SACRAMENTO METROPOLITAN 

AIR QUALITY MANAGEMENT DISTRICT

STAFF REPORT 

RULE 414 

WATER HEATERS, BOILERS AND PROCESS HEATERS RATED LESS THAN 1,000,000 

BTU PER HOUR 

January 15, 2010

Prepared by: Jeffery Yang 

 Assistant Air Quality Engineer 

 Joe Carle 

 Associate Air Quality Engineer 

Reviewed by: Kevin J. Williams, Ph.D. 

 Program Coordinator 

 Aleta Kennard 

Program Supervisor 

Approved by: Brigette Tollstrup 

 Division Manager 
Staff Report 

Rule 414 

January 15, 2010, Page 2 

INTRODUCTION 

Staff is proposing to amend Rule 414, Natural Gas Fired Water Heaters, to reduce NOx 

emissions from water heaters, boilers, and process heaters. Currently, NOx emissions from 

water heaters, boilers, and process heaters are regulated by two existing rules: Rule 414 (for 

units with rated heat input capacities of less than 75,000 Btu/hr) and Rule 411, NOx from 

Boilers, Process Heaters and Steam Generators (for units with rated heat input capacities of 

1,000,000 Btu/hr and higher). The Rule 414 amendments will provide emission standards for 

the previously unregulated units (i.e., between 75,000 and 1,000,000 Btu/hr) and strengthen 

standards for the smaller units currently regulated by Rule 414. The proposed standards have 

been show to be feasible in the South Coast Air Quality Management District (SCAQMD). 

BACKGROUND

Ground level ozone is a secondary pollutant formed from photochemical reactions of nitrogen 

oxides (NOx) and volatile organic compounds (VOCs) in the presence of sunlight. Ozone is a 

strong irritant that adversely affects human health and damages crops and other environmental 

resources. As documented by the U.S. Environmental Protection Agency (EPA) in the most 

recent Criteria Document for ozone (U.S. EPA 2006), both short-term and long-term exposure to 

ozone can irritate and damage the human respiratory system, resulting in: 

• decreased lung function; 

• development and aggravation of asthma; 

• increased risk of cardiovascular problems such as heart attacks and strokes; 

• increased hospitalizations and emergency room visits; and 

• premature deaths. 

The District is currently designated as a nonattainment area for both the state and federal ozone 

standards. Since NOx is a precursor to ozone, one of the strategies to control ozone pollution is 

to reduce NOx emissions from existing stationary sources. 

The District is currently designated as a nonattainment area for the state and federal1

 health 

standards for PM10 and PM2.5. Since NOx is a precursor to PM10 and PM2.5, one of the 

strategies to control particulate emissions is to reduce NOx emissions.

According to the U.S. Environmental Protection Agency (EPA), health studies have linked 

exposure to particulate matter, especially fine particles, to several significant health problems, 

including: 

• increased respiratory symptoms, such as irritation of the airways, coughing, or difficulty 

breathing; 

• decreased lung function; 

 

1

 Based on 1998-2000 monitoring data, EPA made a finding (February 15, 2002 Federal Register, 

Volume 67, Number 32, Page 7082 et seq.) that Sacramento County attained the federal ambient 

PM10 standard by the applicable December 31, 2000 attainment deadline. Note that this EPA finding 

did not redesignate the Sacramento District to attainment. 
Staff Report 

Rule 414 

January 15, 2010, Page 3 

• aggravated asthma; 

• development of chronic bronchitis; 

• irregular heartbeat; 

• nonfatal heart attacks, 

• premature death in people with heart or lung disease; and 

• increased risk of cardiovascular and cerebrovascular events in post-menopausal 

women. 

In addition, burning oil in water heaters, boilers and process heaters produce emissions of 

benzene, formaldehyde, acetaldehyde, toluene, xylenes, hydrogen chloride, arsenic, copper, 

mercury, and nickel2

. All of these pollutants have been identified by the California Air Resource 

Board (CARB) as toxic air contaminates based on their potential to cause cancer, premature 

death, and other health problems. 

Adopted August 1, 1996, Rule 414, Natural Gas Fired Water Heaters, established NOx 

emission limits for natural gas-fired water heaters with rated heat input capacities less than 

75,000 Btu/hr. Staff is proposing to amend Rule 414 to further reduce NOx emissions from 

small water heaters, boilers, and process heaters. In the 2003 Triennial Report, the District 

committed to adopt more stringent NOx standards for these units to satisfy state plan 

requirements for “all feasible measures.” The recently adopted 8-hour Ozone Attainment Plan 

also includes a commitment for the District to achieve emission reductions from this category to 

attain the federal standard. These amendments will fulfill the state and federal plan 

commitments. 

One of the significant sources of NOx emissions is stationary source natural gas combustion. 

Currently, NOx emissions from natural gas-fired water heaters, boilers, and process heaters are 

regulated by two existing District rules: Rule 414 (for units with rated heat input capacities of 

less than 75,000 Btu/hr) and Rule 411 (for units with rated heat input capacities of 1,000,000 

Btu/hr and higher). Staff has identified more stringent, feasible NOx limits in two SCAQMD 

rules: SCAQMD Rule 1121, which sets more stringent NOx limits for water heaters with rated 

heat input capacities less than 75,000 Btu/hr, and SCAQMD Rule 1146.2, which sets limits for 

units with rated heat input capacities from 75,000 to 2,000,000 Btu/hr. Several other districts, 

including San Joaquin Valley Unified APCD (Rule 4308), Bay Area AQMD (Rule 9-6) Yolo 

Solano AQMD (Rule 2.37), Ventura County APCD (Rule 74.11.1),and Santa Barbara County 

APCD (Rule 360) have adopted some or all of these standards. 

LEGAL MANDATES 

Federal Mandates: 

The District is designated as a nonattainment area for the federal 8-hour ozone standard. In 

February 2009, the districts of the Sacramento Federal Nonattainment Area adopted an 

 

2

 Emissions identified in an AB 2588 document published by the Ventura County Air Pollution Control 

District except for the metals which were identified through EPA AP-42 
Staff Report 

Rule 414 

January 15, 2010, Page 4 

attainment plan to achieve the federal 8-hour ozone standard by 2018. The attainment plan 

includes a commitment for the District to achieve NOx emission reductions from water heaters, 

boilers, and process heaters rated at less than 1,000,000 Btu/hr. 

The proposed amendments will satisfy the federal plan commitment. 

State Mandates: 

Serious Nonattainment Plan Requirements: The District is designated as a serious 

nonattainment area for the state ozone standard. The California Clean Air Act requires areas 

with this designation to adopt control measures required in sections 40913, 40914, and 40919 

of the California HSC: 

• HSC Section 40913 requires districts to develop a plan to achieve California’s ambient 

air quality standards by the earliest practicable date. 

• HSC Section 40914(b)(2) requires every nonattainment district which cannot achieve a 

reduction of 5% or more per year in district wide emissions to include in their state 

attainment plans “every feasible measure” to reduce the emissions of nonattainment 

pollutants and their precursors. SCAQMD Rules 1121 and 1146.2, which regulate 

emissions from small water heaters, boilers, and process heaters, qualify as a “feasible 

measures.” The District’s 2003 Triennial Plan update included a commitment to achieve 

NOx emission reductions from this category. The proposed amendments will satisfy the 

state plan commitment. 

• HSC Section 40919(a)(3) requires districts with serious nonattainment for ozone to 

adopt BARCT for all existing permitted sources. The sources affected by the proposed 

Rule 414 are below the District’s permitting threshold; therefore, this requirement is not 

applicable. 

Toxic Air Contaminants: California Health and Safety Code (HSC) Section 39659 allows a 

district board to adopt regulation which are necessary to establish, implement, and enforce 

programs for the regulations of hazardous air pollutants which have been listed as toxic air 

contaminants. HSC Section 39666(d) allows for local districts to adopt and enforce equally 

effective or more stringent measures than the state board. 

Transport Mitigation Emission Control Requirements: Title 17, Section 70600 of the California 

Code of Regulations requires that districts within the areas of origin of transported air pollutants, 

as identified in section 70500(c), include sufficient emission control measures (including “all 

feasible measures” and BARCT) in their attainment plans for ozone to mitigate the impact of 

pollution sources within their jurisdictions on ozone concentrations in downwind areas 

commensurate with the level of contribution. An upwind district shall comply with the transport 

mitigation planning and implementation requirements set forth in this section regardless of its 

attainment status, unless the upwind district complies with the requirements of section 70601. 

The proposed amendments are based on all feasible control measures and therefore comply 

with the state mandates. 
Staff Report 

Rule 414 

January 15, 2010, Page 5 

SUMMARY OF REQUIREMENTS 

This Rule 414 amendment establishes NOx emission limits for water heaters, boilers, and 

process heaters that fall between the heat capacity ranges of existing Rule 411 and Rule 414 

(i.e., from 75,000 to 1,000,000 Btu/hr). The emission limits are based on limits contained in 

SCAQMD Rule 1146.2 (Emissions of Oxides of Nitrogen from Large Water Heaters and Small 

Boilers and Process Heaters). In addition, the current NOx limits for water heaters with rated 

capacities of less than 75,000 Btu/hr contained in the existing Rule 414 will be reduced based 

upon limits established in SCAQMD Rule 1121 (Control of Nitrogen Oxides from ResidentialType, Natural Gas-Fired Water Heaters). 

The most stringent limits in SCAQMD Rule 1121 went into effect for all applicable units less 

than 75,000 Btu/hr between 2006 and 2008. Since that time, compliant water heaters have 

been readily available to the public in the South Coast District. Currently, a few models that 

meet the 10 ng/J standard are being sold in Sacramento County while the majority meets the 

current 40 ng/J standard. Staff has reviewed the list of units certified to be compliant with the 10 

ng/J standard that the SCAQMD has compiled. Because manufacturers of these ultra-low NOx 

units also sell 40 ng/J units within Sacramento County, Staff finds no reason why the ultra-low 

NOx units cannot be made available here; therefore this limit is feasible. 

Units between 75,000 and 400,000 Btu/hr were required by SCAQMD Rule 1146.2 to meet a 40 

ng/J NOx limit beginning 2001 and will be required to meet a 14 ng/J limit beginning January 1, 

2012. SCAQMD will require units between 400,000 and 2,000,000 Btu/hr to meet a limit of 14 

ng/J beginning January 1, 2010. In 2006, when SCAQMD amended Rule 1146.2, they tested 

several types of water heaters, boilers, and process heaters to determine actual emissions. At 

that time they found that 46% of units between 400,000 and 2,000,000 Btu per hour and 18% of 

units between 75,000 and 400,000 Btu/hr had NOx emissions lower than 20 ppmv (14 ng/J). 

SCAQMD allowed at least 4 years for manufacturers to produce the ultra low NOx emitting units 

in order for them to be readily available to the public by the time the new standards are 

effective. Staff has reviewed the list of units certified to be compliant with Rule 1146.2, and the 

units between 75,000 and 400,000 Btu/hr that meet the 40 ng/J NOx limit are readily available in 

the SCAQMD and the same manufacturers sell uncertified units in Sacramento County; 

therefore, this limit is feasible in our District. Because units greater than 75,000 Btu/hr are 

currently not required to meet the 14 ng/J NOx limit in SCAQMD, Staff was unable to find any 

units guaranteed to meet this limit. The SCAQMD showed in 2006 that it is feasible for units to 

meet the 14 ng/J NOx limit, and given that manufacturers who sell in the SCAQMD also sell 

units in Sacramento County Staff finds no reason that compliant units cannot be made available 

before the proposed limits become effective. 

The largest group of units affected by these amendments is residential water heaters. Typically, 

these units are less than 75,000 Btu/hr and heat water in, on average, a 40 gallon tank to meet 

the hot water demands of a typical household. The heat input range between 75,000 and 

1,000,000 Btu/hr that was not previously regulated by District Rule 414 generally applies to 

small commercial/industrial boilers and hot water heaters. These units are used in a variety of 

applications, including in restaurants, retail stores, schools, hotels and office buildings. Some 

larger residential water heaters are also affected by this rule amendment. The smaller units in 

this heat input range (i.e., <400,000 Btu/hr) generally use the natural draft created by 
Staff Report 

Rule 414 

January 15, 2010, Page 6 

combustion of fuel and air to transfer heat to the confined water and do not rely on fans or 

blowers to transport either air or combustion gases. These combustion units are known as 

“atmospheric” and are rather simple in their operation. The larger units in this heat input range 

(i.e., >400,000 Btu/hr) usually resemble small boilers because water circulates through a series 

of water tubes or water jackets close to the flow of hot gases which are heated as the gases 

flow around them. Burners on these units can be either atmospheric or forced draft. 

The proposed amendment will change the applicability of the rule to apply to water heaters, 

boilers, and process heaters fired by fuels other than natural gas. An exemption for units fired 

on liquid petroleum gas (LPG) is also proposed. LPG-fired water heaters are generally in use in 

remote parts of the county where natural gas is not available. Because there are currently no 

NOx standards for LPG-fired units in this size category in other districts or states, Staff has been 

unable to find data for units to show whether they meet the proposed limits. The 2018 planning 

inventory3

 does not have a specific category for LPG-fired water heaters but lists all LPG 

residential combustion as 0.005 tpd of NOx and all LPG service and commercial combustion as 

0.007 tpd of NOx. Staff contends that because of the lack of available compliant units and the 

low potential NOx reductions, LPG-fired units should be exempt from this rule. Units fired on 

other types of fuels such as wood, coal, or fuel oil, would be subject to the rule and emission 

standards. Staff believes there are currently very few or no units of these types currently 

operating in the District. The 2004 American Housing Survey for the Sacramento Metropolitan 

Area shows that approximately 200 households use fuel oil and 200 households use kerosene 

or another liquid fuel to heat water. The metropolitan area defined in this survey also includes 

Placer and El Dorado Counties. Both Placer and El Dorado counties are more rural than 

Sacramento County and Staff believes that the majority of the oil fired units operate in these 

areas4

. Staff contacted Ramos Oil Company and found that they only sell kerosene and not fuel 

oil #2. Staff also contacted industry associations for information on whether these units are 

operating but received no additional information. Additionally, no comments were brought 

forward during the public workshop addressing this assumption. Liquid and solid fuels, because 

of the nitrogen and sulfur content and other fuel combustion characteristics, emit more than 

gaseous fuels5

 and would not be likely to meet the proposed limits. Additionally, units fired on 

oil produce diesel particulates which CARB has identified as a toxic air contaminant and would 

add an extra health risk to the operators and near by residences. Making those fuels subject to 

this rule will effectively prohibit future installations of new devices using those fuels. 

The proposed amendment requires that units distributed, offered for sale, sold, or installed 

within the District have certified NOx and CO emissions less than or equal to the limits shown in 

Table 1. To become certified, natural gas-fired units shall be tested in accordance with the 

South Coast Air Quality Management District Protocol: “Nitrogen Oxides Emission Compliance 

Testing for Natural Gas-Fired Water Heaters and Small Boilers” (included as Appendix E). 

Units fired by fuels other than natural gas seeking certification must do so using standard 

source testing procedures. The CO limits for the largest units ensure that efficient combustion 

is maintained while achieving the NOx limits. 

 

3

 CARB Ozone SIP Planning Inventory. 

4

 Even if all 400 units operated in Sacramento County, that represents less than 0.1% of the total number 

of units within Sacramento County. 

5

 EPA, AP-42 Emission Factors
Staff Report 

Rule 414 

January 15, 2010, Page 7 

 

Table 1. Proposed Emission Limits

NOx Limit 

Nanograms per Joule of Heat Output

(ppmv @ 3% O2)* 

CO Limit 

ppmv @ 3% O2

Heat Input 

Range 

and 

Type Effective 

3/1/1997 

Effective 

1/1/2011 

Effective 

1/1/2013 

Effective 

1/1/2011 

< 75,000 Btu/hr

Mobile Home 

All others 

50 

40 

40 (55) 

10 (15) 

No Limit 

No Limit 

75,000 to < 400,000 Btu/hr

Pool/Spa 

All others 

No Limit 

No Limit 

40 (55) 

40 (55) 14 (20) 

No Limit 

No Limit 

400,000 to < 1million Btu/hr

All Types No Limit 14 (20) 

 

400 

* Where limits are shown in units of both nanograms per joule of heat output and ppmv 

at 3% oxygen, compliance can be demonstrated using either limit. 

The proposed amendments also allow for a 6 month sell through period after the January 1, 

2011 and January 1, 2013 effective dates for non-compliant units to be distributed, offered for 

sale, or sold. These amendments also allow for end users to install non-compliant units at any 

time as long as the unit met the rule requirements at the time of purchase. 

EMISSIONS IMPACT

Emission Inventory

The Sacramento planning emission inventory for NOx6

 from water heaters and small boilers with 

capacities less than 1,000,000 Btu/hr is presented in Table 2 for the three milestone years 

(2011, 2014, and 2017), the attainment year (2018) and the first year that all existing units are 

expected to have been replaced by the units that comply to the proposed amended limit (2029). 

Table 2. Sacramento Planning Emission Inventory for Natural Gas Water Heaters and 

Small Boilers 

NOx Emission Inventory (tpd) 

EIC Code EIC Description 2011 2014 2017 2018 2029 

610-608-

0110-0000 

Residential Natural 

Gas Water Heating 0.9253 0.9503 0.9758 0.9847 1.0820 

060-030-

0110-0000 

Service and 

Commercial 

Natural Gas Water 

Heating 0.3049 0.3092 0.3105 0.3105 0.3097 

Total 1.2302 1.2595 1.2863 1.2952 1.3917 

 

6

 Errata Sheet to Sacramento Regional 8-Hour Ozone Plan 
Staff Report 

Rule 414 

January 15, 2010, Page 8 

SCAQMD conducted surveys of water heaters and small boilers within the South Coast air 

basin, and documented those survey results in their staff reports for Rules 1121 and 1146.2. 

The results of these surveys are expected to be applicable to Sacramento County, because the 

ratios of residential applications to service/commercial facilities such as restaurants, retail 

stores, schools, hotels, and office buildings are similar as shown in Table 3. Although the 

District includes much less heavy industry than SCAQMD, units in industrial applications are 

generally larger in rated capacity than the units affected by this rule. The following information 

was obtained from the SCAQMD staff reports: 

• 98.7 % of the affected units have capacities less than 75,000 Btu/hr 

• 1.06 % of the affected units have capacities between 75,000 and 400,000 Btu/hr 

• 0.215% of the affected units have capacities between 400,000 and 1,000,000 Btu/hr 

• The capacity factors (the ratio of fuel actually burned to the maximum capacity) are 

0.061 for units less than 75,000 Btu/hr and 0.215 for units greater than 75,000 Btu/hr 

• The uncontrolled emission factors for NOx are 0.14 lb/mmBtu of heat input for units 

between 75,000 and 400,000 Btu/hr, and 0.17 lb/mmBtu of heat input for units between 

400,000 and 1,000,000 Btu/hr (The District already limits the emissions of units less than 

75,000 Btu/hr to an emission factor of approximately 0.07 lb/mmBtu of heat input) 

Table 3. Commercial Industry of Los Angeles and Sacramento Counties7

NAICS 

Code Industry Description 

Establishments in 

Los Angeles County 

(2000) 

Establishments in 

Sacramento County 

(2000) 

42xxxx Wholesale trade 22,105 1,263 

44xxxx, 

45xxxx Retail trade 28,126 3,632 

531120 Lessors of nonresidential buildings 

(except miniwarehouses) 1,298 99 

61xxxx Educational services 2,583 300 

622xxx Hospitals 141 16 

623xxx Nursing and residential care facilities 1,654 360 

721110 Hotels (except for casino hotels) and 

motels 939 93 

722110 Full service restaurants 5,893 795 

722211 Limited-service restaurants 5,765 801 

722212 Cafeterias 162 31 

Total Service/Commercial 68,666 7,390 

Total Housing Units 3,270,909 474,814 

Total Establishments 3,441,042 482,204 

% of total establishments that are residential 98.0% 98.4% 

Using this information, Staff allocated the NOx emissions to the three size ranges as shown in 

Table 4, and to the combinations of EIC Code and size range as shown in Table 5. Sample 

calculations of these allocations are presented in Appendix B. 

 

7

 County Business Patterns: 2000, U.S. Census Bureau 
Staff Report 

Rule 414 

January 15, 2010, Page 9 

Table 4. Planning Emissions Inventory Allocated to Size Ranges 

NOx Emission Inventory (tpd) 

Unit Size (Btu/hr) 2011 2014 2017 2018 2029 

< 75,000 0.6923 0.7088 0.7239 0.7289 0.7832 

75,000 to < 400,000 0.3126 0.3200 0.3268 0.3291 0.3536 

400,000 to < 1,000,000 0.2253 0.2307 0.2356 0.2372 0.2549 

Total 1.2302 1.2595 1.2863 1.2952 1.3917 

Table 5. Planning Emissions Inventory Allocated to EIC Code/Size Range 

NOx Emission Inventory (tpd) 

EIC Code/Description 

Unit Size 

(Btu/hr) 2011 2014 2017 2018 2029 

610-608-0110-0000, 

Residential Natural Gas 

Water Heating < 75,000 0.6923 0.7088 0.7239 0.7289 0.7832 

610-608-0110-0000, 

Residential Natural Gas 

Water Heating 

75,000 to 

< 400,000 0.2330 0.2415 0.2519 0.2558 0.2988 

060-030-0110-0000, 

Service and 

Commercial Natural 

Gas Water Heating 

75,000 to 

< 400,000 0.0796 0.0785 0.0749 0.0733 0.0548 

060-030-0110-0000, 

Service and 

Commercial Natural 

Gas Water Heating 

400,000 to 

< 1,000,000 0.2253 0.2307 0.2356 0.2372 0.2549 

Total 1.2302 1.2595 1.2863 1.2952 1.3917 

Emission Reductions

In order to estimate emission reductions, Staff assumed useful lives of affected units to be: 10 

years for units less than 75,000 Btu/hr; 15 years for units between 75,000 and 400,000 Btu/hr; 

and 20 years for units between 400,000 and 1,000,000 Btu/hr. These lifetimes are typical for 

units affected by Rule 414. Table 6 shows the useful lives of units by size range and the 

controlled and uncontrolled emission factors each year as the rule’s emission limits are 

implemented. 

Table 6. Emission Factors and Useful Lives by Size Ranges 

Emission Factor (ppm at 3% O2)

a

Unit Size (Btu/hr) Lifetime 2009 2010 2011 2012 2013 

<75,000 10 55 15 15 15 15 

75,000 to < 400,000 15 115b 55 55 55 20 

400,000 to < 1,000,000 20 143b 20 20 20 20 a

 Based on implementation dates of emission limits 

b

 Uncontrolled emission factors 

Based on the useful lives, it was assumed that the number of units replaced each year will be: 

10% of the units <75,000 Btu/hr, 6.7% of the units between 75,000 and 400,000 Btu/hr; and 5% 

of the units between 400,000 and 1,000,000 Btu/hr. Using these assumptions together with the 
Staff Report 

Rule 414 

January 15, 2010, Page 10 

implementation schedule shown in Table 1, the percent reductions for each size range were 

calculated, as shown in Table 7. 

Table 7. NOx Emission Reduction Percentages by Size Ranges 

NOx Emission Reduction Percentage 

Unit Size (Btu/hr) 2011 2014 2017 2018 2029 

< 75,000 15% 36% 58% 65% 73% 

75,000 to < 400,000 7.0% 21% 38% 43% 83% 

400,000 to < 1,000,000 8.6% 21% 34% 39% 86% 

Applying the emission reduction percentage to the emission inventory, the emission reductions 

were calculated for each size range, as shown in Table 8, and for each combination of EIC 

Code and Size range, as shown in Table 9. Sample calculations for the data presented in these 

tables are in Appendix B. 

Table 8. NOx Emission Reductions by Size Range 

NOx Emission Reductions (tpd) 

Unit Size (Btu/hr) 2011 2014 2017 2018 2029 

< 75,000 0.10 0.26 0.42 0.48 0.57 

75,000 to < 400,000 0.02 0.07 0.12 0.14 0.29 

400,000 to < 1,000,000 0.02 0.05 0.08 0.09 0.22 

Total 0.14 0.38 0.63 0.71 1.08 

Table 9. NOx Emission Reductions by EIC Code/Size Range 

NOx Emission Reductions (tpd) 

EIC Code/Description 

Unit Size 

(Btu/hr) 2011 2014 2017 2018 2029 

610-608-0110-0000, 

Residential Natural Gas 

Water Heating < 75,000 0.10 0.26 0.42 0.48 0.57 

610-608-0110-0000, 

Residential Natural Gas 

Water Heating 

75,000 to 

< 400,000 0.02 0.05 0.10 0.11 0.25 

060-030-0110-0000, 

Service and Commercial 

Natural Gas Water 

Heating 

75,000 to 

< 400,000 0.01 0.02 0.03 0.03 0.05 

060-030-0110-0000, 

Service and Commercial 

Natural Gas Water 

Heating 

400,000 to 

< 1,000,000 0.02 0.05 0.08 0.09 0.22 

Total 0.14 0.38 0.63 0.71 1.08 

Despite the fact that staff has been unable to find evidence of non-gaseous fuel fired units 

operating in the District and the emissions inventory does not show any emissions from this 

category, Staff compared the annual NOx and PM emission output of different types of 

residential water heaters as shown in Table 10. Because Staff was unable to identify any 

retailers supplying heating oil #2 to the District we have assumed that the operator would be 
Staff Report 

Rule 414 

January 15, 2010, Page 11 

firing the unit on diesel. As stated previously in the background section of this staff report 

burning diesel oil in water heaters, boilers and process heaters produce several air toxic 

contaminants adding an extra health risk to the operators and nearby residents. 

Fuel Capacity 

(gallons) 

Input Rating 

(Btu/hour) 

NOx Emissions 

(lb/year) 

PM Emissions 

(lb/year) 

Natural Gas 40 40,000 2.7 0.04 

Propane 36 36,000 2.7 0.04 

Diesel (Heating Oil) 40 40,000 0.50 0.06 

COST IMPACT

Cost and Cost Effectiveness

Section 40703 of the California Health and Safety Code requires that districts consider and 

make public findings relating to the cost effectiveness of implementing an emission control 

measure. Section 401.1 of the proposed amendments to Rule 414 would require a manufacture 

to pay a Source Test Observation and Report Evaluation fee of $1,268 if a model is certified by 

submitting a compliance report for a representative unit, including test results, to the District. 

This fee is based on Section 311 of Rule 301, Permit Fees – Stationary Source. However, 

based on past experience, manufacturers of natural gas-fired units have chosen to comply by 

submitting SCAQMD certifications. Therefore, it is unlikely that manufacturers would incur this 

additional cost. In addition, it is unlikely that manufacturers of liquid or solid fueled units would 

incur this fee because these units are not expected to achieve the proposed emission limits. 

Staff contacted manufacturers of water heaters and small boilers to determine the additional 

costs of units meeting the proposed emission limits compared to the costs of uncontrolled units, 

or in the case of water heaters less than 75,000 Btu/hr, units meeting the current limit. All of the 

compliant units used low NOx burners to meet the proposed NOx emission standards. The 

additional costs of the compliant units are shown in Table 11 (see Appendix C for detailed cost 

information). 

Table 11. Additional Costs of Compliant Units 

Unit Size (Btu/hr) 

Average Additional Cost of 

Unit ($) 

< 75,000 $86 

75,000 to < 400,000 $1,941 

400,000 to < 1,000,000 $7,359 

The cost effectiveness was calculated by dividing the annualized additional cost (using 7% 

interest over the useful life) of new units purchased by the annual emission reduction achieved 

by those units. The overall cost effectiveness of the proposed amendments is $9.04 per pound 

of NOx reduced. The total cost is $503,000 per year. 
Staff Report 

Rule 414 

January 15, 2010, Page 12 

The proposed amendments will subject new oil, wood, coal, and other non-gaseous fuel fired 

units to the proposed standards (excluding LPG fired units). Staff has not been able to find any 

evidence that would show there are these types of units operating within the District. Because 

these types units would likely be unable to meet the proposed standards, making them 

applicable to this regulation would prevent these types of to be installed within the District. Oil 

fired units are the next most prevalent type of water heating fuel besides gas, LPG, or electric8

. 

Staff has conducted an economic analysis of replacement options for an oil fired water heater 

with a 40 gallon capacity listed for residential use, as shown, as in Table 12. This analysis 

assumes a worst case scenario where the owner of the oil fired water heater owns his fuel tank 

and is required to have it removed. Staff was unable to find any dealers in the area that provide 

heating oil #2, and therefore it is assumed that anyone with an oil fired water heater in the 

District might be using diesel oil instead. Staff confirmed an oil fired water heater manufacturer 

that diesel oil can be used as an alternative fuel. Also, for these calculations Staff used the 

assumption that hot water use would be uniform across households despite the type of water 

heater in use. Because oil fired water heaters typically have a much higher input rating than 

natural gas, propane or electric water heaters, there is more hot water readily available. 

Therefore, there is the potential for families with oil fired water heaters to use more hot water 

than a family that has a water heater that is fueled by another fuel, which would drive up annual 

fuel costs and total emission output. 

Table 12. Costs for Replacement of an Oil Fired Residential Water Heater 

Fuel Type Natural Gas Propane Electricity Heating Oil 

(Diesel) 

Capacity 40 gal 36 gal 40 gal 40 gal 

Rated Input 40,000 Btu/hr 36,000 Btu/hr 4,500 Watts 125,000 Btu/hr 

Capitol Cost $1,325 $1,174 $1,012 $2,028 

Oil Tank Removal $500 $500 $500 N/A 

Annual Tank Rental N/A $70 N/A N/A 

Avg. Annual Fixed Cost $260 $238 $215 $340 

Annual Fuel Cost $197 $565 $755 $439 

Total Annual Cost $457 $873 $970 $779 

This analysis shows that natural gas fired units are the least expensive alternative. If a resident 

is using an oil fired water heater, natural gas may be unavailable and therefore, propane or 

electricity may be the compliance option for new replacement of water heaters. Propane has 

the lowest annual cost of these options. These added costs were not added to the overall cost 

effectiveness calculation of this rule due because we do not have information about how many 

of these units are operated within Sacramento County and available information (see page 6) 

suggests that the number is very small or zero. 

 

8

 American Housing Survey for the US 2007 
Staff Report 

Rule 414 

January 15, 2010, Page 13 

Incremental Cost Effectiveness

Pursuant to Health and Safety Code Section 40920.6(a)(3), the District is required to perform an 

incremental cost effectiveness analysis prior to adopting requirements for Best Available Retrofit 

Control Technology (BARCT) or a “feasible measure” requirement pursuant to HSC Section 

40914. The District is required to identify one or more potential control options that achieve the 

emission reduction objective for the regulation. The incremental cost effectiveness of control 

option is the difference in cost divided by the difference in emission reduction potential 

compared to the next less expensive control option. 

The proposed emission limits are readily achievable through the use of low NOx burners. Two 

additional technologies that have been explored for larger sized boilers are flue gas recirculation 

(FGR) and selective catalytic reduction (SCR). Neither of these technologies is currently being 

applied on commercially available units less than 1,000,000 Btu/hr in capacity. 

Currently, more research is being done in modifying the burners to produce less NOx than in 

post-combustion control and FGR. Based on conversations with boiler manufacturers (Parker 

Boiler and Raypack), adding FGR to a smaller unit would result in minimal additional reductions 

when paired with a low NOx burner, and would cost more than a low NOx burner alone. SCR is 

not feasible in applications where units less than 1,000,000 Btu/hr are being used. SCR 

requires ammonia or urea for NOx reduction and units applicable to this rule are typically used 

in residences and service/commercial applications where storage of these materials is 

impractical and could pose a health risk. Additionally, SCR is designed for industrial units that 

run full time and can maintain a temperature that the catalyst requires for NOx reduction, 

whereas smaller units are turned on and off throughout the day and cannot maintain the 

required temperatures. Finally, both FGR and SCR systems require frequent maintenance for 

operation which may not be practical in a residential or small service/commercial setting. 

SCAQMD Rule 1146.2 requires units with rated capacities between 400,000 and 1,000,000 

Btu/hr and more than 15 years old to meet the same emission standards as new units. Meeting 

these standards requires the retrofit, or more likely, replacement of the older units. The 

incremental cost effectiveness of requiring this type of early replacement is $12 per pound of 

NOx reduced. 

SOCIOECONOMIC IMPACT 

CHSC Section 40728.5 requires a district to perform an assessment of the socioeconomic 

impacts before adopting, amending, or repealing a rule that will significantly affect air quality or 

emission limitations. The District Board is required to actively consider the socioeconomic 

impacts of the proposal and make a good faith effort to minimize adverse socioeconomic 

impacts. 

CHSC Section 40728.5 defines “socioeconomic impact” to mean the following: 
Staff Report 

Rule 414 

January 15, 2010, Page 14 

1. The type of industry or business, including small business, affected by the proposed rule 

or rule amendments. 

2. The impact of the proposed rule or rule amendments on employment and the economy 

of the region. 

3. The range of probable costs, including costs to industry or business, including small 

business. 

4. The availability and cost-effectiveness of alternatives to the proposed rule or rule 

amendments. 

5. The emission reduction potential of the rule or regulation. 

6. The necessity of adopting, amending, or repealing the rule or regulation to attain state 

and federal ambient air standards. 

Types of Affected Business and Industry Including Small Business

Rule 414 is a “point of sale” type rule and the source categories affected include water heater 

manufacturers, distributors, plumbing wholesalers, retail home supply stores, plumbers and 

contractors, and homeowners in the District. Since the water heaters and boilers affected by 

the proposed amendments are found throughout the residential and commercial sectors, a wide 

range of businesses and industries may be affected. There are an estimated 7,800 business 

establishments that may be equipped with affected units. As many as 97% of these may be 

small business9

. 

In the District there are approximately 550,000 residential housing units10. Not all housing units 

are equipped with small natural gas-fired water heaters; some may be electric or liquid 

petroleum gas-fired. 

Employment and Economy Impacts

Based upon online searches of yellow pages, there are at least 94 retailers and 6 

wholesalers/distributors of water heaters and boilers in Sacramento County. No manufacturers 

were identified. The proposed NOx limits will increase the cost of new units that are subject to 

Rule 414. There are no water heater or boiler manufacturers that are subject to this rule located 

in Sacramento County. Therefore, to determine the maximum impact in Sacramento County, 

we assume these costs are passed on to consumers in the commercial and residential sectors. 

The increased costs for residents represent approximately 0.02% of the median household 

income. In the commercial sector, the increased cost is less than 0.003% of earnings. Using 

many conservative assumptions, our contractor estimated that 4.23 jobs could be lost annually 

due to this regulation for the entire commercial sector, which contains over 160,000 jobs. The 

detailed analysis can be found in Appendix D of this staff report. 

 

9

 U.S. Census, 2004 

10 U.S. Census, 2005 
Staff Report 

Rule 414 

January 15, 2010, Page 15 

Range of Probable Costs

Rule 414 is a “point of sale” type rule that will require the purchase of compliant water heaters 

and boilers when the existing units are replaced or when new units are added. For a typical 

single family dwelling, the added cost for purchasing a compliant unit is approximately $86. 

Businesses in the service and commercial sector typically have larger units. The additional cost 

for the largest units (950,000 Btu/hr) is approximately $9,400. For more detail on the range of 

probable costs see the “Cost and Cost Effectiveness” section of this staff report. 

Availability and Cost Effectiveness of Alternatives

As discussed earlier in the Incremental Cost Effectiveness section, low NOx burners was the 

only NOx reduction technology available for water heaters, boilers, and process heaters 

applicable to this rule. Currently, there are no commercially available units less than 1,000,000 

Btu/hr in capacity that incorporate post-combustion NOx reduction technology. 

One option is to include a provision for units rated 400,000 Btu/hr and greater but less than 

1,000,000 to meet the new 14 ng/J standards if it is more than 15 years old, as discussed 

previously in the Incremental Cost Effectiveness section of this report. Staff does not 

recommend this alternative at this time for two reasons: 

• the additional emission reductions are small (0.03 tpd in 2018, see Appendix B) because 

units would be nearing the end of their useful lives and would be replaced through 

natural turnover; and 

• units in this size range do not require District permits to operate, making existing units 

difficult to find and enforcement problematic. 

Finally, there is the alternative to not amend the rule. This would result in no cost impacts, but 

would not achieve the NOx emission reductions necessary to satisfy state and federal ozone 

plan commitments. In addition, HSC Section 40914(b)(2) requires the District to adopt “all 

feasible measures”. If the rule is not amended, it would not include measures demonstrated to 

be feasible in the South Coast and Bay Area districts. 

Emission Reduction Potential

The proposed rule will achieve a reduction of 0.71 tons per day of NOx in 2018, the federal 

ozone attainment year, with a reduction of 1.08 tons per day of NOx in 2029, the first year that 

all existing units are expected to be replaced by the lower emitting units (see discussion under 

the Emissions Impact section). 

Necessity of Adopting the Rule

The proposed amendments to Rule 414 reduce emissions of NOx from a size range of small 

water hears and boilers (75,000 – 1,000,000 Btu/hr) that is not currently controlled by District 

rules. The rule will also achieve further NOx reductions from water heaters with capacities less 
Staff Report 

Rule 414 

January 15, 2010, Page 16 

than 75,000 Btu/hr. The amendments are necessary to meet state and federal ozone plan 

commitments. 

OTHER FACTORS

Technological Feasibility

The proposed standards are technically feasible. The low NOx technology is commercially 

available and widely used. Additionally, these standards have already been adopted by the 

South Coast AQMD and the Bay Area AQMD, and except for the limits proposed for 2013 

(which take effect for the SCAQMD in 2012), are already in effect in SCAQMD. As documented 

in the SCAQMD staff report for Rule 1146.2, as of 2006, 18% of the certification tests for units 

between 75,000 – 400,000 Btu/hr and 44% of the certification tests for units between 400,000 

and 2,000,000 Btu/hr were already meeting the 14 ng/J (20 ppmv) standard. SCAQMD 

currently keeps a list of well over 100 certified models that are complaint with the standards in 

Rules 1146.2 and 112111. Liquid and solid fuels, because of the nitrogen and sulfur content and 

other fuel combustion characteristics, emit more than gaseous fuels and would not be likely to 

meet the proposed limits. Making those fuels subject to this rule will effectively prohibit future 

installations of new devices using those fuels. 

Enforceability

Any applicable water heater distributed, offered for sale, sold, or installed within the District must 

be certified in accordance with the SCAQMD Protocol (Nitrogen Oxides Emission Compliance 

Testing for Natural Gas-Fired Water Heaters and Small Boilers, January 1998) or through 

standard source testing procedures and in compliance with the applicable standard. 

Manufacturers are required to submit a compliance report to the APCO showing certification 

prior to sale or distribution for sale. The certification and labeling requirements ensure proper 

identification of compliant units at the point of sale. 

Public Acceptability

The proposed standards have been adopted and implemented by the South Coast and Bay 

Area districts. The standards have future compliance dates to allow time for the distribution of 

compliant units within the Sacramento County market. 

The rule will not require the replacement or retrofit of existing units. Incremental costs will be 

incurred when new units are purchased to replace failed units or to add new units. The majority 

of the affected parties will be homeowners, who will incur relatively small increases in cost. 

Additionally, commercial/service establishments affected by this rule will also have a relatively 

small increase in cost when replacing an older unit. Staff expects the rule and the associated 

costs to be acceptable to the public. 

 

11 SCAQMD certified equipment lists. 
Staff Report 

Rule 414 

January 15, 2010, Page 17 

PUBLIC COMMENTS 

Staff held a public workshop to discuss the proposed Rule 414 amendments on December 16, 

2009. A public notice regarding the workshop was mailed to interested and affected parties 

including all permitted stationary sources, industry associations, retailers, plumbers identified 

through the yellow pages, and all persons who have requested to receive rulemaking notices. 

The notice was also published in the newspaper and posted on the District web site. The draft 

rule and staff report will were available for public review at that time. 

Staff received several comments and questions at the workshop, as well as written comments 

from industry and the EPA. All comments and responses are included in Appendix E. In 

response to public comments, Staff has extended the effective date of the first set of standards 

from 6 months after adoption to January 1, 2011. Additionally, because of the current economic 

climate staff added a provision to allow non-compliant units to be distributed, offered for sale, or 

sold up to 6 months after the January 1, 2011 and January 1, 2013 effective dates in order for 

the industry to deplete their non-compliant stock. This section also allows for end users to 

install non-compliant units at any time as long as the unit complied with the rule regulations at 

the time of purchase. 

ENVIRONMENTAL REVIEW AND COMPLIANCE

Staff finds that the proposed rules are exempt from the California Environmental Quality Act as 

an action by a regulatory agency for protection of the environment (Class 8 Categorical 

Exemption, Section 15308 State CEQA Guidelines) and because it can be seen with certainty 

that there is no possibility that the activity in question may have a significant adverse effect on 

the environment (Section 15061(b)(3), State CEQA Guidelines). 

California Public Resources Code (Section 21159) requires an environmental analysis of the 

reasonably foreseeable methods of compliance. Compliance is expected to be achieved by the 

purchase of compliant equipment when new units are needed or when existing units need to be 

replaced at the end of their normal useful life. The proposed rules will not increase emissions 

and will not cause any other significant adverse effects on the environment; therefore Staff has 

concluded that no environmental impacts will be caused by compliance with the proposed rules. 

FINDINGS

The California Health and Safety Code, Division 26, Air Resources, require local Districts to 

comply with a rule adoption protocol as set forth in Section 40727 of the Code. This section has 

been revised through legislative mandate to contain six findings that the District must make 

when developing, amending, or repealing a rule. These findings, effective January 1, 1992, and 

their definitions are listed in the table below. 
Staff Report 

Rule 414 

January 15, 2010, Page 18 

Rule 414

FINDING FINDING DETERMINATION 

Authority: The District must find that a 

provision of law or of a state or federal 

regulation permits or requires the District to 

adopt, amend, or repeal the rule. 

The District is authorized to adopt rules and regulations by 

the California Health and Safety Code, Sections 39659, 

35666(d), 40001, 40702, 40716, 41010 and 41013. [CHSC 

Section 40727(b)(2)] 

Necessity: The District must find that the 

rulemaking demonstrates that a need 

exists for the rule, or for its amendment or 

repeal. 

The NOx emission reductions from the proposed 

amendments to Rule 414 are necessary to meet the 

commitment in the federal 8-hour ozone demonstration 

plan, submitted pursuant to Section 182(c)(2)(A) of the 

federal Clean Air Act and 40 CFR 51.908. In addition, the 

proposed amendments are necessary to satisfy the state 

commitment in the District’s 2003 Triennial Report, and to 

comply with state requirements including “all feasible 

measures” (CHSC Section 40914), and Transport 

Mitigation Emission Control Requirements (17 CCR 

70600). [CHSC Section 40727(b)(1)] 

Clarity: The District must find that the rule 

is written or displayed so that its meaning 

can be easily understood by the persons 

directly affected by it. 

Staff has reviewed the proposed rule amendments and 

determined that they can be easily understood by the 

affected parties. In addition, the record contains no 

evidence that the persons directly affected by the rule can 

not understand it. [CHSC Section 40727(b)(3)] 

Consistency: The rule is in harmony with, 

and not in conflict with or contradictory to, 

existing statutes, court decisions, or state 

or federal regulations. 

The proposed rule amendments do not conflict with and are 

not contradictory to, existing statutes, court decisions, or 

state or federal regulations. [CHSC Section 40727(b)(4)] 

Non-Duplication: The District must find 

that either: 1) The rule does not impose the 

same requirements as an existing state or 

federal regulation; or 2) that the duplicative 

requirements are necessary or proper to 

execute the powers and duties granted to, 

and imposed upon the District. 

The proposed rule does not duplicate any existing state or 

federal laws or regulations. [CHSC Section 40727(b)(5)] 

Reference: The District must refer to any 

statute, court decision, or other provision of 

law that the District implements, interprets, 

or makes specific by adopting, amending 

or repealing the rule. 

Section 182(c)(2)(A) of the federal Clean Air Act, 40 CFR 

51.908, and CHSC Section 40914. [CHSC Section 

40727(b)(6)] 

Additional Informational Requirements 

(CHSC Section 40727.2): In complying 

with CHSC Section 40727.2, the District 

must identify all federal requirements and 

District rules that apply to the same 

equipment or source type as the proposed 

rule or amendments. 

There are no federal requirements or other District rules 

that apply to water heaters, boilers or process heaters with 

rated heat input capacities less than 1,000,000 Btu/hr. 

(CHSC Section 40727.2) 
Staff Report 

Rule 414 

January 15, 2010, Page 19 

REFERENCES

1. Bureau of Economic Analysis (BEA) – Regional Input Output Modeling System 

(Benchmark detailed industry for Sacramento County, California). Special run requested 

January 23, 2007. http://www.bea.gov/regional/rims/index.cfm, transmitted via March 29, 

2007 memo from Eastern Research Group. 

2. CARB Ozone SIP Planning Inventory, Version 1.06, Sacramento NAA (Rf#980), February 

28, 2007. 

3. Council of Economic Advisors – Economic Report of the President. Table 60. February 

2007. 

4. Errata Sheet to Sacramento Regional 8-Hour Ozone Plan (02/24/09); Water Heater 

Control Measure, SMAQMD-414 

5. Magic Yellow Pages, www.magicyellow.com, Accessed October 2009 

6. Phone call to Jason Fifer of Bradford-White, January 11, 2010 

7. Sacramento Metropolitan Air Quality Management District Rule 411 (NOx from Boilers, 

Process Heaters and Steam Generators) – Amended August 23, 2007. 

8. Sacramento Metropolitan Air Quality Management District Rule 414 (Natural Gas-Fired 

Water Heaters) – Adopted August 1, 1996. 

9. South Coast Air Quality Management District Rule 1121 (Control of Nitrogen Oxides from 

Residential Type Natural Gas-Fired Water Heaters) – Amended September 3, 2004. 

10. South Coast Air Quality Management District, Rule 1121 Compliant Unit Lists, Sent by 

SCAQMD Staff on October 28, 2009. 

11. South Coast Air Quality Management District – Staff Report for Proposed Amended Rule 

1121 (Control of Nitrogen Oxides from Residential Type Natural Gas-Fired Water 

Heaters), November 1999. 

12. South Coast Air Quality Management District Rule 1146.2 (Emissions of Oxides of 

Nitrogen from Large Water Heaters and Small Boilers and Process Heaters) – Amended 

May 5, 2006. 

13. South Coast Air Quality Management District, Rule 1146.2 – Emissions of Oxides of 

Nitrogen from Large Water Heaters and Small Boilers and Process Heaters, List of 

Certified Units, Updated July, 29 2009, http://aqmd.gov/rules/doc/r1146/r1146_2table.pdf

14. South Coast Air Quality Management District – Staff Report for Proposed Amended Rule 

1146.2 (Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers 

and Process Heaters), April 2006. 
Staff Report 

Rule 414 

January 15, 2010, Page 20 

15. U.S. Census 2000, Summary File 1, U.S. Census Bureau 

16. U.S. Census – 2005 American Community Survey, Selected Housing Characteristics. 

U.S. Census Bureau. Accessed February 2007. 

17. U.S. Census – 2006-2008 American Community Survey, Accessed February 2007. 

18. U.S. Census – County Business Patterns: 2004. U.S. Census Bureau. Accessed 

February 2007. 

19. U.S. Census – County Business Patterns: 2000. U.S. Census Bureau. Accessed 

October 2009. 

20. U.S. EPA – Air Quality Criteria for Ozone and Related Photochemical Oxidants, EPA 

600/R-05/004aF. February, 2006. 

21. U.S. EPA, Compilation of Air Pollutant Emission Factors, Volume I Stationary Point and 

Area Sources, AP-42, Section 1.6 – Wood Residue Combustion in Boilers, 2003 

22. Valley Yellow Pages, www.myyp.com, Accessed October 2009 

23. Yellow Pages, www.yellowpages.com, Accessed October 2009 

24. Magic Yellow Pages, www.magicyellow.com, Accessed October 2009 

25. Best Pool Supply, www.bestpoolsupply.com, Accessed January 2010. 

26. Hayward Pool Equipment, www.haywardnet.com, Accessed January 2010. 

27. Laars Pool Equipment, www.laars.com, Accessed January 2010. 

28. Pentair Pool Equipment, www.pentairpool.com, Accessed January 2010. 

29. Raypack, www.raypak.com, Accessed January 2010. 

30. Jandy Pool Equipment, www.jandy.com, Accessed January 2010. 
Appendix A – Summary of Changes 

Rule 414 

January 15, 2010, Page 21 

Appendix A 

Summary of Changes 

Rule 414 

Existing 

Section 

Number 

New 

Section 

Number 

Proposed Change 

Title Same Revised title from “Natural Gas-Fired Water Heaters” to “Water 

Heaters, Boilers, and Process Heaters Rated Less Than 1,000,000 

Btu Per Hour” to be consistent with the expanded applicability of the 

rule. 

101 Same Revised purpose to reflect rule expanded applicability to water 

heaters, boilers, and process heaters less than 1,000,000 Btu/hr. 

102 Same Expanded applicability to include all gaseous and nongaseous fired 

water heaters, boilers and process heaters less than 1,000,000 

Btu/hr. 

110 N/A Removed the exemption for units ≥ 1,000,000 Btu/hr due to 

redundancy with the applicability. 

111 110 Section renumbered. 

112 111 Revised to maintain exemption for pool and spa heaters less than 

75,000 Btu/hr. Units greater than 75,000 Btu/hr will be subject to 

emission standards, consistent with SCAQMD Rule 1146.2. 

113 112 Limited the exemption to only apply to liquefied petroleum gas fired 

water heaters, boilers, and process heaters. 

N/A 201 Added definition of “boiler” consistent with definition in Rule 411, 

NOx from Boilers, Process Heaters and Steam Generators. 

201 202 Revised to define Btu as British Thermal Unit, consistent with 

SCAQMD Rule 1121 and BAAQMD Rule 9-6. 

202 203 Revised definition of heat input, consistent with SCAQMD Rule 1121 

and BAAQMD Rule 9-6. 

203 204 Revised definition of heat output to reference the testing protocol, 

consistent with SCAQMD Rule 1121. 

N/A 205 Added definition of “liquefied petroleum gas” consistent with 

BAAQMD Rule 8-6. 

204 206 Removed “natural gas-fired” because rule is no longer applicable to 

only natural gas-fired units. 

205 207 Section renumbered. 

206 N/A Definition of natural gas-fired water heater deleted and replaced with 

more general definition of water heater (Section 212). 

N/A 208 Added definition of “pool/spa heater,” consistent with BAAQMD Rule 

9-6. 

N/A 209 Added definition of “process heater,” consistent with Rule 411, NOx 

from Boilers, Process Heaters and Steam Generators. 
Appendix A – Summary of Changes 

Rule 414 

January 15, 2010, Page 22 

Existing 

Section 

Number 

New 

Section 

Number 

Proposed Change 

207 210 Section renumbered. 

208 211 Revised definition of “recreational vehicle” to refer to Section 18010 

of the California Health and Safety Code, consistent with SCAQMD 

Rule 1121. This revision keeps the definition the same but now 

includes “a park trailer, as defined in Section 18009.3” of the 

California Health and Safety Code. 

N/A 212 Added definition of “waste heat recovery boiler,” consistent with Rule 

411, NOx from Boilers, Process Heaters and Steam Generators. 

N/A 213 Reworded to define “water heater” instead of “natural gas fired water 

heater,” consistent with SCAQMD Rule 1121. 

301 Same Added table of NOx and CO emission standards for each type of unit 

subject to the rule. Limits are based on SCAQMD Rules 1121 and 

1146.2. For limits that have already been implemented in SCAQMD, 

the limits take effect on 1/1/2011 to allow time for compliance with 

the new standards. The 1/1/2003 effective date for the 20 ppm limit 

on units between 75,000 and 400,000 Btu/hr is consistent with the 

date in SCAQMD Rule 1146.2. 

N/A 302 Given the current economic climate, added section to allow 6 months 

after the 1/1/2011 and 1/1/2013 effective dates for non-compliant 

units to be distributed, offered for sale, or sold. End users may 

install the old units at any time as long as the unit complied with the 

rule requirements at the time of purchase. This section is similar to 

the sell through provision of Rule 442, Architectural Coatings. 

401 N/A Deleted section because the effective date has since passed, and 

because the rest of the statement duplicates Section 301. 

402 401 Added more specific details regarding the required content of 

compliance statements. Included an option to submit an approved 

South Coast AQMD certification. Removed references to natural 

gas-fired units to reflect the rule’s expanded applicability. Added a 

requirement to pay a Source Test Observation and Report 

Evaluation fee pursuant to Section 311 of Rule 301 if a manufacturer 

chooses to certify a model by submitting rest results to the District as 

opposed to submitting a SCAQMD certification. 

403 402 Added a requirement to have manufactures include the 

manufactured year on the rating plate and shipping carton of each 

unit. Revised to include boilers and process heaters, consistent with 

rule applicability. 

404 N/A Deleted section because this calculation applies only to tank type 

water heaters < 75,000 Btu/hr, is included in the emissions testing 

protocol, and does not need to be duplicated in the rule. 

405 N/A Deleted section because this calculation is included in the emissions 

testing protocol and does not need to be duplicated in the rule. 
Appendix A – Summary of Changes 

Rule 414 

January 15, 2010, Page 23 

Existing 

Section 

Number 

New 

Section 

Number 

Proposed Change 

501 Same Expanded test procedure section to include boilers and process 

heaters, consistent with rule applicability. Updated the protocol 

amendment date. Added a procedure to test applicable units not 

fired on natural gas. 

502 Same Expanded duration of records section to include boilers and process 

heaters, consistent with rule applicability. 
Appendix B – Emission Inventory and Reduction Calculations 

Rule 414 

January 15, 2010, Page 24 

APPENDIX B 

EMISSION INVENTORY AND REDUCTION CALCULATIONS 

SCAQMD conducted surveys of water heaters and small boilers within the South Coast air 

basin, and documented those survey results in their staff reports for Rules 1121 and 1146.2. 

The results of these surveys are expected to be applicable to Sacramento County, since the 

demand for hot water is not very sensitive to ambient temperatures, unlike other natural gas 

categories (such as space heating). The following information was obtained from the SCAQMD 

staff reports: 

• 98.7 % of the affected units have capacities less than 75,000 Btu/hr 

• 1.06 % of the affected units have capacities between 75,000 and 400,000 Btu/hr 

• 0.215% of the affected units have capacities between 400,000 and 1,000,000 Btu/hr 

• The capacity factors (the ratio of fuel actually burned to the maximum capacity) are 

0.061 for units less than 75,000 Btu/hr and 0.215 for units greater than 75,000 Btu/hr 

• The uncontrolled emission factors for NOx are 0.14 lb/mmBtu for units between 75,000 

and 400,000 Btu/hr, and 0.17 lb/mmBtu for units between 400,000 and 1,000,000 Btu/hr 

(The District already limits the emissions of units less than 75,000 Btu/hr to an emission 

factor of 0.07 lb/mmBtu) 

EMISSION INVENTORY CALCULATIONS 

Calculation of % of emissions due to each size range 

Basis: 100,000 affected units

# of units < 75,000 Btu/hr = 0.987 x 100,000 = 98,700 

# of units 75,000 – 400,000 Btu/hr = .0106 x 100,000 = 1,060 

# of units 400,000 – 1,000,000 Btu/hr = 0.00215 x 100,000 = 215 

Typical unit input ratings assumed for each size range

<75,000 Btu/hr: 40,000 Btu/hr typical 

75,000 – 400,000 Btu/hr: 237,500 Btu/hr typical 

400,000 – 1,000,000 Btu/hr: 700,000 Btu/hr typical 

Fuel Consumed = (# of units) x (typical input rating) x (capacity factor) x (24 hrs/day)

<75,000 Btu/hr: 98,700 x 0.04 mmBtu/hr x 0.061 x 24 hrs/day = 5,780 mmBtu/day 

75,000 – 400,000 Btu/hr: 1,060 x 0.2375 mmBtu/hr x 0.215 x 24 hrs/day = 1,299 mmBtu/day 

400,000 – 1,000,000 Btu/hr: 215 x 0.7 mmBtu/hr x 0.215 x 24 hrs/day = 777 mmBtu/day 

Emissions = (fuel consumed) x (emission factor)

<75,000 Btu/hr: 5,780 mmBtu/day x 0.07 lb/mmBtu = 405 lb/day 

75,000 – 400,000 Btu/hr: 1,299 mmBtu/day x 0.14 lb/mmBtu = 182 lb/day 

400,000 – 1,000,000 Btu/hr: 777 mmBtu/day x 0.17 lb/mmBtu = 132 lb/day 

Total: 719 lb/day 
Appendix B – Emission Inventory and Reduction Calculations 

Rule 414 

January 15, 2010, Page 25 

Percentage of Emissions for Each Size Range

<75,000 Btu/hr: 100% x 405 lb/719 lb = 56.3% 

75,000 – 400,000 Btu/hr: 100% x 182 lb/719 lb = 25.3% 

400,000 – 1,000,000 Btu/hr: 100% x 132 lb/719 lb = 18.4% 

Inventory allocation: sample calculation for 2018 emission inventory 

Total inventory

Residential Natural Gas Water Heating: 0.985 tpd 

Service/Commercial Natural Gas Water Heating: 0.311 tpd 

Total: 1.296 tpd 

Emission inventory allocation to each size range = (fraction of emissions) x (total emissions)

<75,000 Btu/hr: 0.563 x 1.296 tpd = 0.729 tpd 

75,000 – 400,000 Btu/hr: 0.253 x 1.296 tpd = 0.329 tpd 

400,000 – 1,000,000 Btu/hr: 0.184 x 1.296 tpd = 0.237 tpd 

Emission inventory allocation to size range/EIC code

Assume: 

- All emissions from < 75,000 Btu/hr are residential; balance of residential emissions are 

from 75,000 – 400,000 Btu/hr units; 

- Emissions from 75,000 – 400,000 Btu/hr units that are not allocated to residential are 

allocated to service/commercial; and 

- Emissions from units 400,000 – 1,000,000 Btu/hr are allocated to service/commercial 

For 2018

Residential, < 75,000 Btu/hr: 0.729 tpd 

Residential, 75,000 – 400,000 Btu/hr: 0.985 tpd – 0.729 tpd = 0.256 tpd 

Service/Commercial, 75,000 – 400,000 Btu/hr: 0.329 tpd – 0.256 tpd = 0.073 tpd 

Service/Commercial, 400,000 – 1,000,000 Btu/hr: 0.237 tpd 

EMISSION REDUCTIONS 

Emission reduction percentages are calculated using the following assumptions: 

- Current emission factor for units < 75,000 Btu/hr is 55 ppm (equivalent to 40 ng/J) based 

on current rule limit. 

- Current uncontrolled emission factor for units 75,000 – 400,000 Btu/hr is 115 ppm based 

on SCAQMD estimates 

- Current uncontrolled emission factor for units 400,000 – 1,000,000 Btu/hr is 143 ppm 

based on SCAQMD estimates 

- The average lifetimes of units are 10 year for units < 75,000 Btu/hr , 15 years for units 

75,000 Btu/hr, and 20 years for units 400,000 – 1,000,000 Btu/hr 
Appendix B – Emission Inventory and Reduction Calculations 

Rule 414 

January 15, 2010, Page 26 

- Based on the average lifetimes, each year the following percentages of units get 

replaced: 10% for units <75,000 Btu/hr, 6.67% for units 75,000 – 400,000 Btu/hr and 5% 

for units 400,000 – 1,000,000 Btu/hr. 

The following table shows the emission factors used for each implementation year: 

 Emission Factor (ppm at 3% O2)

Size Lifetime 2009 2010 2011 2012 2013 

<75,000 10 55 15 15 15 15

75,000-400,000 15 115 55 55 55 20

>400,000-<1,000,000 20 143 20 20 20 20

Weighted average emission factors 

Unit lifetimes and emission factors were used to calculate the weighted average emissions 

factors for each year, as described below. 

Sample calculations for 2018

For units < 75,000 Btu/hr, 9 years x 10% = 90% of the units have been replaced with units 

having an emission factor of 15 ppm. The remaining 10% have an emission factor of 55 ppm. 

Weighted average emission factor = (0.9 x 15 ppm) + (0.1 x 55 ppm) = 19 ppm 

Note: By 2019, all of the older units will have been replaced by newer units having an 

emission factor of 15 ppm so the weighted average emission factor will be 15 ppm for 

2019 and beyond. 

For units 75,000 – 400,000 Btu/hr, 3 years x 6.67% = 20% of the units have been replaced with 

units having an emission factor of 55 ppm, and 6 years x 6.67% = 40% of the units have been 

replaced with units having an emission factor of 20 ppm. The remaining 40% have an emission 

factor of 115 ppm. 

Weighted average emission factor = (0.2 x 55 ppm) + (0.4 x 20 ppm) + (0.4 x 115 ppm) = 65 

ppm 

Note: By 2028, all of the older units will have been replaced by newer units with an 

emission factor of 20 and the weighted average emission factor will be 15 ppm for 2019 

and beyond. 

For units 400,000 – 1,000,000 Btu/hr, 9 years x 5% = 45% of the units have been replaced with 

units having an emission factor of 20 ppm. The remaining 55% have an emission factor of 143 

ppm. 

Weighted average emission factor = (0.45 x 20 ppm) + (0.55 x 143 ppm) = 87.65 ppm 

Note: By 2029, all of the older units will have been replaced by newer units having an 

emission factor of 20 ppm so the weighted average emission factor will be 20 ppm for 

2029 and beyond. 
Appendix B – Emission Inventory and Reduction Calculations 

Rule 414 

January 15, 2010, Page 27 

The weighted average emission factors for 2009 (before implementation), the three milestone 

years, the attainment year, and the first full year of implementation are shown in the table below. 

 Weighted Avg Emission Factor (ppm at 3% O2) 

Size 2009 2011 2014 2017 2018 2029 

<75,000 55.00 47.00 35.00 23.00 19.00 15.00

75,000-400,000 115.00 107.00 90.33 71.33 65.00 20.00

>400,000-<1,000,000 143.00 130.70 112.25 93.80 87.65 20.00

Emission reduction percentages 

Emission reduction percentages for each year were calculated using the weighted average 

emission factor for that year and the emission factor for 2009 (i.e., before the amended limits 

take effect). 

Emission reduction % = 100% x [1-(weighted average emission factor) / (2009 emission factor)] 

Sample calculation for 2018

<75,000 Btu/hr: 100% x (1 – 19/55) = 65.5% 

75,000 – 400,000 Btu/hr: 100% x (1 – 65/115) = 43.5% 

400,000 – 1,000,000 Btu/hr: 100% x (1 – 87.65/143) = 38.7% 

The emission reduction percentages for the three milestone years, the attainment year, and the 

first full year of implementation are shown in the table below. 

 Emission Reduction Percentages 

Size 2011 2014 2017 2018 2029 

<75,000 14.55% 36.36% 58.18% 65.45% 72.73% 

75,000-400,000 6.96% 21.45% 37.97% 43.48% 82.61% 

>400,000-<1,000,000 8.60% 21.50% 34.41% 38.71% 86.01% 

Emission Reductions 

Emission reductions for each year were calculated by multiplying the emission inventory for that 

year by its corresponding emission reduction fraction. 

Sample calculation for 2018

<75,000 Btu/hr: 0.6545 x 0.729 tpd = 0.477 tpd 

75,000 – 400,000 Btu/hr: 0.4348 x 0.329 tpd = 0.143 tpd 

400,000 – 1,000,000 Btu/hr: 0.3871 x 0.237 tpd = 0.092 tpd 

Total: 0.683 tpd 

The emission reductions for the three milestone years, the attainment year, and the first full year 

of implementation are shown in the following table. 
Appendix B – Emission Inventory and Reduction Calculations 

Rule 414 

January 15, 2010, Page 28 

 Emission Reductions (tpd) 

Size 2011 2014 2017 2018 2029 

<75,000 0.1007 0.2578 0.4212 0.4771 0.5696 

75,000-400,000 0.0217 0.0686 0.1241 0.1431 0.2921 

>400,000-<1,000,000 0.0194 0.0496 0.0810 0.0918 0.2192 

Total 0.1418 0.3760 0.6263 0.7120 1.0810 

Potential Emission Reductions from Early Mandatory Replacement 

Using the assumption that a unit rated at > 400,000 Btu/hr has a 20 year life span, then 

approximately 1/20 (5%) of the total units should would replaced each year. Under the early 

replacement scenario, units more than 15 years old would be required to meet the new 

emission standards, with a turnover rate of 1/15 (6.7%). 

Units > 400,000 Btu/hr have an uncontrolled emission rate of 143 ppmv at 3% O2 and new units 

will be required to have an emission rate of 20 ppmv at 3% O2. 

By 2018 (the attainment year), there will have been 9 years of turnover to units that comply with 

the new emission limit. With a natural rate of turnover, there will still be 11 years of turnover left 

until all units meet the new standard. However, under the early replacement scenario, there will 

be 6 years left until all units are meeting the new standard. The difference in the percent 

emission reduction in 2018 is: 

[(Average EF, 20 year scenario) – (Average EF, 15 year scenario)]/(Uncontrolled EF) 

100% x [(9x20x1/20 + 11x143x1/20) - (9x20x1/15 + 6x143x1/15)]/143 = 12.9 % 

As shown in Table 4 of the Emission Inventory section, the 2018 emission inventory for units 

rated >400,000 Btu/hr but less than 1,000,000 Btu/hr is 0.2372 tpd of NOx. Therefore the 

additional NOx reduction from early replacement is 12.9% of 0.2372 tpd or 0.03 tpd of NOx.
Appendix C – Cost Information and Calculations 

Rule 414 

January 15, 2010, Page 29 

APPENDIX C 

COST INFORMATION AND CALCULATIONS 

Staff estimated increased costs for waters heaters and boilers that comply with the proposed 

limits. Such units are currently being sold within the South Coast Air Quality Management 

District. 

Units Between 75,000 and 1,000,000 Btu/hr

Currently, the District has no NOx standards for units between 75,000 and 1,000,000 Btu/hr; 

therefore, uncontrolled units can be purchased and installed instead of their more expensive low 

NOx counterparts. Staff contacted the following manufacturers in December 2008 to obtain cost 

quotes for standard and low NOx units, with otherwise comparable features, in varying size 

ranges: 

• Parker Boiler – Contact: Greg Danehauer, (323) 727-9800 

• Raypack – Contact: Richard Nash, (805) 278-5335 

• Rite Boilers – Contact: Jack Coe (502) 862-2135 

The cost quotes are shown below. 

Parker 

Parker Hot Water Boiler, 970,000 Btu/hr 

 Initial Cost 

Standard $10,100

Low NOx $19,000

Difference $8,900

 

Parker Hot Water Boiler, 600,000 Btu/hr 

 Initial Cost 

Standard $6,700

Low NOx $12,500

Difference $5,800

 

Parker Hot Water Boiler, 400,000 Btu/hr 

 Initial Cost 

Standard $6,100

Low NOx $12,000

Difference $5,900
Appendix C – Cost Information and Calculations 

Rule 414 

January 15, 2010, Page 30 

Raypak 

Raypak Hot Water Boiler, 999,000 Btu/hr 

 Initial Cost 

Standard $11,729

Low NOx $21,211

Difference $9,482

 

Raypak Hot Water Boiler, 750,000 Btu/hr 

 Initial Cost 

Standard $10,388

Low NOx $17,316

Difference $6,928

 

Raypak Hot Water Boiler, 500,000 Btu/hr 

 Initial Cost 

Standard $9,047

Low NOx $14,066

Difference $5,019

 

Raypak Hot Water Boiler, 181,000 Btu/hr 

 Initial Cost 

Standard $4,692

Low NOx $5,173

Difference $481

Rite 

Rite Hot Water Boiler, 900,000 Btu/hr 

 Initial Cost 

Standard $8,500

Low NOx $18,250

Difference $9,750

 

Rite Hot Water Boiler, 760,000 Btu/hr 

 Initial Cost 

Standard $7,500

Low NOx $16,850

Difference $9,350

 

Rite Hot Water Boiler, 480,000 Btu/hr 

 Initial Cost 

Standard $6,650

Low NOx $11,100

Difference $4,450
Appendix C – Cost Information and Calculations 

Rule 414 

January 15, 2010, Page 31 

The cost quotes were grouped into narrow size ranges and averaged, as shown below: 

Cost Difference, 900,000 - 1,000,000 Btu/hr 

 Btu/hr Standard Cost Low NOx Cost Difference 

Parker 970,000 $10,100 $19,000 $8,900 

Raypak 999,000 $11,729 $21,211 $9,482 

Rite 900,000 $8,500 $18,250 $9,750 

Average 956,333 $10,110 $19,487 $9,377 

 

Cost Difference, 600,000 - 760,000 Btu/hr 

 Btu/hr Standard Cost Low NOx Cost Difference 

Parker 600,000 $6,700 $12,500 $5,800 

Raypak 750,000 $10,388 $17,316 $6,928 

Rite 760,000 $7,500 $16,850 $9,350 

Average 703,333 $8,196 $15,555 $7,359 

 

Cost Difference, 400,000 - 500,000 Btu/hr 

 Btu/hr Standard Cost Low NOx Cost Difference 

Parker 400,000 $6,100 $12,000 $5,900 

Raypak 500,000 $9,047 $14,066 $5,019 

Rite 480,000 $6,650 $11,100 $4,450 

Average 460,000 $7,266 $12,389 $5,123 

The cost difference of $7,359 was chosen as representative of the midpoint (700,000 Btu/hr) of 

the 400,000 – 1,000,000 Btu/hr units 

To estimate the cost difference at the midpoint (240,000 BTU/hr) of the 75,000 – 400,000 units, 

the data were interpolated between the values for a 181,000 Btu/hr unit and a 400,000 Btu/hr 

unit. 

Cost Difference, 75,000 - 400,000 Btu/hr (240,000 

Interpolated) 

 Btu/hr Standard Cost Low NOx Cost Difference 

Parker 400,000 $6,100 $12,000 $5,900

Raypak 181,000 $4,692 $5,173 $481

Interpolated 240,000 $5,071 $7,012 $1,941

Units < 75,000 Btu/hr

There are hundreds of different models of residential water heaters < 75,000 Btu/hr sold within 

the District. These models must comply with the current Rule 414 NOx limit of 40 ng/J of heat 

output. Similarly, there are hundreds of models of such residential water heaters sold within the 

South Coast AQMD that must comply with a NOx limit of 10 ng/J of heat output. To estimate 

the additional cost of residential water heaters within the District due to adoption of the 10 ng/J 

NOx limit, Staff compared vendor quotes in SMAQMD and compared them to vendor quotes for 
Appendix C – Cost Information and Calculations 

Rule 414 

January 15, 2010, Page 32 

the same manufacturers in SCAQMD. Such a comparison can be complicated by possible 

differences in quality and features of the units being compared, as well as differences in market 

conditions between the two areas. Nevertheless, Staff considered this analysis as the most 

reasonable method to estimate the cost difference. 

Residential water heaters are typically 40,000 Btu/hr with a water storage capacity of 40 – 50 

gallons. The vendor quotes for three brands of water heaters – American, A.O. Smith, and 

Bradford White – are shown below. 

A.O. Smith – SMAQMD 

Model Btu/hr Cost 

GVR – 40 gallon 40,000 $717 

GVR – 50 gallon 40,000 $756 

Mean $737 

A.O. Smith – SCAQMD 

Model Btu/hr Cost 

GCNH – 40 gallon 40,000 $811 

GCHH – 50 gallon 40,000 $851 

GNR – 40 gallon 40,000 $879 

GNR – 50 gallon 40,000 $920 

Mean $865 

American Water Heaters – SMAQMD 

Model Btu/hr Cost 

BFG62-40T0-NOV 40,000 $526 

American Water Heaters – SCAQMD 

Model Btu/hr Cost 

Ultra low NOx 40,000 $555 

UG Series 40,000 $479 

Mean $517 

Bradford White – SMAQMD 

Model Btu/hr Cost 

M-1 Series 40,000 $354 

M-4 Series 40,000 $382 

Mean $368 

Bradford White – SCAQMD 

Model Btu/hr Cost 

U440T6FRN 40,000 $505 

Based on the quotes above, the increased cost for units in SCAQMD vs. SMAQMD, per 

manufacturer, are as follows: 

- A.O. Smith: $129 

- American: -$9 
Appendix C – Cost Information and Calculations 

Rule 414 

January 15, 2010, Page 33 

- Bradford White: $137 

The mean cost difference for all three manufacturers is $86. 

Total Cost and Cost Effectiveness

Uncontrolled Emissions per Unit 

Size Range (Btu/hr) Midpoint Size 

(mmBtu/hr) 

NOx Emission 

Factor (lb/mmBtu)

Capacity 

Factor 

NOx Emissions

(lb/day) 

<75,000 Btu/hr 0.04 0.067 0.061 0.00393 

≥75,000 and <400,000 0.24 0.140 0.215 0.174 

≥400,000 and <1,000,000 0.7 0.174 0.215 0.63 

Controlled Emissions per Unit 

Size Range (Btu/hr) Midpoint Size 

(mmBtu/hr) 

NOx Emission 

Factor (lb/mmBtu)

Capacity 

Factor 

NOx Emissions

(lb/day) 

<75,000 Btu/hr 0.04 0.0182 0.061 0.00107 

≥75,000 and <400,000 0.24 0.0243 0.215 0.0301 

≥400,000 and <1,000,000 0.7 0.0243 0.215 0.0878 

Total Cost and Cost Effectiveness 

Size Range 

and Type 

NOx 

reduction 

per unit 

(lb/year) 

Annualized 

Cost per 

Unit 

($/year) 

Number of 

Units 

Replaced 

per Year 

Total 

Emission 

Reductions 

(lb/year) 

Total Cost 

per year 

Cost 

Effectiveness 

per lb of NOx 

Reduced 

Residential 

<75,000 

Btu/hr 

1.04 $12.19 35,240 36,650 $429,576 

Residential 

≥75,000 

and 

<400,000 

Btu/hr 

52.5 $213.10 179 9,398 $38,145 

Service and 

Commercial 

≥75,000 

and 

<400,000 

Btu/hr 

52.5 $213.10 46 2,415 $9,803 

Service and 

Commercial 

≥400,000 

and 

<1,000,000 

Btu/hr 

198 $694.67 36 7,128 $25,008 

Total 55,591 $502,532 $9.04 
Appendix D – Socioeconomic Impacts 

Rule 414 

January 15, 2010, Page 34 

Appendix D 

Socioeconomic Impacts 

The following table shows the industries and associated NAICS codes that Staff has determined 

are associated with the service and commercial industry that would purchase units subject to 

this regulation. The table also shows the number of establishments and the percent of those 

establishments that would qualify as small businesses according to the 2004 U.S. Census. 

Eastern Research Group, under contract with the District, requested from the Bureau of 

Economic Analysis a special run of the regional input output modeling system to analyze the 

socioeconomic effects of the proposed amendments to Rule 414. The analysis looked at three 

different types of economic effects as a result of the amendments. First, direct effects are 

associated with the change in on-site jobs and new purchases needed to build and operate the 

project. Next, indirect effects occur as local businesses spend their new revenue to re-stock 

and pay their employees. Finally, induced effects result when employees spend their income. 

Induced effects are shown in the following tables as “residential”. The losses shown here are 

associated with the entire economy because an additional portion of residents income must be 

spent on compliant water heaters manufactured outside of Sacramento County instead of being 

spent in the on other goods and services within the County. 

Number of 

Employees 

NAICS (2004) Percent Small 

code Industry Description 

Number 

of Estab. 

(2004) 10 or 

fewer 

100 or 

fewer 

10 or 

fewer 

100 or 

fewer 

42---- Wholesale Trade 1,312 834 1,284 64% 98%

44---- and 

45---- Retail Trade 3,802 2,432 3,667 64% 96%

531120 

Lessors of Nonresidential 

Buildings (except 

Miniwarehouses) 100 89 100 89% 100%

61---- Educational Services 356 212 343 60% 96%

662--- Hospitals 16 1 1 6% 6%

623--- 

Nursing and Residential 

Care Facilities 390 229 363 59% 93%

721110 

Hotels (except Casino Hotels) 

and Motels 98 30 84 31% 86%

722110 Full Service Restaurants 831 446 814 54% 98%

722211 Limited Service-Restaurants 879 375 872 43% 99%

722212 Limited Service-Cafeterias 44 27 43 61% 98%

Sum 7,828 4,675 7,571 60% 97%
Appendix D – Socioeconomic Impacts 

Rule 414 

January 15, 2010, Page 35 

Industry Description 

Annual Loss 

in Output 

Annual Loss 

in Earnings 

Annual Employment 

Loss 

Residential $584,470 $122,672 3.63 

Wholesale Trade $9,838 $2,385 0.05 

Retail Trade $30,358 $7,594 0.26 

Lessors of Nonresidential Buildings $690 $92 0.00 

Educational Services $3,235 $991 0.03 

Hospitals $133 $39 0.00 

Nursing and Residential Care Facilities $3,395 $1,168 0.04 

Hotels (except Casino Hotels) and Motels $853 $294 0.01 

Full Service Restaurants $6,785 $1,882 0.10 

Limited Service-Restaurants $7,177 $1,991 0.10 

Limited Service-Cafeterias $359 $100 0.01 

SUM $647,293 $139,209 4.23 

In order to put these numbers into perspective, we can compare the losses with the overall 

totals for each category. First, the 2004 U.S. Census reports that there are over 160,000 jobs in 

the commercial sector for Sacramento County. The job loss estimated as a result of these 

proposed amendments represents only 0.003% of the total commercial sector jobs. Loss in 

output can be compared to the gross domestic product (GDP) for the commercial sector in the 

Metropolitan area. The GDP is not required to be reported and therefore there is only 

information for certain commercial sectors which include retail trade, educational services, 

accommodation, and food services and drinking places. The total GDP for these sectors is 

$9.27 billion. Because not all sectors were included in the GDP total, this is a conservative 

estimate. The estimated loss in output represents only 0.01% of the total output of these 

commercial sectors. Finally, annual loss in earnings is compared to total earnings. Because 

total earnings are not required to be reported, these data are not available. As a proxy for total 

earnings, we will use the annual payroll data from the 2004 U.S. Census. Because payroll is 

less than the earnings, this will result in an overestimate of the total impact. The total payroll for 

the commercial sector in Sacramento County is $4.8 billion; therefore the total loss in earnings 

is less than 0.003% of the total earnings. 

The median household income for Sacramento County is $57,779 (U.S. Census Bureau, 2006-

2008 American Community Survey). The average increase in cost of a compliant residential 

water heater, $86, amortized over the estimated 10-year life of the unit (7% interest rate), 

represents approximately 0.02% of the median household income. 
Appendix E – Public Comments 

Rule 414 

January 15, 2010, Page 36 

Appendix E 

Public Comments 

EPA Comments (December 7, 2009) 

Comment #1: We recommend that the exemption for pool/spa heaters with a heat input 

less than 75,000 Btu/hr found in Section 111 be eliminated. For example, 

SJV Rule 4902 eliminates this exemption effective 1/1/2010. 

Response: Three districts – Bay Area, Yolo-Solano, and San Joaquin – have recently 

amended their rules pertaining to water heaters rated less than 75,000 

Btu/hr to be essentially consistent with the standards first adopted by the 

South Coast AQMD. However, there has been no consensus on whether 

pool/spa heaters with a heat input less than 75,000 Btu/hr should be 

exempt from the standards. In the South Coast district, and now in the 

San Joaquin district, these units are not exempt. In the Yolo-Solano and 

Bay Area districts, these units are exempt. We reviewed the web sites of 

5 major manufacturers of pool/spa heaters (Hayward, Laars, Pentair, 

Raypak, and Jandy) and one large retailer of pool and spa supplies (Best 

Buy Pool Supply) to determine the number of models/sizes of pool/spa 

heaters being manufactured or offered for sale. Of the 92 models and 

sizes identified, only 4 had an input rating of 75,000 Btu/hr or less. In 

addition, 4 of the web sites had heater sizing charts for various sizes of 

pools and spas, with none recommending heaters smaller than 100,000 

Btu/hr for even the smallest pools and spas. 

After consideration of this information, while we have proposed to subject 

all pool/spa heaters rated 75,000 Btu/hr or greater to NOx emission limits, 

we are proposing to exempt pool/spa heaters rated less than 75,000 

Btu/hr. This exemption will have a minimal effect on the emission 

reductions that will be achieved by the rule amendments. 

Comment #2: The District should consider changing the compliance deadline of 

1/1/2013 to an earlier date similar to SJV Proposed Rule 4308 (November 

5, 2009) which has a compliance deadline of 1/1/2011. The extended 

compliance deadline for Sacramento seems unnecessary since compliant 

equipment should be available sooner nearby to adhere with SJV 4308. 

Response: The standard in question is the 14 ng/J NOx limit for units rated greater 

than or equal to 75,000 Btu/hr and less than 400,000 Btu/hr. This 

standard was originally developed by the South Coast AQMD, and they 

have set a compliance date of January 1, 2012. We have proposed a 

compliance date of January 1, 2013 so that we can evaluate whether 

there are any early problems with manufacture, certification, or availability 

of units meeting this standard in the South Coast district. Our proposed 

compliance date is the same as that established by the Bay Area district, 

and one year earlier than the date established by the Yolo-Solano district. 
Appendix E – Public Comments 

Rule 414 

January 15, 2010, Page 37 

Manufacturers typically certify their units in the South Coast district. In 

our past experience with Rule 414, manufacturers have certified their 

units in our district by submitting the appropriate South Coast AQMD 

certifications, as opposed to submitting test results directly to us. Other 

districts, including Bay Area and Yolo-Solano, also accept the South 

Coast certifications. Setting a compliance date earlier than the date 

required by the South Coast district would put an additional burden on 

manufacturers to first undergo the certification process in our district. For 

these reasons, we continue to propose a compliance date of January 1, 

2013. 

Air-Conditioning, Heating, And Refrigeration Institute (AHRI) Comments (December 15, 

2009) 

Comment #1: We are concerned that the expansion of this rule to include equipment 

fired by nongaseous fuels has not been adequately analyzed or justified. 

The staff report expresses the belief that there are currently no units fired 

by wood, coal or fuel oil operating in the District. If that is correct then 

what is the need to regulate products not being used in the District. 

There are no emission reductions to be achieved by such a regulation. 

Conversely, if the staff report is in error and, for example, there are some 

oil-fired water heaters or boilers operating in the District then applying a 

rule developed for gas-fired products without further analysis of the 

differences between oil-fired and gas-fired products is inappropriate. 

Response: Staff was unable to find any additional evidence that would show there 

are units that fire on non-gaseous fuels operating in the District. This rule 

only applies to new units and therefore having the emission standards 

apply to units fired on non-gaseous fuel will prevent any of these high 

emitting units from being installed within the District in the future. Staff 

has done an economic analysis of converting to a natural gas, LPG, or 

electric powered unit from an oil fired unit, which can be found in the cost 

impact section of this staff report. 

Comment #2: The proposed 6 month delay in the effective date of the revised NOx 

emissions limits is too short for the expanded scope of this amended rule. 

While it is more likely that residential gas storage water heaters can clear 

through the distribution chain and clear inventory in six months, the other 

types of water heaters and boilers proposed to be added to this rule are 

not sold and installed anywhere near the frequency as that of residential 

storage water heaters. The staff report estimates that less than 2% of the 

units affected by this rule will be those with inputs in the range of 75,000 

to 1,000,000 Btu/hr. Distributors and wholesalers will still have to stock 

some of these units, but with significantly less demand, some of these 

units will sit in inventory for more than 6 months. If this rule continues to 

be implemented at “point of sale,” we recommend a 12 month sell through 

period. The better solution would be to apply the rule to the date of 

manufacture, then to make the revised rule effective six months after it is 
Appendix E – Public Comments 

Rule 414 

January 15, 2010, Page 38 

adopted. This is the implementation process that has been successfully 

used in the SCAQMD. 

Response: Staff has extended the effective date from 6 months after adoption to 

January 1, 2011. Additionally, because of the current economic climate 

Staff has added a sell through provision that allows retailers and 

distributors to distribute, offer for sale, or sell non-compliant units for up to 

6 months after the January 1, 2011 and January 1, 2013 effective dates. 

This will allow distributors and retailers a little over 16 months from the 

proposed adoption date of February 18, 2010. Based on comments at 

the public workshop, Staff feels this is adequate time for the retailers and 

distributors to sell through their non-compliant stock. 

Public Workshop (December 16, 2009) 

Participants: George Contos June Livingston Don Thomas 

Laura King Elaine Wong Josh Slade 

Harry Moos Jeff Alkire Jeff Uhler 

Lionel Wade A. Saracen Kevin Weddle 

S. Wendy 

Comment #1: Is the certification testing something that plumbers need to perform? 

Response: No, the certification testing is performed by the manufacturer in order to 

verify the emission rates of new units. 

Comment #2: If a unit meets SCAQMD standards will it meet the proposed standards 

for this rule? 

Response: Yes. Additionally, the District accepts SCAQMD certification for emission 

verification of new units. 

Comment #3: The additional cost for units <75,000 Btu/hr to meet the proposed 

standards is higher than $86 as stated in the staff report. 

Response: Staff used the best information available to calculate the additional costs 

of units to meet the proposed standards. If you would like to provide 

more cost information please send it to the District so we can reevaluate 

the cost calculations. (As of January 14, 2010 Staff has not received any 

additional information.) 

Comment #4: Based on what I have seen on the market District Staff is accurate in the 

cost differentials between current units and units that would meet the 

proposed standards. 

Response: Thank you for your comment. 

Comment #5: Direct vent and power vent units should be excluded from this rule. There 

are no units available that can meet the proposed standards. You should 
Appendix E – Public Comments 

Rule 414 

January 15, 2010, Page 39 

examine how the Bay Area Air Quality Management District (BAAQMD) 

rule handles direct vent and power vent units. 

Response: BAAQMD Rule 9-6 requires direct vent, power vent, and direct power 

vent units rated < 75,000 Btu/hr to meet a standard of 10 ng/J on January 

1, 2011. Based on comments received during the public process, Staff 

has delayed the first effective date from 6 months after adoption to 

January 1, 2011 (about 10 months after the proposed adoption date). 

This would match the BAAQMD requirement for units rated < 75,000 

Btu/hr. Staff talked with a manufacturer of water heaters and they 

confirmed that a power vent water heater that meets the 10 ng/J would be 

available by March 2010. Power vent, direct vent, and power direct vent 

units ≥ 75,000 Btu/hr and < 400,000 Btu/hr currently have to meet a 40 

ng/J standard in the BAAQMD and will have to meet a 14 ng/J standard 

on January 1, 2013 which is consistent with the proposed amendments to 

Rule 414. Finally, power vent, direct vent, and power direct vent units 

must currently meet a standard of 20 ng/J in the BAAQMD and a 

standard of 14 ng/J in 2013. In the SCAQMD these units must currently 

meet a standard of 14 ng/J. Staff feels the technology for emission 

reduction is or will be available for power vent, direct vent, and power 

direct vent in time to have compliant units available by the effective dates 

proposed in the rule. 

Comment #6: We would like a minimum 6 month sell through period where retailers, 

distributors, and dealers can sell through their non-compliant stock. 

Response: Staff has added a sell through period of 6 months after the January 1, 

2011 and the January 1, 2013 effective dates for non-compliant units to 

be distributed, offered for sale, and sold. 

Comment #7: If a unit that is under warranty must be replaced, does it have to be 

replaced with a compliant unit? If it does have to be replaced with a 

compliant unit, who will be responsible for the additional costs? 

Response: A replacement unit is considered a new unit. If the new unit is purchased 

or distributed after the effective dates in Section 301 of this rule, it must 

meet the corresponding standard based on size and type. The issue of 

who pays the additional cost is determined by the terms of the warranty. 

Plumbing-Heating-Cooling Contractors of California (PHCC) Comments (December 22, 

2009) 

Comment #1: Power vent, power direct vent and direct vent water heaters should be 

excluded. No manufacturers currently produce these models. 

Response: See response to public workshop comment #5. 

Comment #2: Timing is everything. Please allow 6 months after the effective date of 

Rule 414 and the date on the plate for inventories to be depleted. This is 
Appendix E – Public Comments 

Rule 414 

January 15, 2010, Page 40 

not much time, but it reduces some concerns with a model or two that 

does not move. Typically, it takes 10 or 11 months to flush out complete 

inventories. 

Response: See response to public workshop comment #6. 

Comment #3: Remember that major manufacturers such as Bradford White, State, AO 

Smith, and Rheem need time to implement production, as California is the 

only one state that requires this, to my knowledge. I would suggest at 

least 10 months. 

Response: Staff changed the effective date of the first set of standards to January 1, 

2011 instead of 6 months after the adoption date. If the proposed 

amendments are adopted at the February board meeting the effective 

date will be a little over 10 months. 
Appendix F – SCAQMD Emission Testing Protocol 

Rule 414 

January 14, 2010, Page 41 

Appendix F 

South Coast AQMD Emission Testing Protocol