February 16, 2022

SoCalGas Proposes to Develop United States' Largest Green Hydrogen Energy Infrastructure System to Help Decarbonize LA Basin and Accelerate California's Climate Goals

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LOS ANGELES, Feb. 17, 2022 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) today announced its proposal to develop what would be the nation's largest green hydrogen energy infrastructure system (the "Angeles Link") to deliver clean, reliable renewable energy to the Los Angeles region. As proposed, the Angeles Link would support the integration of more renewable electricity resources like solar and wind and would significantly reduce greenhouse gas emissions from electric generation, industrial processes, heavy-duty trucks, and other hard-to-electrify sectors of the Southern California economy. The proposed Angeles Link would also significantly decrease demand for natural gas, diesel, and other fossil fuels in the LA Basin, helping accelerate California's and the region's climate and clean air goals.

"The challenges we face on climate require solutions of scale and urgency," said Scott Drury, chief executive officer of SoCalGas. "The Angeles Link is designed to meet those challenges head-on. Today in Southern California we're announcing plans for one of the world's largest clean energy infrastructure systems, to help tackle emissions for which there are no easy answers. Those emissions – from power plants, industry, and heavy-duty trucks - very much 'count' and must be significantly reduced to reach our and the State's climate goals." 

As the nation's largest manufacturing hub, the Los Angeles Basin is home to many potential green hydrogen users. As proposed, Angeles Link's green hydrogen could: 

  • Displace up to 3 million gallons of diesel fuel per day by replacing diesel powered heavy-duty trucks with hydrogen fuel cell trucks
  • Eliminate up to nearly 25,000 tons of smog forming NOx per year
  • Provide the clean fuel to convert up to four natural gas power plants to green hydrogen

As contemplated, the Angeles Link would deliver green hydrogen in an amount equivalent to almost 25 percent of the natural gas SoCalGas delivers today. Building the system to provide a clean alternative fuel could, over time and combined with other future clean energy projects, reduce natural gas demand served by the Aliso Canyon natural gas storage facility, facilitating its ultimate retirement while continuing to provide reliable and affordable energy to the region. 

"California policymakers, thought-leaders, business, academic, labor, and environmental communities all agree green hydrogen is vital to achieving our climate and clean air goals," Drury continued. "With relationships to thousands of industrial end users, a regulatory framework that promotes a transparent and robust stakeholder process serving the public interest, and an extraordinary workforce to do the job safely, SoCalGas is well positioned to work with California to capitalize on this pioneering opportunity to build what would be America's largest green hydrogen hub. The Angeles Link project, if approved and completed, is poised to extend our state's position as a leader on clean energy well into the future while helping to attract billions of dollars in new investment and maintaining and creating thousands of skilled jobs."

"If we are going to be successful in tackling the climate emergency, we need every company, every worker and every community on the front lines," Senate Majority Leader Emeritus Bob Hertzberg (D-Van Nuys) said. "This effort to establish a green hydrogen energy system in the Los Angeles basin is a creative and inventive step forward in that fight. It will not only dramatically reduce carbon emissions, it will create good-paying jobs." 

"We are encouraged that SoCalGas is embarking on a major project that will help make green hydrogen a reality here in Los Angeles," said Marty Adams, Chief Engineer and General Manager of Los Angeles Department of Water and Power (LADWP). "Developing a source of safe, affordable green hydrogen is key to achieving our clean energy future by 2035, while ensuring the reliability we all need and depend on. Projects like the proposed Angeles Link are an important step forward." 

 "As President of the Los Angeles County Federation of Labor, my priority is creating good union jobs while also seeking solutions that protect workers and their families when they return from a hard day's work," Ron Herrera, president of the Los Angeles County Federation of Labor, AFL-CIO said. "The thought of creating a massive clean, green energy hub in Los Angeles, growing union jobs, and preserving the thousands of middle-class jobs for refinery, utility, and electrical workers is exactly the sort of out-of-the-box thinking that this project presents. This is infrastructure done right." 

 "A dedicated green hydrogen system is essential to meeting Los Angeles County's goal of transitioning to a carbon free energy system," said Supervisor Kathryn Barger, who represents Los Angeles County's Fifth District. "By decarbonizing hard to electrify industries, Angeles Link will decrease demand for fossil-based natural gas and increase the amount of reliable clean energy in the region. This will help L.A. County continue to grow sustainably without increasing greenhouse gas emissions and jeopardizing grid reliability." 

"Utility Workers Union of America Local 132 is excited to support Angeles Link. It is precisely the type of future forward energy thinking our members have long advocated for – innovation, union job creation and maintaining reliable, as well as affordable, infrastructure," said Eric Hofmann, president of Utility Workers Union of America Local 132. "This is the way to build back the middle class in California." 

"Infrastructure projects like Angeles Link are critical to realizing the green hydrogen vision we developed in HyDeal LA because it will enable low delivered cost for large-scale users across multiple sectors," said Janice Lin, the founder and President of the Green Hydrogen Coalition. "Continuing a California tradition of leading on climate, Angeles Link will help position the US among global leaders in green hydrogen development. The Green Hydrogen Coalition appreciates SoCalGas' leadership in facilitating access to high volume, low cost green hydrogen to accelerate California's economy-wide clean energy transition." 

"Angeles Link is the first real proposal I've seen that can substantially decrease the need for natural gas in the city of Los Angeles without compromising grid reliability," John Lee, Los Angeles City Councilmember, District 12 said. "I support the goals of this proposal because it will help us get one step closer to achieving the City's goal of 100% clean energy by 2035 without compromising reliability and hurting jobs."

 "Today's Angeles Link announcement is exactly the business innovation that the Los Angeles region needs to remain competitive and affordable today and well into the future" added Tracy Hernandez, Founding CEO of the Los Angeles County Business Federation (BizFed). "A thriving Southern California is essential for California to succeed. Building out a clean energy infrastructure is a win-win for local businesses, our state and, ultimately, the country." 

"We are on the precipice of huge growth in the production, distribution, and use of green hydrogen to enable high renewable use and zero emissions in all sectors of the economy," said Jack Brouwer, Director the National Fuel Cell Research Center at the University of California, Irvine. "For nearly a decade, SoCalGas has worked together with us and others to make the hydrogen economy a reality, including helping us build the very first power-to-gas-to-power system in the country right here on the UCI campus. The Angeles Link is a great example of what can be done when government, industry, and academia work together toward a common purpose."

 "Achieving carbon neutrality requires an integrated clean fuels network to power transportation and industries that are difficult to electrify," said Lew Fulton, Director of the Sustainable Transportation Energy Pathways Program, for the Institute for Transportation Studies at University of California Davis. "This project will help develop a green hydrogen network that can deliver this energy to our nation's largest transportation and manufacturing centers while enabling the widespread production of low-carbon, renewable electricity."

Green Hydrogen Is Key to Reaching Net Zero Emissions by 2045

Renewable green hydrogen has the potential to deliver significant emissions reductions in industries and sectors where renewable electricity alone cannot. Research studies conducted by Energy and Environmental Economics, Inc. ("E3") and the National Renewable Energy Laboratory (NREL LA100) highlight the need for clean fuels like green hydrogen to achieve Los Angeles' LA100 net zero goals and California's mid-century climate goals.

Global investments in green hydrogen are helping to reduce its cost. Locally, HyDeal Los Angeles, an initiative of the Green Hydrogen Coalition, a non-profit organization supported by the Los Angeles Department of Water and Power (LADWP), SoCalGas, Mitsubishi Power, and others aims to make green hydrogen cost-competitive with traditional fuels – and achieve at-scale green hydrogen procurement at $1.50/kilogram in the LA Basin by 2030. 

The proposed Angeles Link is key to helping the region achieve its goals, and it is an extension of SoCalGas' role as an industry leader in hydrogen. In 2015, the company launched the first power-to-gas hydrogen demonstration project in the U.S. In 2021 Fast Company magazine chose SoCalGas' H2 Hydrogen Home microgrid demonstration as one of its World-Changing Ideas in North America. Today SoCalGas has 10 hydrogen pilot projects in motion and is testing moving hydrogen through existing natural gas infrastructure.

Preliminary Actions 

To promote the public's interest in transparency and accountability, SoCalGas today is filing an application with the California Public Utilities Commission (CPUC) requesting approval to track costs related to development of the Angeles Link. The company proposes a phased approach with a robust stakeholder process each step of the way. The application, available here includes descriptions of each phase, including development of a detailed project application as part of Phase 3. With this application submission the proposed Angeles Link is in its initial stage of development, and subsequent stages will require further regulatory review and discretionary approvals, among other things.

SoCalGas' Clean Fuels Initiatives Supporting California's Climate Goals

In support of California's climate goals and in alignment with Paris Agreement recommendations, SoCalGas set a net zero emissions goal for scopes 1, 2, and 3 greenhouse gas emissions by 2045. SoCalGas' Aspire 2045 strategy focuses on helping California navigate the energy transition to a carbon neutral economy with a resilient, clean gas grid. 

To learn more about SoCalGas' sustainability efforts and read SoCalGas' new Aspire 2045 Sustainability Strategy, click here

To learn more about SoCalGas' proposed Angeles Link project, click here

About SoCalGas
Headquartered in Los Angeles, SoCalGas® is North America's largest gas distribution utility, serving 21.8 million consumers across 24,000 square miles of Central and Southern California with affordable, reliable, and increasingly renewable gas service.

SoCalGas's mission is to build the cleanest, safest and most innovative energy company in America. SoCalGas has committed to the goal of achieving net zero greenhouse gas emissions in its operations and delivery of energy by 2045 while keeping bills affordable for customers.

SoCalGas' recent economy-wide technical analysis shows how clean fuels like green hydrogen can help California achieve its net zero goals more affordably and with less risk than other energy pathways.

SoCalGas is a subsidiary of Sempra (NYSE: SRE). For more information visit socalgas.com/newsroom or connect with SoCalGas on Twitter (@SoCalGas), Instagram (@SoCalGas) and Facebook.

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in any forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this press release forward-looking statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "under construction," "in development," "target," "outlook," "maintain," "continue," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), U.S. Department of Energy, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S. in which we do business; the success of business development efforts and construction projects, including risks in (i) completing construction projects or other transactions on schedule and budget, (ii) the ability to realize anticipated benefits from any of these efforts if completed, and (iii) obtaining the consent or approval of partners or other third parties, including governmental entities; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including those related to the natural gas leak at the Aliso Canyon natural gas storage facility; changes to laws; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our substantial debt service obligations; the impact of energy and climate goals, policies, legislation and rulemaking, including actions to reduce or eliminate reliance on natural gas generally and any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to timely and economically incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires or subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance, may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas and natural gas storage capacity, including disruptions caused by limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic, including potential vaccination mandates, on capital projects, regulatory approvals and the execution of our operations; cybersecurity threats to the storage and pipeline infrastructure, information and systems used to operate our businesses, and confidentiality of our proprietary information and personal information of our customers and employees, including ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business; volatility in inflation and interest rates and commodity prices and our ability to effectively hedge these risks and with respect to interest rates, the impact on our cost of capital; changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, or impair our ability to resolve trade disputes; and other uncertainties, some of which may be difficult to predict and are beyond our control.

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

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

SoCalGas Logo (PRNewsfoto/San Diego Gas & Electric,Southern California Gas Company)

SOURCE Southern California Gas Company