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Bay Area could ban sale of natural gas furnaces, water heaters

Jun 01, 2023

Operator Michael Kong adjusts a filter used to pull air particulates at a Bay Area Air Quality Management District facility in San Francisco. On March 15, BAAQMD is expected to vote on a very ambitious plan to dramatically cut emissions from home furnaces and water heaters.

UPDATE: Bay Area will end sales of gas furnaces and water heaters. Here's what it means for you

The regional agency best known for its pollution-fighting Spare the Air Days is poised to vote Wednesday on whether to adopt a rule that will have a major impact on just about every home in the nine counties that touch San Francisco Bay.

In a bid to lower pollution from smog-forming nitrogen oxides (NOx), regional air quality staff proposed a de facto ban on the sale of natural gas-powered water heaters and furnaces, starting as soon as four to six years from now.

The implications of this rule, perhaps the most aggressive in the nation, are huge: Not only would newly built homes have to use electric heat pumps and electric water heaters, but homeowners in existing houses would be gradually forced to replace gas appliances with electric ones when their existing heaters reach the end of their lives.

(Click here for info on how to watch the meeting.)

The benefits could be significant, according to the Bay Area Air Quality Management District, the agency considering the rule. A staff report said getting rid of these two types of gas appliances could slash enough neighborhood-level pollution to prevent 85 deaths each year.

"It's eliminating an entire class of pollution," said Greg Nudd, deputy air pollution control officer for the Bay Area Air Quality Management District.

No other local pollution control district in the country has passed zero-NOx appliance rules, according to Nudd.

The rule applies to retailers, requiring that only zero-NOx water heaters be on the shelves starting in 2027 and air heaters in 2029. It does not apply to gas stoves, which produce fewer emissions.

Even if the air district approves the plan, it could push back the compliance dates. Staff would be required to track the affordability and efficiency of zero-NOx appliances starting two years before the first rule would kick in and advise whether the rule start dates require more time.

But the prospect of eliminating tried-and-true appliances for heating homes and water, items that are generally quick to replace when they break, has generated significant pushback.

Residents wrote dozens of letters to the district worried they would be suddenly faced with a major home retrofit — many heat pumps on the market today require more electricity and updated duct work than older home systems provide — during the type of emergency situation that hits when the furnace stops working and it's freezing cold.

"In order to comply with the proposed regulations, we would have to upgrade our electrical system," Bay Area resident Linda Tolosano wrote to the district. "How do you expect seniors on a fixed income to comply?"

Homebuilder groups wrote with concerns their industry wasn't ready to do mass installations. Others were concerned that PG&E didn't have the capacity to quickly upgrade electric service home-by-home — a necessary service for those considerably expanding their electrical use — and noted that the power can go out amid wildfires and storms.

"No hot water in addition to no power would make a house uninhabitable during a blackout," Bay Area resident Colin Daly wrote in a Jan. 18 letter to the air district, noting he had no electricity for nearly a week in early January storms. "Please leave this decision up to individuals."

Electric heat pumps cost about $2,900 more than a gas-fired furnace, according to a 2021 study from Lawrence Berkeley National Laboratory. And that doesn't include upgrading to a higher amperage electric panel, which costs an average of $4,256 for single-family homes and $2,744 for some multi-family homes, according to a report from the air district.

Some members of the air district's community advisory council have mixed feelings about the rule.

Arieann Harrison, advisory council member and founder of the Marie Harrison Community Foundation, an environmental justice nonprofit based in San Francisco's Bayview neighborhood, said she believes the rule could be especially beneficial for neighborhoods like hers, where working-class communities are often subjected to greater industrial pollution.

"But it's got to be cost effective because we already have astronomical energy bills," Harrison said.

Operator Michael Kong opens a monitor used to collect air particulates at the Bay Area Air Quality Management District in San Francisco on Thursday. The air district is considering ambitious new rules to ban the sale of natural gas-powered furnaces and water heaters.

Contra Costa County Supervisor John Gioia, one of 24 members of the air district's board, said he plans to vote to pass the measure. He feels the Richmond residents he represents, many of whom are from lower-income households, will reap the benefits of air quality improvements. A growing number of government programs — from subsidies to tax credits — are being offered to help people electrify their homes.

"We need to ensure lower-income communities can afford this change," Gioia said. "We want them to take advantage of it, and we don't want to leave them behind."

Matt Regan, senior vice president of the Bay Area Council, a nonprofit association representing local businesses in policy discussions, said his organization is concerned the district is placing too much of a burden on property owners.

"When you add energy efficiency standards, these all add incremental costs" to housing, Regan said. "That means more and more people are priced out of the market. What do they do? They move to coal-burning states."

He also said that the extra demand could place a burden on the power grid.

Air district officials believe the electric grid can handle the change. An analysis produced by an outside firm estimated the proposal would at most increase electricity demand on the state grid by about 2% by 2045.

And Pacific Gas and Electric Co. supports the zero-NOx appliance rule, telling district officials in a June letter that the company embraces its role in helping move California "to a decarbonized and more climate-resilient economy."

PG&E representatives urged the district to go further and apply the rule to all gas appliances — including gas stoves, dryers and gas fireplaces, which are not included in the current proposal — to make it easier for the utility to eventually decommission parts of its gas system.

The agency with the power to affect something as ubiquitous as the furnace is, for most Bay Area residents, not a household name.

The Bay Area Air Quality Management District — BAAQMD, sometimes called "back-mud" — is a 68-year-old agency with a $164 million budget. Its rules govern Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo and Santa Clara counties, as well as southern portions of Solano and Sonoma counties.

It was the first regional air pollution control agency in the country when it was founded in 1955, following the mold of the first-of-its-kind smog control board for Los Angeles.

With a booming population, Bay Area leaders wanted to prevent their smog problem from getting worse like in Los Angeles, where the pollution got so bad during a midcentury heat wave that it blocked out the sun and people experienced widespread respiratory problems.

The state Legislature created BAAQMD to be led by a board of directors filled by local elected leaders, including mayors and county supervisors.

The air district's first rules targeted open burning at garbage dumps. Later, air district directors passed rules limiting emissions from vehicles, gas pumps, oil refineries and semiconductor manufacturers.

Air pollution in California is regulated by a combination of organizations with sometimes overlapping jurisdictions. BAAQMD regulates stationary sources of pollution, like homes, gas stations and industrial facilities. Many of the air district's rules control emissions from the region's four working oil refineries.

Moving sources of emissions like vehicle traffic — the largest source of NOx pollution — are regulated by the California Air Resources Board.

Gas-fired furnaces and water heaters churn out nearly 8% of all NOx, a group of gases generated when fuel burns, in the Bay Area. NOx contributes indirectly to climate change, but it also fouls the air where people live — which is why the air district is acting.

Nudd, the BAAQMD deputy air pollution control officer, said manufacturers are quickly adapting in anticipation of greater demand for electric appliances that will work without major retrofits to homes. While most current models of heat pumps require some homeowners to upgrade their electric panels, which can involve waiting for an upgrade from PG&E, there are models in development that do not, he said.

Electric water heaters that work on old homes with lower-amp electric panels are already available. Nudd said he recently installed a water heater in his 1940s home in the Outer Sunset neighborhood. While one electrician said he needed costly upgrades, he said, a second opinion showed that was not actually necessary.

"We do recognize we’re pushing the envelope on technology, which is why we’re pushing implementation dates out into the future," Nudd said.

"The more you reduce air pollution, the more lives you save," Nudd said.

Reach Julie Johnson: [email protected]; Twitter: @juliejohnson