Bay Area may soften landmark gas appliance rules with new exemptions
Water heaters and furnaces that run on natural gas are scheduled to mostly disappear from Bay Area shelves in the coming years as some of the most aggressive anti-pollution appliance laws in the country kick in.
But on Wednesday the Bay Area Air District, best known for pollution-fighting Spare the Air Days, will discuss whether to allow exemptions for households with low incomes or significant building constraints for whom the swap could be too expensive.
In a recent report, district staff estimated that it costs about $3,500 more to install an electric heat pump water heater compared to a natural gas model, on average, including equipment and labor. And there are still no electric options for models 35 gallons and smaller.
The proposal would allow property owners to apply for one-time exemptions to give more time for upgrades and to allow the market to catch up and the price difference to drop. Qualifying factors include situations like homes that need major electrical or structural upgrades to accommodate new appliances, low incomes and homes with very small water heaters.
District staff estimated the changes would mean up to 38% of new water heater installations could qualify for exemptions, including 18% of cases involving property owners with low incomes and another 20% of property owners with building constraints such as space or electrical limitations.
The Bay Area Air District's goal has been to target appliances that churn out smog-forming nitrogen oxides, or NOx, that foul the air. The rules apply to retailers, requiring that only zero-NOx water heaters be on the shelves starting in 2027, residential air heaters in 2029 and larger commercial heaters in 2031.
The district passed the zero-NOx appliance rules in 2023 in a controversial vote that established the most aggressive pollution limits for heaters in the country. The district governs air quality and air pollution rules for nine counties that touch the San Francisco Bay, and its 24-member board of directors is composed of mayors and county supervisors.
Residential heaters collectively generate about as much pollution as vehicle traffic, according to the district (the rules don't apply to stoves, ovens or laundry dryers, which emit less NOx into the outdoor air). The shift to electric appliances such as heat pumps could help improve local air quality.
And while the rules don't explicitly prohibit natural gas appliances, the zero-NOx requirement is a de facto ban on natural gas models, which currently all emit those gases.
But the rules weren't meant to be a hard stop. Rather they were aimed at phasing out NOx-producing heaters - allowing repairs and only requiring replacement once the appliances die, with a full phase out expected to unfold gradually over 25 years.
And regulators in 2023, acknowledging that zero-NOx options were less common and often more expensive than natural gas models, also included a caveat that they could adjust the requirements as the deadlines drew near if it became clear property owners would need more time and flexibility to make the swap.
The California Air Resources Board is developing similar regulations that, if passed, could apply to the entire state.
The district's proposed amendments are detailed in this report.
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