2



### Background The purpose of Proposed Amended Rule 1111 – NOx Emi ssions from Natural Gas-Fired, Fan type Central Furnaces (PAR 1111) is to reduce e missions of nitrogen oxides (NOx) from gas-fired fan-type residential furnaces. The rule applies to manufacturers, distributors, sales outlets and installers of gas-f ired furnaces. Natural gas fired fan-type

central furnaces are used in residential and small commercial buildings to provide comfort heating.

Rule 1111 was adopted by the AQMD Governing Board i n December 1978. Beginning January 1, 1984, the rule required residential furn aces to meet a NOx emission limit of 40 nanograms per joule (ng/J) of heat output (equivale nt to 55 ppm at 3% oxygen). The rule requires manufacturers to certify that the emission s of a furnace are below the rule limit

before it can be installed in the District. At the time of adoption, the AQMD Board also considered a requirement that furnaces meet a 12 ng /J NOx emission limit by 1995.

Rule 1111 was amended by the AQMD Board in July 198 3 in order to place an upper limit on the size of equipment. 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 B tu per hour. The 1983 amendment also revised the definition of efficiency, exempted unit s manufactured for use in mobile homes (manufactured housing), and clarified testing procedures.

Proposed Amended Rule (PAR) 1111 is based on Contro l Measure CMB-03 of the AQMD 2007 Air Quality Management Plan (AQMP). Cont rol Measure CMB-03 proposed NOx emission reductions of 50 to 75 percen t based on existing burner technologies that can achieve lower NOx emissions o f 20 to 10 ng/J of heat output (30 to 15 ppm) in residential appliances and other equipme nt. There are at least three types of

burners that can achieve these lower emission level s and could potentially be employed in the redesign of these units.

Public Process The rule development effort for PAR 1111 is part of an ongoing process to reevaluate low NOx technologies for combustion equipment. To date, AQMD staff has held seven Rule 1111 Task Force meetings to discuss burner tec hnology, implementation issues and other topics with representatives from affected man ufacturers, trade organizations and other interested parties. At these meetings, low N Ox technology, emission limits, emission testing and compliance dates were discusse d. In addition, a Public Workshop for PAR 1111 was held on September 9, 2009 and PAR 1111 was discussed at the Stationary Source Committee on September 25, 2009 a nd October 16, 2009.

Affected Facilities Proposed Rule 1111 affects manufacturers and distri butors, wholesalers, builders and
installers of residential furnaces. The Air Condit ioning Heating and Refrigeration3



### Institute (AHRI), the manufacturer’s trade organiza tion, indicates that there are currently no manufacturers of fan-type gas-fired residential furnaces within the AQMD jurisdiction. However, these companies do maintain regional sales offices and

distribution centers in the District. Manufacturer s of mobile homes are also affected by
PAR 1111. New mobile homes delivered to locations in the AQMD must have heating furnaces installed that comply with PAR 1111.

Summary of Proposal The proposed amendments will establish a new NOx li mit of 14 ng/J (20 ppm at 3% oxygen) for new furnaces, which reflects a 65% redu ction from the current limit of 40 ng/J. The three main categories of furnace, conden sing, non-condensing and weatherized, must meet the 14 ng/J limit in 2014, 2 015 and 2016 respectively. New mobile home units, which are currently unregulated, will be required to meet 40 ng/J in 2012 and 14 ng/J in 2018. Because an average lifet ime for a residential furnace in Southern California is about 20 to 25 years, replac ement with 14 ng/J furnaces will not be completed until after 2043.

In an effort to encourage the early introduction of the 14 ng/J units into the marketplace and provide manufacturers with a means of partially recovering their product development costs, PAR 1111 provides an incentive f or early compliance. Specifically, manufacturers will be eligible to receive a rebate payment of $75 for each 14 nanograms per Joule standard efficiency furnace sold and deli vered into the District 90 days prior to the applicable compliance date. Further, to promot e the introduction of not just compliant but also more energy efficient units, the proposal offers manufacturers a rebate payment of $90 for each 14 ng/J high efficiency fur nace (greater than or equal to 90 percent annual fuel utilization efficiency) deliver ed and sold into the District 90 days prior to the compliance date. As funds are limited , payments for early compliance will be on a first come first served basis. PAR 1111 propo ses a cap of $3,000,000 on early compliance rebates to all manufacturers.

Because of industry’s concern regarding the propose d emission limits and compliance dates, the proposed rule also includes a requiremen t for staff to prepare a technology assessment by April 1, 2013 to determine if emissio n limits or compliance dates should be revised. In support of the technology assessmen t, AQMD staff is proposing to make available $1,000,000 to fund up to four projects th at will develop prototypes of 14 ng/J

furnaces.

Further, PAR 1111 updates references to test method s, continues the AQMD program for manufacturers to certify the emission level of thei r products, and also provides more specificity in product labeling. To facilitate a s mooth transition to the new units and allow depletion of existing equipment inventories, PAR 1111 also provides a temporary 10 month sell through period for units meeting the current emission limit and delivered into the AQMD prior to the compliance date.4



### Emission Reductions and Cost Effectiveness Based on gas usage data from the California Energy Commission and the Southern California Gas Company, annual average NOx emission s from residential heating using natural gas were 9.7 tons per day in 2002 and estim ated to be 11.1 tons per day in 2023 (2007 AQMP). Based on an average equipment life of 20 to 25 years, the proposed rule is estimated to reduce annual average emissions of NOx by 2.5 to 3.1 tons per day in 2023. It should be noted that because an average l ifetime for a residential furnace in Southern California is about 20 to 25 years, replac ement with 14 ng/J furnaces will not be completed until 2043 and the complete emission redu ction benefit of this amendment is estimated to be about 6.8 tons per day (annual aver age). Since residential heating furnaces in Southern California are typically used between October and May, daily

emissions and reductions for 2023 in these months c an potentially be 5 to 6 tons per day.
Staff estimates the cost effectiveness for PAR 1111 to be between $8,600 and $19,000
per ton.

Key Issues District staff received many comments on the propos ed rule at the public workshop, consultation meeting, and working group meetings. In addition, attendees provided letters summarizing their comments at the workshop and other meetings. From these comments, the following key issues have been identi fied: (1) the compliance schedule and technology studies, (2) labeling requirements, (3) high efficiency units, and (4) an alternate compliance option. These key issues are summarized in Attachment B.

AQMP and Legal Mandates The California Health and Safety Code requires the AQMD to adopt an Air Quality Management Plan to meet state and federal ambient a ir quality standards and adopt rules and regulations that carry out the objectives of th e AQMP. The Health and Safety Code also requires the AQMD to implement all feasible me asures to reduce air pollution. This proposed amendment of Rule 1111 implements Control Measure CMB-03 of the 2007 AQMP to further reduce NOx emissions. The NOx redu ctions from this proposed rule amendment will help achieve compliance with federal and state ambient air quality standards for ozone, PM10 and PM2.5.

California Environmental Quality Act (CEQA) Analysi s Pursuant to California Environmental Quality Act (C EQA) Guidelines § 15252 and AQMD Rule 110, the AQMD has prepared an Environment al Assessment (EA) for proposed amended Rule 1111. The Draft EA was relea sed for a 30-day public review and comment period from September 24, 2009 to Octob er 23, 2009. No comment letters were received from the public regarding the Draft E A. The environmental analysis in the5



### Draft EA concluded that proposed amended Rule 1111 would not generate any significant adverse environmental impacts.

Since the release of the Draft EA, minor modificati ons have been made to the document. However, none of the modifications alter any conclu sions reached in the Draft EA, nor provide new information of substantial importance r elative to the draft document. As a result, these minor revisions do not require recirc ulation of the Draft EA pursuant to CEQA Guidelines § 15073.5. Therefore, the Draft EA is now a Final EA and is included as an attachment to this Governing Board package.

Socioeconomic Analysis The proposed amendments would affect manufacturers, distributors, and installers of natural-gas-fired, fan-type central furnaces. No m anufacturers are located in the fourcounty area. Residential and commercial property o wners and new construction builders would also be affected. About 180,000 furnaces are replaced or installed in the District each year. The proposed rule will increase the cos t of a furnace by about $174. The average annual cost (from 2011 to 2025) of the prop osed amendments is projected to be $30.4 million, of which residential and commercial property owners would incur $22.9 million (75 percent) due to projected higher cost. It is estimated that an average of 221 jobs would be forgone annually across all industrie s in the four-county area, which is 0.002 percent of the average baseline jobs during t he same period.

Resource Impacts Existing staff resources are adequate to implement the proposed amendments.

Attachments

A. Summary of Proposal

B. Key Issues and Responses

C. Rule Development Process

D. Key Contacts List

E. Resolution

F. Proposed Amended Rule

G. Final Staff Report with Socioeconomic Impact Assess ment
H. Final Environmental Assessment

### ATTACHMENT A

SUMMARY OF PROPOSAL

Proposed Amended Rule 1111 – NOx Emissions from Nat ural Gas-Fired, Fan type
Central Furnaces

• Establish a NOx emission limit of 40 ng/Joule (55 p pm) for the currently exempt mobile home furnaces on October 1, 2012

• Lower the NOx emission limit to 14 ng/Joule (20 ppm ) for residential type furnaces:

o Condensing Furnaces on October 1, 2014

o Non-Condensing Furnaces on October 1, 2015

o Weatherized Furnaces on October 1, 2016

o Mobile Home Furnaces on October 1, 2018

• Allow a ten month sell through period

• Update test method references

• Clarify labeling requirements

• Provide a financial incentive for early compliance ($75 per unit and $90 for high efficiency units up to $3,000,000)

• Require a technology assessment by April 1, 20137 

### ATTACHMENT B

KEY ISSUES AND RESPONSES

Proposed Amended Rule 1111 – NOx Emissions from Nat ural Gas-Fired, Fan type
Central Furnaces

Issue – Compliance Schedule and Technology Studies: Manufacturers requested compliance dates beyond 2012 for any new proposed s tandard. In addition, they requested that rule adoption be delayed until after completion of a joint technology assessment that would be funded by manufacturers, A QMD and The Gas Company.

Response: In the 2007 AQMP, the AQMD committed to amending Rule 1111 by 2009 and phasing in reductions beginning 2012. PAR 1111 provides additional time beyond the schedule proposed in the 2007 AQMP. The first compliance date is October 1, 2014 and other dates are phased in over seven years which allows manufacturers five additional years or more to design, test and market equipment that will meet the proposed limit. Therefore, staff believes the propo sed schedule is reasonable and provides manufacturers with adequate time to manufa cture compliant products.

In addition, staff’s regulatory proposal is acc ompanied by several incentives and safeguards. For example, in an effort to facilitat e research and product development efforts, staff proposes to provide funding up to $1 ,000,000 to support up to four projects that will develop prototypes of 14 ng/J fu rnaces. In addition, PAR 1111 commits staff to conduct a technology assessment an d present it to the Board by April 1, 2013 to assess manufacturers’ progress towards m eeting the lower NOx limit and compliance schedule. To encourage and accelerate t he early introduction of units complying with the 14 ng/J limit, and provide the m anufacturer with a means of partially recovering their research and product dev elopment costs, the proposed rule also provides significant financial incentives for early compliance. Specifically the rule provides a rebate payment of $75 per standard unit and $90 for each high efficiency unit, up to $3,000,000, for early compli ance.

Issue – Labeling Requirements: The labeling requirements in the rule are not nee ded.

Response: The labeling requirements in the current rule we re adopted in 1978. The proposed labeling requirements in PAR 1111 are base d upon the AQMD’s experience regulating residential water heaters, commercial wa ter heaters and small boilers, and paints and solvents. Because there are four catego ries of furnaces affected by PAR

1111 and distributors and sellers could have in sto ck 40 ng/J units allowed under the sell-through provision, compliant 14 ng/J units, an d non-certified units that cannot be sold for use in the District, it is crucial that co mpany owners, company employees,8



### installers, builders, homeowners and AQMD complianc e staff can easily identify units that may be sold for use and installed in the Distr ict.

Issue – High Efficiency Units: High efficiency condensing furnaces may suffer a loss in sales because they must comply with the emission li mit first.

Response: High efficiency will likely be the first category to benefit from the early compliance incentive. The early compliance incenti ve will significantly reduce potential price increases and will provide manufact urers with the opportunity to offset their research and development costs appreciably. Additionally, to further promote high efficiency units, AQMD staff has revised PAR 1 111 to increase the incentive for high efficiency condensing furnaces to $90 for each furnace sold and delivered to the District 90 days prior to the compliance date. In addition, it will be easier for high efficiency units to meet the emission limit because it is based on heat output.

Issue – Alternate Compliance and Mitigation Fee Opt ion: The alternative compliance and mitigation fee option should be reinserted into the staff proposal in its modified form by staff for compliance flexibility.

Response: In the Preliminary Draft Rule and Staff Report re leased in August 2009, staff proposed an alternate compliance option that allowe d manufacturers to delay compliance up to three years and pay emission mitig ation fees of $213 for each furnace. In response to comments from industry reg arding the high cost of the mitigation fee, staff revised the proposed mitigati on fee and presented it at the September 25, 2009 Stationary Source Committee of t he AQMD Governing Board as follows:

Alternate Compliance Mitigation Fees

Furnace Emissions (ng/J) Mitigation Fee * ($)

31 to 40 $140

26 to 30 $85

20 to 25 $60

< 20 $35

* At least 10% reduction for high efficiency units



### However, based on the lack of support by the re gulated community for this modified mitigation fee at the committee meeting, staff remo ved it from its proposal and9



### proposed to replace it with the technology assessme nt and financial incentives. Staff is committed to revisit the mitigation fee option as p art of the technology assessment in 2013. Industry supports the technology assessment and incentives but now argues for inclusion of the alternate compliance option as rev ised by staff for additional flexibility.10 

### ATTACHMENT C

RULE DEVELOPMENT PROCESS

Proposed Amended Rule 1111 –

Twenty (20) months spent in rule development. Initial Rule Development

March 2008

Set Public Hearing: October 2, 2009 CEQA Draft EA Released for 30-Day Review Release Date: September 24, 2009

Public Hearing: November 6, 2009

, 2004 • Seven Task Force Meetings (May 2008 to October 2009 )

• Public Workshop: September 9, 2009

• Stationary Source Committee Briefings: September 2 5, 2009 and October 16, 2009

Approximately 1,050 notices of the public workshop were mailed to manufacturers, the Air Conditioning Heati ng and Refrigeration Institute (AHRI), other trade associa tions, equipment suppliers, equipment installers and inter ested parties.11 

### ATTACHMENT D

KEY CONTACTS LIST

Air Conditioning, Heating and Refrigeration Institu te (AHRI)
Amana/Goodman

Bekaert California Air Resources Board (CARB)
Carrier/ICP

DOE Lawrence Berkeley National Laboratory

Lennox/Ducane Nordyne

Rheem SEMPRA/The Gas Company

Trane
USEPA
York/Coleman

### ATTACHMENT E

RESOLUTION NO. -

A Resolution of the Governing Board of the South Co ast Air Quality Management District (AQMD) certifying the Final Env ironmental Assessment for Proposed Amended Rule 1111 - NOx Emissions From Nat ural-Gas-Fired, FanType Central Furnaces.

A Resolution of the AQMD Governing Board amending R ule 1111 - NOx Emissions From Natural-Gas-Fired, Fan-Type Cent ral Furnaces.

WHEREAS, the AQMD Governing Board has determined with certai nty that Proposed Amended Rule 1111 - NOx Emissions Fro m Natural-Gas-Fired, FanType Central Furnaces, is a “project” pursuant to t he California Environmental Quality Act (CEQA); and

WHEREAS, the AQMD has had its regulatory program certified pursuant
to Public Resources Code Section 21080.5 and has co nducted CEQA review and analysis pursuant to such program (AQMD Rule 110); and

WHEREAS, AQMD staff has prepared a Draft Environmental Assessment (EA) pursuant to its certified regulator y program and CEQA Guidelines Section 15252, setting forth the potential environm ental consequences of Proposed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central Furnaces; and

WHEREAS , it was determined that potential environmental im pacts from the proposed project are not significant; and

WHEREAS, the Draft EA was circulated for a 30-day public rev iew and comment period from September 24, 2009, to October 23, 2009, no comment letters were received relative to the Draft EA, and the Dra ft EA has been revised such that it is now a Final EA; and

WHEREAS, it is necessary that the adequacy of the Final EA b e determined by the AQMD Governing Board prior to its certification; and

WHEREAS, the AQMD Governing Board voting on Proposed Amended Rule 1111 - NOx Emissions From Natural-Gas-Fired, F an-Type Central Furnaces has reviewed and considered the Final EA prior to its c ertification; and2 

### WHEREAS , a Mitigation Monitoring Plan pursuant to Public R esources Code Section 21081.6, has not been prepared since n o mitigation measures are necessary; and

WHEREAS , because the proposed project was determined to ge nerate no significant adverse impacts on the environment, a S tatement of Findings and a Statement of Overriding Considerations were not req uired and, thus, not adopted for this project pursuant to CEQA Guidelines Sections 15091 and 15093, respectively; and

WHEREAS, the AQMD Governing Board finds and determines, tak ing into consideration the factors in Section (d)(4)(D) of the Governing Board Procedures, that the modifications which have been made to Prop osed Amend Rule 1111 - NOx Emissions From Natural-Gas-Fired, Fan-Type Central Furnaces since notice of public hearing was published do not significantly change t he meaning of the proposed project within the meaning of Health and Safety Code Sectio n 40726 and would not constitute significant new information requiring recirculation of the Draft CEQA document pursuant to CEQA Guidelines Section 15073.5; and

WHEREAS , California Health and Safety Code Section 40727 requires that prior to adopting, amending or repealing a rul e or regulation, the AQMD Governing Board shall make findings of necessity, authority, clarity, consistency, non-duplication, and reference based on relevant information present ed at the public hearing and in the staff report; and

WHEREAS , the AQMD Governing Board obtains its authority to adopt, amend, or repeal rules and regulations from Section s 39002, 40000, 40001, 40440, 40441, 40702, 40725 through 40728, and 41508 of the California Health and Safety Code; and

WHEREAS , the AQMD Governing Board has determined that ther e is a problem that Proposed Amended Rule 1111 - NOx Emiss ions From Natural-Gas-Fired, Fan-Type Central Furnaces will help alleviate, in t hat the South Coast Air Basin does not meet federal and state ambient air quality stan dards for ozone and particulate matter and Proposed Rule 1111 will promote attainment of t hese standards; and

WHEREAS , the AQMD Governing Board has determined that a ne ed

exists to amend Rule 1111 - NOx Emissions From Natu ral-Gas-Fired, Fan-Type Central Furnaces to reduce emissions of nitrogen oxides whi ch are a precursor to ozone and particulate matter; and

WHEREAS , the AQMD Governing Board has determined that Prop osed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central3



### Furnaces is written or displayed so that its meanin g can be easily understood by the persons directly affected by it; and

WHEREAS , the AQMD Governing Board has determined that Prop osed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central Furnaces is in harmony with, and not in conflict wi th or contradictory to, existing federal or state statutes, court decisions, or fede ral regulations; and

WHEREAS , the AQMD Governing Board has determined that Prop osed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central Furnaces does not impose the same requirements as a ny existing state or federal regulation and the proposed amended rule is necessa ry and proper to execute the powers and duties granted to, and imposed upon, the Distri ct; and

WHEREAS , the AQMD Governing Board in amending Rule 1111 references the following statutes which the AQMD he reby implements, interprets or makes specific: Health and Safety Code Section 400 01(a) (rules to meet air quality standards); Section 40440(a) (rules to carry out th e plan); and Section 40702 (adoption of rules and regulations); and

WHEREAS , Health and Safety Code Section 

### 40727.2 requires the AQMD to prepare a written analysis of existing federal a nd state air pollution control requirements that the AQMD is aware of and that wou ld be applicable to the same source type being regulated whenever it adopts, or amends a rule, and that such comparative analysis is included in the staff repor t; and

WHEREAS , the AQMD Governing Board has determined that the Socioeconomic Impact Assessment of the Proposed Ame nded Rule 1111 - NOx Emissions From Natural-Gas-Fired, Fan-Type Central Furnaces is consistent with the March 17, 1989 and October 14, 1994 Governing Board Socioeconomic Resolutions for rule adoption; and

WHEREAS , the AQMD Governing Board has determined that the Socioeconomic Impact Assessment of Proposed Amended Rule 1111 - NOx Emissions From Natural-Gas-Fired, Fan-Type Central Furnaces i s consistent with the provisions of Health and Safety Code Sections 

### 40440.5, 40440.8 and 40728.5; and

WHEREAS , the AQMD Governing Board has reviewed and conside red the staff's findings related to cost and other soci oeconomic impacts of Proposed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central Furnaces set forth in the Socioeconomic Impact Asse ssment made public with the agenda package for this meeting; and4 

### WHEREAS , the AQMD Governing Board has determined that Proposed

Amended Rule 1111 - NOx Emissions From Natural-Gas- Fired, Fan-Type Central Furnaces may result in increased costs to the indus try, which is considered to be reasonable; and

WHEREAS , the AQMD Governing Board has actively considered the Socioeconomic Impact Assessment and has made a good faith effort to minimize such impacts; and

WHEREAS , a public hearing has been properly noticed in acc ordance with the provisions of Health and Safety Code Section 

### 40725; and

WHEREAS , the AQMD Governing Board has held a public hearin g in accordance with all provisions of law; and

WHEREAS , the AQMD Governing Board specifies the Manager of Proposed Amended Rule 1111 - NOx Emissions From Nat ural-Gas-Fired, Fan-Type

Central Furnaces as the custodian of the documents or other materials which constitute the record of proceedings upon which the adoption o f this proposed project is based, which are located at the South Coast Air Quality Ma nagement District, 21865 Copley Drive, Diamond Bar, California; and

NOW, THEREFORE BE IT RESOLVED, that the AQMD Governing Board hereby certifies, pursuant to the authority g ranted by law, the Final EA for Proposed Amended Rule 1111 - NOx Emissions From Nat ural-Gas-Fired, Fan-Type Central Furnaces; and

BE IT FURTHER RESOLVED , that because no significant adverse environmental impacts were identified as a result o f implementing Proposed Amended Rule 1111 - NOx Emissions From Natural-Gas-Fired, F an-Type Central Furnaces, a Statement of Findings, a Statement of Overriding Co nsiderations, and a Mitigation Monitoring Plan are not required; and

BE IT FURTHER RESOLVED, that the AQMD Governing Board, in an effort to promote early compliance with the emis sion limits of Proposed Amended Rule 1111 - NOx Emissions From Natural-Gas-Fired, F an-Type Central Furnaces, allocates up to Three Million Dollars ($3,000,000) of Rule 1121 mitigation program and variance fees to provide rebate payments to manufac turers that sell compliant units in the South Coast Air Quality Management District ahe ad of the applicable compliance dates, and up to One Million Dollars ($1,000,000) f or contracts to further develop technology for compliance with the rule; and5 

### BE IT FURTHER RESOLVED, that the AQMD Governing Board hereby directs staff to issue no later than March 3 1, 2010, a Request for Proposal (RFP) in an amount of up to One Million Dollars ($1,000,0 00) to develop a natural gas fired, fan-type central furnace compliant with the 14 nano grams per joule NOx limit that conforms with all applicable safety requirements; a nd

BE IT FURTHER RESOLVED, that AQMD staff is directed to return

to the Board with recommendations to award contract (s) for the development of compliance furnaces no later than July 1, 2010, and for such work to be completed within a 2-year time period; and

BE IT FURTHER RESOLVED , that the AQMD Governing Board does hereby amend, pursuant to the authority granted by law, Rule 1111 - NOx Emissions From Natural-Gas-Fired, Fan-Type Central Furnaces, as set forth in the attached and incorporated herein by reference.

Dated:


### Clerk of the District BoardPAR 1111 - 1 (Adopted December 1, 1978)(Amended July 8, 1983)(Da te of Amendment)

RULE PAR 1111. REDUCTION OF NO x EMISSIONS FROM NATURAL-GASFIRED, FAN-TYPE CENTRAL FURNACES

(a) Purpose and Applicability

The purpose of this rule is to reduce NOx emission s from natural gas-fired, fantype central furnaces, as defined in this rule. Th is rule applies to manufacturers,

distributors, sellers and installers of residential and commercial fan-type central

furnaces, requiring either single-phase or three-ph ase electric supply, used for

comfort heating with a rated heat input capacity of less than 175,000 BTU per

hour;

, or, for combination heating and cooling units, a c ooling rate of less than

65,000 BTU per hour.

(a b ) Definitions

(1) ANNUAL FUEL UTILIZATION EFFICIENCY (AFUE) is de fined in

Section 10.1 of Code of Federal Regulations, Title 10, Part 430, Subpart

B, Appendix N.

(2) BTU means British thermal unit or units

. (3) CONDENSING FURNACE means a high-efficiency furn ace that uses a

second heat exchanger to extract the latent heat in the flue gas by cooling

the combustion gasses to near ambient temperature s o that water vapor

condenses in the heat exchanger, is collected and d rained.

(1 4 ) FAN TYPE CENTRAL FURNACE an Type Central Furnace is a selfcontained space heater providing for circulation of heated air at pressures

other than atmospheric through ducts more than 10 i nches in length that

have:

(A) an input rate RATED HEAT INPUT CAPACITY of less than

175,000 BTU/

per hou r; or (B) for combination heating and cooling units, a co oling rate of less

than 65,000 BTU/

per hou r.
(2) Annual Fuel Utilization Efficiency (AFUE) is define d in Section 4.2.35 of

Code of Federal Regulations, Title 10, Part 430, Su bpart B, Appendix N.

(5) HEAT INPUT means the higher heating value of th e fuel to the furnace

measured as BTU per hour.Proposed Amended Rule 1111 (Cont.) (Date of Amendment )

PAR 1111 - 2 (6) NOx EMISSIONS means the sum of nitrogen oxide a nd nitrogen dioxide

(oxides of nitrogen) in the flue gas, collectively expressed as nitrogen

dioxide.

(7) RATED HEAT INPUT CAPACITY means the gross HEAT INPUT of the

combustion device.

(8) RESPONSIBLE OFFICIAL means:

(A) For a corporation: a president or vice-preside nt of the corporation

in charge of a principal business function or a dul y authorized

person who performs similar policy-making functions for the

corporation, or

(B) For a partnership or sole proprietorship: gen eral partner or

proprietor, respectively,

. (9) SINGLE FIRING RATE means the burners and contro l system are

designed to operate at only one fuel input rate and the control system

cycles burners between the maximum heat output and no heat output.

(3 10 ) USEFUL HEAT DELIVERED TO THE HEATED SPACE seful Heat

Delivered to the Heated Space is the AFUE (expressed as a fraction)

multiplied by the heat input.

(11) VARIABLE FIRING RATE means the burners and con trol system are

designed to operate at more than one fuel input rat e and the control system

cycles burners between two or more heat output rate s and no heat output.

(12) WEATHERIZED means designed for installation ou tside of a building,

equipped with a protective jacket and integral vent ing, and labeled for

outdoor installation.

(b c ) Requirements

(1) A manufacturer shall not, after January 1, 1984 , manufacture or supply for

sale or use in the South Coast Air Quality Manageme nt District naturalgas-fired, fan-type central furnaces, unless such f urnaces meet the

requirements of sub paragraph (c) (3).

(2) A person shall not, after April 2, 1984, sell o r offer for sale within the

South Coast Air Quality Management District natural -gas-fired, fan-type

central furnaces unless such furnaces meet the requ irements of

sub paragraph (c) (3).Proposed Amended Rule 1111 (Cont.) (Date of Amendment )

PAR 1111 - 3 (3) Natural-gas-fired, fan-type central furnaces sh all:

(A) not emit more than 40 nanograms of oxides of ni trogen (calculated

as NO 2 ) per joule of useful heat delivered to the heated space; and

(B) be certified in accordance with paragraph subdivision (c d ) of this

rule.

(4) On or after October 1, 2012

, a person shall not manufacture, supply, sell,

offer for sale, or install, for use in the South Co ast Air Quality

Management District, natural-gas-fired, fan-type ce ntral furnaces subject

to this rule, unless such furnace complies with the applicable emission

limit and compliance date set forth in Table 1 and is certified in

accordance with subdivision (d) of this rule.

Table 1 – Furnace NOx Limits and Compliance Schedul e

* Nanograms of oxides of nitrogen (calculated as NO 2 ) per joule of useful heat delivered to the heated space

(c d ) Certification

(1) The manufacturer shall have each appliance mode l tested in accordance

with the following:

(A) Oxides of nitrogen measurements, test equipment , and other

required test procedures shall be in accordance wit h methods

approved by the Executive Officer AQMD Method 100.1

. (B) Operation of the furnace shall be in accordance with the procedures

specified in Section 3.1 4.0 of Code of Federal Regulations, Title

10, Part 430, Subpart B, Appendix N. Compliance Date Equipment Category NOx Emission Limit (nanograms/Joule *)

October 1, 2012 Mobile Home Furnace 40

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 14Proposed Amended Rule 1111 (Cont.) (Date of Amendment )

PAR 1111 - 4 (2) One of the two formulas shown below shall be us ed to determine the

nanograms of oxides of nitrogen per joule of useful heat delivered to the

heated space:

N = 4.566 x 10 4 x P x U , N = 3.655 x 10 10 x P H x C x E (20.9-Y) x Z x E

Where:

N = nanograms of emitted oxides of nitrogen per jo ule of useful heat.

P = concentration (ppm volume) of oxides of nit rogen in flue gas as tested.

U = volume percent CO 2 in water-free flue gas for stoichiometric combustion.

H = gross heating value of fuel, BTU/cu.ft. (60 o F, 30-in. Hg).

C = measured volume percent of CO 2 in water-free flue gas, assuming complete combustion and no CO present.

E = AFUE, percent (calculated using Table 2).

Y = volume percent of O 2 in flue gas.

Z = heating value of gas, joules/cu. meter (0.0 o C, 1 ATM).

(3) At least 120 days prior to the date a furnace model is first shipped to a

location in the AQMD for use in the District, T t he manufacturer shall

submit to the Executive Officer the following:

(A) A statement that the model is in compliance wit h

subsection division (b c ). (The statement shall be signed by a

responsible official and dated, and shall attest to the accuracy of all

statements.)

(B) General Information

(i) Name and address of manufacturer.

(ii) Brand name.

(iii) Model number, as it appears on the furnace r ating plate.

(C) A description of the furnace and specifications for each model

being certified.Proposed Amended Rule 1111 (Cont.) (Date of Amendment )

PAR 1111 - 5 (D) Executive Officer approved emission test protoc ol and emission

test results verifying compliance with the applicab le NOx limit

specified in Table 1.

(d e ) Identification of Compliant Units

(1) The manufacturer shall display the model number of the furnace

complying with subsection divisions (b c ) and (d) shall display the

following on the shipping carton ontainer label and rating plate. of the

furnace:

(A) Model number;

(B) Heat input capacity;

(C) Applicable Certified NOx emission level limit in Table 1 ; and

(D) Date of manufacture or date code.

(2) Any non-certified furnace shipped to a location in the South Coast Air

Quality Management District for distribution or sal e outside of the District

shall have a label on the shipping container identi fying the furnace as not

certified for use in the District.

(e f ) Enforcement

(1) The Executive Officer may require the emission test results to be provided

when deemed necessary to verify compliance.

(2) The Executive Officer may periodically conduct such tests as are deemed

necessary to insure ensure compliance with subsection division (b c ), (d), (e) and

(h)

.

(f g ) Exemptions

(1) The provisions of this rule shall not apply to furnaces installed in mobile

homes before October 1, 2012

. (2) The provisions of this rule shall not apply to natural

- gas

- fired, fan

- type
central furnaces utilizing three

- phase electrical current until January 1,

1986.

(2) For furnaces manufactured, purchased and delive red to the South Coast

Air Quality Management District prior to the applic able compliance date

in Table 1, any person may, until 300 days after th e applicable compliance

date, sell, offer for sale, or install such a furna ce in the District, so long asProposed Amended Rule 1111 (Cont.) (Date of Amendment )

PAR 1111 - 6 the furnace meets the requirements of paragraph (c) (3) and subdivisions

(d) and (e).

(h) Rebate Incentives for Early Compliance

Any manufacturer of natural gas-fired, fan-type cen tral furnaces subject to this

rule that and distributes or and sells into the District furnaces that comply with the

14 nanograms/Joule emission limit 90 days prior to the applicable compliance

date in Table 1 of paragraph (c)(4) may submit a co mpliance plan for early

compliance to the Executive Officer and to receive on a first-come first-served

basis from the AQMD a rebate payment of $75 for each 14 n anograms / per Joule

certified furnace and $90 for each high efficiency 14 nanograms/Joule certified

furnace with AFUE of 90% or greater distributed and or sold into the District

, prior to the applicable compliance date provided funds are available on the date

documentation o n f

the number of units distributed and or sold is submitted to the

AQMD. Total rebate payments to all manufacturers s hall not exceed $3,000,000.

(i) Technology Assessment

On or before April 1, 2013, the Executive Officer shall conduct a technology

assessment and shall report to the Governing Board on the status o f

manufacturers’ progress towards compliance with the 14 nanograms / per Joule

emission limit for nitrogen oxidee s.

### SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

Staff Report Proposed Amended Rule 1111 – NOx Emissions From Nat ural-Gas-Fired, Fan-Type Central Furnaces

October 28, 2009

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

Author: Wayne Barcikowski – Air Quality Specialist

Reviewed by: Gary Quinn, P.E. – Program Supervisor Ruby Fernandez – Deputy District Counsel IISOUTH 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

MARION ASHLEY Supervisor, Fifth District Riverside County Representative

MICHAEL CACCIOTI Council Member, City of South Pasadena Cities Representative, Los Angeles County/Eastern R egion

BILL CAMPBELL Supervisor, Third District Orange County Representative

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

JAN PERRY Council Member, City of Los Angeles City of Los Angeles

MIGUEL PULIDO Mayor, City of Santa Ana Cities Representative, County of Orange

TONIA REYES URANGA Council Member, City of Long Beach Cities Representative, Los Angeles County/Western Region

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 EQUIPMENT AND PROCESS 1-1

TECHNOLOGY ASSESSMENT 1-3

AFFECTED INDUSTRIES 1-5

PUBLIC PROCESS 1-5

CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 1111

AQMP CONTROL MEASURE 2-1

PROPOSED AMENDED RULE REQUIREMENTS 2-1

CHAPTER 3: IMPACT ASSESSMENT

IMPACT ANALYSIS 3-1

COST EFFECTIVENESS 3-2 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSI S 3-3

SOCIOECONOMIC ASSESSMENT 3-3

DRAFT FINDINGS UNDER CALIFORNIA HEALTH AND SAFETY

CODE SECTION 40727 3-3

INCREMENTAL COST EFFECTIVENESS 3-4

COMPARATIVE ANALYSIS 3-4

RESPONSE TO COMMENTS 4-1

REFERENCES

APPENDIX A

### EXECUTIVE SUMMARYPAR 1111 Staff Report

ES -1 October 28, 2009 

### EXECUTIVE SUMMARY

Proposed Amended Rule 1111 (PAR 1111) is designed t o reduce NOx emissions from fan type gas-fired residential furnaces. Natural gas fired fan-type central furnaces are used in residential and commercial buildings to provide comfort heating . Rule 1111 regulates manufacturers, distributors, sales outlets and installers of resid ential furnaces with a heat input rate less than 175,000 British thermal units per hour (Btu/hr) or, for combination heating and cooling units, a cooling rate of less than 65,000 Btu/hr.

PAR 1111 is based on Control Measure CMB-03 of the 2007 Air Quality Management Plan (AQMP). Control Measure CMB-03 proposed NOx emissi on reductions of 50 to 75 percent by requiring furnaces to meet a NOx emission limit of between 10 to 20 nanograms per Joule (ng/J) of heat output (15 to 30 ppm at 3% oxygen).

In line with Control Measure CMB-03 objectives, PAR 1111 seeks to establish a new limit of 14 ng/J (20 ppm at 3% oxygen) for new furnaces, which reflects a 65% reduction from the current limit of 40 ng/J. The three main categories of fur nace, condensing, non-condensing and weatherized, must meet the 14 ng/J limit in 2014, 2 015 and 2016 respectively. New mobile home units, which are currently unregulated, will h ave to meet 40 ng/J in 2012 and 14 ng/J in 2018. Because an average lifetime for a residentia l furnace in Southern California is about 20 to 25 years, replacement with 14 ng/J furnaces will no t be completed until after 2043.

While low NOx burners with emissions less than 20 n g/J are not currently used in residential furnaces, they are technology is used in many other applications such as residential water heaters, boilers and commercial and industrial air heating applications . New burners to be developed for use in residential furnaces are likel y to use improved premixing, increased primary

combustion air and increased excess air. A burner developed for residential furnaces by the Gas Research Institute uses these technologies to reduc e NOx emissions below 30 ppm (U.S. Patent 6,071,115). Another burner developed at Lawrence B erkeley National Laboratory uses these techniques and staged combustion and can achieve NO x emission levels as low as 10 ppm (http://eetd.lbl.gov/aet/combustion/LSC-info/). An alternative approach to reduce NOx emissions to as low as 10 ng/J (15 ppm) can be the use of increased surface area (a metal screen, fiber, or slotted burner surface) combined with pre mixing and increased excess air. Two burners currently used in residential tank type water heate rs sold in the AQMD use this technology. AQMD staff expects many of the aforementioned low N Ox burners and combustion techniques utilized in other residential and commercial applic ations, as well as laboratory prototypes, will successfully be adapted in developing and producing low NOx residential furnaces.

PAR 1111 makes a number of other changes to the rul e. PAR 1111 updates references to test methods for determining compliance with rule emissi on limits and continues the AQMD program for manufacturers to certify the emission l evel of their products. It also provides more specificity in the labeling requirements. To facil itate the depletion of existing inventories and to ensure smooth transition to the new limits, PAR 111 1 also provides a temporary 10 month exemption (a sell through period) for units manufac tured before the compliance date and delivered into the AQMD prior to the compliance dat e.PAR 1111 Staff Report

ES -2 October 28, 2009 PAR 1111 also provides an incentive for early compl iance with the 14 nanograms per Joule emission limit. Companies that deliver low NOx sta ndard efficiency units into the District prior to the compliance date can elect to will receive a payment of $75 for each 14 nanograms per

Joule furnace delivered and sold in to the District 90 days prior to the applicable compliance date. Manufacturers of high efficiency units (greater tha n or equal to 90 percent annual fuel utilization efficiency) will receive a payment of $90 for each high efficiency 14 ng/J furnace delivered and sold into the District 90 days prior to the complia nce date. This early compliance program will be funded by the AQMD Rule 1121 Mitigation Program which provides money for NOx reduction programs in the District. As funds are l imited, payments for early compliance will be on a first come first served basis. PAR 1111 propo ses a cap of $3,000,000 on early compliance

rebates to all manufacturers.

Because of industry’s concern regarding PAR 1111 co mpliance dates, the proposed rule also includes a requirement for staff to prepare a techn ology assessment by April 1, 2013 to determine if emission limits or compliance dates sh ould be revised. The technology assessment

is also meant to address a lack of interest in an earlier p roposal that would have allowed manufacturers to delay compliance up to three years and pay mitigation fees for each noncompliant unit shipped into the District after the compliance date. The mitigation fees collected by the AQMD were to be used to fund NOx emission re ductions from other sources.

There are over four million residential type heatin g furnaces in the AQMD. A typical furnace emits more than one and a half pounds of NOx per ye ar. PAR 1111 will reduce emissions from an individual furnace by more than one pound per ye ar. Based on a 20 to 25 year equipment life,

T t he proposed rule is estimated to reduce annual aver age emissions of NOx by 2.5 to 3.1 tons per day in 2023. It should be noted that because an av erage lifetime for a residential furnace in Southern California is about 20 to 25 years, replac ement with 14 ng/J furnaces will not be completed until 2043 and the complete emission redu ction benefit of this amendment is estimated to be about 6.8 tons per day (annual aver age). Since residential heating furnaces in Southern California are typically used between Octo ber and May, daily emissions and reductions for 2023 in these months can potentially be 5 to 6 tons per day. Staff estimates the cost effectiveness for PAR 1111 to be between $8,600 and $19,000 per ton with an increased cost to the consumer of between $108 to $240 per furnace.

### CHAPTER 1: BACKGROUND

INTRODUCTION

REGULATORY HISTORY

EQUIPMENT AND PROCESS

TECHNOLOGY ASSESSMENT

AFFECTED INDUSTRIES

PUBLIC PROCESSPAR 1111 Staff Report

1 - 1 October 28, 2009 

### INTRODUCTION

The purpose of Proposed Amended Rule 1111 – NOx Emi ssions from Natural Gas-Fired, Fan type Central Furnaces (PAR 1111) is to reduce emiss ions of nitrogen oxides (NOx) from gasfired fan-type residential furnaces. The rule regu lates manufacturers, distributors, sales outlets and installers of gas-fired furnaces. Natural gas fired fan-type central furnaces are used in residential and small commercial buildings to provi de comfort heating. Most single family homes and many multiunit residences in the South Co ast Air Quality Management District (AQMD) use this type of heating equipment. Typical ly, residential gas-fired furnaces have burners with a heat input rating between 50,000 and 175,000 British thermal units per hour (Btu/hr).



### REGULATORY HISTORY

Rule 1111 was passed by the AQMD Governing Board in December 1978. Beginning January 1, 1984, the rule required residential furnaces to meet a NOx emission limit of 40 nanograms per joule (ng/J) of heat output (equivalent to 55 ppm a t 3% oxygen). The rule also requires

manufacturers to obtain certification of each furna ce model based on source testing using specific test methods identified in the rule and ap proved by the District. In addition, the rule requires manufacturers to identify the model number of the furnace on a permanent rating plate and the shipping container. At the time of adoptio n, the AQMD Board also considered a requirement that furnaces meet a 12 ng/J NOx emissi on limit by 1995.

Rule 1111 was amended by the AQMD Board in July 198 3 in order to place an upper limit on the size of equipment and limit applicability to un its used in residences and small commercial buildings. The rule amendment limited applicabilit y to furnaces with a heat input of less than 175,000 Btu per hour, or for combination heating an d cooling units, a cooling rate of less than 65,000 Btu per hour. The 1983 amendment also revi sed the definition of efficiency, exempted units manufactured for use in mobile homes (manufac tured housing), and clarified testing procedures.

PAR 1111 is based on Control Measure CMB-03 of the AQMD 2007 Air Quality Management Plan (AQMP). Control Measure CMB-03 proposed NOx e mission reductions of 50 to 75 percent by requiring furnaces to meet a NOx emissio n limit of between 10 to 20 ng/J of heat output (15 to 30 ppm).



### EQUIPMENT AND PROCESS

Fan-type gas-fired furnaces heat a building by circ ulating 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 exc hanger 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 anotherPAR 1111 Staff Report

1 - 2 October 28, 2009 set of ducts which direct the heated air to differe nt 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 d etected by a thermostat in the building which then shuts off the furnace. When the temperature a t the thermostat goes below a set point, the thermostat sends a signal for the furnace to turn o n.



### Heat Exchangers and Burners

Two types of heat exchanges are used in forced-draf t gas-fired furnaces. These two types of heat exchangers are matched with burners that are design ed for the specific heat exchanger. One type of heat exchanger is a cylinder or “can” type heat exchanger in which a single burner heats the inside of the cylinder and the building air is circ ulated past the outside of the cylinder before distribution throughout the building. An exhaust f an pulls the combustion gases from the burner out of the cylinder through an exhaust duct. The s ingle burner mixes fuel gas and air before the

mixture reaches the combustion zone of the burner.

The second and most common type of heat exchanger f or forced-air gas-fired furnaces is the tube type. The tube typically has a “Z” or “U” shape wh ich allows for more surface area for heat exchange in a smaller volume. Furnaces with this t ype of heat exchanger have three, four or more tubes placed in a row and each tube has its ow n individual burner. These burners are smaller than the single burner used in a cylinder t ype heat exchanger. While each burner is fired into its own heat exchange tube, one exhaust fan pu lls the combustion gases from every tube to a common exhaust duct. Air from the building is heat ed by passing through the row of heat exchangers before it is pushed by the blower throug h distribution ducts.

The tube type heat exchanger is used because it is a cost effective design. Tubes can be made in several ways. In addition to fabricating an indivi dual tube from one or more sections of pipe, a “tube” can be made using two sheets of stamped shee t metal which are pressed together. The tube is formed by the mirror images of a design sta mped into each piece of sheet metal. This “clamshell” design allows manufacturers to greatly increase the surface area of the heat exchanger and produce complicated tubes with more t han one pathway for exhaust gases to pass through. For large scale production, the clamshell tube-type heat exchanger also reduces

construction cost.

The current burners in the tube type heat exchange system are simple and cost-effective. They are essentially Bunsen burners fired horizontally i nto the heat transfer tubes. At the base of the burner an orifice (venturi) ejects fuel gas under p ressure into the body of the burner. As the jet of fuel gas passes two small windows at the base of the burner tube, air is drawn into the burner tube and mixed with the fuel gas. At the end of th e burner tube, the fuel and air is ignited and produces a long flame which projects down the lengt h of the first part of the heat exchange tube. The burner can be fired horizontally because the ex haust fan and tube keep the flame and exhaust gasses in the heat exchanger.PAR 1111 Staff Report

1 - 3 October 28, 2009 

### Heat Transfer

Heat is transferred from exhaust gases to building air in a furnace by both convective and

radiative heat transfer. Convective heat transfer involves transfer of energy from a moving fluid (i.e., heated air and combustion gasses) to a solid , liquid, or gaseous material. In convective heat transfer, heat is transported by both diffusion and larger-scale motion of currents in a fluid.

Radiative heat transfer is the transfer of heat fro m one location to another through emission of electromagnetic radiation. In a furnace this would be in the form of thermal radiation where energy is transferred by emission in the infrared r ange of the electromagnetic spectrum. The amount of thermal radiation emitted by an object de pends upon its temperature. Burners produce radiant heat from the temperature of the flame and the high temperature of exhaust gases.

Forced-air furnaces are designed to capture both co nvective and radiative heat from exhaust gases with metal heat exchangers and then transfer heat by convection and radiation to the building air circulating past the heat exchanger. The heat exchanger dimensions and the power of the combustion gas draft fan determine the amoun t of time hot combustion gases spend in the heat exchanger. The external dimensions of the hea t exchange and the power of the circulation fan determine the heat transfer to the circulating building air. In furnaces with tube-type heat exchangers, a manufacturer can easily produce a var iety of models by varying the number of tubes. Each number of tubes is matched with a spec ific combustion exhaust fan and circulating

air fan.



### TECHNOLOGY ASSESSMENT

There are several options for reducing NOx emission s from residential furnaces. Since 1978 when Rule 1111 was adopted by the AQMD Governing Bo ard, a review of patents for residential

furnaces indicates that manufacturers and others ha ve evaluated many technologies. Since the late 1990s however, research on emissions reduction in residential furnaces appears to have slowed. Prior to that time, manufacturers experime nted with complex technologies such as catalytic converters and refined simple technologie s such as steel inserts which are placed in the burner flame zone to reduce flame temperature. Man y of the products currently sold for use in the AQMD use flame inserts in heat exchangers.

Other organizations have also developed technology for use in residential furnaces. For example, the Gas Research Institute patented a burn er for residential furnaces that can achieve NOx emission less than 30 ppm (referenced to 3% oxy gen). In addition, manufacturer s in Europe have developed small low NOx burners that co uld be used in furnaces in the United

States.PAR 1111 Staff Report

1 - 4 October 28, 2009 

### Emission Reduction Technology

Low NOx burners in some applications can achieve le ss than 10 ppm NOx. There are many types of burners that emit less than 30 ppm NOx (eq uivalent to 20 nanograms of NOx per Joule of heat output in residential furnaces). These tec hnologies could readily be adapted for use in residential furnaces because they have been used in other air heating applications. The manufacturers of these products use a variety of te chniques to achieve lower emissions. The principal technique is better premixing of fuel and air before combustion takes place. This

results in more efficient combustion of fuel and a more uniform flame temperature. A more uniform flame temperature results in fewer hot spot s and reduced formation of NOx.

Most premix burners require the aid of a blower to mix the fuel with air before combustion takes place (primary air). However, residential tank typ e water heaters and some small boilers are now made with atmospheric premix burners that achieve N Ox emissions in the range of 15 to 30 ppm (10 to 20 ng/J). Atmospheric burners do not use a blower to mix fuel and air. The burners in these units combine premixing with specially design ed burner heads that reduce flame temperature and NOx emissions by spreading the flam e over a larger area. Premixing of fuel and air is accomplished using a jet of fuel gas exiting a specially designed nozzle. The velocity of the fuel leaving the nozzle draws air into a mixing zone and mixing is completed before the fuel

and air mixture leaves the burner.

A variety of burners are designed to spread flames over a larger area to reduce hot spots and lower NOx emissions. One type, radiant premix burn ers, has been available for several decades. Radiant premix burners are made with ceramic, sinte red metal, metal screen or metal fiber heads that spread the flame over a larger surface. These burners can be run in either radiant or blue flame modes. When a burner runs in radiant mode, t he flame surface is red instead of blue and it produces more radiant heat. These burners come in a variety of shapes including flat and cylindrical.

To further reduce NOx emissions, some premix burner s also use staged combustion. This technique produces two combustion zones with differ ing air-fuel mixtures. The burner produces

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. In combination, these two zones reduce the formation of NOx. This technique incorporates prem ixing and can be used in combination with other techniques.

Another common technique used to lower NOx emission s is increasing the amount of primary combustion air mixed with the fuel prior to combust ion (increasing the excess air). Increasing the excess air reduces flame temperature and NOx em issions, but it also reduces the temperature of combustion gases through dilution. This reducti on in flue gas temperature can reduce process efficiency if no other adjustments are made. Howev er, furnace heat exchangers can be designed to compensate for higher levels of excess air in th e burner with no loss of efficiency. Excess air through burners can also maintain a lower temperatu re in the heat exchanger, reduce heat stress and extend the life of the heat exchanger.PAR 1111 Staff Report

1 - 5 October 28, 2009 

### Available Technology

While low NOx burners are not currently used in res idential furnaces, the technology is used in other applications and can be adapted for use in re sidential furnaces. Low NOx burners used in these other applications incorporate several of the techniques discussed above. New burners developed for use in residential furnaces are likel y to use improved premixing, staged combustion, and increased excess air. A burner dev eloped for residential furnaces by the Gas Research Institute uses these technologies to reduc e NOx emissions below 30 ppm (U.S. Patent 6,071,115). Another burner developed at Lawrence B erkeley National Laboratory uses these techniques and can achieve NOx emission levels as l ow as 10 ppm (http://eetd.lbl.gov/aet/combustion/LSC-info/). An alternative approach is to use increased surface area combined with premixing and increased excess air to reduce NOx emissions to as low as 15 ppm (10 ng/J). Two burners currently dev eloped for use in residential tank type water heaters sold in the AQMD use these techniques.



### AFFECTED INDUSTRIES

Proposed Amended Rule 1111 affects manufacturers (NAICS 333) and dis tributors and wholesalers (NAICS 423) of residential furnaces. T he Air Conditioning Heating and Refrigeration Institute (AHRI), the manufacturer’s trade organization, indicates that there are no manufacturers of fan-type gas-fired residential fur naces in the AQMD. However, these companies do maintain regional sales offices and di stribution centers in the AQMD. The units affected by the proposed rule are used in most resi dential and many commercial settings for heating small buildings.

Based on gas usage data from the California Energy Commission and the Southern California Gas Company, annual average NOx emissions from resi dential heating using natural gas were 9.7 tons per day in 2002 and are estimated to be 10 .5 and 11.1 tons/days in 2012 and 2023 respectively. As most emissions occur between Octo ber and May, daily emissions in these months are higher.



### PUBLIC PROCESS

The rule development effort for PAR 1111 is part of an ongoing process to reevaluate low NOx technologies for combustion equipment. To date, AQ MD staff has held seven five Rule 1111 Task Force meetings to discuss burner technology, i mplementation issues and other topics with representatives from affected manufacturers, trade organizations and other interested parties. At these meetings low NOx technology, emission limits, emission testing and compliance dates were discussed. In addition, a Public Workshop for PAR 1111 was held on September 9, 2009 and PAR 1111 was discussed at the Stationary Source Committee on September 25, 2009 and October 16, 2009

.

### CHAPTER 2: SUMMARY OF PROPOSED AMENDED RULE 1111

AQMP CONTROL MEASURE

PROPOSED AMENDED RULE REQUIREMENTSPAR 1111 Staff Report

2 - 1 October 28, 2009 

### AQMP CONTROL MEASURE

Control measure CMB-03 of the 2007 AQMP proposed NO x emission reductions of 50% to 75% from this source category. These emission reductio ns require a new Rule 1111 emission limit of 10 to 20 ng/J of heat output (15 to 30 ppm at 3% ox ygen). The control measure also allowed for a phase-in of the new emission limit. The proposed NOx limit for Proposed Amended Rule 1111 (PAR 1111) is within the range proposed by CMB-03 a nd is phased in over a period of seven

years.



### PROPOSED RULE REQUIREMENTS

Purpose and Applicability

A purpose and applicability section has been added to PAR 1111 to make the rule consistent with current practice. The purpose of the PAR 1111 is t o reduce emissions of nitrogen oxides in order to achieve federal and state ambient air quality st andards. This new section of PAR 1111 includes the equipment size limits that were previo usly contained in the definition section of the rule. The rule applies to residential and commerci al space heaters used for comfort heating with a rated heat input capacity of less than 175,000 BT U per hour; or, for combination heating and cooling units, a cooling rate of less than t 65,000 BTU per hour. .



### Requirements

PAR 1111 requires new residential heating furnaces to meet lower NOx emission limits starting in 2012. Table 1 identifies compliance dates and e mission limits for different categories of furnace. Starting October 1, 2012, new mobile home furnaces must meet an emission limit of 40 ng/J heat output. Starting October 1, 2014, a 14 n g/J NOx limit is phased-in for new furnaces. All new units must meet the 14 ng/J NOx limit by Oc tober 1, 2018.

Table 1 – Furnace NOx Limits and Compliance Schedule

The proposed 40 ng/J emission limit for mobile home furnaces is based on the current technology for other residential furnaces. This em ission level can be achieved using current burners. The proposed new 14 ng/J limit is based o n several factors. The first is that the new burner technology will be the same for any emission limit between 10 and 20 ng/J. While 10

Compliance Date Equipment Category NOx Emission Limit (nanograms/Joule)

October 1, 2012 Mobile Home Furnace 40

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 14PAR 1111 Staff Report

2 - 2 October 28, 2009 ng/J has already been achieved in practice by resid ential tank-type water heaters subject to Rule 1121, a higher limit such as 14 ng/J would be more appropriate because of the likely higher energy output per square inch of burner surface ant icipated in residential heating furnaces. In addition, for small boilers and larger water heater s subject to AQMD Rule 1146.2, 14 ng/J was

the most cost effective emission limit.



### Certification, Identification of Compliant Units an d Enforcement

PAR 1111 updates references to test methods for det ermining compliance with rule emission limits and continues the AQMD program for manufactu rers to certify the emission level of their products. PAR 1111 also makes labeling requirement s more specific. In particular, manufacturers must identify on the furnace rating p late and shipping container whether the furnace complies with the 40 or 14 ng/J NOx emission limit. The AQMD will inspect distributors, retailers and installers and conduct tests as necessary to ensure compliance with emission limits, the certification program, and lab eling requirements.



### Exemptions

To allow for the depletion of existing inventories, PAR 1111 allows a temporary 300 day exemption for units manufactured before the complia nce date and delivered into the AQMD prior to the compliance date. PAR 1111 also contin ues the current exemption for mobile home furnaces until these units must comply with the 40 ng/J NOx emission limit on October 1, 2012. As the rule only applies to natural gas fired units , exemptions are not needed for units fired with

other fuels.



### Incentives for Early Compliance

PAR 1111 also provides manufacturers an incentive t o produce 14 ng/J products earlier than the compliance date. A manufacturer may elect to eithe r reduce (offset) payments for alternate compliance plan 40 ng/J furnaces by the number of 1 4/ng/J furnaces of furnaces received by a

distributor or seller in the Dist rict prior to the applicable compliance date or will be eligible to

receive a rebate payment of $75 for each 14 ng/J furnace received by a distributed or or seller and

sold into the District 90 days prior to the compliance date . Manufacturers of standard efficiency furnaces with standard fuel efficiency will receive a rebate payment of $75 and high efficiency furnaces with AFUE greater than or equal to 90 perc ent will receive a rebate payment of $90 for

furnaces delivered and sold into the District 90 da ys prior to the applicable compliance date. Offering the rebate directly to the manufacturers i nstead of distributors, installers or end users, in addition to the administrative and implementation s implicity, it also provides the manufacturer with the best opportunity to recoup hi t s product development costs and offer the best poss ible price reduction to the end user.

The AQMD Rule 1121 emission mitigation program will be used to fund early NOx emission

reductions from residential furnaces. A manufactur er must provide documentation to the AQMD of the number of each model of 14 ng/J furnaces dis tributed or sold into the District and delivered prior to the applicable compliance date. Because funds are limited, this incentive for early compliance will be available on a first come first served basis. PAR 1111 proposes a cap of $3,000,000 on early compliance rebates to all ma nufacturers. The date an applicant providesPAR 1111 Staff Report

2 - 3 October 28, 2009 AQMD approved documentation of the number of units delivered into the District will determine priority.



### Technology Assessment

The rule requires a technology assessment be presen ted to the AQMD Governing Board before April 1, 2013. The technology assessment will inco rporate information provided by industry

and or AQMD funded technology development projects. The technology assessment will be used

to assess whether the evaluate the technical feasibility of the 14 ng/J NOx emission limit in PAR

1111 and recommend if the limit or compliance dates should be changed.

The technology assessment is meant to serve as a sa feguard and address concerns regarding the proposed limits and compliance schedule expressed b y manufacturers. It is also meant to address, due to the a lack of interest by manufacturers the removal of in a proposal in the preliminary draft PAR 1111 that would have allowed manufacturers to delay compliance up to three years and pay mitigation fees for each non-co mpliant unit shipped into the District after the compliance date. The mitigation fees collected by the AQMD were to be used to fund NOx emission reductions from other sources. The mitiga tion fee option will be evaluated as part of the technology assessment to determine its viabilit y.

### CHAPTER 3: IMPACT ASSESSMENT

IMPACT ANALYSIS

COST EFFECTIVENESS

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSI S

SOCIOECONOMIC ASSESSMENT

DRAFT FINDINGS UNDER CALIFORNIA HEALTH & SAFETY CODE
SECTION 40727

INCREMENTAL COST-EFFECTIVENESS

COMPARATIVE ANALYSISPAR 1111 Staff Report

3 - 1 October 28, 2009 

### IMPACT ANALYSIS

There are over four million residential type heatin g furnaces in the AQMD. A typical furnace emits more than one and a half pounds of NOx per ye ar. PAR 1111 will reduce emissions from an individual furnace by more than one pound per ye ar. Based on a furnace life of 20 to 25

years, T t he proposed rule is estimated to reduce annual aver age emissions of NOx by less than 0.1 ton per day in 2014 and 2.5 to 3.1 tons per day in 2023. These emission reductions ar e based upon an average f

urnace lifetime of 25 years and baseline NOx emissions of 10.5 tons/day in 2014 and 11.1 tons/day in 2023 (2007 AQMP). A ll furnaces will be replaced with low NOx units by about 2043. It should be noted that because an average lifeti me for a residential furnace in Southern California is about 20 to 25 years, rep lacement with 14 ng/J furnaces will not be completed until 2043 and the complete emission redu ction benefit of this amendment is estimated to be about 6.8 tons per day (annual aver age). Since residential heating furnaces in Southern California are typically used between Octo ber and May, daily emissions and reductions for 2023 in these months can potentially be 5 to 6 tons per day.

According to the Air Conditioning Heating and Refri geration Institute (AHRI), the manufacturer’s trade organization, there are no fac ilities manufacturing fan-type gas-fired residential furnaces in the AQMD. However, the aff ected companies do maintain regional sales offices and distribution centers in the AQMD.

Manufacturers will be required to test new furnace models in order to certify the furnace. The test must be performed by an independent laboratory not affiliated with the manufacturer. A typical cost for a certification source test is abo ut $1,200 per test. Certification tests will be performed by a number of laboratories including som e in the AQMD.



### COST EFFECTIVENESS

Although residential natural gas fired, fan-type ce ntral furnaces that meet the proposed 14 ng/J NOx emission limit in PAR 1111 are not currently pr oduced;

, cost effectiveness can be estimated in other ways. Three approaches were used to estim ate cost effectiveness for PAR 1111.



### Cost Effectiveness From Rule Amendments for Similar Equipment

One approach is to look at the cost effectiveness f or other rule amendments with similar NOx emission reductions in small equipment using the te chnologies applicable to residential furnaces. Cost effectiveness for installing new low NOx burne rs in equipment affected by PAR 1111 was estimated for 2007 AQMP Control Measure CMB-03 to b e between $10,000 and $16,000 per ton. This estimate was based on analyses for amend ments to AQMD Rules 1121 and 1146.2. Since adoption of the AQMP, an equipment survey and analysis for AQMD Rule 1147, which was adopted in December 2008 and regulates a variet y of air heating equipment, had a cost effectiveness range of $4,000 to $20,000 per ton fo r small burner systems used in air heating applications. Amendments to AQMD Rules 1121 and 11 46.2 and recently adopted AQMD Rule 1147 require manufacturers to use low NOx premix bu rners to achieve emission levels between 15 ppm (10 ng/J) and 30 ppm (20 ng/J).PAR 1111 Staff Report

3 - 2 October 28, 2009 

### Cost Effectiveness Based On Price Increases for Wat er Heaters

The cost effectiveness for residential furnaces can also be estimated from the cost increases for

residential water heaters that had to reduce NOx em issions from 40 ng/J to 10 ng/J. For the

amendment to r R ule 1121 which reduced the NOx limit, staff estimat ed a cost increase of about $60 per water heater to the consumer. Adjusting th e estimated retail cost to 2009 dollars using the annual Marshall and Swift Equipment Cost Index results in an average cost increase per water heater of $83.

The cost increase estimated when the rule was adopt ed is within the range of increases in price

seen for the new low NOx water heaters. When water heaters meeting the new 10 ng/J NOx limit were introduced in the last half of 2007, the retail price increase for a base unit with a six year warranty was about $60. The price increases f or units with longer warranty, higher output and additional options were higher ($80 to $120). However, since the introduction of the new low NOx water heaters, prices have decreased becaus e of competition and reductions in the cost of steel, aluminum and copper. Currently, the cost of an ultra low NOx water heater is about $80 more than the cost of a 40 ng/J unit.

A basic water heater has a 30,000 to 36,000 Btu per hour burner. Higher output models have larger burners. However, a typical residential fur nace has a much higher heat input of about three times that of a water heater (80,000 to 110,0 00 Btu per hour). Adjusting for the difference in burner output, the estimated cost increase to th e homeowner for a residential furnace meeting a NOx emission limit of 14 ng/J is about $240 (3*$8 0=$240). The proposed rule will reduce NOx emission by an average of 1.01 pounds per year per unit. Assuming a 25 year lifetime, the

cost effectiveness for NOx reductions based on resi dential water heater costs is about $19,000
per ton.



### Cost Effectiveness Based On Material Cost and Price Markups

PAR 1111 cost effectiveness can also be estimated f rom the material cost to upgrade residential furnace burners and price markups for manufacturers and wholesalers. The U.S. Department of Energy (DOE) recently calculated markups for reside ntial furnaces during rulemaking which increased the minimum efficiency requirement for re sidential furnaces. Based on the recent residential furnace analysis by DOE and adjusting f or local sales tax, the total price markup to

the homeowner is 4.5 times the manufacturer’s basel ine manufacturing cost.

While the heat exchanger tubes/sections, the burner base and control systems for the new system may be different than for a current furnace, these components should be very similar with no increase in material or manufacturing cost expected other than different tools. The burner base and heat exchangers may be shaped differently but w ill use the same materials. Different tools might be used to shape these components for new fur naces but the tools for existing designs would be kept to manufacture furnaces for other par ts of the country. The control systems in new units would have the same components and perfor m the same functions. Fans, gas valves, flame sensors and other components would be similar and are expected to have the same cost.

The significant change in the design for new units will be the burner head and how it joins with the heat exchanger. AQMD staff has estimated mater ial costs for new burner heads that can meet the proposed emission limit based on discussio n with representatives of companies thatPAR 1111 Staff Report

3 - 3 October 28, 2009 manufacture burners, provide materials that can be used in burners, or who manufacture metal products. The estimate for the cost to the manufac turer for a fabricated burner head for a tube or sectional heat exchanger that can meet the proposed emission limit is approximately $6 per

burner. This is the additional material cost to th e manufacturer of modifying a burner. A typical

residential furnace with a tube or sectional heat e xchanger has four burners. The total estimated cost to the manufacturer for four burner heads is $ 24. Based on the cost markups used by DOE for its recent regulation, the cost to the homeowne r is estimated to be $108. Using this approach for estimating cost, a 25 year lifetime and an emis sion reduction of 1.01 pounds per year, the cost effectiveness to produce a furnace that meets a NOx limit of 14 ng/J is $8,600 per ton of NOx

reduced.

The cost of research for developing new burners and integrating the new burners into existing designs was not included in the above cost estimate of modified burners. Research cost and the cost of certification tests will be recouped over t ime by inclusion in the manufacturer’s price to the distributor or wholesaler (the manufacturer’s m arkup). There may also be other manufacturing costs. The manufacturer’s markup can be assumed to include those costs. However, the cost estimate of $240 per unit based o n the residential water heater cost also includes research, testing and manufacturing costs and can be assumed to be an upper bound on

the increase cost of a low NOx furnace to the homeo wner. Based on the three approaches for calculating cost, staff estimates the cost effectiv eness for PAR 1111 to be between $8,600 and $19,000 per ton with an increased cost to the consu mer of between $108 and $240 per furnace.

Table 2 – Cost Effectiveness Summary

Cost Effectiveness Approach Cost Effectiveness Previous Rule Amendments $10,000 to $16,000 per ton Water Heater Price Increases $19,000 per ton Material Cost & Markups $8,600 per ton



### CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) ANALYSI S

Pursuant to the California Environmental Quality Ac t (CEQA) and AQMD Rule 110, an Environmental Assessment (EA) was prepared for prop osed amended Rule 1111 and was circulated for a 30 day public review from Septembe r 24, 2009 to October 23, 2009. Responses to any comments on the Draft EA received during the public review and comment period are incorporated into the Final EA. Pursuant to the California Environmental Quality Act (CEQA) and AQMD Rule 110, the appropriate CEQA documentation will be prepared to analyze any potential adverse environmental impacts associated with PAR 1111. Up on completion, the CEQA document will be released for public review and comment, and will be available at AQMD Headquarters, by calling the AQMD Public Information Center at (909) 396

- 3600, or by accessing AQMD’s CEQA website at: www.aqmd.gov/ceqa

.



### SOCIOECONOMIC ASSESSMENT

An analysis of PAR 1111 assessing the socioeconomic impacts has been conducted and the draft socioeconomic report was will be available 30 days prior to the Board hearing. The final socioeconomic report is included in the Public Hear ing package for PAR 1111.PAR 1111 Staff Report

3 - 4 October 28, 2009 

### DRAFT FINDINGS UNDER CAL IFORNIA HEALTH & SAF ETY CODE
SECTION 40727

California Health and Safety Code Section 40727 req uires that prior to adopting, amending or repealing a rule or regulation, the AQMD Governing Board shall make findings of necessity, authority, clarity, consiste ncy, non

- duplication, and reference based on relevant inform ation presented at the public hearing and in the staff re port. In order to determine compliance with

Sections 40727 and 40727.2 require a written analysis comparing the proposed rule with existin g regulations.

The draft findings are as follows:

Necessity : The r ule is needed to reduce emission limits from combustion equipment in order to meet federal and state ambient air quality stand ards

.

Authority : The AQMD obtains its authority to adopt, amend, or repeal rules and regulations from California Health and Safety Code Sections 390 02, 40000, 40001, 40440, 40702, 40725 through 40728, and 4 1508

.

Clarity : PR11 11 has been written or displayed so that its meaning c an be easily understood by the p ersons affected by the rule.

Consistency : PR11 11 is in harmony with, and not in conflict with or con tradictory to, existing federal or state statutes, court decisions or feder al regulations.

Non

- Duplication : PR 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 AQMD.

Reference : In amending this rule, the following statu t es which the AQMD hereby implements, interprets or m akes specific are referenced: Health and Safety Cod e sections 39002, 40001, 40702, 40440(a), and 40725 through 40728.5.



### 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 wou ld achieve the emission reduction objective of the proposed amendments, relative to ozone, CO, SOx, NOx, and their precursors.

The only option for reducing NOx emission from equi pment affected by PAR 1111 is replacement of current burners in new manufactured equipment with low NOx burners. Some furnaces do use electricity to provide heat and oth er kinds of units use heated water from a small boiler or water heater. However, these equipment a re either not regulated by the AQMD (electric furnaces or heat pumps) or are regulated by other AQMD rules (Rules 1121 or 1146.2). Because there is only one control option, a typical incremental cost-effectiveness analysis cannot be prepared.PAR 1111 Staff Report

3 - 5 October 28, 2009 Staff did evaluate the incremental cost effectivene ss as compared to a less stringent option. The same technology used to achieve a NOx limit of 14 n g/J can also be used to achieve less stringent limits of 17 ng/J (25 ppm) or the upper b ound limit of 20 ng/J (30 ppm) included in Control Measure CMB-03. For these less stringent l imits the cost of the technology is the same but because emission reductions are less, the cost effectiveness deteriorates rapidly. In other words, the less stringent option is less cost-effec tive



### COMPARATIVE ANALYSIS

Under Health and Safety Code Section 40727.2, the A QMD is required to perform a comparative written analysis when adopting, amending, or repeal ing a rule or regulation. The comparative analysis is relative to existing federal or state requirements, existing or proposed AQMD rules and air pollution control requirements and guidelin es that are applicable to industrial, institutional, and commercial combustion equipment.

The AQMD is not aware of any state or federal requi rements regulating air pollution that are applicable to new or in-use PAR 1111 units. Rule 1 111 is also the only AQMD 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 an d do not duplicate any AQMD, state or federal requirement.

### RESPONSE TO COMMENTSPAR 1111 Staff Report

4 - 1 October 28, 2009 

### RESPONSE TO COMMENTS

Comment: The proposed compliance schedule for PAR 1111 is too soon.

Response: AQMD staff has extended the compliance schedule for meeting the new lower NOx limit by two years. The new 14 ng/J emission limit is phased in for the three main categories of equipment starting in 2014. Control Measure CMB-03 of the 2007 AQMP proposed a compliance date of 2012 but provided an option for a phased approach starting in 2012. PAR 1111 requires that mobile home furnaces meet the ex isting residential furnace limit of 40 ng/J by October 1, 2012 and that high efficiency, conventio nal and weatherized residential furnaces meet the 14/ng/J limit by October 1 2014, 2015 and 2016 respectively. Mobile home furnaces must meet the 14 ng/J emission limit in 2018.

PAR 1111 requires new furnaces meet the new 14 ng/J emission limits seven years after adoption of the 2007 AQMP. The proposed rule amend ment allows industry five years to continue developing, testing and marketing the low NOx technology. Note that when the rule was adopted in 1978, the Governing Board considered a requirement that residential furnaces meet an emission limit 12 ng/J in 1995 in addition to the 40 ng/J limit in 1984.

It should also be noted that PAR 1111 requires AQMD staff to assess the availability of low NOx technology that can meet the 14 ng/J NOx limit by April 1, 2013. Staff will recommend at that time whether the emission limit or compliance dates should be revised.

Comment: The AQMD should participate with industry in tech nology studies before adoption

of the rule in order to determine if a new lower NO x emission limit is feasible.

Response: AQMD staff is committed to contributing to the deve lopment of low NOx technology for residential furnaces. Specifically the adopting resolution directs staff to invest up to $1,000,000 to solicit technical assistance to de velop compliant furnaces prior to the effective

dates. AQMD staff is considering a number of options to evaluate and advance low NOx technology including joint studies with industry. However, t T he AQMP calls for an amendment to Rule 1111 this year. PAR 1111 also includes a n ew requirement for AQMD staff to present a technology assessment to the AQMD Governing Board b y April 1, 2013 that evaluates low NOx technology in residential furnaces and manufacturer s’ progress towards meeting the 14 ng/J NOx

emission limit.

Comment: The 14 ng/J emission limit in PAR 1111 will be di fficult to meet.

Response: AQMD staff understands the concern expressed by ind ustry regarding a new NOx emission limit. Staff recognizes that adapting low NOx technology to a new application takes time. The proposed amendment provides at least 5 y ears for manufacturer s to further develop and test new burner technology. PAR 1111 also incl udes a new requirement for staff to present a technology assessment to the AQMD Governing Board b y April 1, 2013 that will evaluate the state of technology and manufacturers’ progress tow ards meeting the 14 ng/J NOx emission

limit.

The 14 ng/J NOx emission limit was selected based u pon information from a variety of sources. AQMD staff consulted with furnace manufacturers, ma nufacturers of burners and burner materials, and combustion researchers before select ing 14 ng/J as a NOx emission limit. There are also a variety of types of burners that can be used in residential furnaces. At the present time, small residential boilers and residential tank type water heaters can achieve NOx emission levelsPAR 1111 Staff Report

4 - 2 October 28, 2009 of 10 to 14 ng/J. The technology used in these app lications was first developed in larger

commercial and industrial boilers and heaters and w as adapted to residential applications. AQMD staff did not propose the NOx emission level o f 10 ng/J achieved by residential water heaters because AQMD staff expects that, in residen tial furnaces, the heat output per square inch of burner surface will be higher, producing more NO x, than for the burners used in residential

water heaters.

Comment: The PAR 1111 mitigation fee is too high. It will cause builders of new homes to switch to other types of residential heating system s.
Response: Based in part on manufacturers’ comments and limite d interest, the mitigation fee of $213 and alternate compliance option which would allow m anufacturers to delay compliance by up to three years has been removed from PAR 1111. However, the proposed rule now includes a requirement that AQMD staff present a technology as sessment to the AQMD Governing Board by April 1, 2013 that evaluates low NOx technology in residential furnaces and manufacturers’ progress towards meeting the 14 ng/J NOx emission l imit. Further, the proposed amendment now includes an early compliance incentive provisio n to encourage and accelerate the product development and market introduction efforts.

Comment: The revised mitigation fee that provided manufact urers with a sliding scale of $140 to $35 per unit should be included in the proposal.

Response: In response to the comments received relative to the mitigation fee level, staff at the September 25, 2009 Stationary Source Committee of t he AQMD Governing Board, presented a revised proposal that provides manufacturers reques ting delayed compliance with a tiered fee

schedule based on the emission level of furnaces sh ipped. The revised mitigation fee was based on a 20 year average life and a cost effectiveness of $14,000 per ton (taking into account the cost effectiveness of Carl Moyer and other projects). T he proposed fee was also prorated based on a furnaces certified emissions. Staff also proposed to reduce the fee by at least 10 percent for high efficiency condensing furnaces. The following tabl e lists the proposed fees presented to the Stationary Source Committee on September 25, 2009.

Alternate Compliance Mitigation Fees

Furnace Emissions (ng/J) Mitigation Fee * ($)

31 to 40 $140

26 to 30 $85

20 to 25 $60

< 20 $35

* At least 10% reduction for high efficiency units

However, as mentioned above, based on the lack of s upport by the regulated community for this modified mitigation fee at the committee meeting, s taff removed it from its proposal andPAR 1111 Staff Report

4 - 3 October 28, 2009 proposed to replace it with the technology assessme nt and financial incentives. Staff is committed to revisit the mitigation fee option as p art of the technology assessment in 2013.

Comment: The labeling requirements of PAR 1111 are unneces sary and difficult to enforce.

Response: The labeling requirements in the current rule were adopted in 1978. Since the rule was adopted, the AQMD has significantly more experi ence regulating consumer products. The proposed labeling requirements in PAR 1111 are base d upon the AQMD’s experience regulating residential water heaters, commercial water heaters and small boilers, and paints and solvents. Because there are four categories of furnaces affec ted by PAR 1111 and distributors and sellers could have in stock 40 ng/J units allowed under the sell-through provision, compliant 14 ng/J units, and non-certified units that cannot be sold for use in the District, it is crucial that company owners, company employees, installers, builders, ho meowners and AQMD compliance staff can easily identify units that may be sold for use and installed in the AQMD.

Comment: Manufacturers have different types of distributio n networks for providing furnaces

to consumers. Because of these differences in dist ribution, the current proposal that provides an early compliance incentive for any furnace delivere d to the District prior to the compliance is unfair. In order to receive a payment for early c ompliance, manufacturers should be required to deliver furnaces to the District at a time prior to the compliance date.

Response: AQMD staff has revised PAR 1111 to require that f urnaces be sold and delivered to a location in the District 90 days prior to the com pliance date in order to be eligible for the early compliance incentive.

Comment: High efficiency condensing furnaces may suffer a loss in sales because they must comply with the emission limit first.

Response: While high efficiency furnaces must comply with t he emission limit first, they will likely be the first category to benefit from the ea rly compliance incentive. The early compliance incentive will reduce potential price increases. I n addition, AQMD staff has revised PAR 1111 to increase the incentive for high efficiency conde nsing furnaces to $90 for each furnace delivered to the District 90 days prior to the comp liance date. Due to markups from distributors, wholesalers, sales outlets, and installers, the add itional $15 rebate incentive for high efficiency

units to manufacturers could result in further savi ngs to the consumer of $60 to $70.

Comment: It is not possible to estimate cost and cost effe ctiveness for heating furnaces that have not been designed.

Response: The AQMD is required to estimate cost effectivene ss of AQMD control measures, proposed rules and proposed rule amendments. The t hree approaches used by staff provide a reasonable basis for estimating a range for the cos t effectiveness of PAR 1111.

### REFERENCES

### REFERENCES

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

. California Energy Commission, June 2004.

DOE. 2007. Technical Support Document: Energy Efficiency Prog ram for Consumer Products: Energy Conservation Standards for Residential Furna ces and Boilers. U.S. Department of Energy, September 2007.

SCAQMD, 2006. Staff Repot: Proposed Rule 1146.2 - Emissions of Ox ides of Nitrogen from Large Water Heaters and Small Boilers . South Coast Air Quality Management District, May

2006.

SCAQMD, 1999. Staff Report: Proposed Rule 1121 - Control of Nitro gen 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 - Emiss ions of Oxides of Nitrogen from Large Water Heaters and Small Boilers . South Coast Air Quality Management District, December 1997.

### APPENDIX A – LOW NO X 

### BURNERS

### SOUTH COAST AIR Q UALITY MANAGEMENT DISTRICT

SOCIOECONOMIC REPORT FOR Proposed Amended Rule 1111

 NOx Emissions from Natural

- Gas

- Fired,

Fan

- Type Central Furnaces

Octo ber 200 9

Deputy Executive Officer Planning, Rule Development, and Area Sources Elaine Chang, DrPH

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

Author: Sue Lieu, Ph.D., Program Supervisor

Reviewed By: Jill Whynot, Director of Strategic Initiatives Gary Quinn , P.E., Program Supervisor Ruby Fernandez , Deputy District Counsel IISOUTH COAST AIR QUAL ITY MANAGEMENT DISTR ICT
GOVERNING BOARD

Chair man : WILLIAM A. BURKE, Ed.D. Speaker of the Assembly Appointee

Vice Chairman: DENNIS YATES Mayor, City of Chino Cities of San Bernardino County Representative

Members:

MICHAEL D. ANTONOVICH Supervisor, Fifth District Los Angeles County Representative

MARION ASHLEY Supervisor, Fifth District Riverside Count y Representative

MICHAEL CACCIOTI Council Member, City of South Pasadena Cities Representative, Los Angeles County/Eastern Region

BILL CAMPBELL Supervisor, Third District Orange County Representative

JANE W. CARNEY Senate Rules Committee Appointee

JOSIE GONZALES Supervisor, Fifth Distri ct San Bernardino County Representative

RONALD O. LOVERIDGE Mayor, City of Riverside Cities Representative, Riverside County

JOSEPH K. LYOU, P h .D. Governor’s Appointee

JAN PERRY Councilmember, City of Los Angeles Cities Representative, Los Angeles Count y/Western Region

MIGUEL PULIDO Mayor, City of Santa Ana Cities Representative, Orange County

TONIA REYES URANGA Council Member, City of Long Beach Cities Representative, Los Angeles County/Western Region

Executive Officer :

BARRY R. WALLERSTEIN, D.Env.Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD i Octo ber 2009 

### EXECUTIVE SUMMARY

A socioeconomic analysis was conducted to assess the impacts of Proposed Amended Rule (PAR) 111 1



NOx Emissions from Natural

- Gas

- Fired, Fan

- Type Central Furnaces . A summary of the analysis and findings is presented below.

Elements of Proposed
Amended Rule PAR 111 1

— NOx Emissions from Natural

- Gas

- Fired, Fan

- Type
Central Furnaces

— establishes NOx standards for natural

- gas

- fired,

fan

- type central furnaces . Mobile home furnaces sold and installed

in the Sout h Coast Air Quality Management District would have to comply with the 40 nanograms/joule ( ng/J ) NOx emission limit beginning on October 1, 2012 and 14 ng/J on October 1, 2018. Condensing, non

- condensing, and weatherized furnaces are also required to comply with the 14 ng/J limit on October 1, 2014, October 1, 2015, and October 1, 2016 , respectively . Compliant units are required to have proper labels displa yed on them. Manufacturers of furnaces are required to demonstrate their compliance with an emission test protocol and test results. Furthermore, rebates would

be offe red to furnace manufacturers for their early compliance. Finally, sellers and installe rs of furnaces would have up to 300 days

to clear their existing inventory.

The proposed amendments would result in 2.5 tons of NOx emission reductions per day in 2023 and less than one

- tenth of a ton of NOx emission reductions per day in 2014

. The pro posed amendments would not change the furnace replacement schedule.

Affected Facilities
and Industries The proposed amendments directly affect manufacturers of natural

gas

- fired, fan

- type central furnaces because burners would have to

be re

- designed to achieve the NOx limits. However, no

manufacturers are located in the four

- county area. Since furnaces

ar e sold through local distributors, they will be indirectly affected.

R esidential and commercial property owners (consumers and real estate lessors, respectively)

, as well as builders for new construction will pay a higher price (incremental manufacturing cost plus markup) resulting from the proposed amendments. Assumptions of Analysis T he incremental cost of a mobile home furnace to consumers resulting from the NOx emission limit of 40 ng/J in 2012 is

estimated to be $10. It is estimated that approximate ly 15 tests nationwide will be conducted to certify these compliant furnaces.

One

- third of such tests would be conducted in a testing lab in Los Angeles County at a cost of $1,200 per test. It is assumed that the average incremental cost of a furnace mee ting the 14 ng/J NOx limit to consumers regardless of its type is $174 , which is the average of lower and upper end prices . This cost includes material costs and

certification tests to furnace manufacturers, markups at various sales stages, and any other necessary cost to bring a furnace to consumers.Propos ed Amended Rule 1111 Socioeconomic Report

SCAQMD ii Octo ber 2009 The early compliance incentive will help to partially offset R&D

costs for furnaces in the event manufacturers take advantage of it.

T he AQMD planned funding for product development and R&D plans might redu ce the $174 incremental cost.

Based on the upper end price of a furnace at $2,000, implementation of the proposed amendments w ould , at most, result in an average 8.7 percent increase in the price of a furnace . This increase is relatively small given the average 25

- year life of a furnace.

It is estimated that there are 4.5 million existing furnaces in the four

county area, of which four percent are mobile home furnaces, 26
percent are condensing furnaces, 6 0 percent are non

- condensing furnaces, and 10 are percent weatherized furnaces. Since existing

non

- mobile home furnaces located in commercial properties are expected to be very low , staff assumed one percent for this analysis

.

The number of affected furnaces each year is estimated by assuming

an annual four percent replacement rate on the existing 4.5 million

furnace stock based on an average life of 25 years for a furnace plus

the growth in the number of furnace s each year. Th e share of each county’s total number of furnaces in the four

- county area is based on the number of housing units in each county in 2008.

The socioeconomic analysis herein did not consider the impact of the rebate program for early compliance by furnace manufacturers because it is too speculative to predict which manufacturers would opt into the program. Compliance Costs T he average annual cost (from the years 2011 to 2025) of the proposed amendments is projected to be $30.4 million. Of the $30.4

milli on cost, consumers w ould incur $22.9 million (75 percent) due to furnace replacements

, and home and commercial builders will incur $7.3 million (24 percent) due to new construction. The $0.2 million cost to real estate lessors represent s furnace replaceme nts in existing commercial properties. Furnace manufacturers in 2011

would also incur a minor cost for certification tests for mobile home

furnaces. Employment Impacts A macroeconomic analysis was performed to assess the overall job impacts of the prop osed amendments on the entire local economy. It is estimated that an average of 221 jobs will be forgone annually

from 2013 to 2025 across all industries in the four

- county area

, which is 0.002 percent of the average baseline jobs during the same period

. There w ould be an additional 62 jobs created in the wholesale sector where local distributors of furnaces belong.

The sectors of construction

, and real estate and rental and leasing

,Propos ed Amended Rule 1111 Socioeconomic Report

SCAQMD iii Octo ber 2009 are projected to have an average of 47 and 36 annual jobs forgone, respectively . Consumers may reduce spending on other consumption items to compensate for increases in furnace prices. The most affected items would be those products and services sold by the industry of retail trade (NAICS 55). For example, there

would be 50 annual jobs forgone in this sector

. Competitiveness Compared to its national counterparts, t he proposed amendments

could result in an increase of 0.0 1 to 0.02 percent in the cost of production in the construction sector from 2015 to 2025

. Similar

i ncreases are expected in the relative delivered price of products in that industry. The real estate and rental and leasing industry is projected to have increases in its relative cost of production and delivered prices by 0.01 percent at most . No changes in the cost of production or relative prices are observed in other industries.

Overall , these impacts are not significant and thus would not affect the competitiveness of the four

- county area

.Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD 1 Octo ber 2009 

### INTRODUCTION

The proposed amendments to Rule 11 1 1 (Reduction of NOx Emissions from Natural

- Gas

- Fired,

Fan

- type Central Furnaces) set NOx standards for natural

- gas

- fired , fan

- type central furnaces

. Mobile home furnaces sold and installed in the South Coast Air Quality Management District

would have to comply with the 40 nanograms/joule ( ng/J ) NOx emission limit beginning on October 1, 2012 and 14 ng/J on October 1, 2018. Condensing, non

- condensing, and weatherized furnaces are also required to comply with the 14 ng/J limit on Oct ober 1, 2014, October 1, 2015, and October 1, 2016

, respectively

. Compliant units are required to have proper labels displayed

on them

. Manufacturers of furnaces are required to demonstrate their compliance with an emi ssion test protocol and test results

. Furthermore, rebates would be offe red to furnace manufacturers for their early compliance. Finally, sellers and installers of furnaces would have up to 300 days to clear their existing inventory.

The proposed amendments would result in 2.5 tons of NOx emission reductions per day in 2023

and less than one

- tenth of a ton of NOx emission reductions per day in 2014. The proposed amendments would not change the furnace replacement schedule.



### LEGISLATIVE MANDATES

The socioeconomic assessments at the AQMD have evolved over time to reflect the benefits and costs of regulations. The legal mandates directly related to the assessment of the proposed amendments include the AQMD Governing Board resolutions and various sections of the California Health & Safety C ode (H&SC).

AQMD Governing Board Resolutions

On March 17, 1989 the AQMD Governing Board adopted a resolution that calls for preparing an economic analysis of each proposed rule for the following elements:

 Affected Industries

 Range of Control Costs

 Cost Effectiveness

 Public Health Benefits

On October 14, 1994, the Board passed a resolution which directed staff to address whether the rules or amendments brought to the Board for adoption are in the order of cost effectiveness as defined in the AQMP. The i ntent was to bring forth those rules that are cost effective first.

Health & Safety Code Requirements

The state legislature adopted legislation that reinforces and expands the Governing Board

resolutions for socioeconomic assessments. H&SC Sections 4044 0.8(a) and (b), which became effective on January 1, 1991, require that a socioeconomic analysis be prepared for any proposed rule or rule amendment that "will significantly affect air quality or emissions limitations." Specifically, the scope of the anal ysis should include:Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD 2 Octo ber 2009  Type of Affected Industries

 Impact on Employment and the Economy of the D istrict

 Range of Probable Costs, Including Those to Industries

 Emission Reduction Potential

 Necessity of Adopting, Amending or Repealing the Rule in Order to Att ain State and Federal Ambient Air Quality Standards

 Availability and Cost Effectiveness of Alternatives to the Rule

For the necessity of rule adoption and cost effectiveness of alternatives to the rule , please refer to the Staff Report for Proposed Amended Rule 1111. Additionally, the AQMD is required to actively consider the socioeconomic impacts of regulations and make a good faith effort to minimize adverse socioeconomic impacts. H&SC Section 40728. 5, which became effective on January 1, 1992, requires the AQMD to:

 Examine the type of industries affected, including small businesses; and

 Consider Socioeconomic Impacts in Rule Adoption

H&SC Section 40920.6, which became effective on January 1, 1996, requires that incremental cost effectiveness be performed for a proposed rule or amendment relating to ozone, carbon monoxide (CO), oxides of sulfur (SOx), oxides of nitrogen (NOx), and their precursors.

Incremental cost effectiveness is defined as the d ifference in costs divided by the difference in emission reductions between one level of control and the next more stringent control. Please refer to the rule Staff Report for such analysis.



### AFFECTED FACILITIES

The proposed amendments would directly affe ct manufacturers of natural

- gas

- fired, fan

- type
central furnaces because burners would have to be re

- designed to achieve the NOx limits

. However, no manufacturers are located in the four

- county area. Since furnaces are sold through local distributors ( NA ICS 423730

— Warm Air Heating and Air

- Conditioning Equipment and Supplies Merchant Wholesalers ) and installers (NAICS 238220

— Plumbing, Heating, and Air

Conditioning Contractors) , they will be indirectly affected. R esidential and commercial property

owners ( consumers and real estate lessors, respectively)

, as well as builders for new construction will pay a higher price (incremental manufacturing cost plus markup) resulting from the proposed amendments . L ocal distributors and installers will benefit from mar kups on

incremental costs through additional sales dollars

.

Small Businesses

The AQMD defines a "small business" in Rule 102 as one which employs 10 or fewer persons and which earns less than $500,000 in gross annual receipts. In addition to the AQMD's definition of a small business, the federal Small Business Administration (SBA), the federal Clean Air Act Amendments (CAAA) of 1990, and the California Department of Health Services (DHS) also provide definitions of a small business.

The SBA's definition of a small business uses the criteria of gross annual receipts (ranging from $0.5 million to $25 million), number of employees (ranging from 100 to 1,500), megawatt hoursProposed Amended Rule 1111 Socioeconomic Report

SCAQMD 3 Octo ber 2009 generated (4 million), or assets ($150 million), depending on industry type. The SB A definitions of small businesses vary by 6

- digit North American Industrial Classification System (NAICS)

code.

The CAAA classifies a facility as a "small business stationary source" if it: (1) employs 100 or fewer employees, (2) does not emit more than 1 0 tons per year of either VOC or NOx, and (3) is a small business as defined by SBA.

There are no manufacturers of furnaces in the four

- county area. Based on the information provided by t he NAICS Association, there are 234 distributors of furnaces in the area, of which
191 are small businesses (fewer than 100 employees) under the federal SBA definition and 95 are small businesses under the AQMD definition. Emission data on distributors is not available

to determine whether a business is small under the C AAA definition.

According to the 2007 County Business Patterns, there were 3,802 insta llers in the four

- county

area

. However, the lack of data on sales , employment, and emissions prevents the assessment of

small business status of a facility. Sales, e mployment, and emission data on affected lessors of real estate and affected home and commercial builders is not available either. Therefore, their

small business status cannot be determined.



### COMPLIANCE COSTS

The proposed amendments will affect several types of furnaces. Mobile home furnaces have a

two

- phase compliance schedule. AQMD staff assumes that the incremental cost of a mobile

home furnace to consumers resulting from the NOx emission limit of 40 ng/J in 2012 is

estimated to be $10

. It is estimated that approximately 15 tests nationwide will be conducted to certify these compliant furnaces. One

- third of such tests would be conducted in a testing lab in Los Angeles County at a cost of $1,200 per test.

AQMD staf

f estimated that the incremental cost of a furnace meeting the 14 ng/J NOx limit to

consumers regardless of its type (mobile home, condensing, non

- condensing, or weatherized) would be between $108 and $240

, despite the compliance years being staggered by type of furnace (from 2014 to 2018)

. Please refer to the Staff Report for details of these estimates. For the purpose of the socioeconomic analysis herein, the average cost of $174 [= (108 + 240)/2] per furnace is assumed. This cost includ es material costs and certification tests to furnace manufacturers, markups at various sales stages, and any other necessary cost to bring a furnace

to consumers. The early compliance incentive will help to partially offset R&D costs for

furnaces in the e vent manufacturers take advantage of it. T he AQMD planned funding for product development and R&D plans might reduce the $174 incremental cost.

Based on the up per end price of a furnace at $2 ,00 0, implementation of the proposed

amendm ents w ould , at most, result in an average 8.7 percent increase in the price of a furnace

. This increase is relatively small given the average 25

- year life of a furnace

.

T he proposed amendments would affect new and replaced furnaces . It is estimated that there are 4.5 million existing furnaces in the four

- county area, of which four percent are mobile homeProposed Amended Rule 1111 Socioeconomic Report

SCAQMD 4 Octo ber 2009 furnaces, 26 percent condensing furnaces, 60 percent non

- condensing furnaces, and 10 percent

weatherized furnaces. Since existin g non

- mobile home furnaces located in commercial properties are expected to be very low, staff assumed one percent for this analysis.

T he number of affected furnaces each year is estimated by assuming an annual four percent replacement rate (based on an a verage life of 25 years for a furnace ) on the existing 4.5 million furnace stock plus the growth in the number of furnace s each year

. A projection of the number

of new furnaces between 20 1 2 and 20 2 5 was performed based on the existing furnace stock and

th e annual compounded growth rate of housing units between 2000 and 2008 for mobile homes and occupied housing units in each county, as shown in Table 1. 1 This data is based on more

current data and more updated than the 2007 Air Quality Management Plan (AQMP), which was based on the 2002 data and did not include mobile home growth rate. For the purpose of the analysis herein, it is assumed that there would be no growth of mobile home furnace s between

2012 and 2025 i n Orange County. The share of each county’s total number of furnaces in the

four

- county area is based on the number of housing units in each county in 2008

.

Table 1 Annual Compounded Growth Rates by Type of Housing Units by County (2000

– 2008)

Los Angeles Orange Riverside San Bernardino

Mobile Homes 0.018%

- 0.136% 0.524% 0.830% Occupied Housing Units 0.497% 0.789% 3.586% 1.723%
Calculated based on data downloaded from http://www.dof.ca.gov/research/demographic/reports/estimates/e

5_2001

- 06/.

Based on the assumptions above, t he average annual cost (from the years 2011 to 2025) of the proposed amendments is projected to be $30.4 million , as shown in Table 2 . Of the total annual $ 30.4 million cost, consumers w ould incur $22.9 million (75 percent ) due to furnace replacements

, and home and commercial builders will incur $7.3 million (24 percent) due to new

construction

. The $0.2 million cost to real estate lessors represent s furnace replacements in existing commercial properties. The cost to furnace manufacturers in 2011 represents the certification tests for complying with the 40 ng/J NOx limit for mobile home furnaces in 2012.

Table 2
Cost of Proposed Amendments by Indu stry ( in millions of dollars )

Industry

2011 2012 2014 2015 2016 2018 2025 Average

Annual (2011

- 2025)

Furnace Manufacturers $0.018 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.001

Consumers $0.000 $0.072 $8.134 $26.738 $29.839 $31.019 $31.019 $22.856

Real Estate Lessors $0.000 $0.000 $0.081 $0.269 $0.301 $0.301 $0.301 $0.224

Home & Commercial

Builders $0.000 $0.003 $2.329 $7.859 $8.961 $9.407 $10.984 $7.312

Total $0.018 $0.075 $10.544 $34.867 $39.100 $40.727 $42.304 $30.394

1 http://www.dof.ca.gov/research/demographic/reports/estimates/e

- 5_2001

- 06/ , downloaded September 11, 2009.Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD 5 Octo ber 2009 The socioeconomic analysis herein did not consider the impact of the rebate program for early compliance by furnace manufacturers because it is too speculative to predict which

manufacturers would opt into the program

.



### TOTAL IMPACTS

The REMI model ( PI+ v1.0 .116 ) is used to assess the total socioeconomic impacts of a policy change (i.e., the proposed amendments) . The model links the economic activities in the counties of Los Angeles, Orange, Riverside, and San Bernardino. The REMI model for each county is comprised of a five block structure that includes (1) output and demand, (2) labor and capital, (3) population and labor force, (4) wages, prices and costs, and (5) market shares. These five blocks

are inter related. Within each county, producers are made up of 165 private non

- farm industries, three government sectors, and a farm sector. Trade flows are captured between sectors as well as

across the four counties and the rest of U.S. Market shares of indust ries are dependent upon their product prices, access to production inputs, and local infrastructure. The demographic/migration component has 160 ages/gender/race/ethnicity cohorts and captures population changes in births, deaths, and migration.

The as sessment herein is performed relative to a baseline of the existing Rule 1 11 1. Direct effects of the policy change (proposed amendments) have to be estimated and used as inputs to the REMI model in order for the model to assess secondary and induced impac ts for all the

actors in the four

- county economy on an annual basis and across a user

- defined horizon (20 11 to
202 5 ). Direct effects of PAR 1 11 1 include additional costs to the affected entities and additional

sales of furnaces that meet the proposed limits by local vendors at the county level and by industry.

The job impact analysis considers the incremental prices to buyers of compliant furnaces

. The buyers of replacement furnaces are homeowners and lessors of commercial real estate properties

. In general, any rise in furnace prices would tend to reduce purchasing power of homeowners and increase the cost of doing business for the lessors (NAICS 5311

— Lessors of Real Estate) . For new housing units, a rise in furnace prices would also tend to increa se the cost of doing business for home and commercial builders (NAICS 236

— Construction of Buildings). On the other hand, the local distributors of furnaces (NAICS 42

— Wholesale Trade) will benefit from the

additional sales of furnaces and installers of fur naces will benefit from the price markup

. 2 There would also be minor benefit to the industry of professional and technical services ( NAICS 54 ) resulting from certification tests conducted in Los Angeles County

. The following sections attempt to quantity the magnitude of impacts mentioned above, which are relatively minor compared to the overall economy.

Employment Impact by Industry

The total employment impact of the proposed amendments across industries in k ey years is

shown in Table 3 . It is estimated that an average of 221 jobs will be forgone annually from 20 13

2 T he wholesale portion of the incremental cost is approximately 75 percent of the incremental cost based on the markups at various production/selling stages of residential furnaces (Table 5.7.1 in US DOE, 2007). The remaining 25 percent markup from installers to consumers becomes (proprietors’) income to the installers.Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD 6 Octo ber 2009 to 20 2 5 across all industries in the four

- county area , which is 0.002 percent of the average baseline jobs during the same period

. No job impacts are projected for 2012 and 2013. There

w ould be an additional 62 jobs created in the wholesale sector where local distributors of

furnaces belong. The job creation is due to the projected rise in furnace prices

.

Increases in prices of furnace s are translated to reductions in consumers’ purchasing power and the increased cost of doing business for affected industries. The sectors of construction

, and real

estate and rental and leasing are projected to have an average of 47 and 36 annual jobs f orgone, respectively, resulting from purchasing compliant furnaces

. C onsumers may reduce spending on other consumption items to compensate for increases in prices of furnaces . The most affected items would be those products and services sold by the indus try of retail trade ( NAICS 55 ). For example, there would be 50 annual jobs forgone in this industry

.

Table 3 Job Impact of Proposed Amendments by Industry by Year

Industry Title NAICS Year

2014 2015 2016 2018 2025 Average Annual (2013

- 2025) Forestry, Fishing, Related Activities, and

Other 113

- 115 0 0 0 0

- 1

- 1

Utilities 22 0 0 0 0

- 1 0

Construction 23

- 7

- 27

- 42

- 56

- 60

- 47

Manufacturing 31

- 33

- 2

- 8

- 13

- 20

- 31

- 19

Wholesale Trade 42 27 85 88 80 53 62

Retail Trade 44

- 45

- 11

- 38

- 47

- 55

- 69

- 50

Transportation and Warehousing 48

- 49 0 0

- 2

- 5

- 10

- 5

Information 51 0

- 1

- 2

- 3

- 6

- 3

Finance and Insurance 52

- 1

- 5

- 9

- 14

- 23

- 14

Real Estate and Rental and Leasing 53

- 4

- 17

- 25

- 36

- 58

- 36

Professional and Technical Services 54 1 0

- 6

- 15

- 36

- 18

Management of Companies and Enterprises 55 0 1 0

- 1

- 3

- 1

Administrative and Waste Services 56 2 4 0

- 8

- 22

- 10

Educational Services 61 0 0

- 1

- 4

- 10

- 5

Health Care and Social Assistance 62 0

- 1

- 6

- 13

- 36

- 17

Arts, Entertainment, and Recreation 71 0

- 1

- 3

- 5

- 11

- 6

Accommodation and Food Services 72 0

- 2

- 6

- 13

- 30

- 15

Other Services, except Public Administration 81

- 1

- 3

- 7

- 11

- 23

- 12

Government 92 0

- 1

- 9

- 22

- 49

- 25

Total 4

- 14

- 88

- 203

- 428

- 221

Competitiveness

The additional cost s resulting from the proposed amendments c ould increase the cost of production of the affected industries relative to their national counterparts. Changes in relative production costs would thus be a good indicator of changes in relative competitiveness. TheProposed Amended Rule 1111 Socioeconomic Report

SCAQMD 7 Octo ber 2009 magnitude of the impact depends on th e size and diversification of, and infrastructure in a local

economy , as well as interactions among industries. A large, diversified, and resourceful economy would absorb the impact with relative ease. The relative cost of production in the

construction industry is projected to rise by 0.01 percent in 2015 and by 0.02 percent from 2016 to 2025, compared to its national counterparts. The relative cost of production in the industry of real estate and rental and leasing would have a slight rise of 0.01 perc ent in 2016 only. Impacts
on other industries are not observed.

Changes in production costs will affect prices of goods produced locally. The relative delivered price of a good is based on its production cost and the transportation cost of delivering th e good to where it is consumed or used. The average price of a good at the place of use reflects prices of the good produced locally and imported elsewhere. The construction industry is projected to have the same magnitude of increases in its relative pr ices as in the cost of production. The increases in prices for the real estate and rental and leasing industry are projected to be 0.01
percent from 2015 to 20 23 . No projected price increases are forecasted for other industries.



### RULE ADOPTION RELATI VE TO THE COST EFFECTIV ENESS
SCHEDULE

On October 14, 1994, the Governing Board adopted a resolution that requires staff to address whether rules being proposed for adoption are considered in the order of cost

- effectiveness. The 2007 Air Quality Management P lan (AQMP) ranked, in the order of cost

- effectiveness, all of the control measures for which costs were quantified. It is generally recommended that the most

cost

- effective actions be taken first.

The proposed amendments to Rule 1111 implement control me asure CMB

- 03 (NOx Reductions
from Residential Space Heaters) in the 200 7 AQMP. Cost

- effectiveness of control measure

CMB

- 0 3 was estimated to be $ 10,000 per ton of NOx reduced , which resulted in being ranked

7 th out of 12 stationary source control measures . The cost

- effectiveness of the proposed

amendments is estimated to be between $8,600 and $19,000 per ton of NOx reduced

.Proposed Amended Rule 1111 Socioeconomic Report

SCAQMD 8 October 2009 REFERENCES

California Department of Finance. E

- 5 City/County Popu lation and Housing Estimates

. Downloaded September 11, 2009 from http://www.dof.ca.gov/research/demographic/reports/estimates/e

- 5_2001

- 06/

.

NAICS Association. June 26, 2009 Electronic Mail Message from mitch@naics.com on Facility List for Furnace Manufacturers and Distributors in the Counties of Los Angeles, Orange, Riverside, and San Bernardino.

Regional Economic Models, In c. REMI PI+ v ersion 1. 0.116 . Amherst, M A. 2009

.

SCAQMD. Preliminary Draft Staff Report for Proposed Amended Rule 1111

— N O x Emissions

from Natural

- Gas

- Fired, Fan

- type Central Furnaces. Diamond Bar, CA. September 2009.

South Coast Air Quality Manageme nt District (SCAQMD). Final 2007 AQMP . Diamond Bar,

CA. 2007.

U.S. Department of Energy (DOE). Energy Conservation Standards f or Residential Furnaces

a nd Boilers

. Washington, DC. September 2007

U.S. Small Business Administration

. Table of Small Business S ize Standards . Washington. D C.

200 8.

### SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT

Final Environmental Assessment for Proposed Amended Rule 1111 – NOx Emissions from Natural-Gas-Fired, Fan-Type Central Furnaces

November 2009

SCAQMD No. 090902JI State Clearinghouse No: TBD

Executive Officer Barry R. Wallerstein, D. Env.

Deputy Executive Officer Planning, Rule Development and Area Sources Elaine Chang, DrPH

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
Susan Nakamura

Author: Jeffrey J. Inabinet Air Quality Specialist

Contributors: Wayne Barcikowski Air Quality Specialist

Reviewed By: Steve Smith, Ph.D. Program Supervisor, CEQA Joe Cassmassi Planning and Rules Manager, Planning , Rule Development, and Area Sources Gary Quinn, P.E. Program Supervisor, Planning, Rul e Development,

and Area Sources

Barbara Baird District Counsel Ruby Fernandez Deputy District Counsel IISOUTH 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

MICHAEL A. CACCIOTTI Councilmember, City of South Pasadena Cities of Los Angeles County, Eastern Region

BILL CAMPBELL Supervisor, Third District Orange County Representative

JANE CARNEY Senate Rules Committee Appointee

RONALD O. LOVERIDGE Mayor, City of Riverside Cities Representative, Riverside County

JOSEPH K. LYOU, Ph.D. Governor's Appointee

JOSIE GONZALES Supervisor, Fifth District San Bernardino County Representative

JAN PERRY Councilwoman, 9 th District City of Los Angeles Representative

MIGUEL A. PULIDO Mayor, City of Santa Ana Cities Representative, Orange County

TONIA REYES URANGA Councilwoman, City of Long Beach Cities of Los Angeles County, Western Region

MARION ASHLEY Supervisor, Fifth District Cities Representative, Riverside County

EXECUTIVE OFFICER:
BARRY R. WALLERSTEIN, D.Env.TABLE OF CONTENTS

CHAPTER 1 - PROJECT DESCRIPTION

Introduction ......................................

................................................... ................................... 1-1 California Environmental Quality Act ..............

................................................... ...................... 1-2 Project Location ..................................

................................................... .................................... 1-2 Project Objective .................................

................................................... .................................... 1-3 Project Background ................................

................................................... ................................. 1-4 Project Description................................

................................................... .................................. 1-5 Summary of Affected Equipment and Methods of Compli ance .............................................. .. 1-8

CHAPTER 2 - ENVIRONMENTAL CHECKLIST

Introduction ......................................

................................................... ................................... 2-1
General Information ...............................

................................................... ................................. 2-1 Environmental Factors Potentially Affected ........

................................................... ................... 2-2
Determination .....................................

................................................... .................................... 2-3
Environmental Checklist and Discussion ............

................................................... ................... 2-4

APPENDICES Appendix A – Proposed Amended Rule 1111

LIST OF FIGURES Figure 1-1: South Coast Air Quality Management Dist rict .............................................. .... 1-3

LIST OF TABLES Table 1-1: Furnace NOx Limits and Compliance Schedu le ................................................ 1-6
Table 1-2: Estimated Number of Units Affected Sched ule ............................................... .. 1-7 Table 2-1: Air Quality Significance Thresholds ....

................................................... .......... 2-8PREFACE

This document constitutes the Final Environmental A ssessment (EA) for Proposed Amended Rule 1111 – NOx Emissions from Natural Gas-fired, F an-type Central Furnaces. The Draft EA was released for a 30-day public review and comment period from September 24, 2009 to October 23, 2009. No comment letters were received from the public relative to the Draft EA. The environmental analysis in the Draft EA conclude d that Proposed Amended Rule 1111 would not generate any significant adverse environmental impacts.

Minor modifications were made to the proposed amend ed rule subsequent to release of the Draft EA for public review. To facilitate identifying mo difications to the document, added and/or

modified text is underlined. Staff has reviewed th ese minor modifications and concluded that they do not make any impacts substantially worse or change any conclusions reached in the Draft EA. As a result, these minor revisions do not requ ire recirculation of the document pursuant to CEQA Guidelines §15088.5. Therefore, this document now constitutes the Final EA for Proposed Amended Rule 1111.C H A P T E R 1 - P R O J E C T D E S C R I P T I O N

Introduction

California Environmental Quality Act

Project Location

Project Objective

Project Background

Project DescriptionFinal Environmental Assessment: Chapter 1

PAR 1111 1-1 November 2009 INTRODUCTION The California Legislature created the South Coast Air Quality Management District (SCAQMD) in 1977 1 as the agency responsible for developing and enfor cing air pollution control rules and regulations in the Sout h Coast Air Basin (Basin) and portions of the Salton Sea Air Basin and Mojave Desert Air B asin referred to herein as the District. By statute, the SCAQMD is required to ad opt an air quality management plan (AQMP) demonstrating compliance with all federal an d state ambient air quality

standards for the District 2 . Furthermore, the SCAQMD must adopt rules and reg ulations that carry out the AQMP 3 . The 2007 AQMP concluded that major reductions in emissions of volatile organic compounds (VOCs), oxi des of sulfur (SOx) and oxides of nitrogen (NOx) are necessary to attain the air qual ity standards for ozone and particulate matter (PM10 and PM2.5). Ozone, a criteria polluta nt, is formed when VOCs react with NOx in the atmosphere and has been shown to adverse ly affect human health. NOx also

contributes to the formation of PM10 and PM2.5.

Proposed Amended Rule (PAR) 1111 implements AQMP co ntrol measure CMB-03 of the 2007 AQMP. Control Measure CMB-03 proposed NOx emission reductions of 50 to 75 percent by requiring furnaces to meet a NOx emis sion limit of between 10 to 20 nanograms per Joule (ng/J) of heat output [15 to 30 parts per million (ppm) at three percent oxygen]. The objective of PAR 1111 is to r educe NOx emissions from fan-type gas-fired residential furnaces. The proposed emiss ion limit is 14 ng/J (20 ppm at 3% oxygen) with new mobile home units having to meet 4 0 ng/J in 2012 and 14 ng/J in 2018. The three main categories of furnace, condensing, n on-condensing and weatherized, must meet the 14 ng/J limit in 2014, 2015 and 2016, resp ectively. Because an average lifetime

for a residential furnace in Southern California is about 20-25 years, replacement with 14 ng/J furnaces will not be completed until after 204 3.

Additionally, PAR 1111 updates references to test m ethods for determining compliance with rule emission limits and continues the SCAQMD program for manufacturers to certify the emission level of their products. It a lso provides more specificity in the labeling requirements. To facilitate the depletion of existing inventories, PAR 1111 also provides a temporary 10 month exemption (a sell thr ough period) for units manufactured before the compliance date and delivered into the S CAQMD prior to the compliance date.

In an effort to encourage the early introduction of the 14 ng/J units into the marketplace and provide manufacturers with a means of partially recovering their product development costs, PAR 1111 provides an incentive f or early compliance. Specifically, manufacturers will be eligible to receive a rebate payment of $75 for each 14 nanograms per Joule standard efficiency furnace sold and deli vered into the District 90 days prior to the applicable compliance date. Further, to promot e the introduction of not just compliant but also more energy efficient units, the proposal offers manufacturers a rebate payment of $90 for each 14 ng/J high efficiency (gr eater than or equal to 90 percent

1 The Lewis-Presley Air Quality Management Act, 197 6 Cal. Stats., ch 324 (codified at Health & Safety Code, §§40400-40540).

2 Health & Safety Code, §40460 (a).

3 Health & Safety Code, §40440 (a).Final Environmental Assessment: Chapter 1

PAR 1111 1-2 November 2009 annual fuel utilization efficiency) furnace deliver ed and sold into the District 90 days prior to the compliance date. As funds are limited , payments for early compliance will be on a first come first served basis. PAR 1111 propo ses a cap of $3,000,000 on early compliance rebates to all manufacturers.

The previous draft version of the proposed amended rule included an alternative compliance option, which was analyzed in this docum ent. PAR 1111 also provides

manufacturers an This alternative compliance option envisioned that For manufacturers that fail to develop compliant products by the prop osed compliance dates, PAR 1111

could allows a manufacturer to request an extension of the effective date of up t o three years provided the manufacturer pays a mitigation f ee for each unit distributed or sold into the SCAQMD. In addition to the compliance flexibility it will provide , the alternate compliance option is was intended to balance business and environmental obj ectives. It

will would allow manufacturers that need more time for produc t development to continue distributing their existing products which will would alleviate any potential disruption in product availability.

As part of this alternative compliance option, for any category of furnace identified in the rule, a manufacturer may could request a delayed compliance date of up to three y ears. To request a delay, a manufacturer must submit an a lternative compliance plan that requests the alternative compliance date and identi fies when compliant products will be

manufactured and sold. The manufacturer must also submit a progress report with the alternative compliance plan and an annual progress report by the end of each year the manufacturer requests a delay. For each alternate compliance plan, the manufacturer must submit a sales report to the SCAQMD every six months identifying the number of units shipped into the District, where the units we re sent, and must pay a mitigation fee of $213 for each unit shipped into the District. The mitigation fee will would be used by the SCAQMD to fund NOx emission reduction projects in t he District.

It is estimated that there are over four million re sidential type heating furnaces in the SCAQMD. A typical furnace emits more than one and a half pounds of NOx per year. SCAQMD staff has estimated that PAR 1111 will reduc e emissions from an individual furnace by more than one pound per year. The propo sed amended rule is estimated to reduce annual average emissions of NOx by less than 0.1 ton per day by 2014 and 2. 5 3.1 tons per day by 2023.

CALIFORNIA ENVIRONMENTAL QUALITY ACT PAR 1111 regulates NOx emissions from fan-type gas- fired residential furnaces. Because the proposed project requires discretionary approval by a public agency, it is a “project” as defined by the California Environmenta l Quality Act (CEQA). SCAQMD is the lead agency for the proposed project and has pr epared this Final Environmental Assessment (EA) with no significant adverse impacts pursuant to its Certified Regulatory Program. California Public Resources Code §21080.5 allows public agencies with regulatory programs to prepare a plan or other writ ten document in lieu of an environmental impact report once the Secretary of t he Resources Agency has certified the regulatory program. SCAQMD's regulatory program wa s certified by the Secretary ofFinal Environmental Assessment: Chapter 1

PAR 1111 1-3 November 2009 the Resources Agency on March 1, 1989, and is codif ied as SCAQMD Rule 110. Pursuant to Rule 110, SCAQMD has prepared this Fina l EA.

CEQA and Rule 110 require that potential adverse en vironmental impacts of proposed projects be evaluated and that feasible methods to reduce or avoid significant adverse environmental impacts of these projects be identifi ed. To fulfill the purpose and intent of CEQA, the SCAQMD has prepared this Final EA to address the potential adverse environmental impacts associated with the proposed project. The Final EA is a public disclosure document intended to: (a) provide the l ead agency, responsible agencies, decision makers and the general public with informa tion on the environmental effects of the proposed project; and, (b) be used as a tool by decision makers to facilitate decision making on the proposed project.

SCAQMD’s review of the proposed project shows that the project would not have a significant adverse effect on the environment. The refore, pursuant to CEQA Guidelines §15252, no alternatives or mitigation measures are required to be included in this Final EA. The analysis in Chapter 2 supports the conclus ion of no significant adverse environmental impacts.

PROJECT LOCATION PAR 1111 would apply to applicable natural gas-fire d fan-type residential furnaces within the jurisdiction of the SCAQMD. The SCAQMD has jurisdiction over an area of 10,473 square miles, consisting of the four-county South Coast Air Basin (Basin) and the Riverside County portions of the Salton Sea Air Bas in (SSAB) and the Mojave Desert Air Basin (MDAB). The Basin, which is a subarea of the District, is bounded by the Pacific Ocean to the west and the San Gabriel, San Bernardino, and San Jacinto Mountains to the north and east. The 6,745 square- mile Basin includes all of Orange County and the non-desert portions of Los Angeles, Riverside, and San Bernardino counties. The Riverside County portion of the SSAB and MDAB is bounded by the San Jacinto Mountains in the west and spans eastward up to the Palo Verde Valley. The federal non-attainment area (known as the Coachella Valley Planning Area) is a subregion of both Riverside County and the SSAB and is bounded by the San Jacinto Mountains to the west and the eastern boundary of t he Coachella Valley to the east (Figure 1-1).Final Environmental Assessment: Chapter 1

PAR 1111 1-4 November 2009

S outh C oast A ir Q uality M anagem ent D istrict

SC AQ M D Ju risdiction M ojave D esert
A ir B asin

S alton S ea

A ir B asin S an D iego

A ir B asin S outh
C entral
C oast A ir B asin

S outh C oast

A ir B asin

San D iego C ounty Im perial C ounty R iverside C ounty Los A ngeles C ounty K ern C ounty San B ernardino C ounty

O range C ounty Santa

B arbara C ounty

V entura C ounty S an Joaquin V alley
A ir B asin

Figure 1-1 Boundaries of the South Coast Air Quality Managemen t District

PROJECT OBJECTIVE The general project objectives of PAR 1111 are summ arized as the following:

• Implement 2007 AQMP control measure CMB-03

• Reduce annual average emissions of NOx by 0.1 ton p er day by less than and

2. 5 3.1 tons per day by 2023

• Obtain NOx emissions reductions that will contribut e to attain and maintain state and federal PM 2.5 and eight-hour ozone standards

• Promote implementation of BACT.

PROJECT BACKGROUND
PAR 1111 is based on Control Measure CMB-03 of the SCAQMD 2007 AQMP. Control Measure CMB-03 proposed NOx emission reductions of 50 to 75 percent by requiring

furnaces to meet a NOx emission limit of between 10 to 20 ng/J of heat output (15 to 30 ppm).Final Environmental Assessment: Chapter 1

PAR 1111 1-5 November 2009 Rule 1111 was passed by the SCAQMD Governing Board in December 1978. Beginning January 1, 1984, the rule required residential furn aces to meet a NOx emission limit of 40 ng/J of heat output (equivalent to 55 ppm at 3% oxy gen). The rule also requires

manufacturers to obtain certification of each furna ce model based on source testing using specific test methods identified in the rule and ap proved by the District. In addition, the rule requires manufacturers to identify the model n umber of the furnace on a permanent rating plate and the shipping container. At the ti me of adoption, the SCAQMD Board also considered a requirement that furnaces meet a 12 ng/J NOx emission limit by 1995.

Rule 1111 was amended by the SCAQMD Board in July 1 983 in order to place an upper limit on the size of equipment to limit applicabili ty to units used in residences and small commercial buildings. The rule amendment limited a pplicability to furnaces with a heat input of less than 175,000 British thermal units pe r hour (Btu/hr), or for combination heating and cooling units, a cooling rate of less t han 65,000 Btu/hr. The 1983 amendment also revised the definition of efficiency , exempted units manufactured for use in mobile homes (manufactured housing), and clarifi ed testing procedures.

PAR 1111 affects manufacturers (NAICS 333), distrib utors and wholesalers (NAICS 423), as well as sales outlets (NAICS 44-45) and in stallers (NAICS 23) of natural gasfired furnaces in the District. The units affected by the proposed amended rule are primarily located in residential settings, however, they may include units found in small commercial buildings. SCAQMD staff estimates that there are approximately 4.5 million units currently in the District that will be affect ed by PAR 1111.

PAR 1111 requires new residential heating furnaces to meet lower NOx emission limits starting in 2012. Table 1-1 identifies compliance dates and emission limits for different categories of furnace. Starting October 1, 2012, n ew mobile home furnaces must meet an emission limit of 40 ng/J heat output. Starting Oc tober 1, 2014, a 14 ng/J NOx limit is phased-in for new furnaces. All new units must mee t the 14 ng/J NOx limit by October 1, 2018.
Table 1-1 – Furnace NOx Limits and Compliance Sched ule

The proposed 40 ng/J emission limit for mobile home furnaces is based on the current technology for other residential furnaces. This em ission level can be achieved using current burners. The proposed new 14 ng/J limit is based on several factors. The first is Compliance Date Equipment Category NOx Emission Limit (ng/J)

October 1, 2012 Mobile Home Furnace 40

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 14Final Environmental Assessment: Chapter 1

PAR 1111 1-6 November 2009 that the new burner technology will be the same for any emission limit between 10 and 20 ng/J. While 10 ng/J has already been achieved i n practice by residential tank-type water heaters subject to Rule 1121, a higher limit such as 14 ng/J would be more appropriate for natural gas-fired furnaces because of the likely higher energy output per square inch of burner surface anticipated in reside ntial heating furnaces.

Based on Air Conditioning, Heating, and Refrigerati on Institute (AHRI) data and SCAQMD staff projections, an average of approximate ly 180,000 units are sold each year in the SCAQMD. The average lifetime of a unit is estimated to be approximately 20-25 years. SCAQMD staff has also estimated that approximately four percent of the

units in Southern California are utilized in mobile homes / manufactured housing, 26 percent are condensing units, 60 percent are non-co ndensing (standard) units, and 10 percent are weatherized units. Based on these SCAQ MD staff percentages and the proposed PAR 1111 compliance schedule, Table 1-2 de picts the approximate number of units that will be affected during the following ti me increments based on unit replacement after its estimated useful life (20-25 years).

Table 1-2 – Estimated Number of Units Affected Sche dule

Time Period Equipment Category Number of Units Affected
(per year)

2012-2018 Mobile Home Units 7,200

2014-2038 Condensing Units 46,800

2015-2039 Non-Condensing (standard)

Units 108,000

2016-2040 Weatherized Units 18,000

2018-2042 Mobile Home Furnace 7,200

PROJECT DESCRIPTION The following summarizes the key components of the proposed amended rule. A copy of PAR 1111 is included in Appendix A.

Purpose and Applicability [subdivision (a)]

The purpose of this rule is to reduce NOx emissions from natural gas-fired, fan-type central furnaces, as defined in this rule. This ru le applies to residential and commercial fan-type central furnaces, requiring either single- phase or three-phase electric supply, used for comfort heating with a rated heat input ca pacity 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.

Definitions [subdivision (b)]

The following definitions are included in PAR 1111:

• “Annual fuel utilization efficiency (AFUE)” [paragr aph (b)(1)]Final Environmental Assessment: Chapter 1

PAR 1111 1-7 November 2009 • “BTU” [paragraph (b)(2)]

• “Condensing furnace” [paragraph (b)(3)]

• “Fan type central furnace” [paragraph (b)(4)]

• “Heat input” [paragraph (b)(5)]

• “NOx emissions” [paragraph (b)(6)]

• “Rated heat input capacity” [paragraph (b)(7)]

• “Responsible official” [paragraph (b)(8)]

• “Single firing rate” [paragraph (b)(9)]

• “Useful heat delivered to the heated space” [paragr aph (b)(10)]

• “Variable firing rate” [paragraph (b)(11)]

• “Weatherized” [paragraph (b)(12)]

Requirements [subdivision (c)]

PAR 1111 requires new residential heating furnaces to meet lower NOx emission limits starting in 2012. Table 1-1 identifies compliance dates and emission limits for different categories of furnace. Starting October 1, 2012, n ew mobile home furnaces must meet an emission limit of 40 ng/J heat output. Starting Oc tober 1, 2014, a 14 ng/J NOx limit is phased-in for new furnaces. All new units must mee t the 14 ng/J NOx limit by October 1, 2018. The proposed amended rule will not change the current natural gas-fired furnace distribution system and will not change the replace ment schedule of existing furnaces.

The propose d 40 ng/J emission limit for mobile home furnaces i s based on the current technology for other residential furnaces. This em ission level can be achieved using current burners. The proposed new 14 ng/J limit is based on several factors. The first is

that the new burner technology will be the same for any emission limit between 10 and 20 ng/J. While 10 ng/J has already been achieved i n practice by residential tank

- type water heaters subject to Rule 1121, a higher limit such as 14 ng/J would be more

approp riate in because of the likely higher energy output per square inch of burner surface anticipated in residential heating furnaces

.

Certification, Identification of Compliant Units, a nd Enforcement [subdivisions (d), (e), and (f)]

PAR 1111 updates references to test methods for det ermining compliance with rule emission limits and continues the SCAQMD program fo r manufacturers to certify the emission level of their products. PAR 1111 also ma kes labeling requirements more specific. The SCAQMD will inspect distributors, re tailers and installers and conduct tests as necessary to ensure compliance with emissi on limits, the certification program, and labeling requirements.Final Environmental Assessment: Chapter 1

PAR 1111 1-8 November 2009 Exemptions [subdivision (g)]

To allow for the depletion of existing inventories, PAR 1111 allows a temporary 300 day exemption for units manufactured before the complia nce date and delivered into the SCAQMD prior to the compliance date. PAR 1111 also continues the current exemption

for mobile home furnaces installed in mobile homes before October 1, 2012. until these units must comply with the 40 ng/J NOx emission lim it on October 1, 2012. As the r ule only applies to natural gas

- fired units, exemptions are not needed for units fi red with

other fuels.

Rebate Incentives for Early Compliance [subdivision (h)]

In an effort to encourage the early introduction of the 14 ng/J units into the marketplace and provide manufacturers with a means of partially recovering their product development costs, PAR 1111 provides an incentive f or early compliance. Specifically, manufacturers will be eligible to receive a rebate payment of $75 for each 14 nanograms per Joule standard efficiency furnace sold and deli vered into the District 90 days prior to the applicable compliance date. Further, to promot e the introduction of not just compliant but also more energy efficient units, the proposal offers manufacturers a rebate payment of $90 for each 14 ng/J high efficiency (gr eater than or equal to 90 percent annual fuel utilization efficiency) furnace deliver ed and sold into the District 90 days prior to the compliance date. As funds are limited , payments for early compliance will be on a first come first served basis. PAR 1111 propo ses a cap of $3,000,000 on early compliance rebates to all manufacturers.

Alternate Compliance Option

Athough not part of the currently proposed amendmen ts, an alternative compliance option was analyzed. For Under the alternative compliance option, manufacturers that fail to develop compliant products by the proposed compl iance dates PA R 1111 may be

revised to provide s an alternative compliance option that allows a manu facturer to may request an extension of the effective date of up to three years provided the manufacturer pays a mitigation fee for each unit distributed or sold into the SCAQMD. The alternate compliance option is intended to allow manufacturer s that need more time for product development to continue distributing their existing products which will alleviate any potential disruption in product availability. The mitigation fee component of the alternative compliance option will provide an ongoi ng incentive for manufacturers to continue their product development effort.

As part of this alternative compliance option, f or any category of furnace identified in the rule, a manufacturer may request a delayed complian ce date of up to three years. To request a delay, a manufacturer must submit an alte rnative compliance plan that requests the alternative compliance date and identifies when compliant products will be

manufactured and sold. The manufacturer must also submit a progress report with the alternative compliance plan and an annual progress report by the end of each year the manufacturer requests a delay. For each alternate compliance plan, the manufacturer must submit a sales report to the SCAQMD every six months identifying the number of units shipped into the District, where the units we re sent, and must pay a mitigation fee ofFinal Environmental Assessment: Chapter 1

PAR 1111 1-9 November 2009 $213 for each unit shipped into the District. The mitigation fee will be used by the SCAQMD to fund NOx emission reduction projects in t he District.

SUMMARY OF AFFECTED EQUIPMENT AND METHODS OF COMPLI ANCE

PAR 1111 affects manufacturers (NAICS 333), distrib utors and wholesalers (NAICS 423), as well as sales outlets (NAICS 44-45) and in stallers (NAICS 23) of natural gasfired furnaces in the District. The AHRI, the manu facturer’s trade organization, indicates that there are no manufacturers of fan-type gas-fir ed residential furnaces in the SCAQMD. However, these companies do maintain regio nal sales offices and distribution centers in the SCAQMD. The units affe cted by the proposed amended rule are used mostly in residential structures, however, they may also be located in commercial settings for heating small buildings. T he proposed amended rule will not change the current natural gas-fired furnace distri bution system and will not change the replacement schedule of existing furnaces.

Based on gas usage data from the California Energy Commission (CEC) and the Southern California Gas Company (SCGC), annual aver age NOx emissions from residential heating using natural gas were 9.7 tons per day (tons/day) in 2002 and are estimated to be 10.5 and 11.1 tons/day in 2012 and 2023 respectively. As most emissions occur between October and May, daily emissions in t hese months are higher.

Compliance with PAR 1111 means that the equipment, at the time of manufacture, will be equipped with compliant low NOx burner technolog y that has been certified by the

manufacturer to achieve the NOx emission standards. Compliance dates and emission limits for different categories of furnace are iden tified in Table 1-1. Starting October 1, 2012, new mobile home furnaces must meet an emissio n limit of 40 ng/J heat output. Starting October 1, 2014, a 14 ng/J NOx limit is ph ased-in for new furnaces. All new units must meet the 14 ng/J NOx limit by October 1, 2018. It is estimated that there are over four million residential type heating furnaces in the SCAQMD. A typical furnace emits more than one and a half pounds of NOx per ye ar. SCAQMD staff has estimated

that PAR 1111 will reduce emissions from an individ ual furnace by more than one pound per year. The proposed amended rule is estimated t o reduce annual average emissions of NOx by 0.1 ton per day by less than and 2. 5 3.1 tons per day by 2023.

The proposed 40 ng/J emission limit for mobile home furnaces is based on the current technology for other residential furnaces. This em ission level can be achieved using current burners. The proposed new 14 ng/J limit is based on several factors. While low NOx burners are not currently used in residential f urnaces, the technology is used in other applications. New burners developed for use in res idential furnaces are likely to use improved premixing, staged combustion, and increase d excess air. A burner developed for residential furnaces by the Gas Research Instit ute uses these technologies to reduce NOx emissions below 30 ppm (U.S. Patent 6,071,115). Another burner developed at Lawrence Berkeley National Laboratory uses these te chniques and can achieve NOx emission levels as low as 10 ppm (http://eetd.lbl.g ov/aet/combustion/LSC-info/). An alternative approach is to use increased surface ar ea combined with premixing andFinal Environmental Assessment: Chapter 1

PAR 1111 1-10 November 2009 increased excess air to reduce NOx emissions to as low as 15 ppm (10 ng/J). Two burners currently developed for use in residential tank type water heaters sold in the SCAQMD use these techniques.C H A P T E R 2 - E N V I R O N M E N T A L C H E C K L I S T

Introduction

General Information

Environmental Factors Potentially Affected

Determination

Environmental Checklist and DiscussionFinal Environmental Assessment: Chapter 2

PAR 1111 2-1 November 2009 INTRODUCTION The environmental checklist provides a standard eva luation tool to identify a project's potential adverse environmental impacts. This checklist iden tifies and evaluates potential adverse environmental impacts that may be created by the pr oposed project.

GENERAL INFORMATION

Project Title: Proposed Amended Rule 1111 – NOx Emissions From Natural Gas-Fired , Fan-Type Central Furnaces

Lead Agency Name: South Coast Air Quality Managemen t District

Lead Agency Address: 21865 Copley Drive Diamond Bar, CA 91765

CEQA Contact Person: Mr. Jeffrey Inabinet (909) 39 6-2453

Rule 1147 Contact Person Mr. Wayne Barcikowski (90 9) 396-3077

Project Sponsor's Name: South Coast Air Quality Man agement District

Project Sponsor's Address: 21865 Copley Drive Diamond Bar, CA 91765

General Plan Designation: Not applicable

Zoning: Not applicable

Description of Project: PAR 1111 will reduce NOx emissions from natural gas

fired, fan-type central furnaces

. PAR 1111 requires new residential heating furnaces to meet lower NOx emis sion limits starting in 2012. Starting October 1, 2012, new mobile home furnaces must meet an emission limit of 40 ng/J heat output. Starting October 1, 2014, a 14 n g/J NOx limit is phased-in for new furnaces (based on category of furnace). All new units must meet the 14 ng/J NOx limit by October 1, 2018. The proposed 40 ng/J emission limit for mobile home furnaces is bas ed on the current technology for other residential furnac es. The proposed 14 ng/J emission limit is based on low-NOx burner technology used in other residential applica tions. The proposed amended rule will not change the curre nt natural gas-fired furnace distribution system and w ill not change the replacement schedule of existing furnace s. The proposed amended rule is estimated to reduce an nual average emissions of NOx by less than 0.1 ton per day by

2014 and 2. 5 3.1 tons per day by 2023.

Surrounding Land Uses and Setting: Not applicable.

Other Public Agencies Whose Approval is Required: Not applicable.Final Environmental Assessment: Chapter 2

PAR 1111 2-2 November 2009 ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED The following environmental impact areas have been assessed to determine their potential to be affected by the proposed project. As indicated by the checklist on the following pages, environmental topics marked with an "  " may be adversely affected by the proposed project

. An explanation relative to the determination of imp acts can be found following the checklist for

each area.

Aesthetics Agriculture Resources Air Quality

Biological Resources Cultural Resources Energy

Geology/Soils Hazards & Hazardous

Materials Hydrology/ Water Quality

Land Use/Planning Mineral Resources Noise

Population/Housing Public Services Recreation

Solid/Hazardous Waste Transportation/

Traffic Mandatory Findings of SignificanceFinal Environmental Assessment: Chapter 2

PAR 1111 2-3 November 2009 DETERMINATION

On the basis of this initial evaluation:



###  I find the proposed project, in accordance with tho se findings made pursuant to CEQA Guideline §15252, COULD NOT have a significant effect on the environment, and that an ENVIRONMENTAL ASSESSMENT w ith no significant impacts will be prepared.



### I find that although the proposed project could hav e a significant effect on the environment, there will NOT be significant effects in this case because revisions in the project have been made by or agree d to by the project proponent. An ENVIRONMENTAL ASSESSMENT with no sig nificant impacts will be prepared.

I find that the proposed project MAY have a signif icant effect(s) on the environment, and an ENVIRONMENTAL ASSESSMENT will b e prepared.

I find that the proposed project MAY have a "poten tially significant impact" on the environment, but at least one effect 1) has bee n adequately analyzed in an earlier document pursuant to applicable legal stand ards, and 2) has been addressed by mitigation measures based on the earli er analysis as described on

attached sheets. An ENVIRONMENTAL ASSESSMENT is re quired, but it must analyze only the effects that remain to be add ressed.

I find that although the proposed project could ha ve a significant effect on the environment, because all potentially significant ef fects (a) have been analyzed adequately in an earlier ENVIRONMENTAL ASSESSMENT p ursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier ENVIRONMENTAL ASSESSMENT, including revisio ns or mitigation measures that are imposed upon the proposed project , nothing further is required.

Date: November 6, 2009 Signature: Steve Smith, Ph.D. Program SupervisorFinal Environmental Assessment: Chapter 2

PAR 1111 2-4 November 2009 ENVIRONMENTAL CHECKLIST AND DISCUSSION

As discussed in Chapter 1, the main focus of PAR 11 11 is to reduce NOx emissions from natural gas-fired, fan-type central furnaces. The units re gulated by PAR 1111 are primarily located in residential settings, however, they may also be found include units in small commercial buildings. PAR 1111 requires new residential heati ng furnaces to meet lower NOx emission limits starting in 2012. Starting October 1, 2012, new mobile home furnaces must meet an emission limit of 40 ng/J heat output. Starting Oc tober 1, 2014, a 14 ng/J NOx limit is phased-in for new furnaces (based on category of furnace). A ll new units must meet the 14 ng/J NOx limit by October 1, 2018. The proposed 40 ng/J emission limit for mobile home furnaces is based on the current technology for other residential furnac es. The proposed 14 ng/J emission is based on low-NOx burner technology used in other residential applications. The proposed amended rule is estimated to reduce annual average emissions of NOx by 0.1 ton per day by less than and

2.5 3.1 tons per day by 2023.

Manufacturers, distributors, retailers, and install ers of new units will be expected to comply with the proposed requirements in PAR 1111. Compliance with PAR 1111 for a new unit means that the equipment, at the time of manufacture, will be equipped with compliant low NOx burner technology that has been certified by the manufactu rer to achieve the NOx emission standards. Currently existing units are not required to comply with the new NOx emission limits. Therefore, no add-on control equipment is expected to be used. As a result, complying with PAR 1111 is not expected to require any activities using welders, forklifts, etc., to remove and install new equipment or replace old burners with c ompliant low NOx burners. Since compliant units will be installed at the end of existing unit s operable lifetimes in existing equipment locations, no site preparation or grading activitie s requiring large construction equipment will be necessary. Thus, answers to the following checklis t items are based on the assumption that compliant low NOx burner technology at the time of manufacture will be used to meet the requirements of PAR 1111.

Potentially Significant Impact Less Than

Significant Impact No Impact

I. AESTHETICS. Would the project:

a) Have a substantial adverse effect on a scenic

vista? 

b) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? 

c) Substantially degrade the existing visual character or quality of the site and its surroundings? Final Environmental Assessment: Chapter 2

PAR 1111 2-5 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

d) Create a new source of substantial light or glare which would adversely affect day or nighttime

views in the area? 

Significance Criteria The proposed project impacts on aesthetics will be considered significant if:

- The project will block views from a scenic highway or corridor.

- The project will adversely affect the visual contin uity of the surrounding area.

- The impacts on light and glare will be considered s ignificant if the project adds lighting which would add glare to residential areas or s ensitive receptors.

Discussion I.a), b), c) & d) PAR 1111 applies to new residential heating furna ces. Compliance with PAR 1111 for a new unit means that the equipment, at th e time of manufacture, will be equipped with compliant low NOx burner technology that has been c ertified by the manufacturer to achieve the NOx emission standards. Implementation of PAR 1111 would not require the construction of new buildings or other structures that would obstru ct scenic resources or degrade the existing visual character of a site, including but not limit ed to, trees, rock outcroppings, or historic buildings. Further, PAR 1111 would not involve the demolition of any existing buildings or facilities, require any subsurface activities, requ ire the acquisition of any new land or the surrendering of existing land, or the modification of any existing land use designations or zoning ordinances. Thus, the proposed project is not expe cted to degrade the visual character of any site or its surroundings, affect any scenic vista, or da mage scenic resources. Since the proposed project affects new residential heating units and d oes not require the addition of lighting, it is not expected to create any new source of substantial li ght or glare.

Based upon these considerations, significant advers e aesthetics impacts are not anticipated and will not be further analyzed in this Final EA. Since no significant aesthetics impacts were identified, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

II. AGRICULTURE RESOURCES. Would the project:

a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland mapping and Monitoring Program ofthe California Resources Agency, to nonagricultural use? Final Environmental Assessment: Chapter 2

PAR 1111 2-6 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

b) Conflict with existing zoning for agricultural u se, or a Williamson Act contract? 

c) Involve other changes in the existing environmen t which, due to their location or nature, could resul t in conversion of Farmland, to non-agricultural

use? 

Significance Criteria Project-related impacts on agricultural resources w ill be considered significant if any of the following conditions are met:

- The proposed project conflicts with existing zoning or agricultural use or Williamson Act

contracts.

- The proposed project will convert prime farmland, u nique farmland or farmland of statewide importance as shown on the maps prepared pursuant t o the farmland mapping and monitoring program of the California Resources Agency, to non- agricultural use.

- The proposed project would involve changes in the e xisting environment, which due to their location or nature, could result in conversion of f armland to non-agricultural uses.

II.a), b), & c) Compliance with PAR 1111 means installing new comp liant units with low NOx burner technology. The residences that will be aff ected by the implementation of PAR 1111 are located within urbanized areas that are typically d esignated as residential or commercial (for units located within small commercial structures). Therefore, installing a new compliant unit at the end of a current unit’s operable lifetime to co mply with PAR 1111 would not result in any new construction of buildings or other structures t hat would convert any classification of farmland to non-agricultural use or conflict with z oning for agricultural use or a Williamson Act

contract.

Based upon these considerations, significant agricu ltural resource impacts are not anticipated and will not be further analyzed in this Final EA. Since no significant agriculture resources im pacts were identified, no mitigation measures are necessa ry or required.

Potentially Significant Impact Less Than

Significant Impact 

### No Impact

III. AIR QUALITY. Would the project:

a) Conflict with or obstruct implementation of the applicable air quality plan? 

b) Violate any air quality standard or contribute t o an existing or projected air quality violation? Final Environmental Assessment: Chapter 2

PAR 1111 2-7 November 2009 Potentially Significant Impact Less Than

Significant Impact 

### No Impact

c) Result in a cumulatively considerable net increa se of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions that exceed quantitative thresholds for ozone precursors)? 

d) Expose sensitive receptors to substantial pollut ant
concentrations? 

e) Create objectionable odors affecting a substanti al number of people? 

f) Diminish an existing air quality rule or future compliance requirement resulting in a significant increase in air pollutant(s)? 

g) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment, based on applicable threshold of significance? 

h) Conflict with any applicable plan, policy or regulation of an agency adopted for the purpose of reducing the emissions of greenhouse gases? 

III.a) Attainment of the state and federal ambient air q uality standards protects sensitive receptors and the public in general from the advers e effects of criteria pollutants which are

known to have adverse human health effects. Based on the discussion under items III. b), c) and f), the lower future NOx emission limits proposed i n PAR 1111 contribute to carrying out the goals of the 2007 AQMP, specifically, the goals of control measure CMB-03, by replacing the affected units at the end of their operable life to meet current BACT standards. Further, reducing NOx emissions from all affected PAR 1111 units help s contribute to attaining and maintaining the state and federal ambient air quality standards . Thus, because PAR 1111 implements a portion of this control measure in the 2007 AQMP wh ich results in achieving NOx reductions, the proposed project does not obstruct implementati on of the applicable AQMP.

III.b), c) & f) For a discussion of these items, refer to the fol lowing analysis.

Air Quality Significance Criteria To determine whether or not air quality impacts fro m adopting and implementing the proposed amendments are significant, impacts will be evaluat ed and compared to the criteria in Table 2-1. If impacts equal or exceed any of the criteria in T able 2-1, air quality impacts will be considered significant. All feasible mitigation measures will be identified and implemented to reduce significant impacts to the maximum extent feasible.Final Environmental Assessment: Chapter 2

PAR 1111 2-8 November 2009 Table 2-1 Air Quality Significance Thresholds 4

Mass Daily Thresholds
Pollutant Construction Operation
NOx 100 lbs/day 55 lbs/day

VOC 75 lbs/day 55 lbs/day

PM10 150 lbs/day 150 lbs/day

PM2.5 55 lbs/day 55 lbs/day

Sox 150 lbs/day 150 lbs/day

CO 550 lbs/day 550 lbs/day

Lead 3 lbs/day 3 lbs/day

Toxic Air Contaminants and Odor Thresholds

Toxic Air Contaminants (TACs)
Accidental Release of Acutely Hazardous Materials (AHMs) MICR > 10 in 1 million ; HI > 1.0 (project increment)
CAA §112(r) threshold quantities

Odor Project creates an odor nuisance pursuant to S CAQMD Rule 402

Ambient Air Quality for Criteria Pollutants (a)

NO2

1-hour average annual average SCAQMD is in attainment; project is significant if it causes or contributes to an exceedance of the following attai nment standards: 0.25 ppm (state) 0.053 ppm (federal)

PM10 24-hour average

annual geometric average

annual arithmetic mean 10.4 μ g/m 3 (construction) (b) & 2.5 μ g/m 3 (operation)

1.0 μ g/m 3

20 μ g/m 3

PM2.5 24-hour average 10.4 μ g/m 3 (construction) (b) & 2.5 μ g/m 3 (operation)

Sulfate
24-hour average 1 ug/m 3

CO

1-hour average
8-hour average SCAQMD is in attainment; project is significant if it causes or contributes to an exceedance of the following attai nment standards:

20 ppm (state) 9.0 ppm (state/federal)

(a) Ambient air quality thresholds for criteria polluta nts based on SCAQMD Rule 1303, Table A-2 unless oth erwise stated. (b) Ambient air quality threshold based on SCAQMD Rule 403.

KEY: MICR = maximum individual cancer risk HI = Haza rd Index ug/m 3 = microgram per cubic meter ppm = parts per millio n AHM = acutely hazardous material; TAC = toxic air c ontaminant

4 CEQA Air Quality Handbook, SCAQMD, November 1993.Final Environmental Assessment: Chapter 2

PAR 1111 2-9 November 2009 Construction Air Quality Impacts Construction-related emissions can be distinguished as either onsite or offsite. Onsite emissions generated during construction principally consist o f exhaust emissions (NOx, SOx, CO, VOC, and PM10) from the operation of heavy-duty construc tion equipment, fugitive dust (as PM10) from disturbed soil, and VOC emissions from asphalt ic paving and painting. Offsite emissions during the construction phase normally consist of e xhaust emissions and entrained paved road dust (as PM10) from worker commute trips, material delivery trips, and haul truck material removal trips to and from the construction site.

Compliance with PAR 1111 means that the equipment, at the time of manufacture, will be equipped with compliant low NOx burner technology t hat has been certified by the manufacturer

to achieve the NOx emission standards. Based on th e above description of construction activities, the proposed project is not expected to generate construction-related emissions, so no adverse impacts are expected . There are no requirements in PAR 1111 to perform any construction or associated activities (e.g. demolit ion or building of structures, facilities, infrastructure, or installation of control equipmen t) because the proposed amendments do not require any physical modifications at affected manu facturing facilities. Further, there are reportedly no furnace manufacturers located in the District.

Operational Air Quality Impacts The overall objective of the proposed project is to reduce NOx emissions from natural gas-fired, fan-type central furnaces. Compliance with PAR 111 1 means that the equipment, at the time of manufacture, will be equipped with compliant low NO x burner technology that has been certified by the manufacturer to achieve the NOx emission sta ndards. PAR 1111 is expected to permanently reduce NOx emissions from the affected source category by approximately less than 0.1 ton per day by 2014 and 2.5 3.1 tons per day by 2023, so no adverse impacts are ex pected from operational emissions . No other operational emissions changes are expec ted from implementing PAR 1111.

Changes to NOx Emissions PAR 1111 would require affected equipment to meet N Ox emission limits beginning in 2012. Table 1-1 in Chapter 1 contains a summary of the af fected equipment categories and gaseous fuel limits proposed in PAR 1111. The proposed com pliance dates for each affected equipment category are presented in Table 1-2 in Chapter 1.

Based on gas usage data from the CEC and the SCGC, annual average NOx emissions from residential heating using natural gas were 9.7 tons /day in 2002, and are estimated to be 10.5 and 11.1 tons/day in 2012 and 2023 respectively. By 20 14, PAR 1111 is expected to reduce the NOx inventory from affected equipment subject to the ru le by less than 0.1 tons per day by 2014 and

2.5 3.1 tons per day by 2023. Emission reductions were ca lculated based on current emission limits and the proposed emission limits.

Based on the above information, there are no signif icant adverse construction or operational air quality impacts generated by the proposed project.

Summary of Global Warming Impacts Significant changes in global climate patterns have recently been associated with global warming, an average increase in the temperature of the atmosphere near the Earth’s surface,

attributed to accumulation of GHG emissions in the atmosphere. GHGs trap heat in theFinal Environmental Assessment: Chapter 2

PAR 1111 2-10 November 2009 atmosphere, which in turn heats the surface of the Earth. Some GHGs occur naturally and are emitted to the atmosphere through natural processes , while others are created and emitted solely through human activities. The emission of GHGs thr ough the combustion of fossil fuels (i.e., fuels containing carbon) in conjunction with other human activities, appears to be closely associated with global warming. State law defines GHG to include the following: carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (S F 6 ) (Health and Safety Code §38505(g)).

The most common GHG that results from human activit y is CO 2 , followed by CH 4 and N 2 O.

The analysis of GHGs is a much different analysis t han the analysis of criteria pollutants for the following reasons. For criteria pollutants, the si gnificance thresholds are based on daily

emissions because attainment or non-attainment is b ased on daily exceedances of applicable ambient air quality standards. Further, several am bient air quality standards are based on relatively short-term exposure effects on human hea lth, e.g., one-hour and eight-hour standards. Since the half-life of CO2 is approximately 100 yea rs, for example, the effects of GHGs occur over a longer term which means they affect the glob al climate over a relatively long time frame. As a result, the SCAQMD’s current position is to ev aluate the effects of GHGs over a longer timeframe than a single day. Although GHG emission s are typically considered to be cumulative impacts because they contribute to global climate e ffects, this Final EA analyzes the GHG emissions as project specific impacts because of th e close relationship between CO and CO2 emissions from the compliance options.

Based on the type and size of equipment affected by PAR 1111, CO2 emissions from the operation of the compliant units are likely to decr ease from current levels due to improved burner efficiency. Therefore, no fuel penalty is a ssociated with PAR 1111 and CO2 emissions were not required to be evaluated for operational a ctivities. Additionally, compliance with PAR 1111 means that the equipment, at the time of manuf acture, will be equipped with compliant low NOx burner technology that has been certified by th e manufacturer to achieve the NOx emission standards. Therefore, the proposed project is not expected to generate construction-related CO2

emissions.

The SCAQMD has convened a “Greenhouse Gas CEQA Sign ificance Threshold Working Group” to consider a variety of benchmarks and pote ntial significance thresholds to evaluate GHG impacts. On December 5, 2008, the SCAQMD adopt ed an interim CEQA GHG Significance Threshold for projects where SCAQMD is the lead agency (SCAQMD, 2008). This interim threshold is set at 10,000 MT CO2eq per yea r. The SCAQMD prepared a “Draft Guidance Document – Interim CEQA GHG Significance T hresholds” that outlined the approved tiered approach to determine GHG significance of pr ojects (SCAQMD, 2008, pg. 3-10). The first two tiers involve (1) exempting the project b ecause of potential reductions of GHG emissions allowed under CEQA and (2) demonstrating that the project’s GHG emissions are consistent with a local general plan. Tier 3 propo ses a limit of 10,000 MT CO2eq per year as the incremental increase signifying significance (SCAQM D, 2008, pg. 3-11). Tier 4 (performance standards) is currently not approved. Tier 5 impos es mitigation measures that would reduce the GHG impacts to below the Tier 3 brightline threshol d. Projects with incremental increases below this threshold will not be cumulatively consi derable.

Since the proposed project is not expected to gener ate construction-related CO2 emissions, and the operational phase of the proposed project is no t expected to generate any additional GHG emissions, cumulative GHG adverse impacts from PAR 1111 are not considered significant.Final Environmental Assessment: Chapter 2

PAR 1111 2-11 November 2009 PAR 1111 is part of a comprehensive ongoing regulat ory program that includes implementing related SCAQMD 2007 AQMP control measures as amende d or new rules to attain and maintain with a margin of safety all state and national ambi ent air quality standards for all areas within its jurisdiction. The 2007 AQMP estimates a CO2 reduct ion of 427,849 metric tons per year by 2014, and a CO2 reduction of 1,523,445 metric tons per year by 2020. Therefore, the effects of PAR 1111 in connection with other 2007 AQMP control measures is are not considered to be cumulatively considerable and, therefore, its effec ts is are not considered to be a significant cumulative GHG impact.

Conclusion Based on the preceding discussion, PAR 1111 is expe cted to reduce the NOx inventory from affected equipment subject to the rule by less than 0.1 tons per day by 2014 and 2.5 3.1 tons per day by 2023, which is an air quality benefit. Thus , PAR 1111 is not expected to result in significant adverse air quality impacts. Further, implementing PAR 1111 would not diminish an existing air quality rule or future compliance requ irement, nor conflict with or obstruct implementation of the applicable air quality plan. The proposed project has no provision that would cause a violation of any air quality standard or directly contribute to an existing or projected air quality violation. Since air quality impacts from implementing PAR 1111 are seen as benefits and do not exceed any of the air qualit y significance thresholds in Table 2-1, air quality impacts are not considered to be cumulative ly considerable as defined in CEQA Guidelines §15065(c). Therefore, the proposed proj ect is not expected to result in a cumulatively considerable net increase of any criteria pollutant or GHGs.



### III.d) Affected equipment is not expected to increase expo sure by sensitive receptors to substantial pollutant concentrations from the imple mentation of PAR 1111 for the following reasons: 1) affected equipment is primarily locate d in existing residential and/or commercial areas; 2) there are no emission increases associate d with the proposed project; and, 3) installation of any new equipment subject to PAR 1111 is expecte d to reduce NOx emissions from affected equipment. Therefore, significant adverse air qual ity impacts to sensitive receptors are not expected from implementing PAR 1111.

III.e) Historically, the SCAQMD has enforced odor nuisanc e complaints through SCAQMD Rule 402 - Nuisance. Affected equipment is not exp ected to create objectionable odors affecting a substantial number of people for the following re asons: 1) there are no emission increases associated with the proposed project; 2) no heavy-d uty construction equipment with associated diesel exhaust odors are necessary to install compl iant equipment; 3) typically no odors are associated with combustion equipment (heating furna ces) operating in accordance with Rule 1111; and, 4) installation of any new equipment sub ject to PAR 1111 is expected to reduce NOx emissions from affected equipment. Therefore, no s ignificant odor impacts are expected to result from implementing the PAR 1111.

III. g) & h) Based on the type and size of equipment affected by PAR 1111, CO2 emissions from the operation of the compliant units are likel y to decrease from current levels due to improved burner efficiency. Therefore, no fuel pen alty is associated with PAR 1111 and CO2 emissions were not required to be evaluated for ope rational activities. Additionally, compliance with PAR 1111 means that the equipment, at the time of manufacture, will be equipped with compliant low NOx burner technology that has been c ertified by the manufacturer to achieve the NOx emission standards. Therefore, the proposed pr oject is not expected to generate construction-related CO2 emissions. The proposed a mended rule will not change the currentFinal Environmental Assessment: Chapter 2

PAR 1111 2-12 November 2009 natural gas-fired furnace distribution system and w ill not change the replacement schedule of existing furnaces. Since the proposed project is n ot expected to generate construction-related CO2 emissions, and the operational phase of the pro posed project is not expected to generate any additional GHG emissions, cumulative GHG adverse im pacts from PAR 1111 are not considered significant.

Potentially Significant Impact Less Than

Significant Impact No Impact

IV. BIOLOGICAL RESOURCES. Would the project:

a) Have a substantial adverse effect, either direct ly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies

, or regulations, or by the California Department

of Fish and Game or U.S. Fish and Wildlife

Service? 

b) Have a substantial adverse effect on any riparia n habitat or other sensitive natural community identified in local or regional plans, policies, or regulations, or by the California Department of

Fish and Game or U.S. Fish and Wildlife

Service? 

c) Have a substantial adverse effect on federally protected wetlands as defined by §404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or

other means? 

d) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? 

e) Conflicting with any local policies or ordinance s protecting biological resources, such as a tree preservation policy or ordinance? 

f) Conflict with the provisions of an adopted Habit at Conservation plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? Final Environmental Assessment: Chapter 2

PAR 1111 2-13 November 2009 Significance Criteria Impacts on biological resources will be considered significant if any of the following criteria apply:

- The project results in a loss of plant communities or animal habitat considered to be rare, threatened or endangered by federal, state or local agencies.

- The project interferes substantially with the movem ent of any resident or migratory wildlife species.

- The project adversely affects aquatic communities t hrough construction or operation of the project.

Discussion IV.a), b), c), & d) Compliance with PAR 1111 means installing new com pliant units or replacing existing units at the end of their useful lifetime with units utilizing low NOx burner technology. Therefore, installing new equipment to comply with PAR 1111 would not result in any new construction of buildings or other structur es. In general, the areas where affected equipment are located currently do not typically su pport riparian habitat, federally protected wetlands, or migratory corridors. Additionally, sp ecial status plants, animals, or natural communities are not expected to be found in close p roximity to locations were new compliant equipment would be installed.

IV.e) & f) PAR 1111 is not envisioned to conflict with local policies or ordinances protecting biological resources nor local, regional, or state conservation plans because it will only affect combustion equipment primarily located in residenti al settings or small commercial structures. Additionally, PAR 1111 will not conflict with any a dopted Habitat Conservation Plan, Natural Community Conservation Plan, or any other relevant habitat conservation plan for the same

reason.

The SCAQMD, as the Lead Agency for the proposed pro ject, has found that, when considering the record as a whole, Further, there is no evidence that the proposed project wil l have potential for any new adverse effects on wildlife resources o r the habitat upon which wildlife depends. Accordingly, based upon the preceding information, the SCAQMD has, on the basis of substantial evidence, rebutted the presumption of a dverse effec t contained in §753.5 (d), Title 14 of the California Code of Regulations.

Based upon these considerations, significant advers e biological resources impacts are not anticipated from the proposed project. and will not be further analyzed in this Final EA. Since the proposed project is not expected to have no significant adverse biological resources impacts, were identified, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

V. CULTU RAL RESOURCES. Would the project:

a) Cause a substantial adverse change in the significance of a historical resource as defined in §15064.5? Final Environmental Assessment: Chapter 2

PAR 1111 2-14 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

b) Cause a substantial adverse change in the significance of an archaeological resource as defined in §15064.5? 

c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 

d) Disturb any human remains, including those interred outside a formal cemetery? 

Significance Criteria Impacts to cultural resources will be considered si gnificant if:

- The project results in the disturbance of a signifi cant prehistoric or historic archaeological site or a property of historic or cultural signific ance to a community or ethnic or social group.

- Unique paleontological resources are present that c ould be disturbed by construction of the proposed project.

- The project would disturb human remains.

Discussion V.a), b), c), & d) Since no construction-related activities associat ed with installing compliant equipment are expected, no impacts to historical re sources are expected to occur as a result of this project. PAR 1111 is not expected to require physical changes to the environment, which may disturb paleontological or archaeological resou rces. Furthermore, it is envisioned that the areas where the affected equipment exists are alrea dy either devoid of significant cultural resources or whose cultural resources have been pre viously disturbed.

Based upon these considerations, significant advers e cultural resources impacts are not expected

from the implementing PAR 1111. and will not be further ass essed in this Final EA. Since no significant cultural resources impacts were identif ied, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

VI. ENERGY. Would the project:

a) Conflict with adopted energy conservation plans? 

b) Result in the need for new or substantially altered power or natural gas utility systems? Final Environmental Assessment: Chapter 2

PAR 1111 2-15 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

c) Create any significant effects on local or regional energy supplies and on requirements for additional energy? 

d) Create any significant effects on peak and base period demands for electricity and other forms of energy? 

e) Comply with existing energy standards? 

Significance Criteria Impacts to energy and mineral resources will be con sidered significant if any of the following

criteria are met:

- The project conflicts with adopted energy conservat ion plans or standards.

- The project results in substantial depletion of exi sting energy resource supplies.

- An increase in demand for utilities impacts the cur rent capacities of the electric and natural gas utilities.

- The project uses non-renewable resources in a waste ful and/or inefficient manner.

Discussion VI.a) & e) Compliance with PAR 1111 means installing new com pliant units or replacing existing units at the end of their useful lifetime with units utilizing low NOx burner technology.

Installation of new units with low NOx burners or r eplacing existing equipment with new compliant equipment is expected to result in a slig ht reduction in demand for natural gas, as new burners are expected to be more efficient than exis ting affected equipment. As a result, PAR 1111 would not conflict with energy conservation pl ans, use non-renewable resources in a wasteful manner, or result in the need for new or s ubstantially altered power or natural gas systems. Since PAR 1111 would affect equipment tha t is primarily located in existing residential and/or commercial areas, it will not conflict with adopted energy conservation plans because existing structures where new compliant units would be installed would be expected to continue implementing any existing energy conservation plans , because it is expected that compliant equipment will be more efficient than existing equi pment. Additionally, new equipment is expected to comply with existing energy conservatio n plans and standards to minimize operating costs, while still complying with the requirements of PAR 1111. Accordingly these impact issues will not be further analyzed in the Final EA.

VI.b), c), & d) PAR 1111 would not create any significant effects on peak and base period demands for electricity and other forms of energy s ince no construction of buildings or other structures are anticipated as a result of the insta llation of new compliant equipment that utilizes low NOx burner technology.

The majority of the universe of sources that would be regulated by PAR 1111 is fired with natural gas. As discussed in the air quality secti on regarding GHG emissions, due to low NOx burner use in new compliant units, implementation o f PAR 1111 is expected to result in a slightFinal Environmental Assessment: Chapter 2

PAR 1111 2-16 November 2009 decrease in the demand for natural gas. Based upon these considerations, the proposed project is not expected to use energy in a wasteful manner. T here will be no substantial depletion of energy resources nor will significant amounts of fu el be needed when compared to existing supplies. Additionally, the proposed amended rule will not change the current natural gas-fired furnace distribution system and will not change the replacement schedule of existing furnaces.

Furnace manufacturers have expressed concern that a mitigation fee could cause developers and homeowners to switch to alternatives such as heat p umps in order to avoid increased cost associated with the alternate compliance option (mi tigation fees). This option is not likely to occur in Southern California on a widespread basis due to the higher cost of electricity compared to the lower cost of natural gas. However, in orde r to evaluate potential increased energy demand associated with the use of heat pumps, as a worst-case scenario, SCAQMD staff estimated that 50 percent of new units over the thr ee year period from 2014 to 2016 would be included in the alternate compliance plan on an ann ual basis (90,000 units). Of these 90,000 new units installed in the District annually, SCAQMD st aff estimated that approximately ten percent would be replaced by heat pumps (9,000 units). Thi s estimate was based on the Technical Support Document- Energy Efficiency Program for Con sumer Products, Energy Conservation Standards for Residential Furnaces and Boilers, pre pared by the U.S. Department of Energy (2007). Based on the California Statewide Resident ial Appliance Saturation Study (2004) prepared for the California Energy Commission (CEC) , the annual average amount of energy used by a single family residential heat pump in th e State of California is 1,077 kilowatt hours (kWh). Therefore, based on the estimated amount of heat pumps used, an additional 9,693,000 kWh per year would be required. Based on a telepho ne conversation with a Southern California Edison (SCE) representative, SCE’s capacity is appr oximately 20,000 megawatts, which is considerably greater than the expected energy deman d for electric heat pumps. Therefore, the increased energy demand caused by the potential rep lacement of natural gas-fired furnaces with electric heat pumps is estimated to be very small a nd is not considered significant. It should also be noted that the heat pumps would primarily be ope rated during the winter months when unused energy capacity is available. Additionally, the tr ansfer from the usage of furnaces to heat pumps would also eliminate the natural gas demand require d by the previously used furnaces. Therefore, a decrease in the residential usage of n atural gas would also occur in this scenario.

To compare the energy requirements of heat pumps to the current energy usage of natural gasfired furnaces, SCAQMD staff converted the Californ ia statewide annual average electricity use by a heat pump (1,077 kWh) to the California averag e therms used by a gas furnace. Based on the California Statewide Residential Appliance Satu ration Study (2004) prepared for the California Energy Commission (CEC), the annual aver age amount of therms used by a single family residential furnace in the State of Californ ia is 242. A typical heat rate (BTU/kWh) was used in the following conversion calculation:

• 8,500 BTUs per kWh

• 8,500 BTUs x 1,077 kWh = 91.55 therms 100,000 BTUs per therm

Based on the above calculation, the therm equivalen cy that an average heat pump would require to operate is approximately 92 therms 5 . This amount of energy is less than the current a nnual

5 This calculation does not include energy losses (e. g.- transmission line losses, etc.)Final Environmental Assessment: Chapter 2

PAR 1111 2-17 November 2009 average amount of energy used by a single family re sidential furnace (242 therms). Therefore, in this scenario, the proposed amended rule is not exp ected to create any significant effects on local or regional energy supplies and on requirements for additional energy. Additionally, based on the lower therm equivalent of heat pumps, this repl acement scenario would not result in an

increase in GHG emissions due to increased electric ity requirements of heat pumps.

In light of the preceding discussion, PAR 1111 woul d not create any significant effects on peak and base period demands for electricity and other f orms of energy and it is expected to comply with existing energy standards. Therefore, PAR 111 1 is not expected to generate significant adverse energy resources impacts and will not be di scussed further in this Final EA. Since no significant energy impacts are expected were identified , no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

VII. GEOLOGY AND SOILS. Would the project:

a) Expose people or structures to potential substan tial adverse effects, including the risk of loss, injury

, or death involving: 

• Rupture of a known earthquake fault, as delineated on the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other

substantial evidence of a known fault? 

• Strong seismic ground shaking? 

• Seismic–related ground failure, including liquefaction? 

• Landslides? 

b) Result in substantial soil erosion or the loss of topsoil? 

c) Be located on a geologic unit or soil that is

unstable or that would become unstable as a result of the project, and potentially result in on- or offsite landslide, lateral spreading, subsidence, liquefaction or collapse? 

d) Be located on expansive soil, as defined in Tabl e 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? 

e) Have soils incapable of adequately supporting th e use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? Final Environmental Assessment: Chapter 2

PAR 1111 2-18 November 2009 Significance Criteria Impacts on the geological environment will be consi dered significant if any of the following criteria apply:

- Topographic alterations would result in significant changes, disruptions, displacement, excavation, compaction or over covering of large am ounts of soil.

- Unique geological resources (paleontological resour ces or unique outcrops) are present that could be disturbed by the construction of the propo sed project.

- Exposure of people or structures to major geologic hazards such as earthquake surface rupture, ground shaking, liquefaction or landslides

.

- Secondary seismic effects could occur which could d amage facility structures, e.g., liquefaction.

- Other geological hazards exist which could adversel y affect the facility, e.g., landslides,

mudslides.

Discussion VII.a) Southern California is an area of known seismic a ctivity. Structures must be designed to comply with the Uniform Building Code Zone 4 requir ements if they are located in a seismically active area. The local city or county is responsib le for assuring that a proposed project complies with the Uniform Building Code as part of the issua nce of the building permits and can conduct inspections to ensure compliance. The Uniform Buil ding Code is considered to be a standard safeguard against major structural failures and los s of life. The goal of the code is to provide structures that will: 1) resist minor earthquakes without damage; 2) resist moderate earthquakes without structural damage but with some non-structu ral damage; and 3) resist major earthquakes without collapse but with some structural and non-s tructural damage.

The Uniform Building Code bases seismic design on m inimum lateral seismic forces (“ground shaking”). The Uniform Building Code requirements operate on the principle that providing appropriate foundations, among other aspects, helps to protect buildings from failure during earthquakes. The basic formulas used for the Unifo rm Building Code seismic design require

determination of the seismic zone and site coeffici ent, which represent the foundation conditions at the site. Accordingly, buildings and equipment at existing affected facilities are likely to conform with the Uniform Building Code and all othe r applicable state codes in effect at the time they were constructed.

Compliance with PAR 1111 means installing new compl iant units or replacing existing units at

the end of their useful lifetime with units utilizi ng low NOx burner technology. Since implementing PAR 1111 is expected to involve the in stallation of new compliant equipment utilizing low NOx burners, no new buildings or stru ctures are expected to be constructed in response to the proposed project. As a result, sub stantial exposure of people or structure to the risk of loss, injury, or death involving seismic-re lated activities is not anticipated and will not be further analyzed in this Final EA.

VII.b) Compliance with PAR 1111 means installing new com pliant units or replacing existing

units at the end of their useful lifetime with unit s utilizing low NOx burner technology. Since implementing PAR 1111 is expected to involve the in stallation of new compliant equipment utilizing low NOx burners, no soil disruption from excavation, grading, or filling activities; changes in topography or surface relief features; e rosion of beach sand; or changes in existing siltation rates are anticipated in response to the proposed project.Final Environmental Assessment: Chapter 2

PAR 1111 2-19 November 2009 VII.c) Since the affected equipment is primarily located in existing residential and/or commercial areas, it is expected that the soil type s present at the locations of affected equipment will not be further susceptible to expansion or liq uefaction. Subsidence is not anticipated to be a problem since no excavation, grading, or filling ac tivities will occur at affected facilities. Further, the proposed project does not involve dril ling or removal of underground products (e.g., water, crude oil, et cetera) that could produce new , or make worse existing subsidence effects. Additionally, the affected areas are not envisioned to be prone to new risks from landslides or have unique geologic features since the affected eq uipment is located in primarily existing

residential and/or commercial areas where such feat ures have already been altered or removed. Finally, since affected equipment is located primar ily at existing facilities, the proposed project is not expected to alter or make worse any existing potential for subsidence, liquefaction, etc.

VII.d) & e) Since compliance with PAR 1111 means installing n ew compliant units or replacing existing units at the end of their useful lifetime with units utilizing low NOx burner technology, it is expected that people or property will not be exposed to new impacts relative to expansive soils or soils incapable of supporting water dispos al, nor will any existing impacts be made worse. Further, the proposed project does not requ ire installation of septic tanks or other alternative waste water systems. The main effect o f the proposed project will be the installation of new compliant equipment at the end of the curren t equipment’s useful lifetime in primarily existing residential and/or commercial areas.

Based upon these considerations, significant geolog y and soils impacts are not expected from the implementation of PAR 1111 and will not be further analyzed in this Final EA. Since no significant geology and soils impacts were identifi ed, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

VIII. HAZARDS AND HAZARDOUS
MATERIALS. Would the project:

a) Create a significant hazard to the public or the environment through the routine transport, use, disposal of hazardous materials? 

b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the

release of hazardous materials into the

environment? 

c) Emit hazardous emissions, or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? Final Environmental Assessment: Chapter 2

PAR 1111 2-20 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code §65962.5 and, as a result, would create a significant hazard to the public

or the environment? 

e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? 

f) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working in the project area? 

g) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? 

h) Expose people or structures to a significant risk of loss, injury or death involving wildland fires, including where wildlands are adjacent to

urbanized areas or where residences are

intermixed with wildlands? 

i) Significantly increased fire hazard in areas with

flammable materials? 

Significance Criteria Impacts associated with hazards will be considered significant if any of the following occur:

- Non-compliance with any applicable design code or r egulation.

- Non-conformance to National Fire Protection Associa tion standards.

- Non-conformance to regulations or generally accepte d industry practices related to operating policy and procedures concerning the design, constr uction, security, leak detection, spill containment or fire protection.

- Exposure to hazardous chemicals in concentrations e qual to or greater than the Emergency Response Planning Guideline (ERPG) 2 levels.

Discussion VIII.a) There are no provisions in PAR 1111 that would in crease the amount of hazardous materials used or generated by owners/operators of new compliant equipment. Further, because implementation of PAR 1111 would involve the instal lation of new compliant equipment at the end of the equipment’s useful life at primarily exi sting residences or small commercialFinal Environmental Assessment: Chapter 2

PAR 1111 2-21 November 2009 structures, no raw material deliveries or waste dis posal truck trips that handle hazardous materials will be associated with the proposed proj ect.

As indicated in the discussion under energy, PAR 11 11 applies to combustion equipment operations that are fired with natural gas, which i s a flammable substance. Because the low NOx burner technology is more efficient than existing b urner technologies, implementation of PAR 1111 is expected to slightly reduce the demand for fuel compared to what is currently used in currently used equipment. As a result, implementat ion of PAR 1111 is not expected to noticeably change or may slightly reduce any existi ng flammability hazard that may be associated with operating these combustion devices. In summary, implementation of PAR 1111 is not expected to increase any existing flammabili ty hazard associated with firing low NOx burners in new compliant equipment.

VIII.b) & i) Since PAR 1111 would primarily affect combustion equipment that is primarily located at existing residences and small commercial structures, existing emergency planning is anticipated to adequately minimize the risk associa ted with installing new compliant equipment. As noted in item VIII.a), PAR 1111 is not expected to increase the amount of materials used or generated at affected equipment locations. PAR 111 1 is not expected to significantly increase the demand of fuels (natural gas) or other flammabl e substances.

In addition, local fire departments ensure that ade quate permit conditions are in place to protect against potential risk of upset. The Uniform Fire Code and Uniform Building Code set standards

intended to minimize risks from flammable or otherw ise hazardous materials. Local jurisdictions are required to adopt the uniform cod es or comparable regulations. Local fire agencies require permits for the use or storage of hazardous materials and permit modifications for proposed increases in their use. Permit condit ions depend on the type and quantity of the hazardous materials at the facility. Permit condit ions may include, but are not limited to, specifications for sprinkler systems, electrical sy stems, ventilation, and containment. The fire departments make annual business inspections to ens ure compliance with permit conditions and other appropriate regulations. However, PAR 1111 p rimarily affects heating equipment utilized in residential structures. Therefore, the above ha zardous materials storage and usage is not likely to be applicable at the locations where PAR 1111-af fected equipment is located. Additionally, compliance with federal, state and local regulation s and proper operation and maintenance of equipment should ensure the potential for explosion s or accidental releases of hazardous materials is not significant.

VIII.c), e), & f) In general, the purpose of PAR 1111 is to achieve NOx emission reductions from natural gas-fired, fan-type central furnaces, which will ultimately improve air quality and reduce adverse human health impact related to poor air quality. Since operation of the affected equipment is expected to occur primarily in existin g residential and/or commercial areas, implementation of PAR 1111 is not expected to incre ase existing, or create any new hazardous emissions which would adversely affect existing/pro posed schools or public/private airports located in close proximity to the affected faciliti es. Accordingly, these impact issues are not

further evaluated in this Final EA.

VIII.d) It is not anticipated that complying with PAR 111 1 will alter in any way how operators of affected equipment manage their hazardous wastes , seeing that compliance with PAR 1111 means installing new compliant units or replacing e xisting units at the end of their useful lifetime with units utilizing low NOx burner technology. It is not expected that any of the affectedFinal Environmental Assessment: Chapter 2

PAR 1111 2-22 November 2009 equipment locations are designated pursuant to Gove rnment Code §65962.5 as a large quantity generators of hazardous waste, due to the fact that the units affected by the proposed amended rule are primarily located in residential settings.

VIII.g) Aside from the use of natural gas for fueling the equipment, it should again be noted that the proposed amended rule has no provisions that di ctate the use of, or generate any new hazardous material. Under PAR 1111, new compliant combustion equipment with low NOx burners would replace old equipment at the end of i ts useful lifetime or would be used in new development. Either way, the installation of new c ompliant equipment will not pose a substantial safety hazard. Therefore, it is not an ticipated that PAR 1111 would require changes to impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan.

VIII.h) Since the equipment subject to the requirements i n PAR 1111 is primarily located in existing residential and/or commercial areas where wildlands are not prevalent, risk of loss or injury associated with wildland fires is not expect ed. Accordingly, this impact issue is not

further evaluated in this Final EA.

Based upon these considerations, significant hazard s and hazardous materials impacts are not expected from the implementation of PAR 1111 and wi ll not be further analyzed in this Final EA. Since no significant hazards and hazardous mat erials impacts were identified, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

IX. HYDROLOGY AND WATER QUALITY. Would the project:

a) Violate any water quality standards or waste discharge requirements? 

b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g. the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? 

c) Substantially alter the existing drainage pattern of the site or area, including through alteration of the course of a stream or river, in a manner

that would result in substantial erosion or

siltation on- or offsite? Final Environmental Assessment: Chapter 2

PAR 1111 2-23 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

d) Substantially alter the existing drainage pattern of the site or area, including through alteration of the course of a stream or river, or substantially increase the rate or amount of

surface runoff in a manner that would result in flooding on- or offsite? 

e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted

runoff? 

f) Otherwise substantially degrade water quality? 

g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 

h) Place within a 100-year flood hazard area structures which would impede or redirect flood

flaws? 

i) Expose people or structures to a significant risk of loss, injury or death involving flooding, including flooding as a result of the failure of a

levee or dam? 

j) Inundation by seiche, tsunami, or mudflow? 

k) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control

Board? 

l) Require or result in the construction of new

water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental

effects? 

m) Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 

n) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements

needed? Final Environmental Assessment: Chapter 2

PAR 1111 2-24 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

o) Require in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project's projected demand in addition to the provider's existing commitments? 

Significance Criteria Potential impacts on water resources will be consid ered significant if any of the following criteria apply:

Water Quality:

- The project will cause degradation or depletion of ground water resources substantially affecting current or future uses.

- The project will cause the degradation of surface w ater substantially affecting current or

future uses.

- The project will result in a violation of National Pollutant Discharge Elimination System (NPDES) permit requirements.

- The capacities of existing or proposed wastewater t reatment facilities and the sanitary sewer system are not sufficient to meet the needs of the project.

- The project results in substantial increases in the area of impervious surfaces, such that interference with groundwater recharge efforts occu rs.

- The project results in alterations to the course or flow of floodwaters.

Water Demand:

- The existing water supply does not have the capacit y to meet the increased demands of the project, or the project would use a substantial amo unt of potable water.

- The project increases demand for water by more than five million gallons per day.

Discussion The expected options for compliance with the propos ed future NOx emission limits will involve the installation of new compliant equipment at the end of the current equipment’s useful life. No additional water demand or wastewater generation is expected to result from the operation of the units equipped with low NOx burners at the affected equipment locations because this type of control technology does not entail the use of water in the NOx control process. Further, PAR 1111 has no provision that would require the constr uction of additional water resource facilities, increase the need for new or expanded water entitle ments, or alter existing drainage patterns. The proposed project would not substantially deplet e groundwater supplies or interfere substantially with groundwater recharge. PAR 1111 would not create or contribute runoff water that would exceed the capacity of existing or plann ed stormwater drainage systems or provide substantial additional sources of polluted runoff. Further, since compliance with PAR 1111 does not involve wastewater processes, there would be no change in the composition or volume of existing wastewater streams from the affected facil ities. In addition, the proposed amended ruleFinal Environmental Assessment: Chapter 2

PAR 1111 2-25 November 2009 is not expected to require additional wastewater di sposal capacity, violate any water quality standard or wastewater discharge requirements, or o therwise substantially degrade water quality.

IX.a), f), k), l), & o) Complying with the proposed project will not chan ge existing operations at affected equipment locations, nor would it result i n generation of increased volumes of wastewater because the low NOx burners do not requi re water as part of the NOx control process. As a result, there are no potential chang es in wastewater volume or composition expected from units complying with the requirements in PAR 1111. Further, PAR 1111 is not expected to cause affected equipment locations to v iolate any water quality standard or wastewater discharge requirements since there would be no wastewater volumes generated as a result of implementing with PAR 1111. PAR 1111 is not expected to have significant adverse water demand or water quality impacts for the follo wing reasons:

• The proposed project does not increase demand for w ater by more than 5,000,000 gallons per day.

• The proposed project does not require construction of new water conveyance
infrastructure.

• The proposed project does not create a substantial increase in mass inflow of effluents to public wastewater treatment facilities

.

• The proposed project does not result in a substanti al degradation of surface water or groundwater quality.

• The proposed project does not result in substantial increases in the area of impervious surfaces, such that interference with gr oundwater recharge efforts

occurs.

• The proposed project does not result in alterations to the course or flow of
floodwaters.

IX.b) & n) Because the NOx control process of the burners in the equipment affected by PAR 1111 does not rely on water, no increase to any aff ected facilities’ existing water demand is expected. Because low NOx burner technology does n ot utilize water, implementation of PAR 1111 will not increase demand for, or otherwise aff ect groundwater supplies or interfere with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level. In addition, im plementation of PAR 1111 will not increase demand for water from existing entitlements and res ources, and will not require new or expanded entitlements. Since equipment affected by PAR 1111 generally occur in existing structures, no paving is required that might interfere with ground water recharge. Therefore, no water demand impacts are expected as the result of implementing PAR 1111.

IX.c), d), & e) Implementation of PAR 1111 will occur at primarily existing structures, or areas that that are typically located in residential or c ommercial areas that are paved and may have drainage infrastructures in place. Since PAR 1111 does not involve major construction activities, no impacts to storm water runoff, drain age patterns, groundwater characteristics, or flow are expected. Therefore, these impact areas a re not expected to be affected by PAR 1111.

IX.g), h), i), & j) The proposed project will not require constructio n of new housing, contribute to the construction of new building structures, or req uire modifications or changes to existingFinal Environmental Assessment: Chapter 2

PAR 1111 2-26 November 2009 structures. Further, PAR 1111 is not expected to r equire additional workers at affected equipment locations. Therefore, PAR 1111 is not expected to generate construction of any new structures in 100-year flood areas as mapped on a federal Flood H azard Boundary or Flood Insurance Rate Map or other flood delineation map. As a result, PAR 1 111 is not expected to expose people or structures to significant new flooding risks, or make worse an y existing flooding risks. Finally, PAR 1111 will not affect in any way any potential flood hazards i nundation by seiche, tsunami, or mud flow that may already exist relative to existing facilities o r create new hazards at existing facilities.

IX.m) PAR 1111 will not increase storm water discharge, since no construction activities are expected at affected equipment locations. Further, no new areas at existing equipment locations are expected to be paved, so the proposed project will not increase storm water runoff during operation. Therefore, no new storm water discharge treatment f acilities or modifications to existing facilities will be required due to the implementation of PAR 1 111. Accordingly, PAR 1111 is not expected to generate significant adverse impacts relative to co nstruction of new storm water drainage facilities.

Based upon these considerations, significant hydrol ogy and water quality impacts are not expected from the implementation of PAR 1111 and will not be further analyzed in this Final EA. Since no significant hydrology and water quality impacts wer e identified, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

X. LAND USE AND PLANNING. Would the project:

a) Physically divide an established community? 

b) Conflict with any applicable land use plan, poli cy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? 

c) Conflict with any applicable habitat conservatio n or natural community conservation plan? 

Significance Criteria Land use and planning impacts will be considered si gnificant if the project conflicts with the land use and zoning designations established by loc al jurisdictions.

Discussion X.a) PAR 1111 would only affect combustion equipment p rimarily at existing equipment locations. The expected options for compliance wit h the proposed future NOx emission limits in PAR 1111 will involve the installation of new compl iant equipment at the end of the equipment’s useful life. Since PAR 1111 affects eq uipment primarily operating at existingFinal Environmental Assessment: Chapter 2

PAR 1111 2-27 November 2009 equipment locations, it does not include any compon ents that would require physically dividing an established community.

X.b) & c) There are no provisions in PAR 1111 that would af fect land use plans, policies, or regulations. Land use and other planning considera tions are determined by local governments and no land use or planning requirements will be al tered by regulating NOx emissions from affected natural gas-fired combustion equipment. S ince PAR 1111 would establish lower NOx emission limits for these combustion devices, PAR 1 111 would not affect in any way habitat conservation or natural community conservation plan s, agricultural resources or operations, and would not create divisions in any existing communit ies. Therefore, present or planned land uses in the region will not be significantly adversely a ffected as a result of PAR 1111.

Based upon these considerations, significant land u se and planning impacts are not expected from the implementation of PAR 1111 and will not be further analyzed in this Final EA. Since no significant land use and planning impacts were i dentified, no mitigation measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

XI. MINERAL RESOURCES. Would the project:

a) Result in the loss of availability of a known miner al resource that would be of value to the region and t he

residents of the state? 

b)Result in the loss of availability of a locallyimportant mineral resource recovery site delineated on a local general plan, specific plan or other lan d use plan? 

Significance Criteria Project-related impacts on mineral resources will b e considered significant if any of the following conditions are met:

- The project would result in the loss of availabilit y of a known mineral resource that would be of value to the region and the residents of the sta te.

- The proposed project results in the loss of availab ility of a locally-important mineral resource recovery site delineated on a local general plan, s pecific plan or other land use plan.

Discussion XI.a) & b) There are no provisions in PAR 1111 that would re sult in the loss of availability of a known mineral resource of value to the region and t he residents of the state, or of a locallyimportant mineral resource recovery site delineated on a local general plan, specific plan or other land use plan.

Based upon these aforementioned considerations, sig nificant mineral resources impacts are not expected from the implementation of PAR 1111 and wi ll not be further analyzed in this Final EA. Since no significant mineral resources impacts were identified, no mitigation measures are necessary or required.Final Environmental Assessment: Chapter 2

PAR 1111 2-28 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

XII. NOISE. Would the project result in:

a) Exposure of persons to or generation of noise le vels

in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 

b) Exposure of persons to or generation of excessiv e groundborne vibration or groundborne noise levels? 

c) A substantial permanent increase in ambient nois e levels in the project vicinity above levels existin g without the project? 

d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? 

e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport

, would the project expose people residing or working in the project area to excessive noise levels? 

f) For a project within the vicinity of a private a irship, would the project expose people residing or working in the project area to excessive noise levels? 

Significance Criteria Impacts on noise will be considered significant if:

- Construction noise levels exceed the local noise or dinances or, if the noise threshold is currently exceeded, project noise sources increase ambient noise levels by more than three decibels (dBA) at the site boundary. Construction noise levels will be considered significant if they exceed federal Occupational Safety and Heal th Administration (OSHA) noise

standards for workers.

- The proposed project operational noise levels excee d any of the local noise ordinances at the site boundary or, if the noise threshold is current ly exceeded, project noise sources increase ambient noise levels by more than three dBA at the site boundary.

Discussion XII.a) PAR 1111 would only affect combustion equipment a t primarily existing residential

and/or commercial areas. Since installation of new equipment does not require heavy-duty construction equipment, significant adverse noise i mpacts are not anticipated. The expected options for compliance with the proposed future NOx emission limits in PAR 1111 will involve the installation of new equipment at the end of the equipment’s useful life. No other physicalFinal Environmental Assessment: Chapter 2

PAR 1111 2-29 November 2009 modifications or changes associated with the implem entation of PAR 1111 are expected. Thus, the proposed project is not expected to expose pers ons to the generation of excessive noise levels above current facility levels because the proposed project will result in affected equipment locations operating the same type of equipment at e quivalent or similar noise levels and low NOx combustion technology is not typically a noise intensive technology. It is expected that any facility affected by PAR 1111 will comply with all existing noise control laws or ordinances.

XII.b) PAR 1111 is not anticipated to expose people to o r generate excessive groundborne vibration or groundborne noise levels since no cons truction activities are expected to occur at the existing equipment locations and the affected equip ment are not inherently noisy or create

excessive vibrations.

XII.c) A permanent increase in ambient noise levels at t he affected equipment locations above existing levels and low NOx combustion technology i s not typically a noise intensive technology. The proposed project is unlikely to oc cur because any new equipment that would be installed as part of implementing PAR 1111 will be replacing existing equipment with the same or similar noise profiles. Therefore, the existing noise levels are unlikely to change and raise

ambient noise levels in the vicinities of the exist ing equipment locations to above a level of significance in response to implementing PAR 1111.

XII.d) No increase in periodic or temporary ambient nois e levels in the vicinity of affected equipment locations above levels existing prior to PAR 1111 is anticipated because the proposed project would not require construction-related acti vities at affected equipment locations or change the existing operations. See also the respo nse to item XII.a).

XII.e) & f) Implementation of PAR 1111 would not consist of i mprovements within the existing equipment locations requiring major construction ac tivities. Even if affected equipment locations are located near a public/private airport , there are no new noise impacts expected from any of the existing equipment locations as a result of complying with the proposed project. Thus, PAR 1111 is not expected to expose people res iding or working in the project vicinities to excessive noise levels. See also the response to i tem XII.a).

Based upon these considerations, significant noise impacts are not expected from the implementation of PAR 1111 and are not further eval uated in this Final EA. Since no significant noise impacts were identified, no mitigation measur es are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

XIII. POPULATION AND HOUSING. Would the project:

a) Induce substantial growth in an area either dire ctly (for example, by proposing new homes and businesses) or indirectly (e.g. through extension o f roads or other infrastructure)? Final Environmental Assessment: Chapter 2

PAR 1111 2-30 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

b) Displace substantial numbers of existing housing

, necessitating the construction of replacement housing elsewhere? 

c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 

Significance Criteria Impacts of the proposed project on population and h ousing will be considered significant if the following criteria are exceeded:

- The demand for temporary or permanent housing excee ds the existing supply.

- The proposed project produces additional population , housing or employment inconsistent with adopted plans either in terms of overall amoun t or location.

Discussion XIII.a) Because the installation of new equipment only re quires minimal labor, it is expected that workers can be drawn from the existing labor p ool in southern California. Further, the proposed project is not anticipated to generate any significant effects, either direct or indirect, on the District's population or population distributio n as no additional workers are anticipated to be required at equipment locations subject to the prop osed amendments. Human population within the jurisdiction of the SCAQMD is anticipated to gr ow regardless of implementing PAR 1111. As such, PAR 1111 will not result in changes in pop ulation densities or induce significant growth in population.

XIII.b) & c) Because the proposed project is primarily located in existing residential and/or commercial areas, PAR 1111 is not expected to resul t in the creation of any industry that would affect population growth, directly or indirectly in duce the construction of single- or multiplefamily units, or require the displacement of people elsewhere.

Based upon these considerations, significant popula tion and housing impacts are not expected from the implementation of PAR 1111 and are not fur ther evaluated in this Final EA. Since no significant population and housing impacts were ide ntified, no mitigation measures are necessary or required.Final Environmental Assessment: Chapter 2

PAR 1111 2-31 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

XIV. PUBLIC SERVICES. Would the proposal result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered government facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the following public services:

a) Fire protection? 
b) Police protection? 

c) Schools? 

d) Parks? 
e) Other public facilities? 

Significance Criteria Impacts on public services will be considered signi ficant if the project results in substantial adverse physical impacts associated with the provis ion of new or physically altered governmental facilities, or the need for new or phy sically altered government facilities, the construction of which could cause significant envir onmental impacts, in order to maintain acceptable service ratios, response time or other p erformance objectives.

Discussion XIV.a) & b) PAR 1111 would only affect combustion equipment l ocated in primarily residential settings, however, the affected units may also be found include units in small commercial buildings. The expected options for com pliance with the proposed future NOx

emission limits in PAR 1111 will involve the instal lation of new equipment at the end of the equipment’s useful life with low NOx burners that w ill be compliant with fire department standards. No other physical modifications or chan ges associated with the implementation of PAR 1111 are expected. The overall amount of natur al gas at any one equipment location over their current levels is not expected to change subs tantially or increase the chances for fires or explosions that could affect local fire departments . Finally, PAR 1111 is not expected to increase the need for security at affected equipmen t locations, which could adversely affect local police departments.

XIV.c) & d) The local labor pool (e.g., workforce) of particu lar affected equipment location areas is expected to remain the same since PAR 1111 would not trigger any changes to current equipment operations. Therefore, with no increase in local population anticipated, no significant adverse impacts are expected to local schools or pa rks.

XIV.e) The proposed project will result in replacing exi sting equipment with functionally identical new equipment at the end of the existing equipment’s useful life. The proposed projectFinal Environmental Assessment: Chapter 2

PAR 1111 2-32 November 2009 does not require the need for government services. Implementation of PAR 1111 would not result in the need for new or physically altered go vernment facilities in order to maintain acceptable service ratios, response times, or other performance objectives. There will be no increase in population and, therefore, no need for physically altered government facilities.

Based upon these considerations, significant public services impacts are not expected from the implementation of PAR 1111 and are not further eval uated in this Final EA. Since no significant public services impacts were identified, no mitigat ion measures are necessary or required.

Potentially Significant Impact Less Than

Significant Impact No Impact

XV. RECREATION.

a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physi cal deterioration of the facility would occur or be

accelerated? 

b) Does the project include recreational facilities or require the construction or expansion of recreation al facilities that might have an adverse physical effe ct
on the environment? 

Significance Criteria Impacts to recreation will be considered significan t if:

- The project results in an increased demand for neig hborhood or regional parks or other

recreational facilities.

- The project adversely affects existing recreational opportunities.

Discussion XV.a) & b) As previously discussed under “Land Use and Planni ng,” there are no provisions in the PAR 1111 that would affect land use plans, poli cies, or regulations. Land use and other planning considerations are determined by local gov ernments and no land use or planning requirements will be altered by the changes propose d in PAR 1111. The proposed project would not increase the demand for or use of existing neig hborhood and regional parks or other recreational facilities or require the construction of new or expansion of existing recreational facilities that might have an adverse physical effe ct on the environment because it will not directly or indirectly increase or redistribute pop ulation.

Based upon these considerations, significant recrea tion impacts are not expected from the implementation of PAR 1111 and are not further eval uated in this Final EA. Since no significant recreation impacts were identified, no mitigation m easures are necessary or required.Final Environmental Assessment: Chapter 2

PAR 1111 2-33 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

XVI. SOLID/HAZARDOUS WASTE. Would the project:

a) Be served by a landfill with sufficient permitte d capacity to accommodate the project’s solid waste disposal needs? 

b) Comply with federal, state, and local statutes a nd regulations related to solid and hazardous waste? 

Significance Criteria The proposed project impacts on solid/hazardous was te will be considered significant if the following occurs:

- The generation and disposal of hazardous and non-ha zardous waste exceeds the capacity of designated landfills.

Discussion XVI.a) & b) Compliance with PAR 1111 means installing new compl iant units or replacing existing units at the end of their useful lifetime with units utilizing low NOx burner technology. Because affected equipment has a finite lifetime, i t will ultimately have to be replaced at the end of its useful life. Affected equipment may be refu rbished and used elsewhere or the scrap metal from replaced units has economic value and is expec ted to be recycled, so any solid or hazardous waste impacts specifically associated with PAR 1111 are expected to be minor. As a result, no substantial change in the amount or character of so lid or hazardous waste streams is expected to occur. PAR 1111 is not expected to increase the vo lume of solid or hazardous wastes from affected facilities, require additional waste dispo sal capacity, or generate waste that does not meet applicable local, state, or federal regulation s.

Based upon these considerations, PAR 1111 is not ex pected to increase the volume of solid or hazardous wastes that cannot be handled by existing municipal or hazardous waste disposal facilities, or require additional waste disposal ca pacity. Further, implementing PAR 1111 is not expected to interfere with any affected facility’s ability to comply with applicable local, state, or federal waste disposal regulations. Since no solid /hazardous waste impacts were identified, no mitigation measures are necessary or required.Final Environmental Assessment: Chapter 2

PAR 1111 2-34 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

XVII. TRANSPORTATION/TRAFFIC. Would the project:

a) Cause an increase in traffic which is substantia l in relation to the existing traffic load and capacity of the street system (i.e., result in a substantial in crease in either the number of vehicle trips, the volume t o capacity ratio on roads, or congestion at intersections)? 

b) Exceed, either individually or cumulatively, a l evel of service standard established by the county congestion management agency for designated roads or highways? 

c) Result in a change in air traffic patterns, incl uding either an increase in traffic levels or a change in location that results in substantial safety risks? 

d) Substantially increase hazards due to a design f eature (e.g. sharp curves or dangerous intersections) or incompatible uses (e.g. farm equipment)? 

e) Result in inadequate emergency access? 

f) Result in inadequate parking capacity? 

g) Conflict with adopted policies, plans, or progra ms supporting alternative transportation (e.g. bus turnouts, bicycle racks)? 

Significance Criteria Impacts on transportation/traffic will be considere d significant if any of the following criteria apply:

- Peak period levels on major arterials are disrupted to a point where level of service (LOS) is reduced to D, E or F for more than one month.

- An intersection’s volume to capacity ratio increase by 0.02 (two percent) or more when the LOS is already D, E or F.

- A major roadway is closed to all through traffic, a nd no alternate route is available.

- There is an increase in traffic that is substantial in relation to the existing traffic load and capacity of the street system.

- The demand for parking facilities is substantially increased.

- Water borne, rail car or air traffic is substantial ly altered.

- Traffic hazards to motor vehicles, bicyclists or pe destrians are substantially increased.

- The need for more than 350 employees

- An increase in heavy-duty transport truck traffic t o and/or from the facility by more than 350 truck round trips per dayFinal Environmental Assessment: Chapter 2

PAR 1111 2-35 November 2009 - Increase customer traffic by more than 700 visits p er day.

Discussion XVII.a) & b) PAR 1111 affects equipment that is primarily locat ed in existing residential and/or commercial areas and has no potential to adversely affect transportation. The expected options for compliance with the proposed future NOx emissio n limits in PAR 1111 will involve the installation of new compliant equipment at the end of the equipment’s useful life. PAR 1111

would have no a effect on existing equipment locations that would change or cause additional transportation demands or services. The implementa tion of PAR 1111 is not expected to adversely affect circulation patterns on local road ways or the level of service at intersections near affected facilities. The proposed amended rule wil l not change the current natural gas-fired furnace distribution system and will not change the replacement schedule of existing furnaces. Finally, no construction-related activities are exp ected to be associated with installing compliant equipment.

XVII.c) The expected option for compliance with the propo sed future NOx emission limits in PAR 1111 will involve the installation of new compl iant equipment with low NOx burners. However, PAR 1111 will not require operators of exi sting equipment to construct buildings or other structures that could interfere with flight p atterns so the height and appearance of the existing structures are not expected to change. Th erefore, implementation of PAR 1111 is not expected to adversely affect air traffic patterns. Further, PAR 1111 will not affect in any way air traffic in the region because it will not require t ransport of any materials by air.

XVII.d) No physical modifications are expected to occur b y implementing PAR 1111. Therfore, no offsite modifications to roadways are anticipated for the proposed project that would result in an additional design hazard or inco mpatible uses.

XVII.e) Any equipment replacements associated with impleme nting PAR 1111 will likely occur

in or about the same location within the confines o f each existing equipment location such that no changes to emergency access at or in the vicinit y of the affected equipment locations would be expected. As a result, PAR 1111 is not expected to adversely impact emergency access.

XVII.f) Other than the equipment replacements associated w ith implementing PAR 1111

, No changes to the parking capacity at or in the vicini ty of the affected equipment locations are expected. Further, PAR 1111 is not expected to req uire additional workers, so additional parking capacity will not be required. Therefore, PAR 1111 is not expected to adversely impact on- or off-site parking capacity.

XVII.g) Other than equipment replacement at the end of its useful life, no facility modifications or changes are expected that would conflict with al ternative transportation, such as bus turnouts, bicycle racks, et cetera.

Based upon these considerations, PAR 1111 is not ex pected to generate significant adverse transportation/traffic impacts and, therefore, this topic will not be considered further. Since no significant transportation/traffic impacts were ide ntified, no mitigation measures are necessary or required.Final Environmental Assessment: Chapter 2

PAR 1111 2-36 November 2009 Potentially Significant Impact Less Than

Significant Impact No Impact

XVIII. MANDATORY FINDINGS OF
SIGNIFICANCE.

a) Does the project have the potential to degrade t he quality of the environment, substantially reduce th e habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminat e important examples of the major periods of California history or prehistory? 

b) Does the project have impacts that are individua lly limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, an d the effects of probable future projects.) 

c) Does the project have environmental effects that will cause substantial adverse effects on human beings, either directly or indirectly? 

XVIII.a) As discussed in the “Biological Resources” sectio n, PAR 1111 is not expected to significantly adversely affect plant or animal spec ies or the habitat on which they rely because the affected equipment is primarily located in exis ting residential and/or commercial areas which have already been greatly disturbed and that curren tly do not support such habitats. Additionally, special status plants, animals, or na tural communities are not expected to be found within close proximity to the facilities affected b y PAR 1111.

XVIII.b) Based on the foregoing analyses, since PAR 1111 w ill not generate any projectspecific significant environmental impacts, PAR 111 1 is not expected to cause cumulative impacts in conjunction with other projects that may occur concurrently with or subsequent to the proposed project. Related projects to the currentl y proposed project include existing and proposed rules and regulations, as well as 2007 AQM P control measures. Furthermore, the effects of PAR 1111 will not be "cumulatively consi derable" because there are no, or minor, incremental impacts and there will be no contributi on to a significant cumulative impact caused by other projects that would exist in absence of th e proposed project. For example, the environmental topics checked ‘No Impact’ (e.g., aes thetics, agriculture resources, biological resources, cultural resources, energy, geology and soils, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, noise, population and housing, public services, recreation, solid/hazardo us waste and transportation and traffic) would not be expected to make any contribution to potenti al cumulative impacts whatsoever. For the environmental topic checked ‘Less than Significant Impact’ (e.g., air quality), the analysisFinal Environmental Assessment: Chapter 2

PAR 1111 2-37 November 2009 indicated that project impacts would not exceed any project-specific significance thresholds. This conclusion is based on the fact that the analy ses for each of these environmental areas

concluded that there would be no incremental effect s of the proposed project would be or are minor and, therefore, not considered to be cumulati vely considerable. Also, in the case of air quality impacts, the net effect of implementing the proposed project with other proposed rules and regulations, and control measures in the 2007 A QMP is an overall reduction in district-wide emissions contributing to the attainment of state a nd national ambient air quality standards. Therefore, the proposed project has no potential fo r generating significant adverse cumulative or cumulatively considerable impacts.

XVIII.c) Based on the foregoing analyses, PAR 1111 is not expected to cause adverse effects on human beings. Significant air quality impacts are not expected from the implementation of PAR 1111. The direct impact from the proposed project, however, is an air quality benefit with an overall average NOx reduction of NOx by less than 0.1 ton per day by 2014 and 2.5 3.1 tons per day by 2023. No significant adverse impacts to aes thetics, agriculture resources, biological resources, cultural resources, energy, geology and soils, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, noise, population and housing, public services, recreation, solid/hazardo us waste and transportation and traffic are expected as a result of the implementation of PAR 1 111.

As discussed in items I through XVIII above, the pr oposed project has no potential to cause significant adverse environmental effects.A P P E N D I X A

P R O P O S E D A M E N D E D R U L E 1 1 1 1PAR 1111 - 2 (Adopted December 1, 1978)(Amended July 8, 1983)(Da te of Amendment)

RULE PAR 1111. REDUCTION OF NO x EMISSIONS FROM NATURAL-GASFIRED, FAN-TYPE CENTRAL FURNACES

(a) Purpose and Applicability

The purpose of this rule is to reduce NOx emission s from natural gas-fired, fantype central furnaces, as defined in this rule. Th is rule applies to manufacturers,

distributors, sellers and installers of residential and commercial fan-type central

furnaces, requiring either single-phase or three-ph ase electric supply, used for

comfort heating with a rated heat input capacity of less than 175,000 BTU per

hour;

, or, for combination heating and cooling units, a c ooling rate of less than

65,000 BTU per hour.

(a b ) Definitions

(1) ANNUAL FUEL UTILIZATION EFFICIENCY (AFUE) is de fined in

Section 10.1 of Code of Federal Regulations, Title 10, Part 430, Subpart

B, Appendix N.

(2) BTU means British thermal unit or units

. (3) CONDENSING FURNACE means a high-efficiency furn ace that uses a

second heat exchanger to extract the latent heat in the flue gas by cooling

the combustion gasses to near ambient temperature s o that water vapor

condenses in the heat exchanger, is collected and d rained.

(1 4 ) FAN TYPE CENTRAL FURNACE an Type Central Furnace is a selfcontained space heater providing for circulation of heated air at pressures

other than atmospheric through ducts more than 10 i nches in length that

have:

(A) an input rate RATED HEAT INPUT CAPACITY of less than

175,000 BTU/

per hou r; or (B) for combination heating and cooling units, a co oling rate of less

than 65,000 BTU/

per hou r.
(2) Annual Fuel Utilization Efficiency (AFUE) is define d in Section 4.2.35 of

Code of Federal Regulations, Title 10, Part 430, Su bpart B, Appendix N.

(5) HEAT INPUT means the higher heating value of th e fuel to the furnace

measured as BTU per hour.Proposed Amended Rule 1111 (Cont.) (Date of Adopti on)

PAR 1111 - 3 (6) NOx EMISSIONS means the sum of nitrogen oxide a nd nitrogen dioxide

(oxides of nitrogen) in the flue gas, collectively expressed as nitrogen

dioxide.

(7) RATED HEAT INPUT CAPACITY means the gross HEAT INPUT of the

combustion device.

(8) RESPONSIBLE OFFICIAL means:

(A) For a corporation: a president or vice-preside nt of the corporation

in charge of a principal business function or a dul y authorized

person who performs similar policy-making functions for the

corporation, or

(B) For a partnership or sole proprietorship: gen eral partner or

proprietor, respectively,

. (9) SINGLE FIRING RATE means the burners and contro l system are

designed to operate at only one fuel input rate and the control system

cycles burners between the maximum heat output and no heat output.

(3 10 ) USEFUL HEAT DELIVERED TO THE HEATED SPACE seful Heat

Delivere d to the Heated Space is the AFUE (expressed as a fraction)

multiplied by the heat input.

(11) VARIABLE FIRING RATE means the burners and con trol system are

designed to operate at more than one fuel input rat e and the control system

cycles burners between two or more heat output rate s and no heat output.

(12) WEATHERIZED means designed for installation ou tside of a building,

equipped with a protective jacket and integral vent ing, and labeled for

outdoor installation.

(b c )Requirements

(1) A manufacturer shall not, after January 1, 1984 , manufacture or supply for

sale or use in the South Coast Air Quality Manageme nt District naturalgas-fired, fan-type central furnaces, unless such f urnaces meet the

requirements of sub paragraph (c) (3).

(2) A person shall not, after April 2, 1984, sell o r offer for sale within the

South Coast Air Quality Management District natural -gas-fired, fan-type

central furnaces unless such furnaces meet the requ irements of

sub paragraph (c) (3).Proposed Amended Rule 1111 (Cont.) (Date of Adopti on)

PAR 1111 - 4 (3) Natural-gas-fired, fan-type central furnaces sh all:

(A) not emit more than 40 nanograms of oxides of ni trogen (calculated

as NO 2 ) per joule of useful heat delivered to the heated space; and

(B) be certified in accordance with paragraph subdivision (c d ) of this

rule.

(4) On or after October 1, 2012

, a person shall not manufacture, supply, sell,

offer for sale, or install, for use in the South Co ast Air Quality

Management District, natural-gas-fired, fan-type ce ntral furnaces subject

to this rule, unless such furnace complies with the applicable emission

limit and compliance date set forth in Table 1 and is certified in

accordance with subdivision (d) of this rule.

Table 1 – Furnace NOx Limits and Compliance Schedul e

* Nanograms of oxides of nitrogen (calculated as NO 2 ) per joule of useful heat delivered to the heated space

(c d )Certification

(1) The manufacturer shall have each appliance mode l tested in accordance

with the following:

(A) Oxides of nitrogen measurements, test equipment , and other

required test procedures shall be in accordance wit h methods

approved by the Executive Officer AQMD Method 100.1

. (B) Operation of the furnace shall be in accordance with the

procedures specified in Section 3.1 4.0 of Code of Federal

Regulations, Title 10, Part 430, Subpart B, Appendi x N. Compliance Date Equipment Category NOx Emission
Limit (nanograms/Joule *)

October 1, 2012 Mobile Home Furnace 40

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 14Proposed Amended Rule 1111 (Cont.) (Date of Adopti on)

PAR 1111 - 5 (2) One of the two formulas shown below shall be us ed to determine the

nanograms of oxides of nitrogen per joule of useful heat delivered to the

heated space:

N = 4.566 x 10 4 x P x U , N = 3.655 x 10 10 x P H x C x E (20.9-Y) x Z x E

Where:

N = nanograms of emitted oxides of nitrogen per jo ule of useful heat.

P = concentration (ppm volume) of oxides of nit rogen in flue gas as tested.

U = volume percent CO 2 in water-free flue gas for stoichiometric combustion.

H = gross heating value of fuel, BTU/cu.ft. (60 o F, 30-in. Hg).

C = measured volume percent of CO 2 in water-free flue gas, assuming complete combustion and no CO present.

E = AFUE, percent (calculated using Table 2).

Y = volume percent of O 2 in flue gas.

Z = heating value of gas, joules/cu. meter (0.0 o C, 1 ATM).

(3) At least 120 days prior to the date a furnace model is first shipped to a

location in the AQMD for use in the District, T t he manufacturer shall

submit to the Executive Officer the following:

(A) A statement that the model is in compliance wit h

subsection division (b c ). (The statement shall be signed by a

responsible official and dated, and shall attest to the accuracy of all

statements.)

(B) General Information

(i) Name and address of manufacturer.

(ii) Brand name.

(iii) Model number, as it appears on the furnace r ating plate.

(C) A description of the furnace and specifications for each model

being certified.Proposed Amended Rule 1111 (Cont.) (Date of Adopti on)

PAR 1111 - 6 (D) Executive Officer approved emission test protoc ol and emission

test results verifying compliance with the applicab le NOx limit

specified in Table 1.

(d e )Identification of Compliant Units

(1) The manufacturer shall display the model number of the furnace complying

with subsection divisions (b c ) and (d) shall display the following on the

shipping carton ontainer

label and rating plate. of the furnace:

(A)Model number;

(B)Heat input capacity;

(C) Applicable Certified NOx emission level limit in Table 1 ; and

(D)Date of manufacture or date code.

(2) Any non-certified furnace shipped to a location in the South Coast Air

Quality Management District for distribution or sal e outside of the District

shall have a label on the shipping container identi fying the furnace as not

certified for use in the District.

(e f )Enforcement

(1) The Executive Officer may require the emission tes t results to be provided

when deemed necessary to verify compliance.

(2) The Executive Officer may periodically conduct such tests as are deemed

necessary to insure ensure compliance with subsection division (b c ), (d), (e) and

(h)

.

(f g ) Exemptions

(1) The provisions of this rule shall not apply to furnaces installed in mobile

homes before October 1, 2012

. (2) The provisions of this rule shall not apply to natu ral

- gas

- fired, fan

- type
central furnaces utilizing three

- phase electrical current until January 1,

1 986.

(2) For furnaces manufactured, purchased and delive red to the South Coast

Air Quality Management District prior to the applic able compliance date

in Table 1, any person may, until 300 days after th e applicable compliance

date, sell, offer for sale, or install such a furna ce in the District, so long as

the furnace meets the requirements of paragraph (c) (3) and subdivisions

(d) and (e).Proposed Amended Rule 1111 (Cont.) (Date of Adopti on)

PAR 1111 - 7 (h) Rebate Incentives for Early Compliance

Any manufacturer of natural gas-fired, fan-type cen tral furnaces subject to this

rule that and distributes or and sells into the District furnaces that comply with the

14 nanograms/Joule emission limit 90 days prior to the applicable compliance

date in Table 1 of paragraph (c)(4) may submit a co mpliance plan for early

compliance to the Executive Officer and to receive on a first-come first-served

basis from the AQMD a rebate payment of $75 for each 14 n anograms / per Joule

certified furnace and $90 for each high efficiency 14 nanograms/Joule certified

furnace with AFUE of 90% or greater distributed and or sold into the District

, prior to the applicable compliance date provided funds are available on the date

documentation o n f

the number of units distributed and or sold is submitted to the

AQMD. Total rebate payments to all manufacturers s hall not exceed $3,000,000.

(i) Technology Assessment

On or before April 1, 2013, the Executive Officer shall conduct a technology assessment

and shall report to the Governing Board on the status o f manufacturers’ progress towards

compliance with the 14 nanograms / per Joule emission limit for nitrogen oxidee s.