ATTACHMENT H 

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 

Staff Report 

Proposed Rule 1147 – NOx Reductions From Miscellaneous Sources 

September 2011 

Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Elaine Chang, Dr. PH 

Assistant Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Laki Tisopulos, Ph.D., P.E. 

Planning and Rules Manager 

Planning, Rule Development, and Area Sources 

Joe Cassmassi 

Authors: Wayne Barcikowski – Air Quality Specialist 

 Sue Lieu , Ph.D. – Program Supervisor 

 

Reviewed by: Gary Quinn, P.E. – Program Supervisor 

 William Wong – Principal Deputy District Counsel 

 Barbara Baird – District Counsel 
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

GOVERNING BOARD

Chairman: WILLIAM A. BURKE, Ed.D.

Speaker of the Assembly Appointee

Vice Chairman: DENNIS YATES

Mayor, City of Chino

Cities Representative, San Bernardino County

MEMBERS:

MICHAEL D. ANTONOVICH

Supervisor, Fifth District

Los Angeles County Representative

JOHN J. BENOIT

Supervisor, Fourth District

Riverside County Representative

MICHAEL CACCIOTI

Council Member, City of South Pasadena

Cities Representative, Los Angeles County/Eastern Region

JANE W. CARNEY

Senate Rules Committee Appointee

JOSIE GONZALES

Supervisor, Fifth District

San Bernardino County Representative

RONALD O. LOVERIDGE

Mayor, City of Riverside

Cities Representative, Riverside County

JOSEPH K. LYOU, PH.D.

Governor’s Appointee

JUDITH MITCHELL

Council Member, City of Rolling Hills Estates

Cities Representative, Los Angeles County/Western Region

SHAWN NELSON

Supervisor, Fourth District

Orange County Representative

JAN PERRY

Council Member, City of Los Angeles

City of Los Angeles

MIGUEL PULIDO

Mayor, City of Santa Ana

Cities Representative, County of Orange

EXECUTIVE OFFICER:

BARRY R. WALLERSTEIN, D.Env.
i

TABLE OF CONTENTS

TABLE OF CONTENTS i

EXECUTIVE SUMMARY ES-1

CHAPTER 1: BACKGROUND

INTRODUCTION 1-1

REGULATORY HISTORY 1-1

AFFECTED INDUSTRIES 1-2

PUBLIC PROCESS 1-2

CHAPTER 2: SUMMARY OF PROPOSED RULE 1147

PROPOSED RULE REQUIREMENTS 2-1

CHAPTER 3: IMPACT ASSESSMENT

IMPACT ANALYSIS 3-1

COST EFFECTIVENESS 3-1

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS 3-1

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY

(H&S) CODE 40727 3-2

SOCIOECONOMIC ASSESSMENT 3-2

INCREMENTAL COST EFFECTIVENESS 3-3

COMPARATIVE ANALYSIS 3-3

PUBLIC COMMENTS AND KEY ISSUES 3-3

REFERENCES R-1

APPENDIX A: BACT DETERMINATIONS AND SOURCE TESTS A-1

APPENDIX B: DRAFT TECHNOLOGY ASSESSMENT WORK STATEMENT B-1
EXECUTIVE SUMMARY
PAR 1147 Staff Report

ES -1 September 2011

EXECUTIVE SUMMARY

To respond to compliance challenges currently being experienced, staff has developed an 

amendment of Rule 1147 – NOx Reductions from Miscellaneous Sources. The proposed 

amended rule (PAR 1147) is intended to provide relief to the regulated community by 

extending the compliance dates and providing other flexibility and clarification that will 

ultimately reduce implementation costs and facilitate compliance. PAR 1147 will result 

in delayed emissions reductions but will achieve the same NOx reductions by 2014 as the 

current SIP approved rule.

Rule 1147 was adopted on December 5, 2008 and is a vital component of our attainment 

strategy to meet the federal PM2.5 ambient air quality standard by 2014 as well as meet 

the ozone standard. Rule 1147 is based on two control measures from the 2007 Air

Quality Management Plan (AQMP): NOx reductions from Non-RECLAIM Ovens, 

Dryers and Furnaces (CMB-01) and Facility Modernization (MSC-01). Rule 1147 

established nitrogen oxide (NOx) emission limits for a wide variety of combustion 

equipment and affects both new and existing (in-use) combustion equipment. 

Under Rule 1147, equipment requiring AQMD permits that are not regulated by other 

NOx rules must meet an emission limit of 30 to 60 parts per million (ppm) of NOx 

depending upon equipment type and process temperature. Compliance dates for emission 

limits are based on the date of equipment manufacture and emission limits are applicable 

to older equipment first. Owners of existing equipment are provided at least 15 years of 

use before they must meet rule emission limits and the first units that must meet the 

emission limits are at least 25 years old. Small sources, regardless of equipment age, are 

not subject to rule emission limits until 2017 and specific categories of new units have 

later compliance dates.

Rule 1147 also establishes test methods and provides alternate compliance options 

including a process for certification of equipment NOx emissions through an AQMD 

approved testing program. Certification eliminates the requirement for end-users to test 

their equipment. Other rule requirements include equipment maintenance and 

recordkeeping.

The key elements of the proposed amendment are as follows:

 Delay effective dates by one to two years,

 Remove the requirement for the installation of time meters,

 Limit the requirement to install fuel meters only to units where owners elect to 

demonstrate compliance using the “pound per million Btu” compliance unit versus 

parts per million,
PAR 1147 Staff Report

ES -2 September 2011

 Provide compliance flexibility to small emitters (one pound per day or less) by 

clarifying recordkeeping that will easily allow them to identify units eligible for 

the five year delay of the compliance date (2017 and later),

 Provide larger emitters with alternate compliance opportunities including a 

mitigation fee option to delay compliance three years with reduced fee for small 

business, and

 Provide additional flexibility in demonstrating compliance through streamlined 

source testing requirements which also reduce cost to affected businesses, 

 Commit to conducting a technology assessment prior to the effective date for small 

sources.

In developing this amendment, staff has worked extensively with all stakeholders. Staff 

has held six Task Force meetings with representatives from affected businesses, 

manufacturers, trade organizations and other interested parties. Staff has also had 

separate meetings with manufacturers and distributors of equipment and burner systems. 

In addition, staff has met individually with and visited local businesses to observe 

operations and equipment affected by Rule 1147. Staff is committed to continued 

discussion with industry through the Rule 1147 Task Force on issues affecting small 

businesses including availability of low NOx burners for unique applications and specific 

processes. 

The majority of the comments made at the Public Workshop and Task Force meetings for 

PAR 1147 supported the proposed delay of compliance dates and limits on the use of 

meters. However, some consultants commented that the compliance delay was not 

needed and the AQMD should have made a greater effort to educate businesses affected 

by Rule 1147. A more enhanced outreach program to the regulated community continues 

to be a high priority for the AQMD. 

The comments on the proposed amendments received at the workshop and meetings 

typically fit into two categories. One set of comments dealt with implementation of the 

rule and asked for clarification or simplification of rule requirements. In response, staff 

has proposed a number of changes relating to equipment identification, maintenance, 

recordkeeping, and source testing requirements, which ultimately can result in cost 

savings compared to the original rule. In addition, PAR 1147 includes a mitigation fee 

option that allows business with equipment emissions greater than one pound per day to 

delay compliance by three years but will provide emission reductions from other sources 

during that three year period. Together with AQMD efforts to streamline the permit 

modification process, PAR 1147 will help businesses comply with rule requirements. 

The second category of comments received addressed issues beyond the scope of the 

current proposal which is crafted to respond to the existing compliance challenge. These 

comments included proposals for new alternative industry-specific rules, questioning 
PAR 1147 Staff Report

ES -3 September 2011

availability of low NOx replacement burners, requests for exemption from the rule for 

small sources, requests to reevaluate rule cost and cost effectiveness and a request to 

require a cost effectiveness analysis for every piece of equipment subject to the rule. To 

address many of these issues and as previously stated, PAR 1147 commits the District to 

conduct a technology assessment for smaller sources with emissions of one pound per day 

or less no later than 18 months prior to the first effective compliance date for these 

smaller sources (July 1, 2017). A draft work statement for the PAR 1147 technology 

assessment, including an independent third party review, is included in Appendix B of 

this report. Regardless, staff will continue to monitor implementation of the rule to 

identify and resolve compliance issues and may propose future amendment if necessary. 
CHAPTER 1: BACKGROUND

INTRODUCTION

REGULATORY HISTORY

AFFECTED INDUSTRIES

PUBLIC PROCESS
PAR 1147 Staff Report

1 - 1 September 2011

INTRODUCTION

The California Health and Safety Code requires the AQMD to adopt an Air Quality 

Management Plan to meet state and federal ambient air quality standards and adopt rules 

and regulations that carry out the objectives of the AQMP. The Health and Safety Code 

also requires the AQMD to implement all feasible measures to reduce air pollution. The 

NOx reductions from Rule 1147 are essential for achieving compliance with federal and 

state ambient air quality standards for PM2.5, PM10 and ozone. 

To respond to compliance challenges currently being experienced, staff is recommending 

delay of the NOx emission limit compliance dates for equipment subject to Rule 1147. 

While PAR 1147 will result in delayed emission reductions, the delay will not impact the 

2014 NOx emission commitment currently in the SIP approved rule. The proposed rule 

also limits the requirements for fuel and time meters. PAR 1147 will also reduce 

compliance cost due to emissions testing, clarify existing requirements, require a 

technology assessment and add a mitigation fee option with lower fees for small 

businesses. Small sources (less than 1 pound per day) are not subject to rule emission 

limits until 2017. 

REGULATORY HISTORY

Rule 1147 – NOx Reductions from Miscellaneous Sources, was adopted by the AQMD 

Governing Board on December 5, 2008. Rule 1147 is a vital component of our 

attainment strategy to meet the federal PM2.5 ambient air quality standard by 2014 as 

well as meet the ozone standard. Rule 1147 incorporates two control measures of the 

2007 Air Quality Management Plan (AQMP): NOx Reductions from Non-RECLAIM 

Ovens, Dryers and Furnaces (CMB-01) and Facility Modernization (MSC-01). 

Control measure MCS-01 proposed that equipment operators meet best available control 

technology (BACT) emission limits at the end of the equipment’s useful life. Control 

measure CMB-01 proposed emission NOx limits in the range of 20 ppm to 60 ppm 

(referenced to 3% oxygen) for ovens, dryers, kilns, furnaces and other miscellaneous 

combustion equipment. Emission reductions from the equipment addressed by Rule 1147 

and control measure CMB-01 of the 2007 AQMP were proposed in prior AQMPs (e.g., 

control measure 97CMB-092 from the 1997 AQMP). 

Rule 1147 established nitrogen oxide (NOx) emission limits for a wide variety of 

combustion equipment and affects both new and existing (in-use) combustion equipment. 

Rule 1147 requires equipment with AQMD permits that are not regulated by other NOx 

rules to meet an emission limit of 30 to 60 parts per million (ppm) of NOx depending 

upon equipment type and process temperature. Compliance dates for emission limits are 

based on the date of equipment manufacture and emission limits are applicable to older 

equipment first. Owners of existing equipment are provided at least 15 years of use 
PAR 1147 Staff Report

1 - 2 September 2011

before they must meet rule emission limits. Most of the equipment will comply with rule 

emission limits when it is 20 to 30 years old. In addition, owners of small units and units 

with emissions of one pound per day or less will comply with emission limits later 

starting in 2017. 

Rule 1147 also established test methods and provides alternate compliance options 

including a process for certification of equipment NOx emissions through an AQMD 

approved testing program. Other rule requirements include equipment maintenance and 

recordkeeping.

AFFECTED INDUSTRIES

A wide variety of processes use equipment that is regulated by Rule 1147. These 

processes include, but are not limited to, food products preparation, printing, textile 

processing, product coating; and material processing. A large fraction of the equipment 

subject to Rule 1147 heats air that is then directed to a process chamber and transfers heat

to process materials. Other processes heat materials directly such kilns, process tanks and 

metallurgical furnaces.

Proposed Amended Rule (PAR) 1147 affects manufacturers (NAICS 31-33), distributors 

and wholesalers (NAICS 42) of combustion equipment, as well as owners and operators 

of ovens, dryers, furnaces, and other equipment in the District (NAICS 21, 23, 31-33, 42, 

44, 45, 48, 49, 51-56, 61, 62, 71, 72, 81, and 92). The units affected by the proposed rule 

are used in industrial, commercial and institutional settings for a wide variety of 

processes. Some examples of the processes regulated by the rule include metal casting 

and forging, coating and curing operations, asphalt manufacturing, baking and printing.

Staff originally estimated approximately 6,600 units subject to the emission limits of Rule 

1147 are located at approximately 3,000 facilities. Staff estimated that about 1,600 units 

at about 800 facilities affected by PR1147 were estimated to meet the NOx emission 

limits of Rule1147. This leaves about 2,200 facilities that are expected to require retrofit 

of burners in their equipment. Staff estimated as many as 2,500 permitted units with NOx 

emission limits greater than one pound per day and an additional 2,500 permitted units 

with NOx emission limits of less than one pound per day will require modification to 

comply with the emission limits. 

PUBLIC PROCESS

For this rule amendment, staff has held six Task Force meetings with representatives from 

affected businesses, manufacturers, trade organizations and other interested parties. Staff 

also had many meetings with manufacturers and distributors of equipment and burner 

systems. In addition, staff has met individually with and visited local businesses to 
PAR 1147 Staff Report

1 - 3 September 2011

observe operations and equipment affected by Rule 1147. A Public Workshop and 

CEQA scoping meeting for PAR 1147 was held on January 26, 2011.
CHAPTER 2: SUMMARY OF PROPOSED RULE 1147

PROPOSED AMENDED RULE REQUIREMENTS
PAR 1147 Staff Report

2 - 1 September 2011

PROPOSED AMENDED RULE REQUIREMENTS

To respond to compliance challenges currently being experienced, staff is recommending 

that Rule 1147 be amended. The key elements of the amendment can be summarized as 

follows:

 Delay effective dates by one to two years,

 Remove the requirement for the installation of time meters

 Limit the requirement for fuel meters to units where owners elect to demonstrate 

compliance using pound per million Btu versus parts per million,

 Provide compliance flexibility to small emitters (one pound per day or less) by 

clarifying recordkeeping that will easily allow them to identify units eligible for 

the five year delay of the compliance date,

 Provide additional flexibility in demonstrating compliance through streamlined 

source testing requirements which also reduce cost to affected businesses, 

 Provide alternate compliance opportunities including a mitigation fee option to 

delay compliance three years, and

 Commit to conducting a technology assessment prior to the compliance date for 

small emitters.

The proposed amendment will provide additional flexibility and reduce cost to affected 

businesses. The following paragraphs describe in more detail the proposed amendment.

Staff is recommending delay of the compliance dates by one to two years for existing (inuse) permitted equipment. The following table provides a summary of the existing Rule 

1147 compliance dates for in-use equipment and the proposed changes. 

PAR 1147 also delays, until 2017 through 2019, the compliance dates for existing (in-use)

small equipment and low emitters 5 years later than the schedule in the table. In addition, 

PAR 1147 delays the emission limit compliance dates for specific types of new 

equipment consistent with the delay for in-use equipment identified in the table. These 

proposed changes are found in paragraphs (g)(4), (g)(5) and (g)(6) of PAR 1147. This 

allows businesses to install these specific types of new equipment today and not comply 

with rule emission limits until the unit is 15 years old. 

The proposed rule amendment also limits the requirement for meters in paragraph (c)(8). 

Meters will be required only for units when the owner elects to comply with the NOx 

emission limit expressed in pounds per million Btu of fuel. 
PAR 1147 Staff Report

2 - 2 September 2011

Current and Proposed Compliance Schedule for In-Use Units

Equipment Category(ies) Compliance Dates in

Existing Rule

Proposed 

Compliance Dates

Remediation UNIT

Upon combustion modification or 

change of location for units 

manufactured prior to 1998

Beginning January 1, 

2011

Beginning March 1, 

2012

Tar Pot

Permit Application

Beginning January 1, 

2012

Beginning January 1, 

2013

Afterburner, degassing unit, catalytic 

oxidizer, thermal oxidizer, vapor 

incinerator, evaporator, food oven, 

fryer, heated process tank, parts washer 

or spray booth make-up air heater 

manufactured prior to 1998

July 1, 2013 July 1, 2014

Other UNIT manufactured prior to 

1986 July 1, 2010 July 1, 2012

Other UNIT manufactured prior to 

1992 July 1, 2011 July 1, 2012

Other UNIT manufactured prior to 

1998 July 1, 2012 July 1, 2013

Any UNIT manufactured after 1997 July 1 of the year the 

unit is 15 years old

July 1 of the year the 

unit is 15 years old

PAR 1147 provides additional options to reduce cost and assist facility compliance and 

permit processing including: eliminating some test requirements, providing flexibility for 

testing multiple units of same type of equipment, units with dual purpose burners (burners 

designed as afterburners with heat recovery that provides heat for drying, baking, heat 

setting or curing in the same unit) or units in series (e.g., oven and afterburner), 

extending the application date for facilities with five or more units to request an alternate 

compliance schedule (paragraph (c)(14), and providing additional flexibility through a 

new mitigation fee option to delay compliance by three years for larger sources. 

Although these test options are not designed to be an economic incentive program, the 

additional test options in PAR 1147 would comply with U.S. EPA guidance in

"Improving Air Quality with Economic Incentive Programs,” January 2001 (EPA-452/R01-001). AQMD Rule 1147 is a new rule and adding these test options is necessary in 

order to effectively regulate these types of equipment for the first time. These options are 
PAR 1147 Staff Report

2 - 3 September 2011

necessary in order to test units which cannot be tested individually (e.g., similar 

equipment with common exhaust and dual chambered equipment such as burn-off 

furnaces and crematories where the individual chambers cannot be tested). While these 

test options provide the operator with additional flexibility in source testing a group of

units using a common exhaust stack, it should be noted that AQMD policy and past 

practice dictates that in the event test results indicate an exceedance of rule emission 

limits, each unit in the group of units tested will be determined to exceed the rule 

emission limit. 

Source testing requirements are revised to require high and low fire testing for low 

temperature units only. Staff has determined that testing high temperature processes at 

different firing rates is not required to assure the lowest emission burners have been 

installed. In addition the firing rate for testing at low fire has been raised from 25% to 

35% in order to provide flexibility for equipment and operations with a limited firing 

range. These changes will not affect the emission reductions achieved by the rule.

PAR 1147 also clarifies and provides additional options for businesses to identify 

equipment with emissions of one pound per day or less that are eligible for a later 

compliance date starting in 2017. Equipment eligible for a later compliance date pursuant 

to paragraph (c)(6) will be identified through recordkeeping in addition to permit 

conditions or process limitations that result in emissions of one pound per day or less. A 

variety of permit conditions have been used by AQMD to identify equipment that is not 

subject to BACT or offsets because they have emissions of one pound per day or less. 

During the last decade AQMD has used operating limits with time or fuel meters or 

equipment rating to identify equipment with emissions of one pound per day or less. 

However, other permit conditions are also used and the following list provides a summary 

of the types of conditions found in AQMD permits: 

 A permit condition of one pound per day or less.

 The unit rated heat capacity specified on the permit.

 A condition in the unit permit with a process limit resulting in one pound per day 

or less of NOx emissions including but not limited to fuel use, material throughput 

or operating schedule. A person owning or operating a unit subject to this type of 

condition maintains records of unit fuel use, material throughput, operating hours 

or other relevant process activity.

 A permit condition limiting the number of operating hours per day or month and 

recordkeeping. Emissions are calculated as the unit’s maximum hourly emission 

rate in pounds multiplied by hours of operation. The maximum hourly emission 

rate is equal to the rated heat input capacity of the unit multiplied by the unit’s 

emissions at the rated heat input capacity. 
PAR 1147 Staff Report

2 - 4 September 2011

 A permit condition limiting daily or monthly fuel use and recordkeeping. 

Emissions are calculated as the process emission rate per unit of fuel multiplied by 

the amount of fuel used. 

PAR 1147 identifies a variety of options for units to qualify for the five-year compliance 

delay including the above types of permit conditions. To qualify for the five-year 

extension, the owner/operator must keep detailed operating records for the unit. These 

operating records may consist of gas use, operating hours, or other process parameters. 

An owner or operator of a unit may choose to add a time or fuel meter to assist 

recordkeeping for a unit. Addition of a meter does not require a permit modification. 

However, if the unit’s permit does not have one of the above types of conditions, the 

owner/operator may request such a modification to the permit and install a time or fuel 

meter to help demonstrate the unit qualifies for the later compliance date. In addition, the 

owner/operator may use monthly recordkeeping to qualify for the 5 year extension if they 

have installed a meter. 

A mitigation fee compliance option was developed in response to industry concerns 

regarding the wide variety of equipment regulated by the rule and integration of low NOx 

technology into unique applications. The proposed mitigation fee compliance option will

provide businesses with larger units that are not eligible for the 5 year compliance 

extension an option to delay compliance three years. An owner of a unit with emissions 

greater than one pound per day can request a three year compliance delay in exchange for 

a fee that will be used by the AQMD to generate concurrent emission reductions. This 

option can be used to provide a delay for unique applications or processes which require

additional time to incorporate low NOx technology and could also be used to provide 

additional time to phase in compliance for multiple units at a facility. To request the 

mitigation fee option, the unit(s) owner or operator will submit a completed one page 

form (Form 400A), supporting information and pay the compliance plan filing fee 

identified in AQMD Rule 306.

The mitigation fee is based on the fee from the AQMD minor source BACT guidelines 

and small businesses, as defined in the rule, receive a 50% discount on the fee. The fees 

for the mitigation option will be collected in advance to fund or co-fund projects with 

concurrent emission reductions. Emission reductions can could be achieved through a 

variety of demonstration projects including but not limited to replacement of commercial 

leaf blowers with electric units, automobile scrapping, co-funding with Carl Moyer or 

similar programs or purchasing of emission reduction credits or mobile source emission 

reduction credits for the relevant three year period. AQMD has now determined that the 

fees will be used to fund replacement of commercial leaf blowers. This use will provide 

sufficient emission reductions to compensate for this delay.

Of the potential projects for achieving emission reductions, AQMD staff is proposing to 

use Rule 1147 mitigation fees to fund replacement of gasoline-powered commercial leaf 

blowers with electric units. The leaf blower exchange program in the AQMD has been 
PAR 1147 Staff Report

2 - 5 September 2011

very successful and can achieve the necessary emission reductions. In previous years, 

AQMD has exchanged 1,500 leaf blowers per year and the demand for electric blowers is 

much greater. Staff estimates that the mitigation fee option could result in emissions 

forgone of 0.175 to 0.350 tons/day NOx in 2014. This is 5% to 10% of the Rule 1147 

NOx reductions projected for 2014. An exchange of 1,400 to 2,800 leaf blower units per 

year from 2012 to 2014 will result in equivalent emission reductions of 0.175 to 0.350 

tons per day respectively in 2014. Staff has calculated that the expected mitigation fees 

received will be sufficient to fund the exchange of this number of leaf blowers and that 

there is sufficient demand to support the exchange.

In addition, to address concerns expressed by the regulated community about the 

availability of compliant low-NOx burner technology for unique applications, PAR 1147 

requires the District to perform a technology assessment 18 months prior to the date that 

small and low emission units must comply with NOx emission limits. A draft work 

statement for the PAR 1147 technology assessment, including an independent third party 

review, is included in Appendix B. PAR 1147 also includes administrative changes to 

clarify rule requirements including testing, identification of equipment rating, 

recordkeeping and exemptions. These proposed changes are in response to requests and 

comments from affected businesses and consultants. 
CHAPTER 3: IMPACT ASSESSMENT

IMPACT ANALYSIS

COST EFFECTIVENESS

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS

SOCIOECONOMIC ASSESSMENT

INCREMENTAL COST EFFECTIVENESS

COMPARATIVE ANALYSIS

PUBLIC COMMENTS AND KEY ISSUES
PAR 1147 Staff Report

3 - 1 September 2011

IMPACT ANALYSIS

The proposed amendment will result in emission reductions delayed of 1.4, 0.7, 0.06, 0.12 

and 0.6 tons per day in 2011, 2012, 2015, 2016 and 2017, respectively. Emission 

reductions are delayed from 2015 through 2017 because units with emissions of one 

pound per day or less have five years more than units with emissions greater than one 

pound per day. A delay for units with emissions greater than one pound per day also 

provides a delay for lower emitting units. However, PAR 1147 will achieve the same 

reductions as the existing rule in 2013, 2014, 2018 and later years. All units will meet the 

Rule 1147 NOx limits by 2023. The following table illustrates the changes in emission 

reductions by year from adoption of PAR 1147.

PAR 1147 Emission Reductions (Tons/day)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Rule 1147 0.7 0.7 0.7 0.7 0.7 0.06 0.06 0.06 0.06 0.06

PAR 1147 1.4 1.4 0.7 0.12 0.12 0.06

COST EFFECTIVENESS

As PAR 1147 provides delays of compliance dates and other flexibility that do not affect 

emission limits, there is no additional cost for this amendment and a cost effectiveness 

analysis was not prepared for the proposed amendment. In addition, many components of 

PAR 1147 are designed to reduce cost to affected businesses. The mitigation fee option 

will result in costs for facilities selecting that option, but it is expected that facilities will 

only select that option if it is economically beneficial for them. However, the issue of 

cost and cost effectiveness of the existing rule has been raised at the Public Workshop 

and Task Force meetings and is therefore discussed in the section of this report on public 

comments and key issues. 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS

Pursuant to California Environmental Quality Act (CEQA) Guidelines §15252 and 

§15162 and SCAQMD Rule 110, the SCAQMD prepared a Draft Subsequent 

Environmental Assessment (SEA) for proposed amended Rule 1147. The Draft SEA 

concluded that the proposed project has the potential to generate significant adverse 

operational air quality impacts. Further, it was concluded that the proposed project would 

not generate significant adverse environmental impacts to any other environmental topic 

areas. The Draft SEA was released for a 45-day public review and comment period from 

April 6, 2011 to May 20, 2011. One comment letter was received during the public 

comment period relative to the analysis presented in the Draft SEA. No comments in this 

letter identified other potentially significant adverse impacts from the proposed project. 
PAR 1147 Staff Report

3 - 2 September 2011

Responses to the comments received have been prepared and the comment letter and its 

responses are included as Appendix C of the SEA. 

Since the release of the Draft SEA, a mitigation fee compliance option along with other 

minor changes have been added to PAR 1147 and the SEA has been modified to include 

an analysis of potential impacts that could be generated by these modifications to PAR 

1147. However, none of these modifications alter any conclusions reached in the Draft 

SEA, nor provide new information of substantial environmental importance relative to the 

draft document. Further, the modifications do not constitute significant new information 

that would require recirculation of the Draft SEA pursuant to CEQA Guidelines 

§15088.5. Therefore, the document is a now a Final SEA and is included as an 

attachment to this Governing Board package.

Pursuant to California Environmental Quality Act (CEQA) Guidelines §15252 and 

§15162 and SCAQMD Rule 110, the SCAQMD prepared a Draft Subsequent 

Environmental Assessment (SEA) for proposed amended Rule 1147. The Draft SEA 

concluded that the proposed project has the potential to generate significant adverse 

operational air quality impacts. Further, it was concluded that the proposed project would 

not generate significant adverse environmental impacts to any other environmental topic 

areas. The Draft SEA was released for a 45-day public review and comment period from 

April 6, 2011 to May 20, 2011. One comment letter was received during the public 

comment period relative to the analysis presented in the Draft SEA. None of the 

individual comments in this comment letter identified other potentially significant adverse 

impacts from the proposed project. Responses to the comments received will be prepared 

and the comment letter and its responses will be included as Appendix C of the SEA. 

Since the release of the Draft SEA, a mitigation fee compliance option and other minor 

changes have been added to PAR 1147. The proposed modifications will be evaluated 

and the SEA will be modified, as necessary, to include an analysis of potential impacts 

that could be generated by the proposed modifications to PAR 1147. The purpose of the 

analysis of the proposed modifications is to determine whether or not they alter any 

conclusions reached in the Draft SEA or provide new information of substantial 

importance that could require recirculation of the Draft SEA pursuant to CEQA 

Guidelines §15088.5.

SOCIOECONOMIC ASSESSMENT

The proposed amendments extend the compliance schedule, resulting in delayed costs for 

the affected units. In addition, the compliance schedule for low emitters (no more than 1 

pound a day) is also delayed. Low emitters are eligible for a five-year delay when

identified through permit conditions or recordkeeping. Those with more than 1 pound a 

day emissions may also elect to pay a mitigation fee in exchange for an additional three

year compliance delay. The three year mitigation fee delay would be an individual 

business decision.
PAR 1147 Staff Report

3 - 3 September 2011

Units that elect to comply with emission limits in pounds per million BTU (units with 

variable firing rate) would now be required to only install fuel meters under the proposed 

amendments, as opposed to the requirement to install both time and fuel meters under the 

existing rule. Furthermore, there would be no meter requirement for units with emission 

limits in PPM. 

Therefore, compared the existing rule, the proposed amendments will result in cost 

savings. The remaining amendments are administrative and would have few effects on 

costs.

There are three CEQA alternatives to the proposed amendments. Alternative A is the No 

Project Alternative where the proposed amendments would not be adopted. Alternative 

B, a less stringent alternative than the proposed amendments, would have an additional 

delay in the compliance schedule of two to three years beyond the proposed amendments. 

Alternative C is more stringent than the proposed amendments in that it has less of a 

delay in the compliance schedule than the proposed amendments. Compared to the 

existing Rule 1147, Alternative C has delays in compliance schedule from 6 months to 

1.5 years.

Compared to the No Project Alternative, Alternative B would have more delayed costs 

and achieve more savings than Alternative C and the proposed amendments. Affected 

facilities would face fewer delayed costs and have fewer savings under Alternative C than 

those under the proposed amendments because the former has a shorter delay in the 

compliance schedule than the latter. 

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY (H&S) 

CODE 40727

California H&S Code §40727 requires that prior to adopting, amending or repealing a 

rule or regulation, the AQMD Governing Board shall make findings of necessity, 

authority, clarity, consistency, non-duplication, and reference based on relevant 

information presented at the public hearing and in the staff report.

Necessity

A need exists to amend Rule 1147 to provide the regulated community with additional 

time to address compliance challenges due to, in part, the an economic downturn the 

region is experiencing and to minimize the cost impacts of the rule by limiting the 

requirements for fuel and time meters only to those applications that are necessary to 

demonstrate compliance. 

Authority

The AQMD Governing Board has authority to amend existing Rule 1147 pursuant to 

California H&S Code §§ 39002, 40000, 40001, 40440, 40441, 40702, 40725 through 

40728, and 41508. 

Clarity
PAR 1147 Staff Report

3 - 4 September 2011

The proposed amended rule is written or displayed so that its meaning can be easily 

understood by the persons directly affected. 

Consistency

The proposed amended rule is in harmony with and not in conflict with or contradictory 

to, existing statutes, court decisions or state or federal regulations. 

Non-Duplication

The proposed amended rule will not impose the same requirements as any existing state 

or federal regulations. The amendments are necessary and proper to execute the powers 

and duties granted to, and imposed upon, AQMD. 

Reference

By adopting the proposed amended rule, the AQMD Governing Board will be 

implementing, interpreting and making specific the provisions of the California H&S 

Code §§ 39002, 40001, 40440(a), 40702, and 40725 through 40728.5.

INCREMENTAL COST EFFECTIVENESS

California H&S Code § 40920.6 requires an incremental cost effectiveness analysis for 

BARCT rules or emission reduction strategies when there is more than one control option 

which would achieve the emission reduction objective of the proposed amendments, 

relative to ozone, CO, SOx, NOx, and their precursors. The proposed amendment does 

not include new BARCT requirements; therefore this provision does not apply to the 

proposed amendment.

COMPARATIVE ANALYSIS

A comparative analysis, as required by H&S Code §40727.2, is applicable when an 

amended rule or regulation imposes, or has the potential to impose, a new emissions limit, 

or other air pollution control requirements. The proposed amendment does not impose 

new requirements and a comparative analysis is not required.

PUBLIC COMMENTS AND KEY ISSUES

The majority of the comments made at the Public Workshop and Task Force meetings for 

PAR 1147 supported the proposed delay of compliance dates and limits on the use of 

meters. However, some consultants commented that the compliance delay was not 

needed and the AQMD should have made a greater effort to educate businesses affected 

by Rule 1147. A more enhanced outreach program to the regulated community continues 

to be a high priority for the AQMD. 

The comments on the proposed amendments received at the workshop and meetings 

typically fit into two categories. One set of comments dealt with implementation of the 

rule and asked for clarification or simplification of rule requirements. In response, staff 

has proposed a number of administrative changes relating to equipment identification, 
PAR 1147 Staff Report

3 - 5 September 2011

maintenance, recordkeeping, and source testing requirements. Staff has also proposed to 

streamline some test requirements and provide flexibility in how equipment is tested, 

which ultimately can result in cost savings compared to the original rule. In addition to 

the 5-year extension the rule provides to the smaller emitters, PAR 1147 includes a 

mitigation fee option that would allow larger emitters to delay compliance by three years. 

Together with AQMD efforts to streamline the permit modification process, PAR 1147

will help businesses comply with rule requirements. 

The second category of comments received addressed issues beyond the scope of the 

current proposal which is crafted to respond to the existing compliance challenge. These 

comments included development of new industry-specific rules, questioning availability 

of low NOx replacement burners, requests for exemption from the rule for small sources, 

and requests to reevaluate rule cost effectiveness and require a cost effectiveness analysis 

for every piece of equipment subject to the rule. To address many of these issues and as 

previously stated, PAR 1147 requires the District conduct a technology assessment for 

smaller sources with emissions of one pound per day or less no later than 18 months prior 

to the first effective compliance date for these smaller sources (July 1, 2017). Regardless, 

these issues were not limited solely to small sources. The following discussion provides 

responses to these and other comments affecting both large and small sources.

Equipment or Industry Specific Rules – A number of individuals requested the AQMD 

replace Rule 1147 with equipment or industry specific rules. Alternatively, some also 

requested that Rule 1147 be divided into more categories of equipment. These comments 

reflect similar comments made during rule development in 2007 and 2008. The decision 

to regulate these sources through one rule is based on a number of factors. In Control 

Measure CMB-01 of the 2007 AQMP, the AQMD committed to achieving most of the 

emission reductions (3.5 tons/day) from these remaining unregulated combustion sources 

by 2014. The most effective way to provide all affected business the maximum amount 

of time to prepare for equipment changes to achieve these reductions was adoption of one 

rule as early as possible.

In addition, the processes regulated under Rule 1147 are similar from the standpoint that 

they operate under the same heat transfer principles. Regardless of the type of business or 

equipment, all Rule 1147 equipment either heat solid materials directly or provide large 

volumes of heated air for drying and curing. While the functions of the equipment vary, 

the principles involved in providing heat are the same. Melting or heating asphalt, metal, 

and plastic or curing coatings uses the same physical heat transfer processes as 

incineration, sintering, calcining, cooking food, or drying cloth or printed materials. A 

burner either directly provides convective and radiant heat to solid material or an air 

stream or provides heat indirectly through a heat exchanger or tube that heats air or 

material. 

The most important factor in determining an appropriate emission level is the process 

temperature, which was reflected in the Rule 1147 emission limits. The similarities in the 

heat transfer process and the importance of process temperature support the use of one 

rule encompassing many types of industries. 
PAR 1147 Staff Report

3 - 6 September 2011

During the initial rule development Rule 1147 included more equipment categories. 

However, when some proposed emission limits changed, Rule 1147 task force members 

suggested to combine categories with similar emission limits. This led to the equipment 

categories identified in the rule today. 

It should be acknowledged, however, that while rule 1147 compliant low NOx burners 

are designed to operate under the same heat transfer principles, their physical 

characteristics (size and configuration) may differ depending upon the industry that they 

serve. While there are many rule-compliant burners available, staff is committed to work 

with all stakeholders to ensure burners are available for all industry sectors prior to the

effective dates and will be prepared to make industry specific adjustments if warranted by 

the circumstances.

Low-NOx Burner Technology – Low-NOx burners for ovens, dryers, furnaces and 

heaters can achieve less than 10 ppm NOx (at a reference level of 3% oxygen) in low 

temperature applications such as ovens and dryers. In high temperature applications, 

burners for furnaces, kilns, metal heat-treating and afterburners typically achieve NOx 

emission levels of 30 to 60 ppm. These emission levels have been achieved in practice 

since the 1980s. The manufacturers of burners for these processes all use similar 

approaches to achieve low NOx levels. 

The principal technique to reduce NOx involves premixing of fuel and air before 

combustion takes place. This results in a lower and more uniform flame temperature,

which reduces formation of NOx. Some premix burners also use staged combustion with 

a fuel rich zone to start combustion and stabilize the flame and a fuel lean zone to 

complete combustion and reduce the peak flame temperature. Many burners also 

combine these techniques with a form of flue gas recirculation (FGR) in which the burner 

flame induces recirculation in the combustion chamber so that a small amount of exhaust 

is mixed with fuel and air prior to burning. FGR has been used effectively for many 

decades to reduce NOx emissions.

Burners may also be designed to spread flames over a larger area to reduce hot spots and 

lower NOx emissions. A good example of this is radiant premix burners with ceramic,

sintered metal or metal fiber heads that spread the flame, lower peak flame temperature 

and NOx, and produce more radiant heat. These burners can be run with low heat output 

where the burner head glows red or with higher heat output in a blue flame mode, which 

produces less radiant heat and more convective heat but maintains NOx emissions in the 

10 to 30 ppm range. The following figures illustrate four types of premix low NOx gas 

fired burners. Each type of burner uses different techniques to reduce emissions but is 

used in a wide variety of applications.
PAR 1147 Staff Report

3 - 7 September 2011

Nozzle Mixing Built in Blower Radiant Panel Metal Fiber

Efficiency of Low NOx Burners – Statements by industry representatives were made at 

the Rule 1147 Public Workshop and Task Force meetings that low NOx burners are less 

efficient and use more fuel than the burners in older equipment. However, the examples 

provided as evidence were misleading. In fact, during the last decade California gas 

utilities have provided efficiency rebates to businesses that replace old “atmospheric” 

burner equipment and early model low NOx burners with new equipment using more 

efficient low NOx burners. 

Discussions of efficiency need to be clear about what is meant by “efficiency.” Is it the 

percentage of available energy released from the fuel by that specific burner, the amount 

of heat transferred to the material being heated, or the total system efficiency? The 

equipment regulated by Rule 1147 either heat solid materials directly or heat air which is 

used to heat or dry a product. The total efficiency of these processes are affected by many 

factors including the amount of primary air mixed with fuel, the amount of secondary air 

used by the burner during combustion, the nature of the material(s) being heated, and the 

amount of additional air drawn through the system for the heating or drying process or for 

maintaining temperature uniformity. When any burner is replaced, these systems need to 

be adjusted. This requirement is not unique to lower NOx burners. Burners wear out and 

need to be replaced. If the same burner is not available or the business owner chooses a 

different model or vender, the system will require adjustment of fans, dampers and the 

new burner(s) to maintain efficiency. 

Modern low NOx burners are more efficient because they produce more energy from the 

same amount of fuel. This efficiency is best illustrated by the significantly lower 

emissions of carbon monoxide and unburned hydrocarbons in the exhaust of these 

burners. In addition, replacing an old indirect air heating unit (using a heat exchanger) 

with a new direct air heating unit that complies with both Rule 1147 and occupational 

exposure limits can reduce fuel consumption more than 20%.

Most of the examples provided to support the claim that new burners in existing systems 

are less efficient were installation of a higher output burner compared to the existing 

burner. However, installing a higher capacity burner does not mean the equipment uses 

more fuel. The following written comment from one of the attendees of the Public 

Workshop explains the flaw in this logic: “if you are replacing a” ... “2.0 (mmBTU) 

burner with an(other manufacturers)” ... “burner you will possibly need to apply a 2.5 

mmBTU unit because that is the closest size you can use without doing an actual oven 
PAR 1147 Staff Report

3 - 8 September 2011

capacity survey. The real point is that the burner will only use what the oven demands. If

it ran on 1.65 mmBTU’s before the change out it will still run on 1.65 mmBTU’s. The 

“larger” burner is a result of supplier convenience, not the related efficiency of the 

burner process.” Thus, the burner will still use the same amount of fuel.

As discussed above, Sstaff acknowledges that burner replacements will also require 

adjustment of other components in a system to maintain efficiency including blowers 

(fans) and dampers regulating air flow through the system. System fans or dampers 

(intake and exhaust) will need adjustment to compensate for the increased flow of air 

through the burner. However, decreasing fan speeds to compensate for additional air 

through the burner also reduces electricity cost and damper adjustments are relatively 

simple compared with other changes required for a retrofit. Rebates from electric utilities 

are also available when the new low NOx burner fan is more efficient than the fan for the 

old burner.

Burner Availability - Staff has reexamined the issue of availability of compliant burner 

systems and the information used to establish the NOx limits. Staff reviewed burners 

available for a number of manufacturers and found that for the categories of equipment 

covered by Rule 1147, there were at a minimum three manufacturers providing burners 

for each category. In many cases, there were more than three manufacturers providing 

compliant burners for a category of equipment subject to Rule 1147. Manufacturers 

provide a number of burner sizes in each product line. Each burner is designed to be used 

in a specific heat output range. A typical small burner from many companies can be used 

at a maximum of 1 million Btu per hour or at one tenth of the maximum (100,000 Btu/hr). 

A summary of the variety of burners available by process category is provided in the 

following table. There are also electric burners, heaters and dryers for processes such as 

smokehouses, small roasters and spray booths. In addition, a unit with small burner and a 

much larger afterburner (oven, roaster, smoker, furnace, etc.) could comply with the PAR 

1147 NOx limit without changing the small primary burner by using the new weighted 

average emissions test.

Low NOx Burner Availability

Equipment 

Vendor Oven Dryer Furnace Booth

Makeup 

Air

After 

burner

Metal 

Heating

Metal 

Melting Kiln Asphalt

A 7 7 3 5 2 2 1 1 3

B 3 3 2 3 3 3 2 2 4

C 1 1 1 1 1

D 1 1 1 1 5 2 3 1

E 1 1 1 3 1 1 1

F 1 1 1 1 2
PAR 1147 Staff Report

3 - 9 September 2011

In addition, a number of equipment vendors have approached the AQMD regarding new 

compliant burners and have stated they want to certify their burner emissions. These 

vendors have new burners in development for spray booths, dryers, crematories, coffee 

roasters, and heated process tanks, parts washers and food ovens. One manufacturer of 

burners for spray booths, heaters and dryers for autobody and other coating operations has 

developed a lower cost burner for smaller operations. The manufacturer of this burner is 

currently undergoing certification of its product in booths and dryers from several 

manufacturers for both new and retrofit applications. Regardless, as stated previously, 

staff is committed to continue to work with all stakeholders to ensure that compliant 

burners are available for all applications prior to the effective dates and will be prepared 

to propose industry specific adjustments if warranted by the circumstances.

Rule 1147 Emission Limits - Appendix A of this report includes charts identifying the 

BACT decisions and source tests used as the basis for Rule 1147 emission limits. Some 

of the BACT decisions still in use today date back to 1988 (BACT in 1990 for 

smokehouses is an electric burner for the smoke generator and a boiler for providing 

steam heat – 30 ppm NOx) but most were established between 1998 and 2006. Some 

BACT limits are based on information from other agencies. For example, the BACT 

limit of 30 ppm NOx for spray booths, makeup air units and other equipment where 

workers may be exposed is based on the occupational exposure limit for that equipment.

The processes regulated under Rule 1147 either heat solid materials directly or provide 

large volumes of heated air for drying and curing materials. Afterburners and related 

devices incinerate vapors, particulates and toxics, but do this using a burner to provide 

heat to the incineration device. While processes vary, the principles involved in 

providing heat are the same. A burner either directly provides convective and radiant heat 

to solid material or an air stream or provides heat indirectly through a heat exchanger or 

tube that heats air or material. 

An examination of the BACT determinations and source tests for permit applications 

indicate that low temperature processes, including ovens, dryers, and make up air heaters

achieve emissions of 10 to 30 ppm NOx and high temperature processes such as metal 

melting, other furnaces, afterburners and kilns can achieve between 40 and 60 ppm. The 

emission limits in Rule 1147 represent the high end of the range established as BACT for 

these processes and are significantly less stringent than the limits for boilers, water 

heaters, and turbines (6 to 20 ppm at 3% oxygen).

Cost and Cost Effectiveness - Most of the comments on cost or cost effectiveness 

focused on equipment with emissions less than one pound per day. One pound per day of 

NOx is equal to the daily NOx emissions of about 550 new cars or 1,030 new residential 

water heaters. In Rule 1147, one pound per day of NOx emissions is used as the criteria 

to extend the compliance date five years for small equipment and low emitters. This fiveyear extension means that small sources and low emitters have until 2017 at the earliest to 

comply with emission limits. 
PAR 1147 Staff Report

3 - 10 September 2011

Initially comments received at public meetings regarding cost effectiveness focused on 

extreme cases where the primary burner in a unit is very small but the process required a 

large afterburner to control VOC, particulate or toxic emissions (i.e., smokehouses and 

coffee roasters). Other examples included units that are only used a few hours every day. 

Some consultants have suggested that the cost effectiveness for these processes is in the 

hundreds of thousands to millions of dollars per ton. 

Staff does not agree with these assertions because there are small cost effective low NOx 

radiant burners for the above applications and electric burners are also a viable low cost 

alternative. In fact, since 1990, BACT for a smokehouse smoke generator is an electric 

burner. A third alternative for small primary burners coupled with a much larger 

afterburner, as is found in smokehouses and coffee roasters is the new weighted emission 

test in PAR 1147. If the unit’s total emissions are equivalent to those for compliant 

burners, the owner would not have to replace the small primary burner.

Because the replacement of the heating unit in a process is done at the end of its useful 

life, it is not appropriate to include many of the other ancillary costs suggested in 

meetings and written comments. Maintenance is required for both old and new 

technologies and source tests are not required after the first year, so it is not appropriate to 

include these as recurring costs. In addition, regardless of replacement with a 

noncompliant or a low emission unit at the end-of-life, the owner must pay local building 

and safety fees so this cost has not been included in cost effectiveness calculations. 

AQMD staff has surveyed local cities and counties to identify the range of permit fees 

that business owners can expect. Typical local permit fees for modifications to a Rule 

1147 affected unit are in the range of $190 to $648. If a modification is valued at more 

than $25,000, then fees range from $233 to $1,874. These fee totals include plumbing 

and mechanical plan check, building permit, permit issuance and other related fees. Note 

that plan submittals and associated fees are typically included in a contractor’s price along 

with equipment and installation costs. As such, these costs are included in the cost 

estimates provided by installers to the AQMD for rule adoption and this amendment.

In addition, replacing a heating system at the end of its useful life when it is not required 

by Rule 1147 requires an AQMD permit modification and associated fee. The permit 

modification is triggered when identical replacement units are not available. Most units 

more than 10 years old cannot be replaced with identical units because manufacturers 

routinely change their products. However, for Rule 1147 required replacements, the 

AQMD fee has been reduced to an administrative fee, so there is a significant costs 

savings which has not been included in cost effectiveness calculations. In addition, the 

cost savings of the administrative AQMD fee compared to standard permit fees is 

approximately the cost of a source test. Further, a business which buys a certified unit 

will not require a source test. Compliance expenses such as testing are included in the 

socioeconomic analysis and are not part of the cost effectiveness calculation. 

In some cases, a retrofit or replacement of old equipment can trigger a requirement for the 

owner to meet current building and fire code requirements and this cost may not be 

covered by the local utility. However, in situations where utility equipment does not meet 
PAR 1147 Staff Report

3 - 11 September 2011

current code, they represent a risk which would come with other costs such as higher 

insurance premiums. Such costs would not be attributed to this rulemaking because they 

occur whenever old equipment is replaced at the end of its useful life. 

Heating units used in spray booths, dryers, ovens and other units affected by Rule 1147 

are expected to last 10 to 15 years depending upon the type of unit and use. Rule 1147 

requires replacement of small units when they are 20 to 30 years old starting in 2017. 

Because Rule 1147 requires replacement of heating systems at the end of their useful life, 

the appropriate equipment cost is the difference between a new compliant system and a 

new non-compliant replacement. 

In order to provide perspective on the cost and cost effectiveness for Rule 1147, an 

analysis of the cost effectiveness for a typical small emitter is provided in the following 

example. Using a typical emission reduction from a small source of one-half of a pound 

(0.5 lb/day) and a facility operating schedule of 5 days a week, then the emission

reduction over 15 years for this is very close to one ton (1,950 pounds). A number of 

consultants and equipment providers have indicated that the typical cost for retrofitting or 

replacing a unit with these emissions is between $11,000 and $19,000 and the average is 

about $15,000. With an emission reduction of one ton, this example results in a cost 

effectiveness of $11,000 to $19,000 per ton for the typical retrofit of a small source with 

an average cost effectiveness of $15,000 per ton. However, because a new burner system 

is installed at the end of the useful life of the old burner(s), the true cost is the increased 

cost for the Rule 1147 compliant components compared with non-compliant 

replacements. Based on this cost difference, the cost effectiveness is significantly lower 

than $15,000 per ton. For example, the cost difference between a new noncompliant unit 

and a new compliant unit might be $5,000 dollars and the cost effectiveness would then 

be $5,000 per ton.

In addition, there are also potential cost savings when replacing older equipment

including fuel cost. Many of the smaller equipment with emissions less than one pound 

per day have older atmospheric burners or use systems with heat exchangers (indirect 

heating). New burners premix air and fuel to improve combustion efficiency and reduce 

emissions. The increased fuel efficiency of a new system can pay for itself over the life 

of equipment. In addition, replacing an indirect heating system (exhaust to air heat 

exchanger) with a direct air heating unit that meets Rule 1147 and occupational exposure 

limits will increase efficiency and reduce fuel cost by 20% or more. Over 15 years, an 

average monthly fuel cost savings of $50 based on a monthly fuel cost of $200 to $300 

for a small unit will result in a total savings of $9,000 over the life of the equipment. 

When potential fuel cost savings of $9,000 are included in the calculations for the above 

retrofit example with an emission reduction of 0.5 pound per day, then the cost 

effectiveness improves to an average of $6,000 per ton (with a range of $2,000 - $10,000 

per ton). In addition, when the calculation procedure uses the price difference between 

compliant and noncompliant replacements as the cost, the cost effectiveness improves 

even more.
PAR 1147 Staff Report

3 - 12 September 2011

Another example of the cost effectiveness for Rule 1147 is when replacing heating units 

in typical spray booths used by small auto body repair shops or other small coating 

operations with low usage. NOx emissions for these operations are typically about 0.13 

pounds per day which means they will be replaced when they are 20 to 30 years old. 

These older spray booths use indirect air heating units where heated air is provided to the 

booth by a fan blowing air past a heat exchanger. This type of unit is at most about 80% 

efficient. One fifth or more of the energy from combustion goes out the exhaust stack. 

New replacement indirect air heaters can be installed for as little as $6,000 ($5,000 + 

$1,000 installation). However, many non-compliant replacements can be significantly 

more costly. The average cost for installing a Rule 1147 compliant direct air heating 

replacement is about $15,000. If the higher fuel cost of an indirect air heating unit is 

added to the lifetime cost of the unit ($50 or more per month depending upon use), the 

total lifetime cost (15 years) to the business is the same as buying a new rule compliant 

direct air heating unit with lower emissions ($6,000 + $9,000 = $15,000). If the cost of 

the direct heating replacement at the high end of the typical cost range is used for the 

replacement cost ($19,000), and the replacement reduces NOx emissions by an average of 

0.1 pound per day, then the cost effectiveness over 15 years is about $20,500 per ton 

($4,000 / 0.195 ton). 

Questions were also raised in task force meetings about the AQMDs authority to use 

different cost effectiveness levels in rule adoptions. Air pollution districts in California 

have the authority to pass rules in their own jurisdictions and each consider cost and cost 

effectiveness in their decisions. The above examples of cost effectiveness for Rule 1147 

as adopted are well within the range of cost effectiveness for NOx rules adopted by the 

AQMD Governing Board. The cost effectiveness for the last amendment of AQMD Rule 

1146.2 in May 2006 for small boilers 300,000 Btu/hour to 400,000 Btu/hour was about 

$22,000 per ton. For the September 2008 amendment of AQMD Rule 1146.1 (small 

boilers 2 to 5 million Btu per hour), the range of the cost effectiveness was $14,400 to 

$33,500 per ton. In addition, the recent amendment of the AQMD SOx RECLAIM 

program had cost effectiveness up to $50,000 per ton. Other air pollution districts in 

California have passed NOx control rules with cost effectiveness as high as $60,000 per 

ton (e.g., San Joaquin Valley Air Pollution Control District).

Not only is the typical cost effectiveness for small sources regulated by PAR 1147 within 

the range of the cost effectiveness for recent NOx rule amendments passed by the 

AQMD, it is similar to the AQMD BACT cost effectiveness guideline for minor sources. 

The current AQMD minor source BACT cost effectiveness criteria for NOx and VOC 

respectively are about $25,000 and $26,500 dollars per ton (adjusted to 2011 equipment 

costs pursuant to AQMD BACT Guidelines).
REFERENCES
PAR 1147 Staff Report

R - 1 September 2011

REFERENCES

Eclipse Incorporated, 2011. http://www.eclipsenet.com, last accessed July 12, 2011

EPA, 2002. EPA Air Pollution Control Cost Manual, Sixth Edition (EPA-452-02-001), United 

Stated Environmental Protection Agency, January 2002

Maxon Corporation, 2011. http://www.maxoncorp.com last accessed July 12, 2011.

North American Manufacturing Company, 2011. http://www.namfg.com, last accessed June 30, 

2011.

SCAQMD, 2008. Staff Repot: Proposed Amended Rule 1146 - Emissions of Oxides of Nitrogen 

from Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters. 

South Coast Air Quality Management District, September 2008.

SCAQMD, 2007. Air Quality Management Plan, Final 2007 AQMP Appendix IV-A, District’s 

Stationary and Mobile Source Control Measures, South Coast Air Quality Management District, 

June 2007.

SCAQMD, 2006. Staff Report: Proposed Amended Rule 1146.2 - Emissions of Oxides of 

Nitrogen from Large Water Heaters and Small Boilers. South Coast Air Quality Management 

District, May 2006.

SCAQMD, 2005. Staff Report: Proposed Amended Rule 1146.2 - Emissions of Oxides of 

Nitrogen from Large Water Heaters and Small Boilers. South Coast Air Quality Management 

District, January 2005.

SCAQMD, 1999. Staff Report: Proposed Amended Rule 1121 - Control of Nitrogen Oxides 

From Residential Type Natural Gas-Fired Water Heaters. South Coast Air Quality Management 

District, November 1999.

SCAQMD, 1997. Final Staff Repot for: Proposed Rule 1146.2 - Emissions of Oxides of 

Nitrogen from Large Water Heaters and Small Boilers. South Coast Air Quality Management 

District, December 1997.

SCAQMD, 1996. 1997 Air Quality Management Plan, Appendix IV-A, Stationary and Mobile 

Source Control Measures, South Coast Air Quality Management District, November 1996.
PAR 1147 Staff Report

A - 1 September 2011

Appendix A – BACT Determinations and Source Tests
PAR 1147 Staff Report

A - 2 September 2011

Figure A-1

Figure A-2

Figure A-3
PAR 1147 Staff Report

A - 3 September 2011

Figure A-4

Figure A-5
PAR 1147 Staff Report

A - 4 September 2011

Figure A-6
PAR 1147 Staff Report

B - 1

Appendix B – Draft Technology Assessment Work Statement
PAR 1147 Staff Report

B - 2

Draft Work Statement for Rule 1147 Technology Assessment

The Technology Assessment for PAR 1147 would be done in cooperation with industry, trade 

associations and the public. To that end, staff intends to continue to hold task force meetings 

periodically during the implementation phase of Rule 1147, and, specifically ask for the regulated

community’s input in identifying processes and equipment of concern to be further evaluated as 

part of the Technology Assessment. It is envisioned that the Technology Assessment would 

include at minimum the following elements:

1. Study Background and Objectives

2. Processes and Equipment of Concern

3. Evaluation Methodology

4. Findings

a. Review of Compliant and Non-Compliant Equipment

b. Cost of Compliant and Non-Compliant Equipment

c. Installation Costs

d. Operating Costs of Compliant and Non-Compliant Equipment over the 

Expected Life

e. Emissions

5. Conclusions and Recommendations

a. Cost Effectiveness and Affordability

b. Equipment Availability

c. Recommendations

Final Report Preparation Process

Following the initial stakeholder input and its independent analysis of the issues, staff will first

prepare a preliminary draft of the Technology Assessment report and present it to the 

stakeholders for their review and comment. A draft report will then be prepared incorporating 

stakeholder input. 

Staff will also solicit a third party expert’s review prior to finalizing the Technology Assessment. 

A final Technology Assessment report will then be prepared incorporating the third party 

expert’s input. 

An RFP would be issued by the AQMD to identify the third party that will conduct the review of 

the Draft Report for the Technology Assessment. As part of the review of the Draft Report, the 

contractor would evaluate available and potential low NOx burners and control systems, the cost 

differential between standard and low NOx units, fuel and utility costs and potential savings, and 

emissions for typical units. The contractor would also analyze cost effectiveness of low NOx 

systems relative to non-compliant burners and cost impacts on selected industries.

In addition to periodic stakeholder meetings, staff also commits to providing the Stationary 

Source Committee with periodic status updates.
PAR 1147 Staff Report

B - 3

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