Currently, governments and companies aim their concern about the environmental problems and energy security. Within this context, the use of renewable hydrogen is presented as an interesting option. This paper presents the alternative to use a renewable resource abundant in the country: hydroelectricity. The public transport service in the urban area of Foz do Iguacu city, Brazil, was chosen as the scenario where a simulated replacement of the current diesel bus fleet with fuel cell buses was performed. The focus was to take advantage of the energy called Spilled Turbinable Energy (STE) verified by the ITAIPU Hydroelectric Power Plant from 2001 to 2006 in order to produce hydrogen by water electrolysis process. The paper does not contain thermodynamic analysis of the processes involved in the proposal. Based on the monthly average, the maximum value was 1,054,899 MWh and the minimum 9559 MWh. Evaluating the historic behavior of this potential energy in the considered period, from October to June, it was found that the energy demand to produce the electrolytic hydrogen needed to meet the whole demand of the public transport sector of Foz do Iguacu city, estimated in 14,454.3 MWh/month, amounts only between 1.5% to 8.5% of total spilled energy. This study presents two electrolytic hydrogen production models: the centralized and the decentralized associated with various distribution modes. The comparison between models shows that the centralized hydrogen production associated with central supply mode are economically more convenient for the city, and the hydrogen cost achieved was US$ 2.38/kg in contrast with the decentralized model associated with cryogenic liquid delivery which showed the highest cost, equal to US$ 4.61/kg. Finally, a sensitivity analysis was performed varying four parameters: equipment cost; rate of return; capital recovery time and electricity cost. Copyright (c) 2012 John Wiley & Sons, Ltd.