ATTACHMENT G 

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 

Staff Report 

Proposed Amended Rule 1111 – Reduction of NOx Emissions From NaturalGas-Fired, Fan-Type Central Furnaces 

September 5, 2014 

Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Elaine Chang, DrPH 

Assistant Deputy Executive Officer 

Planning, Rule Development, and Area Sources 

Philip M. Fine, Ph. D. 

Planning and Rules Manager 

Planning, Rule Development, and Area Sources 

Joe Cassmassi 

Author: Wayne Barcikowski – Air Quality Specialist 

 

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

 Ruby Fernandez – Senior Deputy 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, Chino 

Cities of San Bernardino County

MEMBERS:

MICHAEL D. ANTONOVICH 

Supervisor, Fifth District 

County of Los Angeles 

BEN BENOIT 

Mayor Pro Tem, Wildomar 

Cities of Riverside County 

JOHN J. BENOIT 

Supervisor, Fourth District 

County of Riverside 

JOE BUSCAINO 

Councilmember, 15th District 

City of Los Angeles Representative 

MICHAEL A. CACCIOTTI 

Councilmember, South Pasadena 

Cities of Los Angeles County/Eastern Region 

JOSIE GONZALES 

Supervisor, Fifth District 

County of San Bernardino 

JOSEPH K. LYOU, Ph.D. 

Governor’s Appointee 

JUDITH MITCHELL 

Mayor, Rolling Hills Estates 

Cities of Los Angeles County/Western Region 

SHAWN NELSON 

Supervisor, Fourth District 

County of Orange 

DR. CLARK E. PARKER, SR. 

Senate Rules Appointee 

MIGUEL A. PULIDO 

Mayor, Santa Ana 

Cities of Orange County 

EXECUTIVE OFFICER:

BARRY R. WALLERSTEIN, D.Env. 
 i 

 TABLE OF CONTENTS 

TABLE OF CONTENTS i 

CHAPTER 1: BACKGROUND 

INTRODUCTION 1-1 

REGULATORY HISTORY 1-1 

EQUIPMENT AND PROCESS 1-2 

TECHNOLOGY ASSESSMENT 1-3 

AFFECTED INDUSTRIES 1-5 

PUBLIC PROCESS 1-5 

CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 1111 

PROPOSED AMENDMENTS TO RULE REQUIREMENTS 2-1 

CHAPTER 3: IMPACT ASSESSMENT 

IMPACT ANALYSIS 3-1 

COST EFFECTIVENESS 3-1 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS 3-1 

SOCIOECONOMIC ASSESSMENT 3-1 

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY

 CODE SECTION 40727 3-2

INCREMENTAL COST EFFECTIVENESS 3-2 

COMPARATIVE ANALYSIS 3-3 

REFERENCES R-1 

RESPONSE TO COMMENTS i 
CHAPTER 1: BACKGROUND 

INTRODUCTION 

REGULATORY HISTORY 

EQUIPMENT AND PROCESS 

TECHNOLOGY ASSESSMENT 

AFFECTED INDUSTRIES 

PUBLIC PROCESS 
PAR 1111 Staff Report

 1 - 1 September 2014 

INTRODUCTION 

The purpose of the current Rule 1111 – Reductions of NOx Emissions Ffrom Natural-Gas-Fired, 

Fan-Type Central Furnaces is to reduce emissions of nitrogen oxides (NOx) from gas-fired fantype residential space heating furnaces with heat input ratings between 50,000 and 175,000 

British thermal units per hour (Btu/hr). The rule applies to manufacturers, distributors, sales 

outlets and installers of such furnaces. The rule also requires manufacturers to certify that each 

furnace model offered for sale in the SCAQMD complies with the emission limit. The rule 

requires emissions testing using specific test methods approved by the SCAQMD and U.S. EPA. 

Most single family homes, many multi-unit residences and some small commercial buildings in 

the SCAQMD use this type of space heating equipment. 

REGULATORY HISTORY 

Rule 1111 was adopted by the SCAQMD Governing Board in December 1978, addressing all 

sizes of space heating furnaces. The original rule required all residential and commercial space 

heating furnaces to meet a NOx emission limit of 40 nanograms per Joule (ng/J) of heat output 

(equivalent to 55 ppm at a reference level of 3% oxygen) beginning January 1, 1984. At the 

December 1978 rule adoption Hearing, a rule requirement that all space heating furnaces meet a 

12 ng/J NOx emission limit by 1995 was considered by the Governing Board but not adopted. 

Rule 1111 was amended in July 1983 in order to limit applicability to units sized for residences 

and exempted larger commercial space heaters. The rule amendment limited applicability to 

furnaces with a heat input of less than 175,000 Btu per hour, or for combination heating and 

cooling units, a cooling rate of less than 65,000 Btu per hour. The July 1983 amendment also 

exempted units manufactured for use in mobile homes (manufactured housing), revised the 

definition of efficiency, and clarified testing procedures. 

In November 2009, Rule 1111 was amended to be consistent with the objectives of Control 

Measure CMB-03 of the 2007 Air Quality Management Plan (AQMP). The 2009 amendment 

established a new lower NOx emission limit of 14 ng/J (20 ppm at reference level of 3% oxygen) 

for residential furnaces, which reflects a 65% reduction from the then current limit of 40 ng/J (55 

ppm). 

Implementation of lower NOx emission limits from the November 2009 rule amendment began 

in 2012. New mobile home heating units, which were unregulated prior to the 2009 amendment, 

had to meet a NOx limit of 40 ng/J in 2012 with a future limit of 14 ng/J in 2018. The 40 ng/J 

emission limit for mobile home furnaces was based on burner and control technology used in 

existing residential furnaces. 

All other new residential space heating furnaces were required to meet a 14 ng/J NOx limit by 

October 1, 2016. The 2009 amendment required the three major categories of residential furnace 

– condensing (high efficiency), non-condensing and weatherized – to meet the new 14 ng/J NOx 

limit by 2014, 2015 and 2016 respectively. 
PAR 1111 Staff Report

 1 - 2 September 2014 

The 2009 amendment to Rule 1111 also made a number of other changes to the rule including 

updating references to test methods for determining compliance with rule emission limits and 

providing more specificity in the labeling requirements. To facilitate the depletion of existing 

inventories and to ensure smooth transition to the new limits, Rule 1111 also provided a 

temporary 10-month exemption (a sell-through period) for units manufactured before the 

applicable future compliance date and delivered into the SCAQMD prior to the compliance date. 

At the time Rule 1111 was amended in 2009, there were no commercially available units 

meeting the future effective limits. In order to encourage and accelerate technology 

development, Rule 1111 provided an incentive for early compliance with the 14 ng/Joule NOx 

emission limit. Companies that deliver 14 ng/J furnaces into the SCAQMD prior to the 

applicable compliance date can elect to receive a payment of $75 for each standard efficiency 

furnace and $90 for each high-efficiency unit sold and delivered into the SCAQMD 90 days 

prior to the applicable compliance date. These manufacturer rebates would result in savings of 

$150 to $350 to consumers because of cost markups in the supply chain. This early compliance 

program is funded by the SCAQMD Rule 1121 Mitigation Program and provides up to 

$3,000,000 for the residential furnace rebate program. As funds are limited, payments for early 

compliance are on a first-come first-served basis. To promote and assist the development of 

compliant furnaces, the resolution for the 2009 rule amendment also committed SCAQMD 

funding for residential furnace technology demonstration projects. 

The 2009 amendment of Rule 1111 also required a technology assessment and status report to 

the Governing Board. This technology assessment was to evaluate both the feasibility of the new 

lower NOx emission limit and the rule implementation schedule. In addition, the amending 

resolution requires SCAQMD staff to include an analysis of a mitigation fee option that would 

allow manufacturers to delay compliance with the new NOx limit. 

Immediately after Rule 1111 was amended in November 2009, the SCAQMD Technology 

Advancement Office (TAO) initiated a Request for Proposals (RFP) to develop prototype 

residential furnaces that meet the new 14 ng/J NOx limit in Rule 1111. The technology 

development projects have been completed and the prototype furnaces developed through these 

four projects demonstrate that the new lower Rule 1111 NOx limit is achievable in all of the 

types of forced air residential heating furnaces produced for the United States market. 

EQUIPMENT AND PROCESS 

Fan-type gas-fired furnaces heat a building by circulating air from inside the building through the 

furnace. In a fan-type furnace, air is heated when it passes through a heat exchanger. 

Combustion gases heat up the inside of the heat exchanger and building air moving past the 

outside of the heat exchanger removes heat from the outside surface. A blower (fan) pulls air 

through one or more intake ducts and pushes the air past the heat exchanger and through another 

set of ducts which direct the heated air to different parts of the building. The heated air 

circulates through the building before it is again pulled into the intake ducts and heated. This 

process continues until a specific temperature is detected by a thermostat in the building which 
PAR 1111 Staff Report

 1 - 3 September 2014 

then shuts off the furnace. When the temperature at the thermostat goes below a set point, the 

thermostat sends a signal for the furnace to turn on. 

TECHNOLOGY ASSESSMENT 

Immediately after Rule 1111 was amended in November 2009, the SCAQMD Technology 

Advancement Office (TAO) initiated a Request for Proposals (RFP) to develop prototype 

residential furnaces that meet the new 14 ng/J NOx limit in Rule 1111. A request for proposals 

was issued in February 2010 and TAO staff selected four bids for funding, including two furnace 

manufacturers, one burner manufacturer and a research institute familiar with residential 

furnaces. The total cost of the four projects was $1,447,737 with $447,737 provided by The Gas 

Company and $50,000 provided by the San Joaquin Valley Unified Air Pollution Control 

District. 

The four proposals were approved by the SCAQMD Governing Board at the June 2010 meeting. 

The four projects demonstrate multiple furnace types (i.e., standard efficiency, high efficiency, a 

range of heat outputs and variable firing rates versus on-off operation). The selected projects are 

summarized in the following list. 

Figure 1 – Summary of Rule 1111 Technology Demonstration Projects

Project Award Amount Scope

Beckett Gas $379,386 Two furnaces: one condensing and one 

non-condensing 

GTI $450,000 

One furnace each for five 

manufacturers: Carrier, Johnson 

Controls, Lennox, Rheem and Thermo 

Products 

Ingersoll Rand $368,261 

Two furnaces: each two-stage 

condensing furnaces with one average 

and one higher heat output 

Nordyne $250,090 

Three furnaces with different firing 

rates: one single-stage (on/off), one 

two-stage (high/low/off), and one 

modulating (low to high and off) 

Because of the confidential and proprietary nature of much of the information in the project 

reports, staff is not able to provide information that includes furnace and manufacturer specific 

details about the projects in this assessment. However, the results of the four technology 

demonstration projects indicate that the 14 ng/J emission limit in Rule 1111 is achievable in both 

standard and high efficiency furnaces (condensing furnaces) with single or variable firing 
PAR 1111 Staff Report

 1 - 4 September 2014 

rates. With the exception of one furnace that did not pass safety testing by the end of the project, 

the contractors and their prototype furnaces achieved the project objectives of meeting the NOx 

emissions limit and passing initial safety tests. 

Figure 2 – Prototype Furnace NOx Emissions (ng/J) *

* Standard and high efficiency units are identified by squares and diamonds respectively. 

The prototype furnaces developed through these four projects demonstrate that the new lower 

Rule 1111 NOx limit is achievable in all of the types of forced air residential heating furnaces 

produced for the United States market. In addition, testing indicates that furnaces with the new 

burners developed for the projects can also meet industry safety requirements. However, there 

remain issues relating to product design, materials of construction, combustion control, and 

manufacturing that each company must resolve. Now that prototype furnaces have been 

developed, the next steps for each manufacturer would be to complete the product design and 

select materials of construction, combustion controls and manufacture of the new units. Staff 

also expects that the technology developed for these residential furnaces will be applicable to 

commercial sized furnaces that will be regulated by Proposed Rule 1111.1. Smaller commercial 

forced air furnaces use the same basic design as residential furnaces. 

← Rule Limit 
PAR 1111 Staff Report

 1 - 5 September 2014 

AFFECTED INDUSTRIES 

Proposed Amended Rule 1111 affects manufacturers (NAICS 333) and distributors and 

wholesalers (NAICS 423) of residential furnaces. Because heating units regulated by the rule are 

used in most residential and many commercial settings for heating small buildings, construction 

and building contractors are also affected by PAR 1111. The Air Conditioning Heating and 

Refrigeration Institute (AHRI), the major manufacturer’s trade organization, indicates that there 

are no manufacturers of fan-type gas-fired residential furnaces in the SCAQMD. However, these 

companies do maintain regional sales offices and distribution centers in the SCAQMD and there 

are manufacturers of other types of heating furnaces in the SCAQMD. 

PUBLIC PROCESS 

The rule development effort for PAR 1111 is part of an ongoing effort to evaluate low NOx 

technologies for combustion equipment. To date, SCAQMD staff has held three Rule 1111 Task 

Force meetings to discuss SCAQMD funded technology demonstration projects, rule 

implementation, feasibility of compliance dates, and mitigation fee options with representatives 

from affected manufacturers, trade organizations and other stakeholders. SCAQMD staff has 

also held numerous separate discussions with furnace and component manufacturers. In 

addition, a Public Workshop and CEQA Scoping meeting for PAR 1111 were held on May 22, 

2014. PAR 1111 was discussed at the Stationary Source Committee on March 21, 2014 and June 

20, 2014. 
CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 1111 

PROPOSED AMENDMENTS TO RULE REQUIREMENTS 
PAR 1111 Staff Report

 2 - 1 September 2014 

PROPOSED AMENDMENTS TO RULE REQUIREMENTS 

SCAQMD staff has proposed to amend Rule 1111 in order to provide manufacturers additional 

time to produce residential furnaces that meet the NOx emission limit of 14 ng/J. Not all 

manufacturers will be able to produce compliant furnaces by the compliance dates. Proposed 

Amended Rule 1111 will add an alternate compliance option to the rule. In lieu of meeting the 

new lower NOx emission limit, PAR 1111 will provide manufacturers of residential furnaces 

subject to Rule 1111 an option to pay a per unit mitigation fee of $200 for each condensing 

furnace and $150 for each non-condensing, weatherized and mobile home furnace distributed or 

sold into the SCAQMD. 

In addition, the proposed rule will delay the compliance date for condensing (high efficiency) 

units from October 1, 2014 until April 1, 2015. This delay will provide manufacturers additional 

time for testing new furnace designs and submitting and receiving approval of alternate 

compliance plans for non-compliant condensing furnaces. 

Table 1 – Furnace NOx Limits and Compliance Schedule

The mitigation fee alternate compliance option can be used for up to 36 months past the 

applicable compliance date in Table 1 of section (c) of the rule. However, the manufacturer must 

submit, 60 days prior to the applicable compliance date, a separate alternate compliance 

application for each 12 month alternate compliance period after the compliance date. 

A manufacturer must submit with each alternate compliance application a compliance plan fee 

and total mitigation fees based on the the number of units that were distributed or sold into the 

SCAQMD during the 12 month time period (July 1 to June 30) prior to the applicable 

compliance date. At the end of each 12 month alternate compliance period the number of units 

distributed or sold into the SCAQMD is reconciled and the manufacturer pays fees for additional 

the number of units distributed or sold into the SCAQMD in excess of the quantity estimated in 

the alternate compliance plan for the alternate compliance period. The manufacturer may also 

request a refund of mitigation fees paid if the number of units distributed and sold into the 

SCAQMD is less than the quantity of units estimated for the alternate compliance period.

Compliance Date Equipment Category NOx Emission Limit 

(nanograms/Joule) 

October 1, 2012 Mobile Home Furnace 40 

April 1, 2015

October 1, 2014 Condensing Furnace 14 

October 1, 2015 Non-condensing Furnace 14 

October 1, 2016 Weatherized Furnace 14 

October 1, 2018 Mobile Home Furnace 14 
PAR 1111 Staff Report

 2 - 2 October 28, 2009 

Emission reductions funded through the mitigation fee alternative compliance option can be 

achieved through a variety of projects including but not limited to replacement of commercial 

leaf blowers with low emission or electric units, replacement of gas powered lawnmowers with 

electric mowers, 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 time period. 

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

Rule 1111 alternate compliance mitigation fees to fund replacement of gasoline-powered 

commercial leaf blowers and lawn mowers with low emission or electric units or any other 

projects with equivalent or better emission reduction potential. The leaf blower and lawn mower 

exchange programs in the SCAQMD has been very successful and can achieve the necessary 

emission reductions. In previous years, SCAQMD has exchanged 1,500 leaf blowers per year 

and the demand for low emission leaf blowers is much greater. Staff estimates that the 

maximum number of non-compliant furnaces that would be sold pursuant to the mitigation fee 

compliance option is 45,000 units in 2016. For illustration purposes, in order to mitigate the sale 

of this number of non-compliant furnaces, the SCAQMD would have to exchange about 8,000 

low emission leaf blowers every 5 years for 20 years. 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. 
 

CHAPTER 3: IMPACT ASSESSMENT 

IMPACT ANALYSIS 

COST EFFECTIVENESS 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS 

SOCIOECONOMIC ASSESSMENT 

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY

 CODE SECTION 40727

INCREMENTAL COST-EFFECTIVENESS 

COMPARATIVE ANALYSIS 
PAR 1111 Staff Report

 3 - 1 September 2014 

IMPACT ANALYSIS 

According to the Air Conditioning Heating and Refrigeration Institute (AHRI), the 

manufacturer’s trade organization, there are currently no facilities manufacturing fan-type gasfired residential furnaces in the SCAQMD. However, affected companies do maintain regional 

sales offices and distribution centers in the SCAQMD and these offices and centers will have to 

assure that only compliant or mitigation plan units are sold for installation in the SCAQMD. 

Annual average NOx emissions from residential heating using natural gas were estimated in the 

2007 Air Quality Management Plan at 9.7 tons per day in 2002 and 11.1 tons/days in 2023. As 

most NOx emissions occur between October and May, daily emissions in these months are 

significantly higher. 

Based on sales estimates for condensing (high efficiency) furnaces in southern California, PAR 

1111 will result in emission reductions forgone of up to 46 pounds per day during the period 

from October 1, 2014 until April 1, 2015. These foregone emission reductions, from the sale and 

installation of non-compliant condensing furnaces during those six months cannot be completely 

mitigated because the mitigation program will not be in effect until sometime between January 1 

and April 1, 2015. However, the mitigation program will be able to offset emission reductions 

forgone for the remainder of the lifetime of these furnaces once mitigation fees are received 

during the last calendar quarter of 2014 and the first quarter of 2015. The six month delay of the 

compliance date will also provide additional time for manufacturers to receive incentive funds 

for early introduction of compliant furnaces. 

The PR 1111 mitigation fee will be used to fund existing SCAQMD programs including the 

clean leaf-blower and lawn mower exchange programs and Carl Moyer and similar programs. 

These programs can fully mitigate the potential emission reductions forgone. For example, the 

cost of a low emission leaf blower is about $180. Each leaf blower purchased and exchanged for 

an old leaf blower by the SCAQMD will reduce more than six times the annual NOx emission 

reductions forgone due to the purchase of one non-compliant furnace. Five low emission leaf 

blowers replaced every five years over 25 years will mitigate the emissions reductions foregone 

by the sale of at least 6 non-compliant furnaces. 

COST EFFECTIVENESS 

The proposed amendment does not impose additional requirements on manufacturers of 

residential furnaces. The proposed amendment provides an alternate compliance option and 

delays a compliance date, which is expected to provide regulatory relief for the affected 

manufacturers and allows additional time to qualify for incentive funds. 

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSIS 

Pursuant to the California Environmental Quality Act (CEQA) and SCAQMD Rule 110, the 

appropriate CEQA documentation has been prepared to analyze any potential adverse 

environmental impacts associated with PAR 1111. The Draft Environmental Assessment (EA) 
PAR 1111 Staff Report

 3 - 2 September 2014 

was released for a 30-day public review and comment period from July 29 through August 27, 

2014. No comment letters were received from the public regarding the Draft EA. The 

environmental analysis in the Draft EA concluded that proposed amended Rule 1111 would not 

generate any significant adverse environmental impacts. The Final EA is available at SCAQMD 

Headquarters, by calling the SCAQMD Public Information Center at (909) 396-3600, or by 

accessing SCAQMD’s CEQA website at: http://www.aqmd.gov/home/library/documentssupport-material/lead-agency-scaqmd-projects/aqmd-projects---year-2014.The CEQA document 

has been released for public review and comment, and is available at SCAQMD Headquarters, 

by calling the SCAQMD Public Information Center at (909) 396-3600, or by accessing 

SCAQMD’s CEQA website at: www.aqmd.gov/ceqa.

SOCIOECONOMIC ASSESSMENT 

Proposed Amended Rule 1111 will allow affected manufacturers to pay a mitigation fee of $150 

to $200 per unit in lieu of complying with the new NOx emission limit. The option to pay a 

mitigation fee was requested by manufacturers and participation is strictly voluntary. This 

mitigation fee is equivalent to the additional cost of a new compliant furnace and will provide 

manufacturers an alternative to producing furnaces that comply with the new emission limit. As 

such, PAR 1111 does not impose additional costs on the affected manufacturers beyond what 

was analyzed for the previous Rule 1111 amendment in 2009 and does not have additional 

adverse socioeconomic impacts. 

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY

 CODE SECTION 40727

California Health and Safety Code Section 40727 requires that prior to adopting, amending or 

repealing a rule or regulation, the SCAQMD 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. In order to determine compliance with 

Sections 40727, 40727.2 require a written analysis comparing the proposed amended rule with 

existing regulations.

The following provides the draft findings.

Necessity: A need exists to amend Rule 1111 to provide residential furnace manufacturers 

additional time to develop the technology to meet the NOx emission limit. 

Authority: The SCAQMD obtains its authority to adopt, amend, or repeal rules and regulations 

from California Health and Safety Code Sections 39002, 40000, 40001, 40440, 40702, 40725

through 40728, and 41508.

Clarity: PAR 1111 has been written or displayed so that its meaning can be easily understood 

by the persons affected by the rule.

Consistency: PAR 1111 is in harmony with, and not in conflict with or contradictory to, 

existing federal or state statutes, court decisions or federal regulations.
PAR 1111 Staff Report

 3 - 3 September 2014 

Non-Duplication: PAR 1111 does not impose the same requirement as any existing state or 

federal regulation, and is necessary and proper to execute the powers and duties granted to, and 

imposed upon the SCAQMD. 

Reference: In amending this rule, the following statues which the SCAQMD hereby 

implements, interprets or makes specific are referenced: Health and Safety Code sections 

40440(a).

INCREMENTAL COST-EFFECTIVENESS 

Health and Safety Code Section 40920.6 requires an incremental cost-effectiveness analysis for 

Best Available Retrofit Control Technology (BARCT) rules or emission reduction strategies 

when there is more than one control option that would achieve different levels of emission 

reductions, relative to ozone, CO, SOx, NOx, and their precursors. 

Because this rule amendment provides furnace manufacturers with an alternate compliance 

option to provide regulatory relief and does not impose a new BARCT limit, a typical 

incremental cost-effectiveness analysis is not applicable for this proposed amendment. 

COMPARATIVE ANALYSIS 

Under Health and Safety Code Section 40727.2, the SCAQMD is required to perform a 

comparative written analysis when adopting, amending, or repealing a rule or regulation. The 

comparative analysis is relative to existing federal or state requirements, existing or proposed 

SCAQMD rules and air pollution control requirements and guidelines that are applicable to 

industrial, institutional, and commercial combustion equipment. 

The SCAQMD is not aware of any state or federal requirements regulating air pollution that are 

applicable to new or in-use PAR 1111 units. Rule 1111 is also the only SCAQMD rule 

regulating this type of equipment. Because there are no state or federal requirements for PAR 

1111 units, the proposed amendments are not in conflict with and do not duplicate any 

SCAQMD, state or federal requirement. 
REFERENCES 
PAR 1111 Staff Report

 R - 1 September 2014 

REFERENCES 

CEC, 2004. California Statewide Residential Appliance Saturation Study (400-04-009). 

California Energy Commission, June 2004. 

DOE. 2007. Technical Support Document: Energy Efficiency Program for Consumer Products: 

Energy Conservation Standards for Residential Furnaces and Boilers. U.S. Department of 

Energy, September 2007. 

SCAQMD, 2009. Staff Report: Proposed Amended Rule 1111 – Reduction of NOx Emissions 

Ffrom Natural-Gas-Fired, Fan-Type Central Furnaces. South Coast Air Quality Management 

District, November 2009. 

SCAQMD, 2013. Status of Rule 1111 Technology Assessment and Demonstration Projects for 

Residential Furnaces. South Coast Air Quality Management District, March 2013. 

SCAQMD, 2014. Rule 1111 Technology Assessment for Residential Furnaces. South Coast Air 

Quality Management District, January 2014. 
RESPONSE TO COMMENTS 
 i September 2014 

RESPONSE TO COMMENTS 

Comment: Because Rule 1111 is an approved rule in the state implementation plan (SIP), the 

proposed amendment could interfere with demonstration of attainment or reasonable further 

progress under section 110(l) of the federal Clean Air Act (CAA) or other provisions of the 

CAA. In addition, PAR 1111 may undermine the rules enforceability and preclude reliance on it 

for SIP emission reduction credit in accordance with USEPA policy on economic incentive 

programs (EIPs) and other nontraditional emission reduction measures. USEPA approval of 

PAR 1111 depends upon demonstration that its provisions, including fee provisions, result in 

emission reductions that are surplus, quantifiable, enforceable, permanent and consistent with all 

applicable CAA requirements.

Response: The SCAQMD 2007 and 2012 Air Quality Management Plan SIPs set aside 

sufficient NOx emissions reductions to offset potential emission reduction shortfalls resulting 

from delays in implementing technology forcing rules. Therefore, the potential SIP reductions 

foregone/delayed are addressed- via the SIP set aside, not incentive programs.

Comment: Why is the mitigation option for three years? 

Response: The mitigation option is for one to three years. The three year mitigation option was 

requested by stakeholders. 

Comment: Why is the compliance date for condensing (high efficiency) furnaces delayed three 

months from October 1, 2014 to January 1, 2015? 

Response: In the preliminary draft rule presented at the Public Workshop, the compliance date 

was delayed in order to provide manufacturers time to prepare and submit mitigation fee 

compliance plans. The current proposal delays the compliance date until April 1, 2015 because 

of comments received at the Public Workshop. 

Comment: All compliance dates should be delayed at least one year. Manufacturers need 

additional time for material selection, product design, preparing new manufacturing lines and 

furnace durability and safety testing. 

Response: Proposed Amended Rule (PAR) 1111 will provide all manufacturers at least six 

months of delay to provide additional time for condensing furnace product development and 

testing, as well as for training of distributors and installers. Moreover, PAR 1111 will allow up 

to three additional years of delay for any category of furnace for all manufacturers through a 

mitigation fee alternate compliance plan which was requested by industry. This proposed 

alternative compliance option is expected to achieve equivalent NOx emission reductions to 

current rule requirements due to implementation of emission reduction projects to be funded by 

mitigation fee alternate compliance plans. 

Comment: The proposed compliance date for condensing furnaces, January 1, 2015, is in the 

middle of the heating season. That is not a good date to transition from existing to new models 

of furnaces. Our distributors and installers must be educated about the new furnaces and this 

will require training and establishment of tracking systems by distributors. 
 ii September 2014 

Response: In response to manufacturers’ request, SCAQMD staff has further delayed the 

compliance date for condensing furnaces until April 1, 2015. 

Comment: What is the basis of the mitigation fee? 

Response: The mitigation fee is based both on the cost of purchasing emission reductions to 

mitigate the sale of non-compliant furnaces and on the expected cost of producing compliant 

furnaces. Assuming the mitigation fees are used in the SCAQMD low emission leaf blower 

program, the cost of one leaf-blower is about $180 and will offset the emissions of about 5 

furnaces for at least 5 years. Four to five low emission leaf-blowers will have to be purchased 

over the lifetime of a furnace to fully mitigate emissions of a furnace with emissions at 40 ng/J.

Comment: The mitigation fee should be paid after non-compliant units are sold and not before. 

Response: The proposed rule has been changed so that mitigation fees are paid at the end of an 

alternate compliance period.The mitigation fee compliance option is designed to fund emission 

reduction projects to offset the sale of non-compliant furnaces. If the mitigation fees are paid at 

the end of a quarter or year, then there is a significant delay in funding projects with emission 

reductions. When fees are paid in advance, significant air quality impacts can be mitigated. 

Comment: The mitigation fee is too high. The fee is higher than the cost difference between 

compliant and non-compliant units. 

Response: The mitigation fee is based both on the cost of purchasing emission reductions to 

mitigate the sale of non-compliant furnaces and on the high end of the range of expected cost to 

producing compliant furnaces. The main reason for the proposed fee levels is that these amounts 

are necessary in order to fund enough emission reductions to mitigate the sale of non-compliant 

furnaces. 

Comment: Condensing (high efficiency) units pollute less because they use less natural gas and 

should not have a higher fee. 

Response: The mitigation fee for condensing and standard efficiency furnaces are both 

approximately the same cost as one low emission leaf blower (~ $180) and more than four leaf 

blowers must be purchased to mitigate the emissions of one furnace over its lifetime. Each leaf 

blower can mitigate the emissions of five furnaces for at least five years.

While condensing furnaces emit less green -house gases than standard units, condensing units do 

not emit less NOx than standard units. Note that the emission limit for both condensing and 

standard units is in ng/J of heat to the heated space (net useful heat). It is not based on the gross 

amount of heat generated (amount of gas used). The average of emission test results for current 

condensing and standard units are the same. In addition, condensing units do not emit less NOx 

than standard units on a mass basis. In fact, the form of the rule emission limit allows 

condensing units to emit NOx at higher concentrations (PPM) than standard units. 

Comment: Manufacturers should have the option to apply for less than one full year of sales. 

Manufacturers should also be able to reconcile their sales at the end of the mitigation fee period 

and pay additional fees if needed and receive a refund if they have paid for more units than they 

have sold. 

Response: In lieu of a yearlong mitigation plan in the first year the new emission standard is in 

effect for any type of furnace, a manufacturer may use the sell through period for up to 10 
 iii September 2014 

months. In addition, the mitigation program allows manufacturers to apply for a one year 

alternate compliance plan for up to 3 successive years regardless of the timing of the compliance 

date (April or October). A compliance plan for less than one year will also be difficult to 

enforce. A one year mitigation plan coupled with the 10 month sell through provision provides 

companies manufacturers with flexibility. The proposed PAR 1111 mitigation alternative and 

fee payment system was revised by staff to allow manufacturers to pay mitigation fees at the end 

of each alternate compliance periodreconcile their sales at the end of the mitigation fee period 

and pay additional fees or receive a refund of excess fees paid. The mitigation fee program is 

designed so that all manufacturers are subject to the same requirements if they choose that 

option. 

Comment: The cost of a new furnaces or an existing furnace with a mitigation fee may cause 

homeowners to delay the purchase of a new furnace when an old furnace needs repair. This will 

result in fewer NOx emission reductions than projected for the current rule. 

Response: This proposed amendment will not change the cost of new compliant units because 

there are no additional costs added to new furnaces. Thus, PAR 1111 will not result in 

significant emission reductions foregone relative to the current rule. 

This proposed amendment will not affect homeowner’s decisions regarding furnace repair versus 

replacement and will not affect the amount of emission reductions achieved by Rule 1111. 

Homeowners make decisions regarding repair or replacement of a furnace based on many factors 

including: the type and cost of the repair, the cost of a new unit and other components such as 

ducts, and the cost of air conditioning components and labor cost for a new furnace. The cost of 

replacing a new circuit board, exhaust motor or fan, air circulation fan and motor, or gas supply 

components is significantly less than replacing an entire furnace, modifying the air conditioning 

system, replacing some ducting and a new thermostat. Most homeowners replace furnace 

components when they fail. It is the least cost option. They replace whole furnaces when they 

remodel their house and want a new furnace or have a failure of the air conditioning system and 

decide to replace both the cooling and heating system at the same time. 

Comment: What constitutes a sale or delivery into the District? 

Response: The first sale or delivery to any party in the SCAQMD whether it is a distributor, 

developer, contractor or homeowner. 

Comment: Can non-compliant units be stored in the SCAQMD when the manufacturer 

provides compliant units for sale for use in the SCAQMD? 

Response: The current rule and proposed amendment allows manufacturers to store noncompliant units in the SCAQMD. The manufacturer and distributor must have in place a system 

to identify and track non-compliant units that are intended to be sold outside the boundaries of 

the SCAQMD. For SCAQMD Rule 1121, this is accomplished using an additional label on the 

product and the shipping carton to identify non-compliant units that cannot be sold or installed 

for use in the SCAQMD. 

Comment: Can non-compliant units, intended for sale outside the SCAQMD, be stored in the 

SCAQMD without paying the mitigation fee if a manufacturer is participating in the mitigation 

fee program? 
 iv September 2014 

Response: The proposed rule would allow units intended for sale outside the SCAQMD to be 

exempt from the mitigation fee. However, to avoid paying a mitigation fee for all units shipped 

to the SCAQMD, the manufacturer and distributor must have in place and implement a plan to 

clearly identify all units. The manufacturer and distributor must place labels on each unit and the 

outside of each unit’s shipping container identifying those units that may be sold into the 

SCAQMD pursuant to the 10 month sell through period in the rule, those units stored for sale 

outside the SCAQMD, and those units sold pursuant to a mitigation fee alternate compliance 

plan. In addition, the manufacturer and distributor must have in place a system to identify the 

date each unit was shipped to the distribution center in the SCAQMD, the date each unit arrived 

at the distribution center, the dates each unit was sold and shipped out of the distribution center, 

the address where each unit was shipped to (for units sold into and out of the SCAQMD) and the 

person or business who purchased each unit. 

Comment: Is the mitigation fee for the first compliance date based on all sales into the 

SCAQMD or only the sale of condensing (high efficiency units)? 

Response: A mitigation plan application is only for the sale of the type of units and year for 

which the manufacturer is applying. For example, a mitigation fee plan for condensing furnaces 

is based only on the prior sales of condensing furnaces into the SCAQMD. In order to sell noncompliant units in the SCAQMD, each year of each type of furnace will require a separate 

mitigation plan submittal with a separate check for the mitigation plan application and for the 

actual mitigation fees. 

Comment: How does a company apply for the rebate incentives for early compliance? 

Response: The application process is similar to the process for the mitigation fee compliance 

plan. 

The manufacturer will send a letter to SCAQMD Permit Services with the name of the 

manufacturer submitting the Rule 1111 rebate incentive early compliance plan signed by a 

responsible official identifying the type of compliance plan and the time period that the early 

compliance plan covers. All applications must be for time periods early than 90 days prior to the 

applicable compliance date. 

The submittal will include a completed SCAQMD Form 400A with company name, 

identification that application is for an alternate compliance plan (section 7 of form), 

identification that the request is for the Rule 1111 rebate incentive early compliance application 

(section 9 of form), and signature of the responsible official. 

The application must include documentation for all rule compliant units distributed or sold into 

the SCAQMD for the time period covered by the application including the number of each 

specific model sold or distributed by the manufacturer to each company or person in the 

SCAQMD, a copy of each company or person’s invoice purchasing the compliance furnaces and 

a copy of the certification letter from the SCAQMD for each specific model included in the 

manufacturer’s application that identifies the model as compliant with the 14 ng/J NOx emission 

limit. A copy of the letter and the complete application will also be sent to the SCAQMD 

Manager for Area Source Compliance. 

Comment: Does a company need to test furnaces that are designed to run on natural gas but are 

sold with a propane conversion kit? 
 v September 2014 

Response: Units that are designed to run on natural gas must be tested, comply with the 

emission limit and receive SCAQMD certification. Units that are designed to run only on 

propane are exempt from the rule. Units that can be converted from natural gas to propane must 

receive SCAQMD certification on natural gas in order to be sold for use in the SCAQMD. All 

furnaces are tested based on how they are manufactured, the SCAQMD does not test units 

installed in residences. 

Comment: Who can do certification testing of furnaces? 

Response: All testing must be performed by third parties using a SCAQMD approved protocol. 

Questions regarding testing should be directed the SCAQMD Source Testing division (909-396-

3536 or 909-396-2162).