discussion of details of the scope of work with the CEC to address potential duplication concerns, and to decide which two of the three proposed projects should be funded by memo accounts for SoCalGas and SDG&E and which one could be considered for funding by CEC.

Testimony Supporting the Application Lays Out Clear Objectives for the Program (Chapter 3) that Address Hydrogen Blending Knowledge Gaps and Will Validate Literature and Laboratory Research (Chapter 4)

The Proposed Decision errs in stating that the Program does not have clear objectives. The table below provides a high-level summary of how the field experience gained from the Program will corroborate hydrogen blending literature and laboratory research (discussed in Chapter 4) and address knowledge gaps for various areas such as odorant, pipeline integrity, metering, gas usage, and appliances. For example, Chapter 4 notes some odorant vendors have suggested a hydrogen blend will not impact the efficacy of odorant currently used for natural gas. One goal of the Program is to validate in the field that odorant will still serve its safety function of alerting customers to a gas leak, should one occur. Samples of the blended gas at different hydrogen blend percentages will be collected and analyzed to evaluate odorant intensity. Results from the demonstration project will validate odorant vendors’ feedback, will help establish an acceptable hydrogen blending limit for currently used natural gas odorant, and ultimately contribute towards an overall hydrogen blending injection standard.

Table 1 - Demonstration Project Objectives to address utility knowledge gaps and safety concerns

Chapter Reference Area Objective Validate that hydrogen does not affect Ch.3: page 14 Odorant efficacy of current natural gas odorant Ch.4: page 6 with odorant intensity sampling Safety checks; repair any leaks prior to starting demo; determine if hydrogen Ch.3: pages 9, 11 Leak surveys blends affect leakage from fittings, Ch.4: page 3 valves, etc.; facilitate long-term integrity modeling and development of

7 / 23 new operational and maintenance standards Validate performance of new leak survey equipment when operating with Ch.3: pages 9, 13, 14 Leak survey hydrogen blends; facilitate development Ch.4: page 4 equipment of new operational and maintenance standards Verify if there are any material impacts (steel piping, polyethylene piping, elastomers, rubbers, gaskets, valves, Ch.3: pages 13, 14 Samples of pipe and fittings, regulators) after exposure to Ch.4: pages 6 to 10 pipeline components hydrogen blends; facilitate long-term integrity modeling and development of new operational and maintenance standards Validate design, load balancing, and Ch.3: pages 9, 13, 14 Blending skid blend consistency; facilitate Ch.4: pages 30 to 32 operation development of new operational and maintenance standards Ch.3: pages 9, 10, 13, 14 Validate customer equipment operation Ch.4: pages 14 to 18, 25 to Customer feedback and response 30 Ch.3: pages 13, 14 Monitor and analyze demand changes to Gas usage Ch.4: pages 30, 32 forecast potential future supply needs Compare data from customer meters and Ch.3: pages 9, 14 Customer meters blending skid data to confirm accuracy Ch.4: pages 8, 9 and performance of meters Ch.3: pages 9, 10, 13, 14 Validate gas interchangeability Customer equipment Ch.4: pages 14 to 18, 25 to calculations and lab testing that have checks 30 been done

Supplementing the Application Allows the Joint Utilities to Provide Additional Detail on the PG&E and Southwest Gas Memo Account and SoCalGas and SDG&E’s Estimated Program Costs, Which Do Not Require a Budget and Exceed the Scope of Existing RD&D Funding

The Proposed Decision raises the concern with authorizing a “blank check” through approving memorandum accounts; however, it does not take into account the multiple Data Request responses the Joint Utilities have provided to Energy Division and the Public Advocates Office, outlining questions related to RD&D Programs and memorandum accounts. The

8 / 23 evidentiary process of an open docket would allow for these responses to be moved into the record of this proceeding, which the Joint Utilities support. For example, as noted in response to Data Request A2011004-CAL ADVOCATES-DR- 01-MT3: “SoCalGas and SDG&E have established internal orders in their accounting systems that will be used to track costs for purposes of recording these costs in the HBDPMA. These internal orders are established in connection with SoCalGas’ Work Order Authorization process where the appropriate level of management approval is obtained based on the estimated cost of the project/program. Costs subsequently charged to these internal orders are then reviewed by Program Management for appropriateness and accuracy of the costs charged. Program Management’s review is performed at the time for authorization of payment of costs associated with the program as well as the overall costs charged to the HBDPMA in connection with the account’s reconciliation.” Further, as noted in response to Data Request A2011004-CAL ADVOCATES-DR-02- CY3: “There is no overlap between the “projects” covered in AL 5652-G and A.20-11-004. The projects covered by AL 5652-G (SoCalGas RD&D account) support the State’s climate and air quality goals and will be complementary to advancing the overall goals of SoCalGas and SDG&E’s Hydrogen Blending Demonstration Program (Program); however, the projects are independent in nature and not tied to the Program.” By keeping this proceeding open, the discovery process with the Public Advocates Office and other intervenors can continue, which will provide the Commission with a sufficient body of evidence from which to render a final decision.

Memorandum Accounts Are Not “Blank Checks”

The Joint Utilities request the Commission grant their respective motions to establish a Renewable Hydrogen Memorandum Account to track incremental costs associated with developing and implementing a Preliminary Renewable Hydrogen Injection Standard in accordance with the requirements of Phase 4 of Rulemaking (R.) 13-02-008. Page 18 of the Proposed Decision states, “We understand that the Joint Utilities propose that all costs are later subject to reasonableness review, but we are not inclined to essentially authorize a ‘blank check’ no matter how important the subject research.” Memorandum accounts, however, are not “blank checks” and, as noted in the Proposed Decision, all tracked expenses would be subject to

9 / 23 reasonableness review until such time that the costs are requested to be recovered. Any unreasonable costs would then be disallowed for future recovery. Memorandum accounts are appropriate to track costs in situations where it is too early to develop a reasonable forecast of the costs to be incurred.14 Additionally, the Joint Utilities would only record incremental costs15 in the memorandum accounts that are not currently in base rates. As stated in their Application, the Joint Utilities have not received funding for this project in any past GRC or included a forecast for these costs in a pending GRC or any other proceedings. For these reasons, the Joint Utilities request permission to establish a Renewable Hydrogen Memorandum Account to begin tracking incremental costs related to this program.

The Joint IOUs Have Been Collaborating with the CEC and UCR

The Proposed Decision errs in stating, “In preparing such application, the Joint Utilities should first collaborate with stakeholders including UCR, the CEC, and parties in this proceeding; and Energy Division.”16 The Joint Utilities have been actively engaged with UCR, CEC and other stakeholders before and after submitting the Application, including hosting two required Technical Hydrogen Interconnection Working Group workshops in 2020 on the status of hydrogen blending research and the application. Additionally, the proposal to add a blending pilot to the Application (formalized as the Program) was introduced by SoCalGas and SDG&E, with support from PG&E and Southwest Gas, in the second workshop on June 17, 2020.17 PG&E and SoCalGas presented at the CEC Hydrogen Blending Scoping workshop held March 18, 2021, submitted comments on the scoping workshop, and had discussions with the CEC in advance of the workshop to help guide the research. The workshop goal was “to identify research

14 The standard for establishing memorandum accounts involves showing that (1) the costs are incremental to the utility’s GRC or other ratemaking applications, (2) the costs are foreseeably substantial, and (3) their existence is not speculative. D.18-06-029 at 7; see also D.21-04-015 at 26 (summarizing standard for authorizing memorandum accounts and noting that it would be foreseeable that the utilities will each incur substantial costs). 15 For example, PG&E establishes separate orders for tracking these incremental costs. 16 Proposed Decision at 23. 17 See Technical Working Group Report of Joint Utilities filed on Aug. 14, 2020, in R.13-02-008.

10 / 23 needs and opportunities for testing and demonstrating hydrogen blending into the existing California natural gas system.”18 Additionally, the Proposed Decision correctly notes in Finding of Fact 15, “The Joint Utilities are a part of the Technical Advisory Committee for the Riverside Study.” As such, the Joint Utilities are actively collaborating with UCR and any lessons learned will be incorporated into demonstration projects and further research and development efforts. In their technical advisory role, the Joint Utilities are well situated to identify any potential overlaps or knowledge gaps to address in pilot and demonstration projects to capture learnings, such as the SoCalGas and SDG&E Program. To further illustrate that the Application is not redundant, below is a table comparing the research of CEC, UCR and the Joint Utilities; it is also important to note that in order to have a rigor of real-world results, multiple demonstration projects should be completed before enacting a broad standard into practice. Figure 1 - Comparison of UCR, CEC and SoCalGas/SDG&E Proposed Program19

18 Scoping Workshop - Upcoming Solicitation Regarding Pilot test and Demonstration of Hydrogen Blending into Existing California Natural Gas System, available at https://www.energy.ca.gov/event/workshop/2021-03/scoping-workshop-upcoming-solicitation-regarding- pilot-test-and. 19 Attachment A to Notice of Ex Parte Communication by SoCalGas and SDG&E served on June 15, 2021, at Slide 4.

11 / 23 a. Because the UCR Report Is Expected September 2021, SoCalGas Can Quickly Build on Lessons Learned and Incorporate any Changes to the Program’s First Project

The Joint Utilities agree with the Proposed Decision – the UCR study is more than modeling and does include laboratory testing and experimentation. This is similar to actual testing and experimentation completed directly by the Joint Utilities as well as consortiums they participate in, such as PRCI, NYSEARCH, etc.20 The Joint Utilities nonetheless reiterate that UCR is not blending hydrogen into a SoCalGas, SDG&E, PG&E, or Southwest Gas active pipeline. The Joint Utilities support the ongoing research being conducted by UCR, but do not believe that completion of this work will address all technical and safety issues identified in the Chapter 4 testimony. The Joint Utilities are actively engaged in multiple international research programs to advance the use of hydrogen and will continue to incorporate any learnings from these programs into our respective hydrogen strategies. Notably, Dr. Arun Raju, Principal Investigator of the UCR study, provided comments that were sent to the proceeding’s service list stating “the need for subsequent real-world demonstration of hydrogen injection into natural gas infrastructure” and noting that “the current study is also not designed to develop new operational or safety protocols and does not include public outreach.”21 Dr. Raju emphasized the importance of both the CEC demonstration project and the Program: The demonstration projects proposed by the California Energy Commission, and the Southern California Gas Company can be important steps towards developing a state-wide hydrogen injection standard and initiating the transition towards a hydrogen economy. Such demonstration projects would not be duplicative of ongoing investigations but would incorporate the knowledge gained from recently completed and current projects.22

20 See Chapter 4 of Application for more information on the Joint Utilities’ past and current research, available at https://www.socalgas.com/sites/default/files/2020-11/H2_Application-Chapter_4- Technical.pdf. 21 Letter from Arun SK Raju, Ph.D., UCR, to CPUC Comm’r. Clifford Rechtschaffen (April 15, 2021, served on May 12, 2021), at 1. Attached hereto as Attachment B. 22 Id. at 2.

12 / 23 b. The CEC Project Can Learn from the Program’s First Project

The Proposed Decision states it is unclear what can be learned from the first demonstration project (referred to as Phase 1) that cannot be learned from the CEC project.23 In fact, in discussions with the CEC, there is mutual interest in having the CEC project learn from the first project in the Program. As part of the CPUC’s regulatory process, parties are invited to participate and offer recommendations for the CPUC’s consideration to ensure the Program delivers on specific performance metrics to further advance or evaluate the viability of blending hydrogen into the natural gas system. The Proposed Decision also notes the high cost of the first demonstration – expected at $15M, whereas the CEC’s budget is $6-7M. In Data Request Response A2011004-CAL ADVOCATES-DR-01-MT3, SoCalGas explained how it was estimated: SoCalGas retained an international consultant experienced in hydrogen projects to assist in developing a preliminary cost estimate. The consultant provided planned budgets from several international demonstrations shown in Table 6 of Hilary Strong Petrizzo’s testimony—many of which are newly operational or commencing in 2021. SoCalGas further refined the cost estimate based on infrastructure experiences and expected expenses within other projects completed in California. In further planning the first project internally, SoCalGas already has lessons learned to share with CEC and will continue to gain lessons learned which will ideally allow for more efficiency from the CEC pilot.

Pilot Demonstration Projects Yield Benefits to All of the Joint Utilities

FOF 25 states, “The Joint Utilities’ proposal does not address the applicability of the Program results to PG&E and Southwest Gas.” The Joint Utilities disagree and assert that the Program will benefit all California Joint Utilities including PG&E and Southwest Gas through the discovery of operational solutions for safely blending hydrogen into the respective California natural gas systems. PG&E and Southwest Gas are supportive of innovative research and development projects that support blending of hydrogen and other decarbonization strategies, especially those that address technology gaps specifically in terms of impacts to the gas

23 Proposed Decision at 11.

13 / 23 infrastructure and gas customers. PG&E and Southwest Gas agree that the hydrogen pilots presented by SoCalGas and SDG&E in the Application will provide the gas utility industry first- hand experience in a controlled operational testing environment on distribution and transmission pipeline materials, as well as consumer applications and residential and commercial appliances. Using the knowledge and experience gained from this Program will provide the Joint Utilities with results from testing and material analysis that will be used to develop standards for hydrogen blending in the California natural gas infrastructure systems. It may also lead to development of larger scale proposed demonstration projects to assess blending at higher hydrogen content or in more complex gas systems. From a technical perspective, PG&E and Southwest Gas believe that the lessons learned, and information gained from the Program with respect to system tolerances and function, will have direct applicability to all Joint Utilities.

SoCalGas and SDG&E Appreciate the Suggestions for the Program

SoCalGas and SDG&E appreciate the Proposed Decision’s guidance on the direction the Joint Utilities should consider in a future application.24 SoCalGas and SDG&E could, as suggested, shorten the length of the demonstration from up to five years to two to three years and can incorporate that adjustment, including any lessons learned or clarification on which project will be undertaken by the CEC. As SoCalGas stated during the March 18, 2021, CEC Scoping Workshop,25 the preference is for CEC to lead a high-pressure steel demonstration that would be applicable to all four Joint Utilities as their respective systems are connected via high pressure steel. The Joint Utilities will also provide interim reports and gather regular feedback from stakeholders, including UCR and CEC, and are open to doing so in the form of a Technical Advisory Committee as suggested by the Proposed Decision.

24 Section 5: Guidance for New Application, at 22. 25 https://www.energy.ca.gov/event/workshop/2021-03/scoping-workshop-upcoming-solicitation- regarding-pilot-test-and.

14 / 23

II. CONCLUSION Dismissing the Application would be based on the factual, legal, and technical errors identified above and ultimately be counterproductive to California’s climate goals, which are already facing substantial time constraints. The more reasonable approach is to withdraw the Proposed Decision and allow the Joint Utilities to supplement the Application as indicated above.

Respectfully submitted on behalf of the Joint Utilities,

By: /s/ Ismael Bautista, Jr. Ismael Bautista, Jr.

ISMAEL BAUTISTA, JR. ELLIOTT S. HENRY

Attorneys for SAN DIEGO GAS & ELECTRIC COMPANY SOUTHERN CALIFORNIA GAS COMPANY 555 West Fifth Street, Suite 1400 Los Angeles, California 90013 Telephone: (213) 231-5978 Facsimile: (213) 629-9620 June 24, 2021 E-mail: [email protected]

15 / 23 Attachment A Corrections to Findings of Fact

Findings of Fact insertions are underlined and deletions are strikethrough formatting

10. The Joint Utilities propose recovery of costs recorded in the Memo Accounts upon demonstration of the reasonableness of incurred costs in their next general rate cases or other ratesetting proceedings. 23. The complete scope of work, timing, the total costs of the Application, and cost recovery are unknown. The Program is too uncertain to provide reasonable assurance that it will lead to optimal outcomes.

24. A close collaboration outside of a formal proceeding among the Joint Utilities, the CEC, UC Riverside, Energy Division staff, and parties would not have scheduling constrains or requirements to file various pleadings and would allow open discussions on new ideas and concerns among stakeholders without having to defend a position in a formal proceeding.

16 / 23 Attachment B

17 / 23 1084 Columbia Ave. Riverside, CA 92507 951-781-5791 www.cert.ucr.edu

Commissioner Clifford Rechtschaffen April 15, 2021 California Public Utilities Commission Sacramento, CA

SUBJECT: COMMENTS REGARDING THE SCOPE OF UCR HYDROGEN BLENDING IMPACTS STUDY SPONSORED BY THE CALIFORNIA PUBLIC UTILITIES COMMISSION

Dear Commissioner,

I am the principal investigator of the CPUC sponsored Hydrogen Blending Impacts study currently being carried out at the University of California, Riverside (UCR), Center for Environmental Research and Technology (CE-CERT). I am writing to summarize my comments during an ex-parte meeting with your staff on Mar 26, 2021.

CE-CERT is the largest research center at UCR and performs multi-disciplinary, state of the art research to address society’s most pressing challenges in air quality, climate change, energy, and transportation. CE-CERT is a nationally recognized leader in these areas and prides itself on its education, and public service activities. CE-CERT also has a distinguished record of conducting independent, unbiased and science-based research, testing, and technology assessments for over 25 years.

As you may know, the current UCR study is aimed at evaluating the major impacts of injecting hydrogen into California’s natural gas pipeline infrastructure through laboratory scale experimental work and modeling analysis. My purpose in joining the meeting with your staff was to discuss the scope and deliverables of the UCR study, and the need for subsequent real world demonstration of hydrogen injection into natural gas infrastructure.

Specifically, the current effort is aimed at experimentally evaluating the hydrogen impacts on key phenomena including gas leakage rates from pipelines and associated components, impacts on degradation, durability and integrity of the pipeline system, hydrogen driven embrittlement of materials and components of the pipeline system, and analysis of the degradation processes. Our research team will also conduct a comprehensive review of the existing literature on this topic, and will make recommendations of maximum percentage hydrogen blending potential based on the literature review and project results. We believe that this study will address important gaps in knowledge and will identify the next steps necessary to move towards real world hydrogen blending. Due to the lack of scientific data in existing literature on many of these topics, the budget and performance period requirements, the project scope was designed to focus on select critical issues while other topics are addressed only through the literature review. For example, the current study does not involve any experimental or modeling work on the effects of hydrogen on end use equipment, on storage facilities, and a number of accessory components. The current study is also not designed to develop new operational or safety protocols, and does not include public outreach. UCR has other ongoing projects that examine some of these issues and plans to continue to conduct research and demonstration in this critically important area.

18 / 23 1084 Columbia Ave. Riverside, CA 92507 951-781-5791 www.cert.ucr.edu

As a result, the recommendations from the current CPUC study would identify acceptable hydrogen blending levels for specific materials and components, anticipated issues, potential mitigation techniques, and will detail additional research and next steps necessary to address unresolved questions. However, I believe it is necessary to conduct real world demonstration of hydrogen injection into the different sections of the natural gas infrastructure, under all relevant conditions, and over extended periods. Such demonstrations are critical in order to identify safe hydrogen injection levels, and necessary technological and procedural requirements. The demonstration projects proposed by the California Energy Commission1, and the Southern California Gas Company2 can be important steps towards developing a state-wide hydrogen injection standard and initiating the transition towards a hydrogen economy. Such demonstration projects would not be duplicative of ongoing investigations but would incorporate the knowledge gained from recently completed and current projects.

In conclusion, the ability to use California’s natural gas infrastructure to transport and store renewable hydrogen will likely play a crucial role in facilitating a transition to a hydrogen economy and addressing both greenhouse gas and criteria pollutant and toxic emissions. Hydrogen is known to interact with a number of materials used in the natural gas infrastructure in ways that can lead to degradation and potential failure. Therefore, it is critical to understand these phenomena and to develop mitigation and control strategies. Given the urgency associated with addressing climate change, renewable hydrogen production and use should be pursued as vigorously as possible. UCR is pleased to have been chosen by the CPUC to conduct a study on some of the elements of this critical issue and believes the results will help inform the Commission’s future decision-making processes.

Thank you for the opportunity to discuss this important topic with your office. I have attached several power point slides to summarize key points noted above. Please feel free to reach out to me with any questions.

Sincerely,y

Arun SK Raju, PhD., Research Faculty, Center for Environmental Research and Technology (CE-CERT) University of California, Riverside Riverside, CA 92507 Phone: +1-951-781-5686 E-mail: [email protected]

1 https://www.energy.ca.gov/event/workshop/2021-03/scoping-workshop-upcoming-solicitation-regarding- pilot-test-and 2 https://docs.cpuc.ca.gov/SearchRes.aspx?DocFormat=ALL&DocID=351622423

19 / 23 UCR Hydrogen Blending Impacts Study Overview • This project will study critical hydrogen driven processes that can potentially cause safety and performance related issues in select materials and components of the natural gas infrastructure • The recommendations will identify potential safety issues including the likelihood of damage/failure and any available mitigation strategies for these materials and components • Hydrogen blending percentage recommendations will need to be complemented and finalized through additional work. Areas requiring further experimental analysis, data collection, modelling, and evaluation will be identified as part of the project final report • To develop practical injection standards, it is critical to evaluate all the materials 20 /23 and components of the infrastructure, including storage and end use equipment. End use poses unique challenges related to gas quality, hydrogen combustion properties, and safety

https://www.cert.ucr.edu/ April 2021 1 UCR Hydrogen Blending Impacts Study Summary • Long term, in-situ exposure to hydrogen under real world conditions is essential in order to fully understand hydrogen related impacts. This can be accomplished only through real world demonstration projects that inject hydrogen into isolated sections of the infrastructure for extended periods • Other key components include developing appropriate safety protocols and mechanisms, policy directives, and stakeholder engagement, with emphasis on community outreach • Knowledge and information from recently completed, and several ongoing studies, including the UCR study, can be used to design and conduct the demonstration projects. Such efforts are not duplicative, but complement demonstrations

21 /23 • Given the climate urgency and decarbonization challenges, it is important to pursue renewable hydrogen deployment as vigorously and rapidly as possible

https://www.cert.ucr.edu/ 2 UCR Hydrogen Blending Impacts Study Goal: Assess safety concerns associated with injecting hydrogen into the existing natural gas pipeline system at various percentages. UCR will conduct a literature review, and perform modeling and laboratory scale experimental work to achieve this goal

Tasks 1: Literature survey 2: Potential impact of hydrogen injection on the natural gas infrastructure a. Modeling and experimental assessment of potential impact on natural gas pipeline leakage rates b. Modeling assessment of the impacts, including degradation, on durability/integrity of the existing natural gas pipeline system 22 /23 c. Modeling and experimental assessment of any impact on valves, fittings, materials, and welds due to hydrogen embrittlement d. Degradation analysis 3: Maximum hydrogen blending potential evaluation

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UCR Hydrogen Blending Impacts Study Deliverables • Literature Review: discussion of the current state of the art • Experimental and Modeling Work: Assessment of hydrogen driven processes that affect the durability/integrity, and cause embrittlement in select materials and components of the natural gas infrastructure • Maximum Blending Recommendation: Recommendations on potentially safe blending levels under select conditions based on existing literature, and experimental and modeling results

Topics Outside of Project Scope • End use equipment

23 /23 • Storage facilities • Safety protocols and procedures • Community engagement/outreach

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