Assembly Select Committee on Select Committee on Building a Zero-Carbon Hydrogen Economy

Folks, we're going to start in 60 seconds. We'll start in 60 seconds. If people could take their seats and their conversations. Thank you.

For those with a power plant, there is a clicker available. Samantha from LBC has. They want to go up and grab the flicker before they go through this. All right, good.

Where are the-where are the questions from the agenda? No, they were going to be. You said you were going to. Yeah. I thought you were going to put. Both of them there.

No, because then for the second pound.

All right. Making you nervous, right? Okay. This is mine. This is mine. Good afternoon, everyone, and we really appreciate the large attendance here today.

Hydrogen is going to play a critical role as we try to move from a carbon economy to a carbonless economy and deal with all of the climate change challenges that the world faces and that California faces. So really appreciate this.

My overall concept is we will never get to the number of renewables that we need if we don't have a way to store some of the energy from those renewables that are out there. And hydrogen is going to be one of the key ways that we will do that storage.

But there will be many other ways that hydrogen will fit into our economy as we move forward. Today we only have 2 hours. That's not our decision.

We would like to have had this hearing go for as long as it was needed, as long as we could keep everyone engaged, but that's how long we're allowed to have the room.

So consequently, people will be limited four minutes each in terms of the presentation, which being on the other side and getting four minutes, I know is not very much time, but I hope that you'll view this as the initial invitation to identify the key points that you would like to make, both about whatever industry, whatever group, organization you happen to be representing.

What are you doing that we should be aware of? As we consider the fundamental question, how do we gear up the production of hydrogen, and how do we gear up the offtake of hydrogen? That's what we're looking at from the legislative standpoint and that we hope this hearing will help us.

I had two conversations a day with two key legislators involved in this, and they both said, so what are the incentives that we need to come up with for production and for offtake to make sure that we have the production and nobody wants to produce.

If there's not going to be the proper offtake out there, nobody wants to do. It's the classic chicken and egg. Nobody wants to be an off taker if they don't know that there's going to be production.

Market economies have to work harder at that than command economies where they can just dictate, this is what's going to happen, and you're going to be a lost leader until things catch up. So we need your expertise there. So I've had a chance to look at your PowerPoints. A lot of impressive work going on.

We want to hear about that. But if at the same time you can identify where are the choke points, what is the stick point, what is stopping you from scaling up even faster, bigger, better of scaling up, either on the off tag side or on the production side. We would really appreciate you doing that.

One of the advantages of having this as a Select Committee hearing is that all of this is being recorded. It'll be officially kept in the archives. Everybody can watch it. We have many legislators interested, and we have many legislators that are busy with lots of things.

So traditionally, Select Committees usually have a drop in or two from some of the other Committee Members, but it's usually just run by the chair in this environment. But I want you to know it won't be only observed by one Legislature. There'll be a lot of people, particularly staff of the legislators, that will be also watching this.

So really welcome you being here today. And I think I'm staying within my four minutes that I was allocated to get this kicked off. And with that, we have chairs for six here, and unfortunately we have seven on the panel. So I have. So, Paul, you'll be the last person.

And what I think I'll do is I will call up four and then I'll call up three in terms of doing that. So Angelita Galativa from arches, CEO of arches. Chris Hannon, President, state Building and Construction Trades Council, Dorn Barnes, CEO of Foothill Transit, and Jason Claudell, CEO of City of Lancaster.

And one other thing, and that is if you have a PowerPoint, and you want the PowerPoint as part of your four minute presentation, the sergeant is ready over there, but she has a mouse over there if you want to control it yourself or if you want to ask her to push the slide.

Any of the four of you, would you like the mouse? You're good. All right, excellent. And with that, and with no further ado, I'm really excited to have Angelina here representing arches, and then board Members from arches, like Chris.

Arches, just to get this on the record, was awarded $1.2 billion from the Federal Government, and they recently signed the actual contract for that. And Arches is the hydrogen hub application Committee. They submitted the hydrogen hub application, the Federal Government, we were awarded that and it was based on a commitment to green hydrogen.

And that just seems so appropriate to California and what we're trying to accomplish here in California. So with that, Angelina, you're on. Thank you for being here. Thank you.

Thank you so much for having us here. And if we can just pull up the presentation, the one slide. It's been wonderful to have the opportunity to work with you, General Bennett. We're excited to be here and talk about what is necessary.

You got to talk right into the end of these things.

Hello, can you hear me? Okay. Okay, great. Well, okay. Well, thank you so much for, for the opportunity to be here. And thank you so much for your leadership as well.

We've appreciated the conversations and having the dialogue to make sure that we can work together to ensure that we can actually build out the sustainable marketplace and ecosystem for hydrogen for California.

That allows us to reach our environmental goals faster in an accelerated manner in a much more optimized fashion, ensuring reliability and resiliency of our energy system, and of course, being dedicated to environmental justice, frontline communities, jobs, PLA's, and making sure that we have careers in this industry available to communities that have traditionally been underrepresented.

As you know, arches was awarded $1.2 billion, but Arches also has unlocked the potential of an additional $10 billion, for a total of $12 billion.

And we need to make sure that the signals that we send as we build out this marketplace are ones of transparency, longevity, and consistency, and making sure that we have a framework of policies that enable production and offtake. As you pointed out, arch's ecosystem depends on production and offtake being matched in real time.

We're focused on three major areas to begin with, power, ports and transportation. And we want to make sure that we have the hydrogen to meet those demands. And then we'll be transitioning to agriculture, to aviations, to shipping and other industries and heavy industries that are necessary to decarbonize the whole economy. Hydrogen can certainly help us do that.

And that builds on the tradition of renewables that we have in California, routinely hitting 100% renewable on the grids, having a lot of curtailed energy that we can use to deploy hydrogen, and use hydrogen in electrolyzers, but also biogenic sources that are green and sustainable as well.

And I'm not going to take up too much time, because we've got esteemed speakers who can actually talk about what is necessary for offtake and for production, who are also partners in arches.

And they are a part of our 400 plus public private entities and original equipment manufacturers who have joined this ecosystem and are dedicated to making it a success. So, again, thank you for the opportunity. We're super excited to be here.

Thank you for your assistance in helping us get such a great panel here today. I'd like to welcome assemblymember Hart, representing Santa Barbara, or any initial comments you'd like to make as we start. Wonderful. Great. Thank you very much. Thank you. I'd like to introduce Chris Hannon, President of State Building and Construction Trades Council.

Thank you so much. Chair Bennett, Committee Member, Assemblymember Hart and staff. Are you okay if we take this panel out of order and take me last on the panel? Certainly. That's great. Perfect. Wonderful.

I'm Dorren Barnes, Chief Executive Officer of Foothill Transit, and I don't know if the slide decks available.

We'll go on to Doren Barnes, CEO of Foothill Transit. I got the quick handoff there. That's right. Well, good afternoon. It's a pleasure to be with you.

And I just have a few pictures here that help illustrate, I think, some of the work behind our story. See if that comes up here in a minute. But when the first light comes up, you'll see a picture of one of our hydrogen fuel cell buses in front of the mountain range that sits behind our service area.

We are the fixed route transit operator for the San Gabriel and Pomona Valleys of Los Angeles County, and normally we don't get snow on those mountains, but that was a winter day, an unusual day when the snow was there, and I think it really illustrates what we're trying to do, which is create mobility options for our communities and at the same time do the right thing for the environment, and that's really what this effort is all about.

So if we go to the next slide, you'll see our mission, and the thing I would point out on our mission statement is that the first couple of words really talk about what we do, which is to move people throughout the community to make their lives better. That's our core function.

That's the thing that we do that we focus on every day. Sustainability is an important part of that and innovation is an important part of that, and you'll see innovation as the very last word as part of our mission statement. That's helped inform the work that we do, but always keeping in mind that our job is to move people throughout the community.

If we go on to the next slide, it should be about Foothill Transit. Again, we are the primary fixed route transit operator in the San Gabriel and Pomona Valleys of Los Angeles County. Service area: population of about 2 million people. About 327 square miles.

We operate a combination of 30 local routes and six commuter express routes connecting into Downtown Los Angeles. Our overall fleet at 337 CNG-powered buses. So, compressed natural gas has been an important part of our work for a long time. But we also today they have the largest fleet of hydrogen fuel cell buses in North America.

I'll say that again: the largest fleet. Let me say that again. And I say that somewhat jokingly. We'll have that for at least the next 10 or 15 minutes because we know there are lots of others that are working in this space and we collaborate extensively on that.

If we go on to the next slide, walk you through a little bit of our journey, and we have been a pioneer in the zero-emission space since the very beginning. We were the first transit system to deploy heavy-duty, fast charge battery electric buses. We moved on to grid-powered, longer range battery electric buses. We were the first in North America to deploy a battery electric double deck bus.

And all of that work that we've done has really helped inform not only our knowledge of using different zero-emission technologies, but also has helped inform the industry in terms of how things have been moving forward. Based on that experience, which again, has been incredibly valuable, what we learned is that using grid-powered, battery electric buses present some operational challenges that we struggled with.

Six-hour charging overnight to be able to refuel the bus versus ten minutes for compressed natural gas, range limitations, which are getting better, but managing the range is very different, and then managing electric fuel as a transportation fuel is much more complex than the traditional commodity-based fuels that we've used, like diesel, or more recently, compressed natural gas. That prompted us to dip our toe, if you will--really not our toe--our whole foot--in the hydrogen fuel cell space.

And we ordered 33 hydrogen fuel cell buses that we've now been operating for the last year. The hydrogen fuel cell buses operate pretty much identically to our compressed natural gas powered buses. We can fuel them up in ten minutes or less. They have a 300 plus mile range.

They're able to do the entire duty cycle that we need to complete our service to our community. And that's really been a key for us, is to have that similarity from an operational standpoint going forward. And that's caused us to continue to look at hydrogen as an option.

What you don't see here are the two bars we need to add, which is an additional 19 hydrogen fuel cell buses that we have on order, but we also have 24 grid-powered, battery electric double deck buses on order. So we're looking at both technologies going forward, continuing to evaluate, continuing to learn.

Beyond that, we're looking for funding for 24 additional hydrogen fuel cell buses, and we're looking to ARCHES, and we're looking to the TRCP Program and other programs to secure the funding to be able to move that forward. On our next slide, you'll see our hydrogen infrastructure, and this is our 25,000 gallon fueling tank.

These are able to supply fuel to up to 100 vehicles. So again, scalability has been important, and the infrastructure investment in the hydrogen infrastructure has been much lower. Last thought, I'll leave you with, again, the advantages are the reliable range, the efficient fueling time, and the operational resiliency.

From the standpoint of going forward, the two challenges that we have, one is that hydrogen costs two and a half times what CNG costs in terms of the operational cost for the fuel and buses currently cost double what a CNG-powered bus would cost that's identical to a hydrogen fuel cell bus.

The bus itself.

The bus itself. And so we're looking at the whole effort behind ARCHES and behind the industry again to increase production. We become the off-taker to be able to move that forward.

Great, thanks.

Thank you.

Appreciate that. You talked about having both the double decker electric buses and the hydrogen buses, and we've said over and over again one of the things that we think is a great policy for California is to try to keep hydrogen and electricity competing with each other--

Absolutely.

So that we have that competition driving innovation and driving performance and we all benefit from that. So glad to see you doing that and certainly the issue of trying to increase scale of production to bring these costs down would be really helpful.

I'd like to take a quick second before we go to our next speaker to welcome Assembly Member Cottie Petrie-Norris who joined us, and she's the Chair of the Utilities Committee--really appreciate you being here today--and Assembly Member Juan Carrillo who's also joined us. Do you have anything that you would like to say here to kick this off?

Just, thank you, as always, Mr. Chair, for convening this hearing and for bringing today's experts. Look forward to, I think, deepening everyone's knowledge base around the many challenges that we face as we try and to create California's clean energy future and figure out the role that hydrogen can and needs to play as part of that. So really appreciate all of you being here and look forward to your insights in the conversation ahead.

Assembly Member Carrillo.

Same here. Thank you, Mr. Chair. Looking forward to the conversations and looking at the regional opportunities that this can bring to Californians and looking forward to finding the solutions that we need in the state. Thank you.

Well, I appreciate all three of you Assembly Members joining us. Thank you very much. We do have a great panel here today. We'll move on to Jason Caudle, CEO of the City of Lancaster.

Great, thank you guys. Good afternoon. I appreciate being here. Just a quick story about Lancaster, very quick. We have a long history of green energy innovation. So when I talk about the impact on cities, we're probably unique in the sense that we understand it probably a little better than most.

We're able to process it a little better than most, but when you look at the topic of today, the question's going to be is how do cities move along at the same pace and the same stride that you guys are? Brief history. What we're doing, we've built gigawatts of solar energy in the desert in Lancaster.

From a perspective of where we're at, we're just north of LA County, thousands of acres that formerly farmed ag land that's perfect for solar generation. We've pretty much maxed out that solar generation as a community and we see hydrogen in our leadership, our mayor--all Republicans, by the way--see that hydrogen is the vision for what our greening of the economy is going to be, not only for Lancaster, but the entire state.

We have--you name it--every project that you could think of from solar electrolytic hydrogen to sewer gas to hydrogen, through waste to hydrogen, mixed paper to hydrogen. We've got a hydrogen-to-grid project that the city is engaging in, all of which we've developed partnerships with these developments for the effort of one: to create jobs for our community. We don't--we don't lose sight of this. The purpose we're doing this is to create jobs and tax revenue to our community.

And in every case, every one of these projects is doing that and going to be employing those people who need it the most in our community. So the urgency for us is there. The speed at which we operate is there. These projects that I've mentioned are in the permitting process, ready to be developed.

And as you mentioned earlier, the disconnect between offtake and production is difficult. Right? As you have that standoff, who's going to go first? What are we going to do first? We're working on solutions for that, but for this committee's purpose, I think it's important to understand how local government works and how it doesn't work.

One challenge we see--that I see in the future, and we're not the example of that, because I think we permit things very quickly and we have a leadership structure that is very aggressive in their decision-making process--I think Assembly Member Carrillo can attest, as our Assembly Member--we don't wait.

But as these projects come through, we talk about Foothill Transit, isn't going to be making green hydrogen likely in industry. The ports aren't going to be making green hydrogen. We need to find the places to make this in this state that is green. There are other alternatives that don't take so much space, but in the desert is where we're at.

The challenge we're going to see is that local governments sometimes are the ones that issue--not sometimes--they're always the ones that issue the building permits. Our President doesn't issue the building permits. Our Governor doesn't issue the building permits. Our Assembly and Legislature doesn't issue building permits.

At the end of the day, these projects all need building permits, and it comes down to a mayor and a city council who has to look their public in the face, sometimes with angry citizens across from them. I'm sure many of you are involved in local government.

Those decisions are difficult, whether it be Not In My Backyard, whether it be environmental groups challenging their CUP process, their environmental process, some of them not validated, maybe not for the same, for the right purposes, challenging some of these things, some of these EIRs.

So at the end of the day, I'm concerned that as we move forward in this industry, that we're going to be, we are going to be constricted by our own local governments. And I've been doing this for 30 years, so I know how I've watched a lot of local governments.

So the challenge is--and my local government brethren may be shaking their heads at me--but is figuring out a way that you can free us of those fears, right, of those concerns about litigation on projects that are going to need a CUP or need an environmental document, concerns from the fire departments who are going to be saying, 'you're not putting my firemen at risk,' relieving concerns from those neighbors that say, 'we're doing this right,' and either centralizing some of these decision-making processes, limiting or freeing up resources to make these decisions easier for city councils.

And I dare say some of the work you've done in housing already as it relates to removing some authorities of local government might be a solution if this is your purpose as a State Legislature. We have 1.2 billion dollars to spend quickly. So, I mean, I'm a local government advocate. I don't advocate for you usurping our authorities, but of the same token, if it's that kind of priority, that's the kind of work and support we're going to need.

And I think that's what's key to making this thing move forward because all the projects that Angelina is dealing with, all the projects you're going to be funding, everything we're doing is all going to require a building permit, and there's going to be local governments who are going to be impacting that. So...

Thank you very much. I appreciate that. We're going to specifically ask questions of Mr. Caudle right now because we have seven panelists. We only have six chairs here. And since you're city and nobody else represents a city, let's get all of our questions that we might have for city asked because then we're going to bring up the other three panelists and let them speak, and then we'll have Mr. Hannan go last, which is what he wanted to do.

So I, number one, would--I'm not starting with a question, I'm starting with a compliment. You gave us exactly what we were looking for here in that you told us what you're doing, but you also told us what you need.

And I think it's perfect sort of segue to what we're trying to do with this committee, is we need to spend time at the state level trying to figure out how we can relieve some of the burden of the unusual permitting that is going to be required for hydrogen facilities, whether that is statewide standards, and if you meet these standards, then you're relieved of liability or statewide standards and so therefore your community feels more comfortable as it goes forward, et cetera.

Is there anything else besides permitting that you think the state could do to help municipalities deal with or try to increase both your willingness to accept production facilities and your willingness to accept off-takers in terms of hydrogen?

Yeah. So when we look at it--and we've done the calculations--so if you look at the production of hydrogen, and it's this picture, we've got one project in Lancaster that's 22,000. The short answer is, other than providing us more money--we'll always take more money.

But when you look at the production of hydrogen, there is sales tax associated with that when you sell it for transportation purposes. So you look at a sales--I believe it's property tax. It's not exempt from property tax like solar is. Every project that's built has a property tax on it, so we should get revenue from there.

It's job creating, which is already happening. It is under a CWA, community workforce agreement, or a PLA, so every worker there should have benefits, retirement, and a good trained and good paying job. And there's sales tax associated with it. Depending on where the site is used or where it's brokered from, there should be a sales tax associated with these. All of those things are significant reasons to proceed.

If you look at a 22,000, we're different scale. 22,000 tons of hydrogen in one project in Lancaster is 22 million kilograms of hydrogen at $6.00 a kilogram is what the pricing is looking like today. That's 138 million dollars in revenue or in net sales, right? That's the equivalent of four Costcos in Lancaster, if you want to break it down to those.

That's four million dollars a year to Lancaster with zero responsibility for service. They're not going to call the cops, they're not going to need, you know, whatever. There's certain things that cities should be proceeding with these based on those metrics alone.

Great. We're going to take that little clip of the segment and send it to every city manager to try to encourage that, so that's great. Members, any other questions for Mr. Caudle before we go on?

One thing that I think is important for us to look at too is that the training. It's a new industry, new technologies. I think that with the Assembly Members looking forward to more investment in CTE, I think that that's something that we can consider.

I would consider providing the technology that, the training for this new technology because that's a workforce that may be there right now, but as technology improves and we improve the quality of the hydrogen, the CT training, I think that that's something that I would be interested in discussing to see how we can facilitate that, something that needs to be done across the state, of course. So is that something that you want to address, Mr. Hannan?

Sure, sure. Thank you, Assembly Member. So we recognize that this is a tremendous opportunity to not just provide a carbon-free fuel for, you know, for power, for transportation, for industry with environmental and health benefits, but it's also a workforce development tool.

Every one of the projects for construction is under a community workforce agreement or a project labor agreement that all has joint labor management apprenticeship training for all of the apprentices. There's continuing education for journey-level members. On top of that, on every ARCHES Project, one percent of the project is going to go into community benefits.

Different communities are going to have different needs. Workforce development, CTE education, is certainly a qualifying deliverable for those community benefits. So whether it be the Antelope Valley or another region of our state--and we didn't want to negotiate those ahead of time.

But if there's some funds that are needed for a local school district, for a nonprofit, hey, maybe it isn't, you know, CTE or training, and it's, you know, it's green space, it's clean water, whatever the need is for that community, but workforce development is high at the need of deliverables for those community benefits programs.

One more thing is just the opportunities for the region. As you know, we're commuters in the high desert, providing those opportunities for those that stay in the high desert, in other regions throughout the state obviously. I can only speak to my district.

But because we are commuters there, and we rely a lot on the aerospace industry, having this opportunity to be in this region is tremendously important to me because that can diversify the job options that we can provide and keep our residents away from the 14 Freeway as much as possible because it does take 2 hours to get down to the jobs where they are right now. So whatever we can do to be--whatever I can do, I should speak for myself--happy to do that. Thank you.

Similar--do you mind if I--so similar to the City of Lancaster or the City of Palmdale's community workforce agreements, the community workforce agreements on the ARCHES projects also have local hire, so that local community is going to be the first priority along with veterans and graduates from the workforce development programs associated. So we're trying to centralize the opportunities first for the communities these are located in.

Assembly Member?

Well, thank you all for being here, and like the Chair, appreciated your focus on what you're doing and what you need from the state. So I want to dig into that a little bit because one of the things that, you know, we've been trying to think through, not just in the hydrogen context, but in the broader clean energy context, is how do we incentivize and encourage local governments to get to yes?

And I think when we talk about incentives, the obvious thing is money. Don't have a ton in the couch cushions just right now. Are there other things that we as the state can offer to our local governments to help encourage them to get to yes and cite these projects and be part of the collective solution?

Thank you. I think one, and being very specific, is that you have an opportunity with ARCHES, and what they're doing, what Angelina is doing is phenomenal. They have a certain key number of projects they've identified as priority projects. If the Legislature could somehow identify--you don't have to do every project. Not every project and not every city.

You don't have to become a blanket across rules across every city. We've got--and we personally and our council directly get as much of that 1.2 billion dollars as you can, right? She's been directed: spend as much of that 1.2 billion as you can, as fast as you can.

And I think that's what we're looking for you to do, is figure out those projects, streamline them, fast track them, pre-approve them, environmental waivers, you know, State Fire Marshal certifications on their product, whatever it may be, and you guys know that better than I do, but it doesn't have to be every project in the entire world.

It doesn't have to be every city in the entire state. It has to be those projects that are getting that 1.2 billion dollars that Angelina is focused on spending. And if we could just do that, it'll get the ball rolling and then what happens next is what happens next. But we get that 1.2 billion spend as fast as possible because nobody knows what November is going to have anyway.

Great.

And if I can just add very quickly, as Chris also pointed out, the benefits of the projects that were awarded, the 1.2 billion dollars, are quite significant in terms of the one percent going back into community benefits, which is 380 million dollars into our communities, 229 into job training, and making sure that we have the training and the qualified labor force to come into those jobs.

And starting with the training institutes that the labor unions run, but also state schools, community colleges; the UC is a partner in our initiative as well in our endeavor, and making sure that we have certification and training across the board that's coordinated that allows for new relationships to be formed.

150 million dollars going into community benefits, the projects that Chris mentioned as well. We're buying 1,000 new buses to help Durham maintain its leadership in being number one in North America but also we have another 14 transit agencies in ARCHES and another 25 that want to come in.

200,000 new jobs, new high-quality, family-sustaining career jobs, and most importantly, 2.95 billion dollars in environmental benefits and health benefits every year. That's year after year as a result of the pollution that will be mitigated with these projects, and we focused on the major ones, mainly taking diesel off the road.

So those are cutting edge projects that we work together with our partners to make sure we're creating an ecosystem that allows, again, all projects to succeed, and if we are together working with you to enable that ecosystem to develop with a platform of policies that are aligned on the local, state, and even national level, then we've actually done a service not only to California and our communities, but to the region and the world.

Thank you. I have the pleasure and responsibility to try to have 13 speakers speak and have us ask the questions that we want to ask, all within the 2 hours that they allotted us, and the members weren't here but I offered my initial whine about only being given 2 hours, but that's what they gave us for this room. So if everybody will just try to keep that in mind and cut to the chase, get to the important stuff, but we already got some really important stuff and I appreciate this very much.

So I'm going to call up the other three speakers, and Mr. Hannan, I'm going to ask you, do you want to be--yeah, you're going to stay there? Oh. Just know that Mr. Barnes, if you'll stay, please? Mr. Barnes, you stay. We haven't asked you questions yet. We have questions for you.

We were just trying to knock one of you out because we only had six chairs, right, so we knocked the city rep out. They could, but I think we're all right. So we have--well, I'll just introduce them as they get up here, but we have Haris Gilani, who is here on behalf of the University of California, and Mr. Gilani, would you like to kick us off with your four minutes that you're allocated? Thank you very much.

Great. Thank you so much for the opportunity. My name is Haris Gilani, and I'm the Biomass and Bioenergy Advisor with--sure, okay. Is it better? Good. I am the Biomass and Bioenergy Advisor with the University of California Agriculture and Natural Resources Division, also known as UCANR.

And at UCANR we connect the power of research with local communities to improve the lives of all Californians. Over the past few years, we have been heavily involved in research regarding biomass utilization.

And that really means that utilizing excess biomass that we have in the state and converting it in different low carbon and carbon-negative fuels, such as hydrogen. And this work is really important because it not only provides energy security to California, but also it helps the state meets its climate goals and reduce wildfire risks.

So the good news is that there is a lot of biomass available in the state in the order of about 70 million bone dry tons. And that's in the form of agricultural waste, forest biomass, and the municipal solid waste. And if we are able to convert all of this biomass into hydrogen, it will be sufficient to meet 95 percent of the state's hydrogen demand by the year 2050. So that's pretty significant.

One of the things that we have seen over the past few years is that a lot of startup companies have come up in California and they are producing biomass-based hydrogen in the state, and they are in various stages of development right now.

But we see that the future demand for hydrogen is in a variety of sector, including agriculture, heavy-duty transportation, and heavy equipment in the ag sector. So there are a number of companies that are manufacturing heavy equipment, such as hydrogen-powered tractors or fuel cells operated forklifts that are used in the warehouses, but we think that the biggest opportunity lies in green ammonia sector in the state, and that's because green ammonia has applications in fertilizers and also in maritime shipping.

At this point, we don't have any green ammonia facilities in California at commercial scales, but there are a number of facilities in Texas that are commercial scale and that are under development right now, but we think that with ARCHES's efforts to create hydrogen hub in California and the City of Lancaster's pilot program on green ammonia would pave the way for future expansion of this sector in the state. So to scale up this industry in California, we need long-term biomass supply.

We also need infrastructure development and enhanced government policies through providing incentives, such as procurement policies and mandates on public procurement purchases for public agencies. Thank you.

Thank you very much. Our next speaker is Heather Tomley, Managing Director in Planning and Environmental Affairs at the Port of Long Beach. Welcome.

Great. Thank you. And I do have some slides, so as they're pulling those up, I'll go ahead and get started. It's my pleasure to be here today and to represent the Port of Long Beach, but also the good work that's being done by the port sector throughout California.

Ports in California are aggressively pursuing zero-emission and decarbonization goals. At the Long Beach and Los Angeles port complex in San Pedro Bay, we established zero-emission goals to get all of the terminal equipment to zero-emissions by 2030 and for the on-road trucks by 2035.

And we need all the tools in the toolbox to be able to get there. So the work that's being done on behalf of the state through ARCHES and the development of the hydrogen hub is really critical to support the work that we're doing. For many years, the ports in our terminals have been demonstrating innovative technologies to support the transition to zero-emissions, and we're learning a lot about how those technologies can meet the operational needs.

And for some heavy-duty, hard to decarbonize operations, we found that the hydrogen fuel cell technology can perform better to be able to meet those demands. Hydrogen fueling operations are similar to the existing fueling operations today, and they can offer more flexibility to move equipment as needed because you aren't locked into particular locations where the electrical infrastructure is located. Hydrogen technologies can also be suitable for a wide range of applications to meet the operational demands over extended ranges and for different equipment types.

And there's less cost and operational disruption to install the needed infrastructure for fueling as compared to electrification. If we could skip ahead two slides. Today we're seeing hydrogen fuel equipment demonstrated in terminal operations.

We've been testing different types of terminal equipment since 2019 and for on-road trucks, we're starting to see an escalating number of equipment or on-road trucks in our fleet. You need to register to be able to do drayage operations in and out of the ports, and from the beginning of this year, we started with four fuel cell trucks. As of yesterday, we were up to 54. Next slide, please.

Beyond terminal equipment and trucks, we also foresee a significant future potential for hydrogen to support decarbonization for locomotives, harbor craft like tugboats and pilot and crew boats, ocean going vessels, and applications to support power system resilience and installation of stationary fuel cells into microgrid systems at ports and terminals, and also the potential to use fuel cells to provide alternative clean power for shore powering vessels or powering electric dredges.

The transition will require all of us working together and the technologies--next slide, please--the technologies are still emerging, and they're being refined to help us to meet the operational needs and the testing that we've been conducting over the last several years really has been critical to help us to inform the upgrades that are needed and also to build user confidence in the equipment. Upfront, capital costs for the equipment is very high, and the operational costs are also higher than traditional technologies.

And that's why incentive funding programs have been so critical at this early stage to help build the market. Current supplies of clean, renewable hydrogen are limited, but we need to allow the market to build as we continue to decarbonize the fuel supply, similar to how we're proceeding with electric technologies.

Permitting and approvals for these new technologies are also a challenge, and a critical hurdle for terminal operators is the need to be able to conduct mobile fueling of the equipment with liquid hydrogen, which is currently prohibited by the Fire Code.

We also need to build experience and expertise related to hydrogen equipment, including support for training and workforce development programs for operators, mechanics, and response agencies like firefighters. And finally, grants will be critical to reduce financial risk and to accelerate deployment.

But access to funding can be challenging for many of the operators if they're not grant experts or if they need a local government sponsor. And requirements like foreign company ownership and Build America Buy America are challenging in an international industry where most of the port equipment is spent specialized, and limited production--manufacturing occurs in the United States. So, next slide. I appreciate the opportunity to speak to you today and be happy to answer any questions.

Your timing's impeccable. Great. Thank you very much. And our last speaker in this panel, Paul Habib, Legislative Intergovernmental Affairs, Los Angeles Department of Water and Power, and you guys have a very exciting project.

Yes. Thank you very much for having us here today. In the interest of brevity, I'll skip the slides. We at Los Angeles Department of Water and Power, the largest municipal utility in the country, and we always view ourselves as trying to be at the forefront of moving the power industry away from fossil fuels.

So in 2019, we enacted our LA100 Study that said our city council gave us some very ambitious goals of getting to 100 percent decarbonized power by 2035. So we did the LA100 Study with the National Renewable Energy Labs, NREL, to see if that's possible and how can we do it.

And the study was completed in 2021 and said, 'yes, you can do it.' It requires all pathways. You're going to need solar, you're going to need wind, you're going to need storage and battery. But you're also, we have four in-basin power plants right now, and it says you're going to need to continue to run those to provide that firm, dispatchable energy that you need.

Renewable energy can be intermittent if the wind doesn't blow, the sun doesn't shine, but so you need that as a backup for high heat days, emergencies if there's fires to take out the transmission. A lot of our renewables come in through transmission lines from other places, including other states. And so it's very important that those are available.

And we can't run that on fossil fuels. Right now they run on natural gas, and so how do we do that? The study pointed to hydrogen. Our stakeholders chose that as--you could do biofuels, you can do other things--but hydrogen was the one our stakeholders selected as the pathway forward.

If you combusting turbines on 100 percent green hydrogen, you would have 100 percent removal of all of carbon, right? You would lose carbon monoxide, carbon dioxide, all the carcinogens that are said. So these huge impacts to the air quality.

Well, quite frankly, on the labor side, continuing jobs that are very similar to the jobs they have now, so that those continue function and opening up additional to your point in the science and technology and those opportunities for the local community to kind of be part of this transition. And so we look at this as very important.

We have committed locally in Los Angeles to transition our scattergood power plant by the end of this decade to be hydrogen compatible so they can run on a mix of hydrogen and natural gas until the technology is commercially available to run at 100 percent.

And there's a lot of people who wonder, how do you know this is possible? How will it work? Well, we did have the foresight already to move forward. We still get some of our power, unfortunately, from coal out in Utah, and we are transitioning that next year to a new turbine.

Initially it was going to be natural gas, and when we got this mandate, we are actually doing it as a hydrogen turbine. It'll start off at 30 percent hydrogen blend with natural gas and again ramp up to 100 percent when that technology is available. That will be opening next year. So we are going to--we know it's possible, it's going to be green hydrogen, renewable energy producing that, and that will kind of be the roadmap for how we do it here locally. So it's not just an idea that's out there as a concept.

The plant is almost built and it will be operational hopefully around this time next year, but for sure sometime next year. So when it came to hydrogen hub, our City Council gave first unanimous vote to go after hydrogen hub funding in collaboration with our local partners, the Port of LA and sanitation.

And then they also did a unanimous support to move forward on the Scattergood Project. I think because of that support that we had locally and then the additional support we had on the state level, I think that's why we were so successful in getting this hydrogen funding.

Scattergood has been selected as one of the projects that's going to get significant amount of money, and why that's important is those millions of dollars are millions of dollars that our ratepayers don't have to pay. As we do this transition, how do we make sure that we can do this in a cost-effective way?

We know we have to get off fossil fuels. It's not cheap. The cheapest thing is to keep our fossil fuels, and we're not doing that. We're committing to a new technology. But when we can get incentives, when we get this grant--that's the local support that we got both from the City of LA and the state--I think allows us to find ways to do this in a way that is cost-effective.

And then, the other thing is at scale. We are located to other sectors who have hard to electrify. We're right next to the ports. We're near the airports. There's a lot of interest there. And there's a lot of folks who wonder, I want to transition, but am I going to get the supply?

And so as an off-taker, we know we're going to leave large quantities if we have to run this for a small amount of time, but we're also right next to folks who also could then--if there's a supply that comes to us, then it's accessible to them and you open up those marketplaces and that's our hope and that's what we need.

I think the help here is to make sure that there's that connectivity--that's what ARCHES is trying to do as well, I think this great thing--the connectivity of the producers and the off-takers, so that there's a confidence that you'll be able to get that and you can make that financial commitment. As a government agency, we did that previously when it came to solar.

It was a little more expensive, but we put that investment--now it's pennies per kilowatt when it was dollars, right? We're thinking the same thing with hydro. We put that investment along with our partners, we see it at the ports, and we expect that we'll drive down hopefully the market so that it becomes more cost-effective because people ultimately are going to make this decision based on the economy. We think it's good for the environment, but it's actually both, right?

And so if it can be economically viable, we already know the environmental benefits for our communities, local and for the region. And so that support is going to be integral moving forward is connecting that infrastructure so that we all win.

You're going to be both the chicken and the egg, right? Unlike everybody else, right? You're going to produce it and you're going to consume it.

So then nothing comes first. They just come together, apparently.

Yeah, exactly. Right. Great. Mr. Hannan, would you like to go with this panel? When you said last, you don't want to go last after every--yeah. This panel. Go ahead.

Yeah, this is fine. Thank, thank you, Chair Bennett. Thank you, Assembly Members, staff, for allowing ARCHES and the State Building Trades to be part of the discussion on this important topic. Chris Hannan, State Building and Construction Trades Council of California. Also founding board member for ARCHES for the State Building Trades.

It was important for us to be a part of something that was going to, number one, help the state deliver our ambitious climate goals, deliver those benefits to the residents, and also for our members to be included in the future.

Hydrogen can allow us to continue, but to decarbonize industries where our members are not necessarily always working on the shop floor. We have other good sisters and brothers in labor that are, you know, doing the work on the shop floor, in the factory or in the port, doing the maritime and longshore work. We have great sisters and brothers that are operating production facilities.

Our members are coming in there highly trained to deliver the construction, the infrastructure, and the ongoing construction maintenance to keep those facilities operating. Hydrogen and doing it through the deliverables that the Department of Energy has set forth through the Infrastructure and Jobs Act, through the Biden/Harris Administration, can be done the right way.

It's not, you know, picking production and then there's no customers. It's not helping a transportation agency roll out a fleet of vehicles and then not having the supply or having intermittent supply where we don't have the reliability.

And then for the consumer, one of the deliverables and one of the main deliverables for the Department of Energy is cost. We want to shoot towards that $3.00 per kilogram. We want to do it in the safest, cleanest, most reliable way that has the values that all of us are accustomed to here.

You know, values for environmental stewardship, values for workers and community. Other states and other countries simply do not have those values. So it was important for the Building Trades to be involved with the creation of ARCHES, for us to pursue ARCHES together along with the State of California.

We appreciate our partnership, as well as with our partnership with Renewables 100, the UC and the Office of GO-Biz, but also the industrial partners that are coming on that are buying into these values. Every project in ARCHES has deliverables to the Department of Energy. They also have standards that we all hold very close here in California.

So that's, you know, this all has to go together: production, transportation, distribution, and offtake. And if we can time those together and if we can have a large enough need and we can have the matching production and seamlessly safely transport, we can deliver it at a cost, we can deliver it sooner, realizing the environmental goals, the job creation and all the economic benefits of it, but they all have to go together.

And your help, you know, taking up this important subject in this Select Committee in the Assembly, we want to recognize your wisdom for doing that, and we're happy to be a part of it and answer any questions you have.

Thank you very much for being here. Really appreciate it. In the interest of trying to get all of this done, I'm going to try to discipline myself to keep my questions to 32nd questions and try to ask for 32nd answers just because that's going to be the best way for us to maximize, I think.

So I'm going to start with one 30 second one. I have some other questions, but I'm going to turn to my colleagues after mine first. Mine's not so much a question as a comment as we start this, but you know, to make this transition, we need hydrogen to become reliable, we need it to become cost-effective, and we need to have people have confidence that it's going to be clean. That doesn't all have to happen overnight, and it can't all happen overnight.

So what I want to emphasize is there's a fourth thing that we really need to move forward I think, and that is trust, and it's amazing how much you can get done if people trust that eventually you're going to get to 100 percent hydrogen, right?

Eventually you're not going to take advantage of this loophole that we're creating temporarily so that we can make the transition that that's not going to then become the permanent loophole and we don't actually get to clean. So I can't emphasize enough, when I'm over in Europe I'm always impressed.

They cut deals because they trust each other and they go, 'okay we'll take this right now because we know we're going to eventually get to that.' And so for everybody in the room and all of us as legislators, everything we can do to have everybody start to increase their trust on this important transition will be better off. I hope that was 30 seconds. I'm going to turn to my colleagues. Questions for any of these six people that are up here right now? Assembly Member.

So, Mister Hannan, you talked about the fact that everyone is oriented to this goal of $3 a kilogram.

And I realize, I don't know what are some of like the interim milestones and goals and what are sort of, in your view and love to hear also from you, Miss Galiteva, what are some of the critical enablers to achieving those interim milestones? Paint us the 30 second picture of how we're going to get there.

Well, maybe I'll start off and Angelina can fill in on anything I miss. Previous efforts to roll out incentives for hydrogen have not been a complete ecosystem like we have now. The reliability and the cost have nothing gotten to the points where we would like to see them here, the deliverables.

I believe in the 2032, we're supposed to be delivering hydrogen at scale, and the target is $3 per kilogram. We are hopeful that we get there, but if we don't get there, we're delivering hydrogen at scale in 2032. So really in 20302-031-2032 we're delivering these. So we need to get under construction quickly.

We need to start across the whole state, and we need to focus on, you know, all aspects of, you know, of whether it be production, transportation, distribution, or offtake.

Thank you so much for that question, Assembly Member Petrie Norris. And just as an aside, we very much look forward to being in your district. Our headquarters is going to be at the UCI research center, and we just signed the lease. Yep. So we're moving in very, very soon. So we're very excited.

Yes, as Chris mentioned, it needs to be an ecosystem, and you'll hear from my colleague, our chief technology officer, and one of the chief scientists at LBNL, who created that ecosystem and ran the numbers for us. He will be speaking at the next panel as well.

But the whole idea is in the objective of the DOE hub was to reach a cost competitive price for hydrogen. The hydrogen shot that the DOE has is actually a dollar a kilogram. In 10 years, I don't think we'll reach that goal, but, you know, we can get pretty close to being, to reaching it.

And our biggest objective is to be cost competitive with diesel. We want to make sure that in the first time frames with those 37 projects that we've selected, with the creation of that ecosystem and the increase in production, for instance, we're starting production in 20242025.

With our projects, we have about 600080,000 metric tons per year produced in California right now, which makes us the second largest user of hydrogen in the country by 2032. Which is the goal of the hub. We have to reach 190,000 metric tons per year produced.

And to reach California's goals by 2045, we need to be producing 17 million metric tons of hydrogen. Now, Harris assures us he can manufacture 95% of that, and we're very happy about it. But we need massive acceleration in terms of deployment of infrastructure in the ground. The DOE said these are projects that are commercially viable.

We do not want research and development, we do not want proof of concept. We want steel in the ground, large scale price reduction with volume. And we believe that the approach that we've taken allows us to achieve that.

And I also wanted to mention something in case we don't have time, but we have had several working groups that have been meeting as part of arches for the last 18 months in terms of production, transportation, ports, aviation, hydrogen derivatives. And they have come up with a set of recommendations, which is a white paper.

This is the summary of it. We were going to distribute it to you today, but we just noticed we printed the wrong version. So we'll send you the updated right version tomorrow and hopefully have it posted on your websites as well. But those are recommendations on what the industries need also to succeed.

So we believe we have the elements. We're certainly going to need the help on the local and the national level as well. We're going to have some challenges with the DOE. All of us know that specifically with NEPA, the National Environmental Policy act.

We're in negotiations with them to ensure that it doesn't stall our projects, because our projects are ready to go and we want to make sure that we meet the timelines that the DOE has laid out for us.

Got it. All right, look forward to digging into that. Sounds like it might be the topic of our next hearing. Mister Chair.

A great suggestion. Assembly Member Hart.

Yeah, I had a question for Mister Habib in talking about hydrogen production from biomass, actually. Mister Khabib. Wrong name, sorry. Where do you see the most opportunity in the shortest period of time? Is it green ammonia? Is it fuels? There's a big collection problem of taking decentralized agricultural waste and timber products and turning that into hydrogen.

How do you see us getting from here to something that's economically viable as soon as possible?

Yeah, thank you so much for the question. So I think the first step is really to create green hydrogen markets using woody biomass or agricultural residues, because we have a lot of it in California. And then moving on to the next step would be investing in hydrogen derivatives.

And Ammonia is one of the hydrogen derivatives that has a lot of applications, particularly in the fertilizer sector. So establishing green Ammonia facilities in California would really provide outsized benefits to the communities and to the farmers, especially in the Central Valley of California. And, yeah.

So for that, we need to invest in infrastructure development, providing supportive policies, and the biggest, I think, priority would be to ensure long term viable supply of biomass.

Thank you.

Thank you. Anything else?

I'd like to introduce Assembly Member Isaac Bryan, who as another Member of this Committee, and as I said, people would be rolling in and out, et cetera. Really appreciate you being here. Any initial comments you want to make? Just finishing the first panel.

No, I just want to thank you, thank the chair and thank the panelists for being here. This is an important topic, has been for a couple of years, and will be for many years going forward. So it's going to take all of us to solve these challenges and meet the need.

So thank you, Mister Chair, for convening us. Great, thank you.

So I'm going to try to do this really rapid fire. Miss Galiteva, you say you identify 37 projects. Do you have 37 projects that you've identified as these are the first 37 projects you want to roll out of? Correct. Those have been clearly identified.

So the suggestion that we had before about the possibility of trying to have legislation that deals specifically with those 37 projects and try to accelerate them is going to be easier to come up with exemptions, et cetera, if it's limited to those 37 projects. What's your initial reaction to that idea?

We'll take anything we can get, but we also have 32 projects that are tier two projects because we issued an RFP to see what the ecosystem for hydrogen right now in California is. We received over 100 projects, all viable projects, totaling over $56 billion in California.

They had been developing as a patchwork and not connected to each other. The benefit of arches is that we create that ecosystem, we create that matchmaking where an off taker and a producer can talk to each other.

We can actually have a marketplace where we could even be doing joint purchases for several transit agencies of many buses to bring down the cost, to bring manufacturing.

So yes, it is very helpful, but let's keep in mind that we're building an ecosystem and we are going to try and identify the benefits that we can bring to all the projects. In any case, any legislation, any framework that is helpful will be helpful to all projects. And we look forward to working with you.

You're sort of the in vitro fertilization of the chicken and egg issue that we've been talking about. Right. But it's exactly what we need, which is why I think it was really wise for the Federal Government to come up with the hub. So thank you for that.

It's a great catalyst.

I appreciate that. I'm going to go very quickly. Mister Barnes, buses. Besides economies of scale, is there anything else critical that could bring down the cost of buses from your perspective?

Well, I think there's a number of issues. You could probably do a whole separate hearing on the State of the bus market right now. Economies of scale certainly help, and I think the coordination that's happening through arches is going to help as well.

There is a lot more work that needs to be done in the bus market segment.

Why don't you get to us with that, that answer sometime as we go forward? Miss Tomley, how challenging is it for your truck fleets, particularly the sole proprietors of the smaller fleets, how challenging is for them? How much pushback are you getting from them in terms of adopting these fuel cell vehicles?

I know they're hugely expensive and tough. You got any suggestions for us in terms of what we could do?

Right. I think you absolutely identified it. We in the ports of Long Beach and Los Angeles, we have over 23,000 trucks that are operating in and out of the ports. And like I said, we have 54 that are fuel cell right now. We actually have more that are electric.

We're close to just under 400 that are zero emission trucks that are operating now. But the cost is very expensive for these fuel cell trucks. They're three to four times more expensive than a traditional diesel. And a lot of the operators, the smaller independent owner operators used trucks, and so they pay even much less.

So subsidies to help reduce the cost, subsidies to help to, or incentives to help reduce the cost, money to help bring down the cost of the fuel. All of that's going to be important, but we need to focus on some of the larger operators first that can help develop that trickle down market.

Great, thank you. So that there are used vehicles out there. Mister Hannan, probably my biggest concern of this whole effort of going from carbon to carbon less is it appears I have people telling me there's going to be a tremendous shortage of electricians.

And what can you tell us about assurances that there will be enough skilled and trained electricians that we're going to increase the training capacity? But if we're going to electrify the whole state essentially one way or the other, even if it's fuel cells, where are we with that? What kind of help needs to happen for that?

To happen, etcetera.

So I think doing projects like we're doing with arches, where we're getting ahead of the planning so that we can instill confidence at the local level, at the joint labor management apprenticeship training programs. California has the largest network in the country. Right now, we have about 65,000, give or take union construction apprentices.

It's more than the next three largest states combined. But the better that we can forecast that we're going to have a need for electricians, we're going to have a need for insulators. And you name all the crafts, because there's going to be all types of crafts working on here in addition to electricians, the better we can plan.

A couple years ago, we had 73,000 union construction apprentices with COVID sending signals of, hey, we're not sure what's going to take place in the world. People pull back.

So the more project labor agreements, you're looking at project labor agreements and other avenues like SB 150, the more that we can signal that three years from now, we're going to start working on the scattergood plant. We're going to need skilled craft workers.

They know, even though we get a couple folks out of work, because jobs are always ending and always starting, we have to bring in that next class of apprentices. We got to continue training.

Is there any official sort of forecasting agency, Department, group, et cetera, that is giving us verifiable information about what we need?

Absolutely. We've done analysis of the projects coming up for arches, but, you know, we have 450,000 Members in the building trades unions. We could have more if there were more opportunities to go to work.

Right now, we have give you IBW, for example, across the state in training center, after training center, there's lines of people waiting to come in that are ready to go to work, ready to begin their training, but they're waiting to identify jobs. So the sooner we identify jobs and the further out in the future we identify them.

It'll give those programs confidence to get started. So we don't really have shortages. We just have to identify those projects.

Thank you. And you wanted to jump in.

This might actually be an excellent opportunity to start an initiative of where we are, signaling what the market would be, much more loudly and forcefully. Arches was also selected as a mega project by the Department of Labor. That needs to be signaled. That also supports the Arches projects.

We are also supported by the DOE with the DOE selection. The $1.2 billion is great, but it's just a catalyst that accelerates the other $12 billion that the arches projects open up.

And I think that if we have initiatives on the state level, whether it's with permitting, whether it's with straight line streamlining and signaling a support for those projects in that ecosystem, that amplifies the message and allows for that training to happen.

To your first question, I just want to chime in. You asked, should we have special attention to those? And the short answer is yes, because the success of those initial 37 projects determines whether there will be another 31 project.

It's instrumental for us and the DOE that these are successful and that we then have that framework that we build upon. For all of these reasons.

Thank you. We're going to have to call this panel to a close and bring up the next six people. Thank you very much. We really appreciate that. I wish we had more time for more questions.

And so if the panelists will come up, and it's Doctor Adam Weber, chief technology officer of Arches. Randy Howard, General manager of Northern California Power Agency. Sticks Founder, of Think Watts Foundation. Tom Knox, Executive Director of Valley Can. Don Boylen. Boyle Jin, Director of government affairs Plug Power and Michael Lohr, Executive engineer of Toyota.

All right, we're going to--same thing. Of course, the second panel is always shorter on time than the first panel, but there's only six of you instead of seven. And we'll try to move as promptly as we can in terms of time.

But again, what you're doing, but what's really valuable for us is what are the obstacles that you would hope we might be able to help you overcome in terms of. And you're the off-takers in terms of increasing offtake and having reliable demand for this supply that we're trying to incentivize from the first panel. So with that, Dr. Adam Weber, chief technology officer of Arches.

Yeah, if you can bring up the slide. So thank you for.

Nice and close to the mic.

So thank you for having me here today to discuss a little bit. Angelina already covered a lot, so I can be brief. What I wanted to show and what's shown on that slide slide there is really what is the key circuit of Arches is really building that ecosystem, and that's kind of taking that chicken and the egg and making a frittata or an omelet or however you want to really look at it.

We're building projects that will be providing kind of the certainty, building the market and building the ecosystem and being that intermediary between those production and between the offtake. So you see that on the right of the slide, really, which is kind of a hydrogen flow, if you will.

So you see, we will have multiple production sites all feeding into the actual marketplace and then that feeding out to different offtake. And so that kind of builds a robust and resilient. It signals as well kind of long term viability for the production projects.

It provides price certainty for the offtake projects as well as, you know, informing things like the workforce development, informing the needs that we have going forward. And so we've done analysis of the projects.

We've also done the lifecycle assessment, analysis of the projects using kind of standard techniques from, you know what, I'm also a scientist at Lawrence Berkeley Lab.

So we leverage kind of those resources to really understand what are the benefits of hydrogen, what are the benefits of the projects, and as well as making sure that there's accountability within that whole ecosystem that we're building.

So the key thing is, if I want to leave you with something, it's really to understand that anything that you can enable to enable Arches to build that ecosystem and remove the barriers such that it is kind of the clearinghouse for the activities and the hydrogen activities through the state is going to benefit, I think everybody, the state and its people, and the projects.

Great. Thanks for being concise with your comments. Just being on the other side of the podium when I speak to committees, there's a tendency for me also to try to lean all the way forward.

We can't move these mics, but you guys can pull those things right up to your mouth and you can sit nice and straight if you want to do that. Randy Howard, general manager at Northern California Power Agency.

Good afternoon. Thank you for the opportunity to be here. I had some slides, be a little difficult to put them up, so I won't put them up, but just a couple things that I wanted to get across.

Similar to Paul Habib, LA DWPE, we're a large energy provider and we have one of the large power plant projects in the Arches. It's built in 2012, so it's a very new plant, one of the most efficient plants in the state. It's located down in the City of Lodi, right along the I-5 corridor. It's well positioned.

We have about 1000 acres around us that are owned by the City of Lodi that are available to us in that project. We use reclaimed water. In our project, we've already installed the turbine capable of a 45% blend of hydrogen. It's installed, it's ready to go. What we need is the hydrogen.

So part of our Arches project is really to build out the electrolyzers and the storage capability to produce the hydrogen. What we're really good at is building power plants, operating power plants, doing a lot of renewables. And one of our big concerns is we have a lot of excess renewables and curtailed renewables today.

And if you were to look at my slide deck, you'll see that in the last couple of years, we continue to grow the amount of excess and curtailed renewables that we have available.

And so from our utility perspective, it's to take those excess renewables to produce the hydrogen, store that hydrogen, use it when our power plant operates. Our power plant operates down there about 50% of the time, so it doesn't operate much during the day. So if there's excess on the grid, we're not operating that plant.

We want to use that same transmission line, the same interconnection, the same electrical facilities to produce hydrogen, let it be a load during those times, use that excess that our customers already pay for. The one thing with a lot of the renewables, we're paying for them whether we use them or not. That's part of the affordability issue.

The other thing that with electric grid and trying to decarbonize the grid, we know the physics of it. You have to have the inertia. Electricity doesn't move on its own. You're either pushing it or you're pulling it. We have to have spinning machines. We can't just use solar fields. We can't use just wind turbines.

We can't use batteries. We have to have spinning machines. So taking a set of some of our existing power plants that can be converted that have the right ability to do so, convert those and repurpose them with hydrogen, to have a zero emission footprint is just critical to our success.

So Arches provides us with that opportunity to demonstrate it. Demonstrate it soon. Our plant should be capable. Siemens is our technology provider. They're saying by about 2028 to be 100% emission free. So 100% hydrogen. Our only challenge there is being able to produce that much hydrogen on site.

We hope to be a very big user of it, but a producer as well. Some of the opportunities that have been spoken about for waiving some of the permitting processes or making some of that more streamlined is going to be very critical for the timeline.

Also, the cost is going to be very important for us because we have the capability of also supporting transportation sector and the port of Oakland, which is one of our members, with hydrogen from our facility. But right now, our focus is a heavy emphasis on what's the hydrogen we need, how do we produce it, and using that excess renewables to do so.

Great, thank you very much. And we'll try to make sure that your slides and everybody's slides get part of the record here so that somebody that goes to look at this will be able to see all of the PowerPoint slides that are out there. Stix?

Absolutely. Immediately after hearing everybody talk, I know exactly why I'm here. I represent the individuals who are often forgotten about when we introduce new technology, new infrastructure opportunities, when we talk about workforce development and job opportunities and things like that, it usually leaves out the people who are in communities like Watts, in communities like Compton, certain parts, Inglewood, et cetera, et cetera.

So I'm not going to pretend to speak for every single person, because that would be foolish of me, but I will speak for the individuals that I have direct contact with. And what I do know is, in communities like Watts, your life expectancy is 75 years old.

One of the major factors of that is air pollution. Understanding the Alameda corridor, understanding how heavy duties travel through communities like that, is a major cause of air pollution in these areas. I will speak more towards in a second of what we need from you. Right. Because that's the main point of this entire conversation.

I will also speak about the socioeconomic factors of how creating jobs is very important. And a lot of times on the panel, I've heard a lot, jobs, jobs, jobs. And, well, are we prepared to handle that? I'll just tell you what I already have set up.

El Camino College, Compton College, LA Trade Tech, LAUSD, have all agreed to work with ThinkWatts Foundation to produce job creation and training for individuals and students who are interested in the sciences of fuel cell energy and technology and hydrogen infrastructure that's in place.

So as soon as the money is deployed and comes down, we can immediately start activating these programs with all of these different institutions, along with organizations like LA Urban League and Brotherhood Crusade, who are all involved in the idea of producing jobs within this new industry of hydrogen infrastructure. So why is this important?

Again, I like to put a magnifying glass on Watts because that's where I come from. I know the most about the data and the information and the people, because that's where it starts. So, average income, $48,000, between $48,000 to $52,000 a year.

I know some people in this place right now would lose their mind if they was making that much money a year. Now, let's skip forward. Average gas spending a year is $1,600. Average loan is $26,000 for a used car, plus 11% interest. We're talking about $523 a month and annual insurance at $2,937, which equals a total.

If you calculate those numbers. I'll keep it fast. That's about $10,813 annually that you spend just on transportation. That's 20% of your income if you live in that type of neighborhood, whether you're black or brown. Right. People of color, that is nothing equitable or suitable for individuals. And how does this relate? Right.

If we can produce more jobs, we're talking about salaries that can reach without. You don't need a high school diploma that can reach anywhere between $60,000 to even $80,000 a year, obviously, based on experience and different things like that. We're talking about pipefitters, electricians. We're talking about plumbers.

That is the basic level of entry for hydrogen fueling and hydrogen economy. None of these trades do you need a college degree to participate. So what I'm saying is this is an opportunity to get it right at the ground level. If we all can come together.

As we know, the DOE has already committed to Arches a certain amount of money. As long as we can work together to get to the point where we can deploy this money fast enough, we have an opportunity to get it right and provide for the individuals in low income communities.

And last but not least, I just want to drop this small nugget. There's this big misconception that the community does not want hydrogen or hydrogen infrastructure because of x, y, or z. We have already launched programs with Valley Can with Tom Knox and Toyota, where we've distributed 27 Toyota Mirais to vehicles.

Considering where the infrastructure is today with hydrogen stations, and we have had zero complaints from anyone who is driving a Toyota Mirai. Well, I'm still complaining about where the stations are because we don't have enough.

So we need more investment so we can build more stations so we don't have to travel from Watts to Torrance or Watts to Santa Monica to fill up our vehicle, or even sometimes Hollywood to fill up our vehicle. But no one's complaining. They're actually more excited and interested to learn more about the hydrogen economy. And so last but not least, I know because I'll do this all day because I'm very passionate about it. This is important.

We just need the collective effort to come together to make sure we get the resources financially to agencies like Arches, so they can get them to organizations on the ground level like ThinkWatts Foundation, to be able to deploy these programming for jobs and vehicles.

Appreciate your energy and passion for this. And go ahead, Assembly Member.

You know I have to run, but I came to see you, brother, because we don't know each other personally, but our people know each other and have been trying to make this connection for a long time. Appreciate everything you said and everyone else who has spoken so far and apologize that I have to run.

I know we've got to have many, many more of these meetings. And I think the point that you're making is powerful. It's also why it's so critically important for us to set up stuff right, right? Because part of the reason the air quality is so bad is not just for travel. We know those refineries down the street. We know the smell when we get down there. I got the oil field in my district.

Absolutely.

And part of that is built because of the transitioning from one type of energy to another type of energy. It was the natural gas conversation that predated both of us, and I think that's where the conversation with hydrogen is and why we're learning so much and I'm so grateful for everybody here, because we need to go the route of clean and sustainable energy and we need to build it up the correct way so that families can eat and build and work in these industries for decades to come.

That's what I'm interested in. That's what I believe the Chair is interested in. But I just want to thank you for coming up here and giving that real experience for folks down in Watts and Compton and surrounding areas. All the work that you do is noticed and appreciated. Thank you for coming.

Appreciate you. Vice versa, right back to you.

Thank you very much. And Mr. Tom Knox, executive director of Valley CAN.

Thank you, Chair and Members. I'm Tom Knox of Valley Clean Air Now. I'm here to update you on a project we've been doing on testing whether light duty fuel cell vehicles can really work for low income residents in disadvantaged communities.

This started as a project with Gobiz a few years ago, where we're testing potential solutions to barriers to ZEV adoption in disadvantaged communities since grown. And we're looking at two regions that have really higher barriers to ZEV adoptions.

A rural areas where residents have to drive very far distances, and then urban areas where you've got a high rate of multi unit housing as well as a relatively low availability of EV charging. So what we've done is adapt the existing guidelines for Clean Cars for All.

And we've been offering used Toyota Mirai with a $15,000 gift card to low income residents and disadvantaged community census tracts to see if this works for them as well as to look at.

As Stix was just saying, if we can essentially zero out the transportation costs for these households where their transportation cost is the highest single cost in most households every month. What's the effect? Does this work?

And so we've done two rounds of this pilot, and first in Coalinga around the fueling station at Harris Ranch, we had 27 customers in the surrounding rural areas. We did these vehicle replacements in April and May of 22. So these customers have now been in the cars for 27 months.

After about two months of transition to the beginning, with the customers getting used to only one fueling station. And then the fueling station now has a new use pattern. Big thanks to First Element for working with us to resolve that.

Since then, it's gone extremely smoothly and we've now seen these customers driving an average of 18,000 miles per year, some as far as 24,000 miles per year, which then brings up one issue is this was started before the run up in hydrogen price a couple years ago.

We're having to continually subsidize these drivers, but they're incredibly happy in their cars and they want to stay in them long term. We took those lessons, adapted them to South LA.

And so in September 23, in association with half a dozen community based organizations, including ThinkWatts, we found 25 customers who are willing to switch to a used Mirai, and very similar to Coalinga. It's been a very smooth experience after the first month or so of getting used to how to fuel the cars. They love the reliability.

They're smooth, they're quiet. But no one can claim the fueling network, especially south of the 10, is especially reliable. What we found, though, is it may not be sufficient. It's not insufficient for the needs of our customers.

In the past 12 months, each of them have managed to drive an average of 12,000 miles for the past 12 months, which is as much or more as they were driving gasoline powered cars. And what they've done is just adapt to. They're going to the station at non peak times, they're fueling more frequently.

We selected these customers all based on the fact that they live near or drive by at least three fueling stations, so they figured out how to make that network work for them. None of them have reported that fuel has been a significant impediment to living their lives. So they're incredibly happy. And what we've really found is the quality of life increase.

The lack of stress now is incredibly difficult to find or keep a job, especially in LA, without a car. Being freed up from working for two or three days a week to afford the gas to get to work has now given a lot of these customers a new freedom, and they've now, this has changed their mentality on what's possible. And so we've seen, as Stix said, extremely high satisfaction. They love hydrogen. This is working for them. I think we have proved our thesis. Thank you, Chair.

Really appreciate that. And it's great to hear those stories. And again, we're trying to figure out what are the things that we might be able to do at this level. And I know light duty hydrogen cars is a, you know, right now it's sort of a niche.

And my prediction is that won't be the case 15 years from now, that people will find out that it's so much easier to put in hydrogen infrastructure, you know, when there's going to be the shortage of all the electrical connections that we need out there, you're going to find hydrogen, have that opportunity, and why.

I go back to the comment I made at the beginning of this hearing, which is we need to keep hydrogen and electricity competing with each other everywhere we can, so they both push each other, and when we have a problem in one industry, the other one can pick up the slack there. So thank you. Don Boyajin, director of government affairs at Plug Power. And did I pronounce your name right?

That was good. That was good. Thank you for having me here today. So Plug really plays a unique role in that. We are a one stop shop in the hydrogen space, and we're a true first mover, pioneer in every sense, in all aspects of the hydrogen space, both on the generation side and the offtake side.

And for me, it's a particularly cool story of the company because I grew up right near where Plug is headquartered, and I actually interned there 20 years ago. It was kind of an R and D shop, not many people. And now today, it's a leader.

It's the first company to ever commercialize a fuel cell product, a commercially viable fuel cell product. 3,500 employees. So to see that change right where I grew up, it's a real testament to where the technology is going and how far it's come. As I mentioned, Plug was the first company to create a commercially viable fuel cell product.

It was a fuel cell that goes into fork trucks. Over 70,000 fuel cells operating out in the field today. During the height of the pandemic, about 30% of all food items in the United States were moving on a fork truck that was powered by a Plug Power fuel cell.

We realized through developing that market, like Mr. Weber talked about, you need to have an ecosystem approach to building the hydrogen economy. We needed to have capabilities in the hydrogen generation, we needed to have capabilities in the refueling. We built over 200 refueling stations through building this forklift market.

But what we've also done is become a leading manufacturer of electrolyzers. And today, as of this year, we have the largest operating electrolytic hydrogen facility in the United States. 15 tons liquid hydrogen per day in Georgia.

And several other projects that are currently in different stages of construction are under development, including a site that's under development in California. And just like building that first fuel cell market, you need to walk before you run. And the incentives and having functioning incentives is really dispositive in making that happen.

What allowed us to build that forklift market was the existence of a federal tax credit, called the investment tax credit for qualified fuel cell properties. It's clean, it worked, it was functional, and it drove cost parity with incumbent technologies. That's what was necessary to convince our customers, like Amazon, Walmart, and hope and depot to make that investment.

And quite frankly, you know, as true first movers in this space, we eat some of the costs. We've been buying hydrogen before we had that operating electrolytic site. We've been buying hydrogen from gas companies for a long time and basically selling it at a loss to those customers.

We wanted to get out from underneath that, and we wanted to do it in a low carbon intensity way. That's why we've made this commitment to building out electrolytic hydrogen facilities across the United States. But just like the importance of having clean policy signals and clean incentives for fuel cells, you need the same for Generation as well.

And right now, there's so much uncertainty, and I think that's creating a little bit of heartburn across a wide range of stakeholders. Understandable. The deliberation process is important, but I want to emphasize this one point with respect to Generation. 80% of the cost of making electrolytic hydrogen is the cost of the electricity.

You need access to cheap, clean electrons. That's priority number one when we're looking for a new project. Now, when I started at Plug, I learned about our project in Fresno County under development. It's got the best narrative you could ever imagine. It's old agricultural land, salt contaminated, putting a great reuse of this land.

We have plans to build a tertiary wastewater treatment facility for the municipality in the City of Mendota. It has a wonderful narrative to it, with all sorts of benefits for the local community, certainly benefits for our customers. And it has a behind the meter solar setup for making electrolytic hydrogen.

Penciling out a project like that in California is tough because, quite frankly, the cost of electricity compared to other jurisdictions, it's challenging. That project is dependent upon us being grandfathered into net metering 2.0. Right. So if I can leave you with one point it's that we need clear energy policy around the production of electrolytic hydrogen in California. That would be really, really potent policy to help ensure that clean electrolytic hydrogen is made here in the state of California. Thank you.

Great. Thank you. That's an easy thing to deliver. Assembly Member Hart will be in charge of that. Make sure we have that low cost electricity by next year. Michael Lord, executive engineer of Toyota. Thank you.

Thank you so much for that testimony. And thank you for the opportunity to speak today. I have a quick presentation.

He's passing it out here to us, too.

So today, I just want to briefly kind of review. We announced our hydrogen headquarters in Gardena, California in May 1. So I wanted to kind of go over that, showing our commitment to hydrogen, and then maybe get to some of the questions you had on what could be helpful. So, going to the next slide.

So Toyota has been working on hydrogen. I'm trying to speak very quickly. Time since 1992 as part of Project 2000. Project 2000 also resulted in the birth of the Prius that was introduced in 2001. If we go to the next slide, this is the activity in Gardena starting in 2001 with five employees.

As you can see, we worked on the first prototypes of the vehicles in the US, on road testing and then additional testing in the second and the third generation. In 2010, we leased out 100 vehicles to get feedback from customers.

2011 was the first pipeline station in Torrance, California, leading up to the launch of the Mirai in 2015. Around that time, we are also looking at how to expand the use of the fuel cell technology. And we started Project Portal.

And in 2016, we built our first in house, the Alpha truck in 2016, based on two Mirai fuel cell systems. So everything is based on the Mirai technology leading up to 2018. The beta truck in 2019 was the Zanzib project with Packard and other partners. 10 vehicles in the port of LA, tens of thousands of miles.

Three are still in use. And I'll continue on the next slide, if that's okay, and we'll talk about some of those projects. So, in Gardena, in Toyota Motor North America, we have four pillars for fuel cell development. Still extremely key is light duty, and we're super proud of the projects in south LA and the Central Valley.

Thank you, Stix and Tom Knox. But light duty is going to be key to meeting the goals of California. And you mentioned maybe 15 years out, fuel cell will be there. We have 100% mandate in 10 years.

So I think we need to move quicker in the light duty sector to capture everyone who can to be able to drive a zero emission vehicle. Trucks are the second product. And you can see in the bottom of that, that is our certified, a picture of our certified drop in fuel cell unit for a heavy duty truck.

It has two Mariah fuel cell stacks in it, and then what we call new business, or in Japanese Gaian, which is other systems, and I'll talk about that. And of course, certification, regulation, and standardization. Next slide just kind of shows our gen one and gen two vehicles.

And like I mentioned to it is not just for fuel cell battery, electric, plug in, hybrid fuel cell. They all have their place, they're all key. And each one within the light duty segment, they are hard to electrify and there's hard to fuel cell, but you need them all to capture every segment of the, of the market.

So there are hard to electrify portions of the light duty sector that only fuel cell, we think, can capture. Next slide kind of just shows the timeline of our heavy duty. We have the two prototypes, the alpha and the beta on the top, leading to the Zanzib project. And now we have production intent vehicles on the bottom.

The next slide shows our port applications. So we have our units are in top pick handlers, a tractor rig. We're doing demonstrations, and of course, rubber tire gantry units. So that'll be part of the, we believe, the equation of decarbonizing the port activity. And just. I'll go through the next three real quickly.

But that's three flavors of stationary power using Mirai fuel cell stacks. A smaller unit that was shown first at the LPGA event in Palm Springs, I believe in 2020, ran the leaderboard, and you can see a little picture of it set up to fast charge a plug in hybrid, the Toyota Rav4 Prime.

The next slide is a medium sized unit. We're working with Kohler, who has lots of experience with power units. And this is being installed at Klickattack, I love that name. Valley Hospital in Washington state, using all renewable hydrogen. So that's backup power. And then lastly is the megawatt scale unit at NREL in Colorado.

I think that just came online. We were in with our unit. The rest of the system is taking a little bit longer, so just want to leave a, you know, what, what is the key issue for, you know, getting these units mobile?

Light duty, heavy duty, is the infrastructure we need to get the hydrogen to the use case. So we need light duty infrastructure, we need to reinforce that and build that up. We need heavy duty infrastructure, and we need to be able to support the infrastructure for.

Port equipment and other items, and of course, reducing the cost of hydrogen and arches is going to go a long way to do that, we believe so. Those are the two key issues right now.

We would have a lot more Mirai on the market if we had the infrastructure, but the infrastructure is the only thing that's holding it back.

Well, I want to thank this panel because all of you were concise, and I rarely got tapped on the shoulder telling us to move forward. So, thank you very much. Also, I'm happy because everybody else has left and now I have all the time for the questions for you.

But I do have questions, and I hope we can get through them fairly efficiently because we're coming up on our time. But my first question will start with Mister Weber.

You know, when opponents to solar, the early opponents of solar, some people from, from the electricity generation industry, etcetera, we're just saying it's too expensive, it's too expensive. And of course, now we see solar has come down.

How confident are you that 20 years from now we're going to say, "Oh, hydrogen is really very much more cost effective doing it with renewable sources," if that's going to end up being a much cheaper energy source than fossil fuel in general?

Yeah. So, I mean, the first thing that you can look at is the, the DOE, Hydrogen Earthshot, right, of trying to get down production cost to a dollar per kilogram. Are we going to get there within a decade? There's a chance it'll probably take longer, but we see pathways to do that.

If you look at electrolyzer technologies, especially on the production side, those haven't moved much over the last several decades because people have been looking to just commercialize, like plug looking to kind of commercialize some of the first units.

What we're doing in terms of the research side is there's a lot more funding now going into kind of innovation within the electrolyzer space. And so, we are starting to see kind of improvements similar to what we've seen on the fuel cell side where the Toyota Mirai stacks have come down over the last decade.

We see that happening for the production side as well. And so, I think we do have visibility to starting to reach down to cost parity that we'll have to look at whether we get exactly cost parity or there's slight premium for a decarbonized technology, we'll have to wait and see. But there is pathways there.

If lawmakers have confidence that we will get to parity or close to parity, it's going to make it a lot easier for us to sell that, yes, we should go ahead and make that move away from the fossil fuel generation side of that. So, it's going to be important for us to be able to do that.

So, any help you can give in terms of convincing people, lawmakers in particular, that appreciate it. Mister Howard, 45% generation right now you have with your thermal generation. The concerns - I'm trying to knock down the arguments that are out there.

So this question is offered as a friendly sort of how do you the confidence that you're going to be able to get to 100%, and then people have the confidence that you'll be able to get to 100% and be able to use truly clean, fossil free hydrogen, because you're sort of in this, you know, you're sort of using a blend of fossil and non-fossil at a time.

What's your sense in terms of the confidence and the time frame, if you have confidence that you're going to get there?

So, if you consider that today we use 100% natural gas. So, the moment I start producing hydrogen of a quantity and have a storage capability, if I can get to 45%, I've just improved dramatically. So, we're on a mission to get to this decarbonized grid. We don't get there immediately, so technology has to improve with us.

So, we're working closely with our technology partner. We're their North American site for their development activities towards this, and we're committed to that. We're owned by cities and communities, so if we don't get there by 2028, we're going to give it a really good try. But maybe we get there at 2030.

But you're confident you will get there?

I'm very confident we will get there. Or very close to there. It becomes a lot of material science and the materials and the temperatures that we use and making sure that we keep all of our other emissions, like our NOx and other things, down to levels that are acceptable.

So, we're committed to it, and we believe we will get there.

Is that a 15-year horizon or a 50-year horizon? Closer to 15 years or closer to 50?

I'd say less than 10.

There you go. That's closer to 15. Wonderful. Great. I'm just trying to make it easy for you. And Mister Boyajin, you talked about 200 fueling stations. 200 fueling stations.

Is this across the nation or?

Globally: over 200 globally. Off road. These are distribution centers.

All just for forklifts.

Correct?

Got it. Great. All right. And then Mister Lord, I had heard a year ago that at the end of 2023, you were going to start rolling off out of a plant in Kentucky, the drivetrains for hydrogen trucks. Did that actually happen?

Yeah, that's right. I did mention that in the presentation. That's the fuel cell heavy duty unit, which is being assembled in Kentucky.

Can you pull that a lot closer to you, Mike? Yeah, you are really.

That is correct.

And so, what's the production level of that facility now?

Right now, of course, we don't make the trucks. We're just applying the unit. So, we're still waiting. We have some orders, which I can't really disclose right now.

Okay, so now you've got the ability. Now you need the demand for the drivetrains.

Right. And obviously, the drivetrain is CARB certified for sale in California.

Can you go into conversations about cost of those drivetrains, or is that proprietary?

Probably not.

Okay, great. Sorry. Thank you. I completely understand. Right. I want to share with you.

I was over talking with in Japan, talking at Toyota headquarters, and I shared my perception that here in California, Toyota has been really committed to the light duty and then moving into the heavy duty.

And that I think quite a few of us really believe, and I mean quite a few legislators really believe that the far better way to move and to move the light duty market is to make sure the infrastructure is there for the heavy-duty market. That 45 years ago, my wife and I bought a little diesel rabbit.

Right. We had. Exactly. And where did we fuel that thing up? We fueled it up at all the truck stops. We knew on a trip you were going to come to a truck stop, and so you could always. So, we had no range anxiety with that diesel. It wasn't as convenient as the local corner gas station.

And you could eliminate range anxiety on hydrogen if you had it at all, the truck stops, because there's a truck stop closer than having to drive all the way to Hollywood from Watts. I'm sure there's some place where people are getting diesel fuel.

So instead of investing in the infrastructure to just build light duty hydrogen stations that trucks cannot access, if you instead, if we, and we're trying to convince the CEC, if instead you make sure every 50 miles on the interstate, you're going to come to a hydrogen truck fueling station that has light duty capacity right there next to it, I just want you to pass on, there are many legislators, I mean, many, that just see that really buy that as the way for us to go in terms of what we should try to incentivize.

And when I talked to the people at Toyota, they said, the marketing people in California tell us that people don't want to go fuel up at a truck stop. And I said my wife hadn't. They said it just won't feel safe for their, you know. I said, my wife had no problems going into a truck stop.

And I would think that you driving, you would much rather go 5 miles to the truck stop than 25 miles to get your hydrogen. So, I just think somebody's making a mistake there in the marketing side of it. Sorry to get into the specifics of that, but I say it in a friendly thing.

I want hydrogen to be successful in California. I think you've got the right idea with the Mirai. It's getting that, and you kept saying, if we had the infrastructure, we could really produce a lot more. That's the key to break the infrastructure. And then once you get enough Mirais out there, people, same thing happened.

There didn't used to be diesel at. At local corner gas stations that came after people started fueling their diesel cars up there. So, thank you very much for tolerating my 92nd lecture on that and stuff.

And maybe just really quick, if it's okay. I agree with that. For certain truck stops where there's a separate spot for passenger cars, they exist right now. That's a great place to put hydrogen for the heavy duty and the light duty. I still think we need both. I understand your point very well.

And just regarding the cost, maybe I should say something that the fuel cell system is more expensive, significantly more expensive than the conventional. So, incentives for the trucks are still very important. So that would be another request to continue incentivizing the vehicles.

And is your sense that that cost will come down significantly with mass production?

It should come down, yes, but right now we have -

I would think so, yes. Right. You know, I really appreciate this. We are at the end of this. We're past our 05:00 timeframe. Let me just tell you, sort of the next step. Next January is when we start to introduce legislation.

So between now and next January and February, this hearing will be the basis. You heard Assemblymember Petrie Norris say, "Hey, maybe we can talk about this and that, etcetera."

We will be taking this and thinking about what are the things that we should do to try to encourage production, encourage offtake, and try to match these things to make it happen. And certainly, Arches is playing a leading role in helping to address that. So, we will be paying attention to all of that.

So, I wanted you folks all to know we'll be having those conversations. We may be reaching out to you, if I had to guess. We'll have a Zoom Select Committee hearing, if they will let us, but they probably won't.

But I would like to have one because we'll be out of session and so trying to bring everybody together when we're out of session. And so, if we can't have a Zoom Select Committee hearing, I'm allowed to have my own Zoom meeting. And I'll have a Zoom meeting where we can start to talk about that.

And some of these suggestions that you've had, we will ask you between now, well, we're asking you now if you have specific suggestions about legislation that will incentivize things that's more creative than just give us more money, because we know that one.

But real, truly creative suggestions about ways to incentivize this and this for people on both panels, please send them to us.

You now have this contacts been made, but we will float those suggestions to, to everybody because what we like to do is have people who have concerns about that suggestion tell us about that early and tell us about that in front of the people who are making the suggestion. That's what would happen in a zoom.

We would have somebody who, if you want to criticize a suggestion, say it in front of the person making the suggestion so they can criticize your criticism. Right. It's just so much faster for us than finding out about it later. So, I will let you know.

That'll be the, the theme and the approach that we will take as we try to corral this and figure out what the next step is to help make this happen. Now, the final thing we have is we always open these things up to public comment.

And so, to the extent that we have people in the room that are here for public comment, we ask you to come on forward. You panelists can go back to your seats, or you can stay where you are, whatever you prefer to do. Thank you very much for being here. Here. Really appreciate it.

But I could have another, I'll talk to you about that. Go ahead. 1 minute for these comments. But we're going to, we're going to go 90 seconds because you guys have waited and there aren't that many of you. So, 90 seconds. Go ahead.

I'll be brief, Mister Chair. Joe Cruz on behalf of the California State Council of Laborers -

Good to see you.

Good to see you for conducting this hearing today, bringing to light the importance of hydrogen production in California. I also want to express. I share the same passion.

My brother from Watts, think, from Thinkwatts, shares with working families. I represent an organization that has the highest number of women, people of color, and second chancers. We're the jump off point, an entryway into the construction industry. And we're excited about hydrogen. We're excited about not just an energy transition, but a work transition.

Good paying jobs, health care benefits, everything associated with having a good life and providing a good opportunity is involved with this industry. We want to be part of the discussion. We thank you again and members who are attending today. We look forward to moving forward. Thank you.

Thank you.

Hello, Chair Bennett: Sara Fitzsimon from the Independent Energy Producers Association. As you heard from our panelists today, there are many uses for hydrogen, but here, I'm here today to talk about the power sector. So, California has been a leading state in hydrogen market development.

We've had lots of different types of legislation and programs, like the governor's hydrogen market development strategy, SB 1075, SB 423, among others. These efforts, coupled with the Department of Energy's Hydrogen Earthshot, are going to lead the way in hydrogen development across the globe.

However, as we're having this market grow, we really have to have a couple things in consideration as we develop, as you said, new legislation coming in this next year. So, IEP would like to offer three considerations as we look to draft legislation that will help the market grow.

First, to keep costs low, we really would like to emphasize that hydrogen policy should preserve and strengthen competitive markets. That's really crucial for low costs. Second, to make sure that we have reliability and diverse resources. We want to make sure that incentives should be technology agnostic, with eligibility tied to carbon intensity metrics.

And then finally, we find that hydrogen market rules should align with well-established policy at the state and federal level. So that includes the CARB scoping plan and also the federal Ira to make sure that the growth of this nascent market isn't installed with conflicting policies and rules.

So, thank you so much for your time and thank you for having this informational session. We think these are really important, and we appreciate you listening to stakeholders like IEP.

Thank you.

Hello. Thank you, Assemblymember Steve Bennett, for convening this select hearing. And it's great to be back up here to talk about some of the environmental justice concerns that we've had.

I think it's pretty well known at this point that EJ communities across the state have a lot of concerns about the potential for dirty hydrogen production and other forms of hydrogen production. And I think we heard a lot about renewable hydrogen sources from biomass, other sources, and a lot of requests for streamlining and permitting.

And I just want to say, you know, today we were, we had our congresso where we were able to talk to members from across the legislature. We brought members from across the state, almost 200 of them, to really talk about the concerns we have with existing vehicles that include streamlining, and I think specifically with Arches.

There are a lot of projects that are happening in communities like the Central Valley, Oakland, Long Beach, across that we really have no information about.

And we've been trying to engage to get more information about the potential cumulative impacts of these projects, where they're going to be cited, what the metrics are going to be for storage, delivery, all of that jazz. And I think having streamlining without having that transparency is really concerning.

I think one of the things we want to continue to affirm is that environmental justice communities and communities that haven't had a history of decision making actually be brought into the process, especially insofar as how these are going to impact them.

And I think one of the things I also wanted to reiterate is that I think it's really great that we're having conversations about reducing GHG emissions through the hydrogen sector. But I think it's important to be really cognizant that some of these solutions may also increase criteria, air pollutants, that's the source.

For example, with hydrogen burning and power plants or burning in turbines, you could potentially increase nitrogen oxides or SOx emissions, making sure that we have some ways to mitigate or combat that or have some research on what potential impacts these could have. Great. Thank you.

I just want to mention, we've had environmental justice representatives on all of our panels except for this one today. We did have Stix here and representing the watch project that is going on. But we will definitely continue to engage the environmental community and the environmental justice community.

What one of our intentions was is let's get the suggestions out there, because it's hard for you to evaluate the suggestions until you've actually heard what they are.

But we will then these suggestions will go out there and we will ask for people's input and certainly with the same outreach to the environmental justice and the environmental community we've done in the past. So, thanks for being here today. We really appreciate it. And you'll continue to be part of the conversation.

Yeah, we appreciate that Assemblymember Bennett, thank you.

Good evening, Chair Bennett and staff. Thank you for the chance to comment. Jeanie Ward-Waller, on behalf of the Leadership Council for Justice and Accountability. I want to echo my colleague from APAN and SEHA in expressing some concerns from environmental justice communities.

Particularly, we want to be cautious to not overstate the benefit to hydrogen in the future and not use hydrogen where we can otherwise use electricity going forward. We also want to be very cautious about truncating environmental review and community input to projects as they're being developed.

And finally, for leadership council, a lot of the communities we work with are in the Central Valley, and we have some concerns about the potential to cite a lot of these facilities in the Central Valley. We want to make sure community engagement is happening upfront with arches on the potential development of those facilities. Thank you.

Thank you for being here today. Look forward to talking with you in the future.

Hi, good afternoon. My name is Andrea Leon Grossman. I'm a board member with Environmental Justice Coalition for Water. I'm also a Mexican born immigrant. And there's a few things that I'm concerned about here. As you may know, we have in California the human right to water, meaning that every Californian should have safe, affordable, and accessible water.

But even despite having that, since 2012, we have 1 million Californians without access to water. So, I think the right thing to do is to provide those Californians with water before we give a single drop to the industry.

I know many people who don't have water, even like in cities like Maywood. They open the tab, and you have brown stuff coming out of the tab. Then the other thing is, just like the previous two speakers said, we need to look at really the hard to electrify sectors right now.

I know that we have steelmaking that is now being electrified. We know we have cruise ships that are electrified. We even have 10 different airplanes that are electric. So, what are really the uses for hydrogen?

And when we have that hydrogen, it needs to be replaced with green hydrogen, and we really need to bring in environmental justice communities. And by the way, I was part of the LA 100 study, and we were very, very many of us who were against having hydrogen, especially in Scattergood.

If we have an explosion or something, we have critical infrastructure. We have LAX right next to it, and we have the Hyperion treatment plant. If something goes south, who's going to pay for that and how are we going to survive? So, I just want to make sure that we look at all the faces. Thank you.

Thank you very much. And with that, we will be bringing this hearing to an end, but we will be trying to stay in touch with everybody.

Please feel free to stay in touch with us and send us your suggestions and ideas about what's the best way to move forward in hydrogen, regardless of what your stakeholder position is on this. Thank you very much. Meetings adjourned.