SoCal regulators weigh weakened rules for emissions-free appliances

In 2021, Gayatri Sehgal moved away from the fresh air of upstate New York and into the smog-choked city of Los Angeles. The pollution quickly made their asthma worse. On a given day, Sehgal might be short of breath or wheezing as their airways inflame.

“I’ve felt valid anxieties about the air,” the 28-year-old said. Their symptoms are bad enough that they don’t know if they can continue living in the region.

At a March 21 public meeting, Sehgal, a mental health worker focused on climate issues and an intern with the LA-area chapter of the Sierra Club, urged Southern California regulators not to delay in adopting clean air rules that would support the state’s plan to unleash millions of electric heat pumps — and net a major health win for residents like Sehgal.

Regulators are deciding just how much to heed appeals like these. The South Coast Air Quality Management District is weighing new rules to reduce emissions of nitrogen oxides, or NO_x, the smog-forming byproducts of combustion, by limiting the sale of home gas-fired furnaces and water heaters. About 10 million of these fossil-fueled appliances are currently installed throughout the region, home to more than 17 million residents across Los Angeles, Orange, Riverside, and San Bernardino counties.

Although an earlier draft of the rules would have effectively banned the sale of gas-fired units, the agency’s staff walked back the idea after vigorous opposition from industry, business organizations, city governments, and others.

Now, the agency is proposing to allow manufacturers to gradually ratchet down the amount of gas equipment they sell so long as they pay nominal mitigation fees. Starting in 2027, manufacturers would be required to aim for a sales target of 30% for appliances that meet zero-NO_x emissions standards, i.e., heat pumps and heat-pump water heaters. The fraction would increase to 90% by 2036, but the rules would never require sales of gas appliances to actually stop.

Some advocates are still pushing for updates with stronger teeth, saying the proposed fees are likely too small to get manufacturers to comply. But over two years into a prolonged process that has only diluted the initial proposal, supporters are also urging the agency to get the rules done as soon as possible and lock in their considerable health and environmental benefits. The full board for the district is expected to vote on the rules on June 6.

NO_x emissions are a nationwide problem that many states are actively working to solve. But the challenge is especially urgent in Southern California, which has some of the worst air quality in the country, according to the American Lung Association, a supporter of stronger draft rules.

“We fail to meet several federal air quality standards,” said Sarah Rees, deputy executive officer at the air district, the oldest in the nation. ​“We really need to take all actions that we can to reduce those emissions.”

Most NO_x is from transportation sources, which are regulated by state and federal agencies. But under the SCAQMD’s jurisdiction are the fossil fuel–burning appliances in residential and commercial buildings. These pollution sources are responsible for roughly 76,000 asthma attacks, 30,000 lost school days, and 130 premature deaths each year, according to the advocacy group Coalition for Clean Air and climate think tank RMI. The annual health costs total about $2 billion.

The district first set NO_x emission limits on residential space heaters with Rule 1111 and residential water heaters with Rule 1121 in 1978. Regulators have progressively strengthened them over time, first beginning to consider the shift to zero-emission equipment in 2016.

Though the proposed updates to the rules don’t represent a wholesale shift to NO_x-free units, they could still reduce NO_x emissions by 6 tons per day by 2060. For comparison, the more ambitious rules, which included space heaters in commercial buildings, would have enabled the South Coast to eliminate 10 tons of NO_x per day by 2054.

Still, 6 tons per day is ​“a pretty big chunk,” Rees told Canary Media. ​“It’s about 10% of all of the stationary source emissions [from every factory, refinery, power plant, etc.] in our region.”

The public health benefits would be enormous, according to the district’s socioeconomic impact analysis: more than $25 billion from 2027 to 2053, including about 2,500 lives saved.

Zero-NO_x emissions standards taking off

Zero-NO_x standards for new home appliances aren’t a new concept. San Francisco Bay Area regulators adopted such rules in 2023, and the California Air Resources Board is developing a similar proposal for the entire state.

The trend is growing outside of California, too. Maryland is developing zero-emissions rules for heating homes and businesses, and in 2023, eight more states — Connecticut, Hawaii, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, and Washington — committed to exploring such standards.

The South Coast also has a recent history of health- and climate-aligned rulemaking. In 2023, regulators adopted a first-of-its-kind rule to electrify large commercial bakeries and kitchens. In 2024, they passed another landmark rule to electrify small industrial boilers and large water heaters.

However, this time, critics got the district to refrain from requiring new space and water heaters be electric.

Between September 2024, when the SCAQMD floated a zero-NO_x standard, and February, the staff received over 200 comment letters, with 70% opposed. Among the top concerns raised was affordability for consumers who would be required to buy heat pump equipment when replacing their furnaces or water heaters.

So the district added flexibility to the proposed rules in February. By mid-March, the district had received almost 2,000 letters, with 80% in support of emission-slashing rules. The two largest cities in the air basin, Los Angeles and Long Beach, also adopted supportive resolutions last month.

Yet the minority in opposition has remained unmoved. The Southern California Gas Co. — SoCalGas, the nation’s largest gas-distribution utility — the Orange County Business Council, the Central Valley Business Federation, and others claim that the current proposal maintains an unaffordable zero-emissions mandate. Several cite a recent report whose author works for the California Business Roundtable, an organization SoCalGas parent company Sempra paid membership dues to last year. A SoCalGas employee serves on the Orange County Business Council’s executive committee, and SoCalGas is a founding member of the Central Valley Business Federation.

With growing exasperation, the district’s staff members have pointed out that current draft rules are not an all-electric mandate; they allow consumers to buy gas equipment.

The district staff have presented this information at several city council meetings. ​“Even when we’re in those meetings and saying that there is no mandate, that there is choice … people get up right after and say, ​‘This is a mandate,’” said SCAQMD Executive Officer Wayne Nastri at the March meeting. ​“That is a talking point.”

Moreover, several incentive programs already exist or will soon be available to help residents afford heat pump appliances. California’s new $500 million Equitable Building Decarbonization program alone is expected to install heat pump equipment in more than 10,000 low- and moderate-income households in Southern California at no cost, according to advocates.

The SCAQMD is also launching the $21 million Go Zero pilot program this spring that will provide households and small businesses with rebates for heat pump equipment.

Additional Go Zero funding would come via the air-quality mitigation fees imposed by the rules. Manufacturers would be required to pay $100 for each gas-fired furnace and $50 for each gas-fired water heater they sell within the target limit, and higher fees for units exceeding that limit. In 2027, for example, manufacturers with more than 70% of sales coming from gas-powered equipment would have to pay $500 per unit over the target. Stakeholders expect manufacturers, all of which produce both gas and heat-pump equipment, to pass these fees through to consumers rather than absorb them.

Incentives are crucial, especially for low-income households, because heat pump appliances can cost more up-front than their gas counterparts, and the district’s staff don’t expect energy bill savings to make up for it. Installing a new gas furnace in the average single-family home currently costs $11,000 compared to a heat pump at $19,000, staff members estimated using data from the state incentive program TECH Clean California. For multifamily residences, though, a heat pump costs $1,400 less than a gas furnace on average. 

Advocates call for more ambitious rules

Advocacy groups including California Environmental Voters, Earthjustice, Evergreen Action, and the Sierra Club support the district’s current proposal to adopt heat pumps gradually and use mitigation fees to incentivize the market.

At the same time, they’re calling on the agency to adopt a faster timeline, a target of 100% zero-emissions equipment by 2037, and higher fees that reflect the real health costs imposed on the public when a new gas appliance is installed. Those would be $950 for a gas-fueled water heater and $3,300 for a gas furnace, according to an analysis using the district’s determination that the health costs of NO_x are $383,000 per ton.

The district’s staff have so far rejected these ideas because the costs are high, potentially creating too great a burden for homeowners who choose gas appliances, Heather Farr, SCAQMD’s planning and rules manager, said at the March 21 meeting of SCAQMD’s stationary source committee.

Although advocates want the rules fortified, they called on regulators at the March meeting to vote on them as soon as possible to avoid the risk of further erosion. A public hearing before the full governing board had originally been set for May but was pushed back to June to give the agency more time to communicate with the public.

“We need to put out some facts so that [the cities that appointed us] can get on board and not oppose this as we go forward,” said Larry McCallon, committee chair and mayor pro tempore of the city of Highland.

Los Angeles County supervisor Holly J. Mitchell, committee vice chair who opposed the monthlong delay, took issue with the notion that a regulatory agency responsible for public health should continue to drag out the rulemaking process. The district has already held over 100 stakeholder meetings, 10 public meetings, and over 30 presentations to cities and other groups.

Mitchell, who was formerly a state lawmaker, said that in the state Legislature, ​“we heard thousands of bills a year where we came nowhere near 100 stakeholder meetings…. A bill might be heard in the Assembly twice, [in the] Senate twice, and it became law.”

“So I just want to state my deep concern at a trend this board appears to be succumbing to where, when the going gets tough, we delay a decision,” Mitchell noted. ​“We have a responsibility to do the actions that the people who live in our service area require of us.”

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