The California Public Utilities Commission voted to have ratepayers subsidize about $8 million for utilities? alternative-fuel vehicle infrastructure expansion, which will indirectly allow utilities to boost energy sales?even though some commissioners argued against that link. With the current political move toward hydrogen to supplant gasoline-powered vehicles, utilities with natural gas businesses can?t lose because hydrogen is made through a process using natural gas. ?Hydrogen is where the market is going,? said John Swanton, California Air Resources Board air-pollution specialist. The air board is helping that market with its vehicle manufacturing requirements. Beginning with the 2005 model year, manufacturers are required to earn low-emissions credits for 10 percent of the vehicles produced for sale in the state. Manufacturers can meet that requirement by building 250 fuel cell vehicles for 2008, ramping up to 50,000 fuel cell vehicles by 2015. One known way to create hydrogen fuel involves ?steam reforming? natural gas. It can also be done by electrolysis, but that method is less than optimal at this time. Using natural gas as a feedstock means that Southern California Gas, San Diego Gas & Electric, and Pacific Gas & Electric can all get an economic lift from hydrogen sales by creating hydrogen for the next generation of fuel cell?powered vehicles. Hydrogen fuel development may get a big boost at both the state and federal levels. Language?although quite general language?in the pending federal energy bill aims to look at hydrogen development funding for nuclear and renewable fuel sources. In California, the new governor announced support for ?hydrogen highways? for fueling vehicles. While governor-elect Schwarzenegger envisions use of hydrogen instead of gasoline for internal combustion engines, the more likely scenario is hydrogen for refueling fuel cells in electric-drive-train vehicles. Even though fuel cells, which make electricity to power a car through a chemical reaction, are sealed like batteries, they have to be refueled with hydrogen about as often as a vehicle?s gasoline tank needs to be filled. Also at the state level, the air board?s new deadlines for automakers to increase production of zero- to low-emission vehicles are about to be reached. PG&E and SoCal Gas are both developing hydrogen plans. PG&E, for instance, is offering a site in Auburn, along with the natural gas feedstock, to create a hydrogen fuel cell fueling station in partnership with Ztek Corp. The proposed station is set to be finished sometime next year, according to Robb Edwards, Ztek manager of market research. The natural gas?to?hydrogen converter is about the size of an old IBM mainframe computer. Edwards said it would be capable of fueling about eight vehicles a day and will not be open to the public. SoCal Gas ?is definitely on the hydrogen bandwagon,? said utility spokesperson Richard Beamish. He said SoCal is discussing the future with automobile companies for hydrogen distribution but doesn?t expect commercial viability for another decade. In the package approved by the CPUC this week, SoCal Gas has some research and development funds that ?could have applications for fuel cell vehicles,? Beamish said. He said SoCal bought the first commercial fuel cell in 1992, a stationary plant that included its own natural gas?to?hydrogen plant installed at the South Coast Air Quality Management District headquarters. SoCal has bought eight more stationary fuel cells, none of which is currently in operation, he added. While hydrogen can practically be made out of thin air?or water?and is seen as a clean resource, it is not a renewable resource. ?The energy in the natural gas is greater than the energy content of the hydrogen produced. Therefore, the life-cycle efficiency is negative,? was the report from the 2001 National Renewable Energy Laboratory?a venture partly sponsored by Bechtel. Reports show that natural gas loses about one-third of its energy value in conversion. However, fuel cell vehicles running on electric motors are more efficient than their internal combustion brethren.