GOVERNING BOARD

Tom Wheeler, Chair

Supervisor, Madera County

Oliver L. Baines III, Vice Chair

Councilmember, City of Fresno

Sally J. Bomprezzi

Councilmember, City of Madera

Dennis Brazil

Mayor, City of 

John Capitman, Ph.D.

Appointed by Governor

David Couch

Supervisor, Kern County 

Bob Elliott

Supervisor, San Joaquin County

Harold Hanson

Councilmember, City of Bakersfield

Buddy Mendes

Supervisor, Fresno County 

William O’Brien

Supervisor, Stanislaus County

Craig Pedersen

Supervisor, Kings County

Alexander C. Sherriffs, M.D.

Appointed by Governor

Vacant

Small City – Tulare County

Hub Walsh

Supervisor, Merced County

J. Steven Worthley

Supervisor, Tulare County

Seyed Sadredin

Executive Director

Air Pollution Control Officer

Northern Region Office

4800 Enterprise Way 

Modesto, CA 95356-8718

(209) 557-6400 • FAX (209) 557-6475

Central Region Office

1990 East Gettysburg Avenue

Fresno, CA 93726-0244

(559) 230-6000 • FAX (559) 230-6061

Southern Region Office

34946 Flyover Court

Bakersfield, CA 93308-9725

(661) 392-5500 • FAX (661) 392-5585

www.valleyair.org

DATE: January 22, 2015

TO: SJVUAPCD Governing Board

FROM: Seyed Sadredin, Executive Director/APCO

Project Coordinator: Sheraz Gill 

RE: ITEM NUMBER 11: ADOPT PROPOSED 

AMENDMENTS TO RULE 4905 (NATURAL GASFIRED, FAN-TYPE CENTRAL FURNACES)

RECOMMENDATIONS:

1. Adopt proposed amendments to Rule 4905 (Natural Gas-Fired, 

Fan-Type Central Furnaces).

2. Authorize the Chair to sign the attached Resolution.

BACKGROUND:

Rule 4905 is the District’s point of sale rule that reduces oxides of 

nitrogen (NOx) emissions from natural gas-fired, fan-type residential 

central furnaces (residential units) with a rated heat input capacity of 

less than 175,000 British thermal units per hour (Btu/hr) and less than 

65,000 Btu/hr cooling capacity for combination heating and cooling 

units. 

The proposed Rule 4905 amendments would lower the allowed NOx 

emission rates by 65% for new units sold in the San Joaquin Valley

and extend the applicability of Rule 4905 to commercial units and units 

installed in manufactured homes. These proposed amendments will

satisfy the commitments included in the 2008 PM2.5 Plan, 2012 PM2.5 

Plan, and 2013 Plan for the Revoked 1-hour Ozone Standard. 

During the last Governing Board meeting on December 18, 2014, 

District staff recommended postponing rule adoption in response to late 

concerns raised by some manufacturers regarding their potential 

inability to accommodate increased production demand in time to meet 

the compliance deadlines in proposed Rule 4905. As a result, your 

Board elected to continue the adoption of this rule until the next 
SJVUAPCD Governing Board

ITEM NUMBER 11: ADOPT PROPOSED AMENDMENTS TO RULE 4905 (NATURAL GAS-FIRED, FANTYPE CENTRAL FURNACES)

January 22, 2015

regularly scheduled meeting of the Governing Board to allow staff time to make 

necessary rule amendments and fulfill California Health and Safety Code requirements 

for public notices regarding rule amendments. The proposed amendments now include 

an additional option for manufacturers to pay emissions fees if non-compliant units are 

sold during the initial phase of implementation.

DISCUSSION:

Rule 4905 was adopted on October 20, 2005 to establish a 0.093 lb/MMBtu (or 55 

ppmv) NOx emission limit for natural gas-fired, fan-type residential central furnaces 

(residential units) with a rated heat input of less than 175,000 Btu/hr and a rated cooling 

capacity of less than 65,000 Btu/hr for combination heating and cooling units. 

The District committed in its 2008 PM2.5 Plan to lower the NOx emissions limitation for 

residential units subject to Rule 4905. The District further committed in the 2012 PM2.5 

Plan and 2013 Plan for the Revoked 1-hour Ozone Standard to evaluate the potential of 

including commercial units within the applicability of Rule 4905. In 2010, the District 

determined that advanced low NOx technology for residential furnaces was still in the 

early stages of development and was not yet commercially available. Therefore, your 

Board approved an extension to amend the rule to allow for the development of new 

advanced low NOx residential furnace technology in partnership with the South Coast 

Air Quality Management District (SCAQMD). The extension resulted in a revision to the 

State Implementation Plan (SIP) and committed the District to amending Rule 4905 in 

2014, with compliance starting in 2015.

The District partnered with the SCAQMD and provided $50,000 to fund a $1.5 million 

technology assessment project to develop and test low-NOx furnace technologies that 

could meet more stringent NOx limits. The assessment project was completed in early 

2014 and resulted in the successful development and testing of compliant units. To 

provide manufacturers sufficient time to complete the commercialization process for the 

new technologies, and to provide for regulatory consistency in California, the proposed 

compliance deadlines are analogous with those in SCAQMD Rule 1111, including the 

300-day periods for manufacturers and retailers to sell through existing inventories. 

However, while some manufacturers indicated that they would be able to produce 

enough compliant units to meet projected demands, the District received comments 

from a few manufacturers raising concerns regarding the compliance deadlines and 

their ability to comply. 

One manufacturer indicated that their primary focus has been on meeting expected 

demand in Southern California and additional time is needed to meet expected demand 

in the San Joaquin Valley. Another manufacturer has developed compliant units, but 

expressed the need for additional time to demonstrate the reliability and durability 

necessary to be able to go to market. However, information obtained through the multiagency technology assessment project indicated that due to low anticipated demand, 

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SJVUAPCD Governing Board

ITEM NUMBER 11: ADOPT PROPOSED AMENDMENTS TO RULE 4905 (NATURAL GAS-FIRED, FANTYPE CENTRAL FURNACES)

January 22, 2015

high cost to produce, new and costly tooling, and other products with higher potential 

return on investment currently using development resources, the manufacturer is not 

actively pursuing the development and manufacturing of complying units. 

To help minimize unfair competitive disadvantage for manufacturers that will provide 

compliant units to the San Joaquin Valley, the proposed amendments will allow the sale 

of non-compliant units during the initial implementation period (36-months) in exchange 

for the payment of an emissions fee for each non-compliant unit sold. This allowance is 

necessary to ensure adequate supply for the expected demand for new units in the San 

Joaquin Valley. However, the emissions fee is set at a level to provide a financial 

disincentive for continued sale of non-compliant units as follows:

It is estimated that the retail value for non-compliant units will be approximately $150 

less for non-condensing units and $200 less for condensing units. One way to 

disincentivize the sale of non-compliant units would have been to set the emissions fees 

at this price differential. However, to encourage manufacturers to produce compliant 

units with lower emissions the proposed emissions fees include an additional surcharge 

of $75 for non-condensing units and $90 for condensing units. This surcharge equates 

to the incentive rebate currently provided by South Coast AQMD and is expected to put 

the Valley in a more favorable position for receiving compliant units. Therefore, the 

emissions fee would be set to $225 for each non-condensing unit and $290 for each 

condensing unit. 

Summary of Proposed Amendments to Rule 4905

The District is proposing the following amendments to Rule 4905:

• Lower the NOx emission limit for residential units to 14 ng/J, effective on April 1, 

2015 for condensing units, October 1, 2015 for non-condensing units, and 

October 1, 2016 for weatherized units

• Expand applicability to include commercial units with a 14 ng/J NOx emission 

limit effective on April 1, 2015 for condensing units, October 1, 2015 for noncondensing units, and October 1, 2016 for weatherized units

• Expand applicability to include units installed in manufactured homes with a 40 

ng/J NOx emission limit effective January 1, 2015

• Lower the NOx emission limit for units installed in manufactured homes to 14 

ng/J in 2018

• Allow the sale of non-compliant units during the initial implementation period (36-

months) in exchange for the payment of an emissions fee for each non-compliant 

unit sold

• Revise definitions to remove redundancy and improve clarity

• Expire the exemptions for units installed in manufactured homes, units using fuel 

other than natural gas, and nonfan-type units

• Add labeling requirements to ensure compliance with proposed amendments

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SJVUAPCD Governing Board

ITEM NUMBER 11: ADOPT PROPOSED AMENDMENTS TO RULE 4905 (NATURAL GAS-FIRED, FANTYPE CENTRAL FURNACES)

January 22, 2015

Emission Reduction Analysis 

The District did not commit to a specific quantity of emission reductions for this rule 

amendment in the state implementation plans. Since Rule 4905 is a point-of-sale rule, 

emission reductions would occur over the 20 year lifespan of existing units as they are 

replaced with new units. Proposed rule amendments would result in approximately 2.10 

tpd of NOx emission reductions upon full turnover of existing units by 2036, reflecting a 

greater than 50% reduction from projected emissions. The complete Emission 

Reduction Analysis is presented in Appendix B of the Final Draft Staff Report.

Cost Effectiveness Analysis 

Pursuant to California Health and Safety Code (CH&SC) Section 40920.6(a), the District 

analyzed the cost effectiveness of proposed amendments. The cost effectiveness of 

implementing the proposed amendments is conservatively estimated to range from

$30,598 to $40,808 per ton of NOx emission reductions, based on a cost increase of 

$150 to $200 to purchase new compliant units. The cost effectiveness analysis is 

attached as Appendix C of the Final Draft Staff Report. 

Socioeconomic Impact Analysis

Pursuant to CH&SC Section 40728.5, the District analyzed the socioeconomic impacts 

of proposed rule amendments. No significant socioeconomic impacts are expected 

from these proposed rule amendments. The socioeconomic analysis is attached as

Appendix D of the Final Draft Staff Report.

Rule Consistency Analysis 

Pursuant to CH&SC Section 40727.2, the District compared the elements of the 

proposed amendments for Rule 4905 with the corresponding elements of other District 

rules and federal regulations and guidelines that apply to the same type of equipment or 

source category. Proposed amendments would not conflict with other District rules, 

federal regulations, or policies covering similar stationary sources. The rule consistency 

analysis is presented in Appendix E of the Final Draft Staff Report.

Environmental Impacts

According to the California Environmental Quality Act (CEQA) statutes and pursuant to 

Section 15061 (b)(3) of the CEQA Guidelines, the District investigated the possible 

environmental impacts of the proposed amendments to Rule 4905. Based on the 

District’s investigation and lack of evidence to the contrary, the District has concluded 

that the proposed rule amendments will not have any significant adverse effects on the 

environment. As such, the District finds that the rule amendments do not constitute a 

project under the provisions of the California Environmental Quality Act of 1970 

(CEQA). Furthermore, the rule amendments are exempt per the general rule that 

CEQA applies only to projects which have the potential for causing a significant effect 

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SJVUAPCD Governing Board

ITEM NUMBER 11: ADOPT PROPOSED AMENDMENTS TO RULE 4905 (NATURAL GAS-FIRED, FANTYPE CENTRAL FURNACES)

January 22, 2015

on the environment (CEQA Guidelines §15061 (b)(3)). Therefore pursuant to Section 

15062 of the CEQA Guidelines, the Staff will file a Notice of Exemption upon Governing 

Board approval of amendments to Rule 4905.

Rule Development Process

The District hosted a public workshop to present, discuss, and hear comments on the 

draft rule and draft staff report on October 16, 2014. Comments received were 

considered and incorporated into Proposed Rule 4905 and the Final Draft Staff Report, 

as appropriate.

In accordance with CH&SC Section 40725, the Proposed Amendments to Rule 4905 

and Final Draft Staff Report were publicly noticed prior to the Governing Board public 

hearing to consider adoption of the proposed amendments. The proposed amendments 

to Rule 4905, Final Draft Staff Report, and other supporting documents were made 

available for public comment on December 22, 2014. Comments received during the 

subsequent two-week comment period were considered and incorporated into the Final 

Draft Staff Report, as appropriate. The public is also invited to provide comments 

during the public hearing for proposed adoption of this rule. 

FISCAL IMPACT:

The District expects no fiscal impact to result from this action.

Attachments:

Attachment A: Resolution for Proposed Amendments to Rule 4905 (5 pages)

Attachment B: Proposed Amendments to Rule 4905 (6 pages)

Attachment C: Final Draft Staff Report with Appendices for Proposed Amendments to Rule 4905 

(50 pages)

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