Grants for Hydrogen Fueling Stations Cancelled

In brief: After controversy over how funds were granted, the California Energy Commission has suspended hydrogen fueling station grants as they revamp their awards process.

The word

The CEC was to award grants to hydrogen fueling station builders under a 2007 law passed by the Assembly and then signed by then-governor Arnold Schwarzenegger. $15 million was available for dispersal in 2010 and $12 million more earlier this year.

Under the design of the grants, eight automotive companies that had signed on to California's hydrogen vehicle program (including Nissan, Toyota, GM, Honda, Chrysler, Volkswagen, Hyundai and Daimler / Mercedes-Benz) were able to approve a refueling location before a grant would be considered. So if a company wishing to build an H2 station could not get one of the 8 to sign off on it, they would not even be put into the grants process and would have no chance at all of getting a grant.

According to the lawsuit by hydrogen startup Hygen, which caused the controversy and now the grant system shutdown, the grant system was rigged.

Hygen's complaint was that the $16 million awarded so far to private companies was given almost entirely to just two companies - the only two given membership on the California Fuel Cell Partnership, a private group.

The lawsuit alleges that because executives from Linde Group and Air Products (the two H2 station providers in question) are in private meetings with the automakers who can approve or disapprove of any fueling station location, insider dealing was taking place.

And so ...

The CEC says it will revamp the bid and awards process and then restart them. More lawsuits are sure to follow.

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