The Bay Area will begin phasing out the use of gas water heaters and furnaces by the end of this decade in an effort to reduce toxic emissions and protect air quality and public health, following a decision by regional regulators Wednesday.

“This rule amendment begins the bold transformational leadership that’s needed to continue cleaning our air quality,” said Belmont Vice Mayor Davina Hurt who also serves as vice chair of the Bay Area Air Quality Management Board. “Poor air quality does not recognize city lines, district lines or who voted you into office. We must bring a collaborative and collective mentality and work hard together on what is undoubtedly a challenging but absolutely necessary rule. It matters today and people are feeling the effects right now.”

Twenty of 24 Bay Area Air Quality Management Board members voted in favor of amending rules 9.4 and 9.6 — rules govern emissions levels in furnaces, boilers and water heaters — to reduce the permitted level of nitrogen oxides emitted by the appliances to zero.

By 2027, homeowners looking to replace their natural gas water heater will have to seek out an electric version. And by 2029, aging natural gas furnaces will need to be replaced with an electric unit.

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The policy change will not require the replacement of functioning natural gas appliances and homeowners will still be allowed to have their gas water heaters and furnaces repaired if possible. The policy also does not apply to appliances used for cooking, like gas stoves.

Policymakers are targeting furnaces and water heaters because the appliances produce similar rates of NOx as passenger vehicles in the Bay Area. The toxins are known to cause respiratory irritation like coughing, wheezing and difficulty breathing, asthma and increased likelihood of contracting respiratory illnesses. The appliances also emit particulate matter known to cause neurological disease, heart attack, stroke, lung cancer and premature death, according to the Air District.

“The 1.8 million water heaters and furnaces in the Bay Area significantly impact our air quality, resulting in dozens of early deaths and a wide range of health impacts, particularly in communities of color,” Dr. Philip Fine, executive officer of the Air District, said in a press release. “This groundbreaking regulation will phase out the most polluting appliances in homes and businesses to protect Bay Area residents from the harmful air pollution they cause.”

Board members largely supported the amendments, the first of its kind in the nation, as vital steps toward improving public health, particularly among communities of color who are disproportionately affected by the pollutants. By adopting the regulations, officials hope to signal a market demand that will spur quicker innovation in hopes of reducing the cost to install the zero-emission appliances.

Staff acknowledged zero NOx space and water heater technology is currently limited and expensive to install, but projects that availability will increase while the cost will decrease. Through an incremental phase out, they expect the transition to be complete by 2046.

“Many of our most vulnerable community members cannot choose where they live and cannot choose how impacted they are by particulate matter and nitrogen oxide,” District 2 Supervisor Noelia Corzo said. She said the vote is one she will remember for the rest of her life; while noting county residents, particularly rural ones, will need support making the transition. “I know that we are committed to doing everything we can to provide that support at a local and regional level so no one gets left behind.”

Raising concerns

San Mateo County Supervisor Ray Mueller was the lone board member to abstain from voting on the measure. Before casting his vote, he shared a number of concerns about the policy change including worries the industry wouldn’t be ready to meet demand once the policy took effect. He was also concerned residents — particularly middle-class earners often left out of aid programs — would be left with the financial burden of making the switch from gas appliances to electric and potential hidden costs to retrofitting their homes.

“Candidly, what I think is missing from this discussion is the fact that there’s a middle class out there that’s really hurting. Inflation is killing them,” Mueller said. “There are people who make a decent income who are mortgaged who are trying to figure out how to put their kids through college. And I don’t hear a discussion about them here.”

Like many critics of the policy change, Mueller and other members also noted the region’s electrical grid and infrastructure are unreliable and not yet capable of taking on the additional strain. As the decision was being made, hundreds of thousands of Bay Area residents were without power due to recent storms, most of whom live in San Mateo County.

Having recently met with representatives of Pacific Gas and Electric, Mueller said they were forthcoming about being years out from being able to underground electric infrastructure along the county’s coast and rural areas where trees frequently fall and down wiring.

Mueller said he was interested in developing a carveout for residents in his district who were less impacted by the emissions, however, the board as a whole would have had to support the change. No other member shared support for the suggestion publicly. San Leandro Mayor Juan Gonzalez did acknowledged the cost benefits may be more concentrated in denser areas more impacted by the emissions and suggested that the matter be studied further before implementation.

Many of Mueller’s concerns are shared by the county’s energy provider, Peninsula Clean Energy, according to a letter Mueller read during the meeting. In the letter, PCE CEO Janis Pepper highlighted the need for BAAQMD to provide financial support to enable widespread electrification, for PG&E’s cooperation and for the development of an extensive network of qualified contractors and contractor training to meet the anticipated demand.

PCE provides incentives of its own to those looking to switch to electric appliances. Residents can receive a rebate of up to $3,000 for switching to a heat pump water heater and up to $3,500 for switching to a heat pump heating, ventilation and air conditioning system.

Threading solutions

The agency also offers 0% interest loans up to $10,000 through its Zero Percent Loan Program to help people switch to electric water heaters, heating and cooling systems and energy efficient upgrades that reduce carbon emissions and energy use in homes, according to its website.

Additional financial incentives exist outside the county and through the recently passed federal Inflation Reduction Act that includes thousands of dollars in rebates and tax credits for people who switch to electric appliances. Board members stressed the importance of educating the public on what incentives are currently available, making accessing that information as easy as possible, and considering what other forms of incentives BAAQMD could help support.

Members also underscored the importance of ensuring the amendments are implemented equitably with some sharing concerns for what will happen with gas appliances after they’re removed from a home.

Solano County Supervisor Erin Hannigan shared concerns the appliances would end up in the landfill or up for resell while Alameda County Supervisor Nate Miley worried a black market would be created, putting underserved communities more at risk of paying someone under the table to improperly install a gas appliance.

Community concerns and unanswered questions about implementation of the program will be further addressed through a working group. The group will be made up of external stakeholders — members suggested tradespeople and PG&E representatives be invited to participate in the group — who will present an updated report about technological advancements and potential remaining gaps two years before the changes take effect. The board could decide to push off the implementation period depending on the information presented.

“It’s a mandatory requirement, but we’re going to do everything we can to help the consumer achieve the goal. We want to produce a win-win situation as far as I can tell,” Miley said. “Everybody is winning on this. We’re all getting clean air.”

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