SB5910 – Accelerating the availability and use of renewable and electrolytic hydrogen.
Prime Sponsor – Senator Carlyle (D; 36th District; Seattle) (Co-Sponsors Hawkins -R; Billig, Conway, Hunt, Mullet, Saldaña, and Stanford – Ds)
Current status – Passed by the House March 7th. Senate concurred in House amendments March 9th.
Next step would be – To the Governor.
Legislative tracking page for the bill.
In the Senate – Passed
Had a hearing in the Senate Committee on Environment, Energy & Technology January 26th. Replaced by a substitute from the prime sponsor and passed out of committee February 2nd. Referred to Ways and Means. Had a hearing February 5th; passed out of committee on the 7th. Referred to Rules, and passed by the Senate unanimously February 12th.
In the House – Passed
Had a hearing in the House Committee on Environment and Energy on February 22nd. Replaced by a striker that drops the authorizations for municipal utilities and PUDs to produce, use, sell, and distribute some kinds of hydrogen; drops the provision making the Facilities Site Review process available to additional facilities; requires specific commitments from participants in an application for Federal hydrogen hub funding; and makes some other changes that are summarized by staff at the end of it.
Replaced by a striker in Appropriations; amended to make it null and void if funding for it isn’t appropriated, and passed out of committee February 28th. The new striker restores the authorizations for municipal utilities and PUDs to produce, use, sell, and distribute some kinds of hydrogen; it restores the tax breaks for producing electrolytic hydrogen and for the sale of electricity to produce it and renewable hydrogen that the Senate substitute dropped. It allows Commerce to provide funding (at an appropriated amount, not the earlier version’s $500K) to support applying for Federal hydrogen hub funding. It requires the Department of Revenue to produce guidance for county assessors to refer to in appraising solar and wind projects of at least one megawatt. Referred to Rules; amended on the floor to require utilities to provide certain information to the UTC before replacing natural gas with renewable or electrolytic hydrogen, and to provide some general guidelines for what the UTC is to consider in setting rates for it; passed by the House March 7th.
Summary –
Substitute –
The substitute no longer expands the tax breaks for the production of renewable hydrogen to include electrolytic hydrogen, and no longer provides the tax breaks on the sale of electricity to produce either of them. It moves the Office of Renewable Fuels under the Director of Commerce, removes the $500,000 appropriation to support applying for Federal clean hydrogen hub funding, and it would add facilities for storing any sort of electricity, not just electricity from renewable sources, to the Energy Facilities Site Council’s permitting process.
Original bill –
The bill would create a Statewide Office of Renewable Fuels, with a Director appointed by the Governor. It would work with other state agencies to:
(a) Accelerate comprehensive market development with assistance along the entire life cycle of renewable fuel projects;
(b) Support research into, development, and deployment of renewable fuel production and distribution.
(c) Drive job creation and support the transition to clean energy;
(d) Enhance resiliency by using renewable fuels to support climate change mitigation and adaption; and
(e) Partner with overburdened communities to ensure they benefit from renewable fuels efforts equitably.
It would also collaborate with local government, state and Federal agencies, private entities, public four-year institutions of higher education, and others on research, development, and deployment efforts in the production, distribution, and use of renewable fuels including electrolytic hydrogen. It would review existing renewable fuels initiatives, policies, and investments; consider opportunities for coordinating public, private, state, and federal funds to develop and deploy renewable fuels; and assess opportunities for and barriers to their deployment in hard to decarbonize sectors of the economy. The Office could request recommendations from the Washington State Association of Fire Marshals on fire and safety standards adopted by authorities.
By July 1, 2024, it would be required to develop a plan and recommendations for the Legislature and Governor on renewable fuels policy and funding including project permitting, state procurement, and pilot projects. It could apply for Federal funds and grants, would collaborate with a range of other agencies, and might work with them on compiling data about the State’s use of renewable fuels.
The bill would appropriate $500,000 for the next biennium to have the Department of Commerce provide funding to one or more local government bodies or a public-private partnership to prepare an application to secure federal funding to locate one of the four planned regional clean hydrogen hub in Washington. The Infrastructure Bill provides $8 million over four years to develop these; they’d work toward achieving a hydrogen fuel carbon intensity goal; would demonstrate the production, processing, delivery, storage, and end use of hydrogen; and would be the basis for developing a national network to facilitate a clean hydrogen economy. (The bill lists some reasons to think Washington would be a good location.) The Director would seek strong and timely applications with a broad range of participants for developing and implementing the hub’s infrastructure, and that had commitments from manufacturing industries, transportation, utilities, and other sectors to incorporate hydrogen fuels into their transition to cleaner energy.
The bill would have the UTC report to appropriate Legislative committees by December 1, 2024 about whether it should regulate rates and services for the production and distribution of hydrogen fuels; and whether the electric utilities it regulates should be required to analyze the costs and benefits of adopting special tariffs for power used in producing electrolytic hydrogen. The report would also address the adoption of safety standards for distributing and dispensing hydrogen fuel; recommended standards for blending it into natural gas distribution infrastructure; and the role it may serve as the state reduces greenhouse gas emissions.
It would make changes in the definitions of the “alternative energy resources” to add projects for producing renewable natural gas, for renewable and electrolytic hydrogen, and for energy storage to the Energy Facilities Site Council’s permitting process. (HB1812 makes some of the same changes, but adds clean energy manufacturing, expands the pre-applicant process to more than transmission facilities, and includes biofuels used for things besides transportation.)
The bill would authorize PUDs to produce, distribute and sell electrolytic hydrogen as well as renewable hydrogen, and authorize municipal utilities to operate with renewable and electrolytic hydrogen as well as natural gas. It would expand the current sales and use tax exemptions for renewable hydrogen (as “electric vehicle infrastructure”), and the exemption from the leasehold excise tax collected instead of property tax form leased public lands to include electrolytic hydrogen production facilities, in addition to ones for renewable hydrogen.
It would provide a 25 year rebate of the sales tax on electricity used in producing electrolytic hydrogen or renewable hydrogen, or in compressing, liquifying, or dispensing them, by exempting those sales from the tax if the utility reduced the price for producers by the same amount.