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PG&E seeks rate hike to test adding hydrogen to its natural gas supplies
PG&E rate hike art

PG&E filed for yet another rate increase this month.

But instead of asking for a third round of money for “hardening” the electrical distribution system to reduce its wildfire liability  exposure, PG&E wants to test adding hydrogen blending to existing natural gas pipelines.

PG&E — which on Sept, 9, 2010 blew up a San Bruno neighborhood killing eight people, destroying 38 homes and damaging 70 others — has a checkered past when it comes to maintaining and safely operating its aging natural gas pipelines.

The utility in 2012 obtained a $769 million rate hike on the back of consumers to upgrade segments of the company’s 1,800 miles of natural gas pipelines that were shown to be in less-than-safe condition.

PG&E wants $94.2 million from ratepayers to underwrite a phased approach known as hydrogen blending to “safely test adding hydrogen to existing natural gas pipelines.”

A handful of utilities are exploring the option including Southern California Gas Co.

PG&E believes “using existing pipelines may be a cost-effective and timely way to transform California’s future energy system and achieve decarbonization at scale.”

PG&E, like all of California’s energy providers, is under the gun to meet the state’s decarbonization goals.

While there were no less than 26 pilot projects worldwide at the start of 2023 involving hydrogen blending, the San Francisco-based think tank Energy Innovation in 2022 issued a critique questioning the wisdom of what PG&E wants to do.

The think tank noted that while green hydrogen may end up being a vital tool to reduce greenhouse gas emissions in the chemical, oil refinery, steelmaking and even the shipping sectors,  it has less-than-stellar prospects for the process being used to heat homes by replacing 100 percent natural gas.

At the heart of Energy Innovation’s analysis is that hydrogen, the smallest molecule in existence:

• Would be more difficult to contain in pipes than natural gas;

• Is known to weaken steel that is used in large-scale gas pipelines;

• Ignites substantially easier than natural gas; and

• Carries roughly two-thirds less energy per unit by volume than methane or natural gas.

The critique by Energy Innovation mirrors independent studies such as the International Energy Agency’s 2021 “Net Zero by 2050” in concluding such a move by a utility like PG&E would likely only result in a minuscule reduction in greenhouse emission from home heating.

It noted replacing heating systems, stoves, water heaters, and such using natural gas with all-electric versions would be far more effective in terms of obtaining greenhouse gas reduction goals.

The think tank noted using hydrogen in existing natural gas systems could mean consumers would have to buy all new appliances and that major retrofits and/or replacement of existing pipelines would need to occur.

PG&E’s website posting regarding its hydrogen project notes “in addition to decarbonizing the gas system, using zero-carbon fuels like hydrogen can help reduce the carbon footprint in hard-to-electrify areas.”

It adds, hydrogen is “one of the ways PG&E is aiming for a net-zero carbon energy system in 2040 — five years ahead of California’s carbon-neutrality goal.”

Ground zero for the PG&E hydrogen experiment is San Joaquin County.

The utility indicates it plans to use water from Lodi’s municipal wastewater treatment on the west side of Interstate 5 north of Stockton in it hydrogen production.

Besides blending hydrogen with natural gas for use by existing heating systems and gas appliances, PG&E says the project will also demonstrate gas separation technologies.

The website notes, “When hydrogen is injected into the natural gas system, once downstream, it could be separated from the natural gas to provide high-purity hydrogen for use in fuel cell electric vehicles or for carbon emission free fuel cell electricity production. In fact, the only by-product from fuel cells is pure water.”

PG&E, in its March 1 filing, is asking the California Public Utilities Commission to allow it to recover, via a rate increase, the costs of the pilot project over a 10-year period beginning as early as 2027.

The added cost to a customer using 100 terms a month will be 15 cents.