SB 1350: California Makes Hydrogen Power Count as Clean

Governor Gavin Newsom signed Senate Bill 1350 into law on Monday night, June 29, letting electricity generated from green hydrogen at natural gas plants count toward California's Renewables Portfolio Standard for the first time. The bill directs the California Energy Commission to recognize qualifying hydrogen turbines under the RPS, and it took effect immediately as an urgency statute.

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What Does SB 1350 Actually Change?

SB 1350 lets natural gas power plants earn renewable energy credit when they burn green hydrogen, something state law didn't previously allow.

Before this law, a plant blending hydrogen made from wind or solar power still counted as a fossil fuel generator under the state's Renewables Portfolio Standard. That gap discouraged utilities from investing in hydrogen-ready turbines. Senator Jerry McNerney, D-Stockton, introduced the bill, with Senators Bob Archuleta and Suzette Valladares and Assemblymember Juan Carrillo signing on as principal coauthors.

The RPS requires utilities to source 60 percent of their electricity from qualified clean sources by 2030. SB 1350 gives green hydrogen a direct path into that mix for the first time. Qualifying facilities can also sell excess credits to non-qualifying plants, creating a new revenue stream.

>> RELATED: LADWP's $800M Hydrogen Conversion Proves the Case for Firm Clean Power

How Green Must the Hydrogen Be to Qualify?

A facility must meet three specific conditions before its hydrogen-fueled electricity earns RPS credit under SB 1350.

• The hydrogen must come from state-certified renewable sources
• At least 20 percent of the fuel blend must be green hydrogen
• The hydrogen's use must reduce, not increase, air pollution from the power sector

These guardrails matter because not all hydrogen is equal. Green hydrogen comes from electrolysis, splitting water using renewable electricity from wind and solar. That's different from hydrogen made from natural gas, the kind still central to Chevron's dual hydrogen projects in Texas and California. SB 1350 only rewards the renewable version.

SB 1350 by the Numbers

Requirement	Before SB 1350	After SB 1350
RPS credit for green hydrogen blending	Not eligible	Eligible at 20%+ blend
State Senate vote	N/A	38-0
State Assembly vote	N/A	74-0
Statewide clean electricity target by 2030	60%	60%, now open to green hydrogen

SB 1350 arrives as the state's hydrogen hub funding faces headwinds. The ARCHES hydrogen hub lost $1.2 billion in expected federal support in 2025. Only five of the original seven federally backed hydrogen hubs kept their funding after a Department of Energy review. State-level policy like SB 1350 gives hydrogen projects a funding path that doesn't depend on Washington.

Why Does This Matter for LADWP's Scattergood Plant?

The Los Angeles Department of Water and Power's Scattergood Generating Station is the clearest example of what SB 1350 unlocks for California utilities.

LADWP approved a controversial conversion of two units at Scattergood to run on a blend of natural gas and hydrogen. The turbines are designed to burn at least 30 percent hydrogen at startup, with an $800 million investment aimed at eventually reaching 100 percent hydrogen. Before SB 1350, that hydrogen use generated no RPS credit for LADWP, regardless of how green the fuel was.

Now, once Scattergood clears the 20 percent hydrogen threshold, its output can count toward the city's clean energy targets. That's a meaningful shift for a utility working toward the state's 2035 renewable energy goal, a milestone tied to Los Angeles' full exit from coal power last December.

What Are Industry Leaders Saying?

These two views point to the same conclusion from different angles. Lin's Green Hydrogen Coalition co-sponsored the bill alongside the State Building and Construction Trades Council, and both chambers passed it unopposed before Newsom signed it into law.

McNerney's office named two direct beneficiaries. The Lodi Energy Center, in the senator's own district, already plans to run on green hydrogen. Element Resources' Lancaster Clean Energy Center, expected to become the nation's largest clean hydrogen project, is another. McNerney added the urgency clause specifically so Lancaster could make timely use of $675 million in federal energy credits.

The bill's momentum also connects to broader cost pressure on hydrogen. The Department of Energy has set a public target of bringing clean hydrogen production down to $1 per kilogram by 2031. Lower production costs paired with new revenue paths like RPS credits could make hydrogen-blended power plants more attractive to utilities beyond Los Angeles.

What Comes Next for California Utilities?

Utilities across the state now have a financial reason to consider hydrogen blending as they retire aging natural gas plants. California's separate push for 200 million gallons of sustainable aviation fuel by 2035 shows a similar pattern, using state mandates to build markets ahead of federal support.

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