SoCalGas Achieves Important Milestone in Advancing Proposed Angeles Link Green Hydrogen Infrastructure System

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Dec 16, 2022, 06:55 ET

California Regulator Determines:

Angeles Link, "has the potential to decarbonize the state's and the Los Angeles Basin's energy use."
"Public interest is served if SoCalGas begins conducting a feasibility study of the Project immediately."
SoCalGas to join members of the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) in support of the State of California's application for historic federal funds to support regional hydrogen hubs

LOS ANGELES, Dec. 16, 2022 /PRNewswire/ -- The California Public Utilities Commission (CPUC) has approved Southern California Gas Co.'s (SoCalGas') request to track costs for advancing the first phase of Angeles Link, a proposed green hydrogen pipeline system that could deliver clean, reliable, renewable energy to the Los Angeles region. As envisioned, Angeles Link could be the nation's largest green hydrogen pipeline system and support significantly reducing greenhouse gas emissions from electric generation, industrial processes, heavy-duty trucks, and other hard-to-electrify sectors of the Southern California economy.

In a final decision, the CPUC declared, "the public interest is served if SoCalGas begins conducting a feasibility study of the Project immediately." The agency also asked SoCalGas to join members of the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) in support of California's application for a share of $8 billion in available federal funds to support regional hydrogen hubs.

"California has some of the boldest climate and clean air goals in the nation. The proposed Angeles Link aligns SoCalGas' scale, 150 years of expertise in service, and our highly skilled workforce with the clean energy and environmental policies that will shape this century," said SoCalGas Chief Executive Officer, Scott Drury. "As the CPUC's decision highlights, Angeles Link has the potential to support decarbonization for hard-to-electrify sectors of our economy, improve our air quality, bring new economic opportunities as well as sustain and grow skilled jobs to our region."

"As the chair of the California Senate Select Committee on Hydrogen Energy, it is my goal to help California continue serving as a national and global leader in clean hydrogen development so we can reach our clean energy and zero emission vehicle goals," said California Senator Bob Archuleta (D-Pico Rivera). "This decision on Angeles Link by the CPUC advances California's leadership on hydrogen and better positions the state to secure billions in federal funding opportunities via ARCHES."

Proposed in February of this year, Angeles Link would serve hard-to-electrify industries like dispatchable electric generation, heavy duty trucking and industrial processes. As contemplated, Angeles Link would deliver green hydrogen in an amount equivalent to almost 25% of the natural gas SoCalGas delivers today. In serving those industries, Angeles Link's green hydrogen could:

Displace up to 3 million gallons of diesel fuel per day, or 1 billion gallons annually, and enable conversion of up to four natural gas power plants to run on clean renewable hydrogen.
Eliminate nitrogen oxide (NO_x) and carbon dioxide (CO₂) equal to removing 3.1 million cars off the road annually.
Generate billions of dollars in new clean energy investments in the LA Basin and create thousands of new union jobs.

Over time and combined with other future clean energy projects, Angeles Link could also help reduce natural gas demand served by the Aliso Canyon natural gas storage facility, facilitating its ultimate retirement, while continuing reliable and affordable energy service to the region.

Consensus Grows: Clean Renewable Hydrogen Key to Reaching California's, Nation's Climate Goals

There is growing recognition among experts and policymakers that a broad set of tools will be needed to achieve California's climate and clean air goals by mid-century, including electrification, clean fuels like renewable natural gas and clean renewable hydrogen, and carbon management.

The California Air Resources Board's (CARB's) recent Scoping Plan calls for scaling up, "new options such as renewable hydrogen for hard-to-electrify end uses" in its roadmap to decarbonize California. The federal government has also signaled that clean renewable hydrogen will play a key role in a clean-energy future, with billions of dollars in funding becoming available to develop clean renewable hydrogen hubs.

The Angeles Link project could extend California's position as a leader on clean energy well into the future, while potentially helping to attract billions of dollars in new investment and maintaining and creating thousands of skilled jobs.

"Green hydrogen is an important pathway to reach our goal of zero-emissions cargo operations at the Port," said Port of Los Angeles Executive Director Gene Seroka. "The Port and our terminal partners have five active hydrogen demonstration projects and, ultimately, Angeles Link can play a key role in providing green hydrogen at the scale needed to achieve our zero-emissions and decarbonization goals by 2030."

"This decision demonstrates that California is a clear leader in paving the way for clean energy infrastructure while ensuring good union jobs for members like Utility Workers Local 483 and our union brothers and sisters alike," said Ernie Shaw, President UWUA Local 483, AFL-CIO.

"For the tens of thousands of skilled workers who build California's natural gas system, green hydrogen represents real and meaningful opportunities to participate in the state's clean energy transition," said Rodney Cobos of the Southern California Pipe Trades Council. "California's energy workers are among the most skilled and experienced in the nation, and it's important that they are ready and prepared to build the hydrogen infrastructure that projects like Angeles Link will facilitate. That's why we're glad to see that studying workforce planning and training will be a critical component of Angeles Link's next phase."

"Green hydrogen looks promising as a form of long-duration energy storage that could enhance electric system reliability and as a fuel that can help California reach its net zero-carbon goals for industrial end uses that currently have no practical alternatives to the use of natural gas," said Jan Smutny Jones of Independent Energy Producers. "Establishing the memorandum account is a critical first step toward determining whether green hydrogen can supplement or replace natural gas and reduce carbon emissions from end uses that are hard to electrify."

"The California Hydrogen Business Council is pleased with the California Public Utilities Commission decision to allow SoCalGas to begin incurring costs to study the feasibility of a purpose-built hydrogen pipeline," said Katrina M. Fritz, Executive Director of the California Hydrogen Business Council. "A common carrier pipeline would ensure transparent market access for hydrogen producers at all scales. The growth of this market is a necessary pathway for California to achieve deep decarbonization, as outlined in the recent update to the California Air Resources Board 2022 Scoping Plan for Achieving Carbon Neutrality."

"Angeles Link is a robust project that will significantly reduce the need for fossil-based natural gas and Aliso Canyon in Los Angeles," said Kathryn Barger, who represents Los Angeles County's Fifth Supervisorial District. "I support efforts to move feasible projects forward that reduce emissions and the need for Aliso Canyon without jeopardizing grid reliability – or the good jobs and important businesses – that depend on the natural gas system. Angeles Link is a win-win for Los Angeles businesses and residents."

"A hydrogen infrastructure project of this scale could help catalyze the market for clean hydrogen in California and across the Western United States," said Laura Parkan, Vice President, Hydrogen Energy Americas for Air Liquide N.A. "Our Nevada facility – currently the largest liquid hydrogen plant in the world – is already supplying the California transportation market, so a project of this scale will be another significant step forward for our hydrogen future."

"Hydrogen is creating the next infrastructure boom in the U.S.," said Tracy Hernandez, Founding CEO of the Los Angeles County Business Federation (BizFed). "Estimates show green hydrogen alone could generate approximately $140 billion in revenue and support 700,000 jobs nationally by 2030. Angeles Link better positions Los Angeles to capture that revenue and benefit from those jobs."

"Projects like the Angeles Link are vital to broader adoption of zero emission technologies across the state," said Craig Scott, Group Manager in Toyota's Fuel Cell Solutions Group. "Securing reliable and affordable supplies of green hydrogen allows companies like Toyota to develop next generation hydrogen fuel cell technologies for use in a variety of applications, such as our fuel cell electric vehicle powertrain for heavy-duty transport."

"Securing a reliable and affordable supply of green hydrogen into the Los Angeles region, paired with more funding for zero emissions heavy-duty truck technology conversion, would enable more truck fleet owners and operators to transition their vehicles," said Matt Schrap, CEO of Harbor Trucking Association. "This decision by the CPUC to advance the Angeles Link is a crucial step towards making the transition a reality."

Growing Portfolio of Sustainability, Hydrogen Innovation

SoCalGas is a leader in sustainability, having announced its aim to have net-zero greenhouse gas emissions by 2045. It is the first large natural gas utility in the United States to do so. As part of SoCalGas' net-zero strategy, the company is developing an industry-leading portfolio of clean fuels demonstration projects with collaborators from private industry, the US Department of Energy and California Energy Commission, and leading research institutions such as the University of California, Irvine, and the National Renewable Energy Laboratory. More than a dozen hydrogen pilot projects are already underway across the company.

In September, SoCalGas announced a proposed collaboration with the University of California, Irvine, to demonstrate how electrolytic hydrogen can be safely blended into existing natural gas infrastructure on the university's campus – an important next step in establishing a statewide injection standard for renewable hydrogen.

SoCalGas is also constructing a clean renewable hydrogen microgrid as part of its [H2] Innovation Experience. The [H2] Innovation Experience is a proof-of-concept project for resilient, clean energy using an electrolyzer to convert solar energy to clean renewable hydrogen and a fuel cell to supply electricity to a home, neighborhood, or campus community – independent of the electric grid. Earlier this month, the project was awarded the U.S. Green Building Council - Los Angeles' (USGBC-LA) Sustainable Innovation Award which recognized SoCalGas' commitments to sustainability through projects that demonstrate exemplary performance. The project was also named a World-Changing Idea in North America by Fast Company in 2021.

Angeles Link – Phase One and Next Steps

The CPUC's approval of SoCalGas' Angeles Link memorandum account application allows the company to track costs of performing Phase One feasibility studies for the project. Phase One activities include preliminary engineering, design, along with studies of supply, demand, possible end users, pipeline configuration and storage solutions, environmental considerations, workforce planning and training, robust stakeholder outreach, and an analysis of project alternatives.

"We're excited to have reached this important milestone and are grateful to the Commission and to leaders from labor, environmental organizations, government, and the private sector who are working together on the critical building blocks of California's clean renewable hydrogen economy," Drury said. "We look forward to supporting California in its application for federal hydrogen hub funding and continuing the robust, transparent and collaborative engagement process that has been a hallmark of the Angeles Link proposal from the start."

For the latest information about Angeles Link, visit https://www.socalgas.com/angeleslink.

About SoCalGas

Headquartered in Los Angeles, SoCalGas® is the largest gas distribution utility in the United States. SoCalGas delivers affordable, reliable, and increasingly renewable gas service to 21.8 million consumers across 24,000 square miles of Central and Southern California. Gas delivered through the company's pipelines will continue to play a key role in California's clean energy transition—providing electric grid reliability and supporting wind and solar energy deployment. 

SoCalGas' mission is to build the cleanest, safest and most innovative energy company in America. In support of that mission, SoCalGas aspires to achieve net-zero greenhouse gas emissions in its operations and delivery of energy by 2045 and to replacing 20 percent of its traditional natural gas supply to core customers with renewable natural gas (RNG) by 2030. Renewable natural gas is made from waste created by landfills and wastewater treatment plants. SoCalGas is also committed to investing in its gas delivery infrastructure while keeping bills affordable for customers. SoCalGas is a subsidiary of Sempra (NYSE: SRE), an energy infrastructure company based in San Diego. 

For more information visit socalgas.com/newsroom or connect with SoCalGas on Twitter (@SoCalGas), Instagram (@SoCalGas) and Facebook. 

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Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include risks and uncertainties relating to: decisions, investigations, regulations, issuances or revocations of permits or other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), U.S. Department of Energy, and other governmental and regulatory bodies and (ii) the U.S. and states, counties, cities and other jurisdictions therein in which we do business; the success of business development efforts and construction projects, including risks in (i) completing construction projects or other transactions on schedule and budget, (ii) realizing anticipated benefits from any of these efforts if completed, and (iii) obtaining the consent or approval of partners or other third parties, including governmental and regulatory bodies; civil and criminal litigation, regulatory inquiries, investigations, arbitrations and other proceedings, including those related to the natural gas leak at the Aliso Canyon natural gas storage facility; changes to laws and regulations; cybersecurity threats, including by state and state-sponsored actors, by ransomware or other attacks on our systems or the systems of third-parties with which we conduct business, including to the energy grid or other energy infrastructure, all of which have become more pronounced due to recent geopolitical events, such as the war in Ukraine; failure of our counterparties to honor their contracts and commitments; our ability to borrow money on favorable terms or otherwise and meet our debt service obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook and (ii) rising interest rates and inflation; the impact on our cost of capital and the affordability of customer rates due to volatility in inflation, interest rates and commodity prices and our ability to effectively hedge these risks; the impact of energy and climate policies, laws, rules and disclosures, as well as related goals and actions of companies in our industry, including actions to reduce or eliminate reliance on natural gas, any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to efficiently incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities or systems, cause the release of harmful materials, cause fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms, may be disputed or not covered by insurers, or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas and natural gas storage capacity, including disruptions caused by limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic on capital projects, regulatory approvals and the execution of our operations; changes in tax and trade policies, laws and regulations, including tariffs, revisions to international trade agreements and sanctions, such as those that have been imposed and that may be imposed in the future in connection with the war in Ukraine, which may increase our costs, reduce our competitiveness, impact our ability to do business with certain counterparties, or impair our ability to resolve trade disputes; and other uncertainties, some of which are difficult to predict and beyond our control.

These risks and uncertainties are further discussed in the reports that the company has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, http://www.sec.gov, and on Sempra's website, http://www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure, Sempra Texas, Sempra Mexico, Sempra Texas Utilities, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company or Southern California Gas Company, and Sempra Infrastructure, Sempra Texas, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

SOURCE Southern California Gas Company