BOARD MEETING DATE: December 12, 1997 AGENDA NO. 44
PROPOSAL:
Adopt Proposed Rule 1146.2 - Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers
SYNOPSIS:
Proposed Rule 1146.2 will establish emission limits for oxides of nitrogen (NOx) for new water heaters and small boilers rated between 75,000 and 2,000,000 Btu/hr heat input. Beginning January 1, 2000, new units sold or installed in the AQMD would be certified by the manufacturer to comply with the NOx standards. In addition, beginning July 1, 2002, existing units rated at 400,000 Btu/hr or greater would be phased into compliance with NOx emission standards. It is estimated that the proposed rule will reduce about 9 tons per day of NOx.
COMMITTEE:
Stationary Source, November 21, 1997, Reviewed.
RECOMMENDED ACTIONS:
- Certify the Notice of Exemption for Proposed Rule 1146.2 - Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers; and,
- Adopt Proposed Rule 1146.2 - Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers.
Barry R. Wallerstein, D. Env.
Acting Executive Officer
Overview
Proposed Rule 1146.2 was developed to implement control measure CMB-02B of the 1997 Air Quality Management Plan (also control measure CMB-B of the 1994 AQMP). The proposed rule will address NOx emissions from large water heaters and small boilers rated between 75,000 and 2,000,000 Btu/hr heat input. Currently, the AQMD limits NOx emissions from units rated smaller than this (Rule 1121) and units larger than this (Rule 1146.1). Proposed Rule 1146.2 will seek to achieve an emission reduction from this uncontrolled source category of approximately 9 tons per day of NOx when the rule is fully implemented.
Background
Large water heaters and small boilers are used for a variety of purposes in the AQMD. These units provide hot water, space heating, processing heating, or steam for a large number of facilities, ranging from apartment buildings to large industrial plants. These units are rather simple in their design. Natural gas is typically combusted in an atmospheric burner to produce heat which is transferred to water. Most of these units are similar in their appearance and operation to units which have already been engineered to reduce NOx emissions through Rules 1121 and 1146.1. Indeed, many manufacturers of units in the proposed rule size range already manufacture and market units which comply with the proposed rule limits.
Initial estimates on the number of units in this size range for planning purposes were obtained from The Gas Company. In the 1994 AQMP, an inventory of 23,000 units producing about 6 tons per day of NOx was used. In the 1997 AQMP, an inventory of 48,000 units producing about 3 tons per day of NOx was used. For rule purposes, staff conducted a survey and estimated that there are over 65,000 units creating over 14 tons per day of NOx.
Other jurisdictions have already regulated units in this size range. Ventura County Air Pollution Control District adopted Rule 74.15.1 in May 1993 which requires that all new and existing units rated between 1,000,000 and 5,000,000 Btu/hr heat input meet a NOx level of 30 ppm (@3% O2, dry). Existing units in Ventura County have already been retrofitted and are at or below the NOx standard.
Technology for NOx control is available for all units in the size range. The technology is adopted from the approaches used to comply with Rules 1121 and 1146.1. Reducing NOx can also have the added benefit of reducing natural gas usage. Fuel savings of 10 to 13 percent have been reported by the California Energy Commission.
Proposal
The proposed rule will, in essence, expand the limits of Rules 1121 and 1146.1 to include units in the size range of 75,000 to 2,000,000 Btu/hr heat input. Manufacturers will be required to certify that new units comply with the standards. In addition, larger existing units in this size range will be required to meet the NOx levels through retrofit or replacement.
Beginning January 1, 2000, all newly manufactured units rated greater than 400,000 Btu/hr up to and including units rated at 2,000,000 Btu/hr heat input will be required to meet Rule 1146.1 emission limits - NOx levels not to exceed 30 ppm (@3% O2, dry) and CO levels not to exceed 400 ppm. Beginning January 1, 2001, all newly manufactured units rated between 75,000 and 400,000 Btu/hr will be required to meet Rule 1121 emission limits - 40 nanograms of NOx per joule of heat output.
Existing units rated at greater than 400,000 Btu/hr heat input will be required to meet the emission standards in three phases. By July 1, 2002, all existing units manufactured prior to January 1, 1992, and rated at greater than 1,000,000 Btu/hr up to and including 2,000,000 Btu/hr, will have to be modified, retrofitted, or replaced to meet the NOx and CO levels. By January 1, 2005, all existing units manufactured after January 1, 1992, and rated at greater than 1,000,000 Btu/hr up to and including 2,000,000 Btu/hr will have to be modified, retrofitted, or replaced to meet the NOx and CO levels. By January 1, 2006, all existing units rated at greater than 400,000 Btu/hr up to and including 1,000,000 Btu/hr heat input will have to be modified, retrofitted, or replaced to meet the NOx and CO levels.
The proposed requirements are summarized in the following table:
|
Unit Size (Btu/hr) |
Status |
Requirement |
Timing |
|
75,000 - 400,000 |
New units only |
40 n/j (Rule 1121) |
1/1/2001 |
|
>400,000 - 2,000,000 |
New units only |
30 ppm (Rule 1146.1) |
1/1/2000 |
|
>400,000 - 1,000,000 |
Retrofit |
30 ppm (Rule 1146.1 |
1/1/2006 |
|
>1,000,000 - 2,000,000 |
Retrofit
|
30 ppm (Rule 1146.1) |
7/1/2002 |
|
>1,000,000 - 2,000,000 |
Retrofit
|
30 ppm (Rule 1146.1) |
1/1/2005 |
Exemptions are included for a few select categories of units. An exemption is included for units in mobile homes that mirrors the exemption in Rule 1121. Units at RECLAIM facilities are also exempt, consistent with the underpinnings of that program which removed command and control requirements from a declining universe balance. Low usage and standby units are exempt from the retrofit requirements, consistent with Rule 1146.1 practice. Finally, residential units are also exempt from retrofit requirements consistent with AQMD rules and practices.
AQMP and Legal Mandates
Proposed Rule 1146.2 was developed to satisfy a control measure identified in both the 1994 and 1997 AQMPs. In addition, the proposed rule was developed to satisfy State Health and Safety Code Section 40440 (b) which requires best available control technology for new sources and best available retrofit control technology for existing sources.
Environmental Assessment
Environmental Quality Act (CEQA) and will prepare the appropriate CEQA document. The CEQA document will be made available to the public prior to certification by the AQMD's Governing Board.
proposed rule. Additional compliance costs may result for some users while some users may enjoy a net benefit. The NOx cost effectiveness has been calculated as ranging from $8,400/ton for retrofits to a net savings of $2,900/ton for new larger units.
The AQMD has reviewed the proposed project pursuant to State CEQA Guidelines § 15002 and AQMD CEQA Implementation Guidelines § 1.2, which involves a three-step process for determining the appropriate CEQA document. The first step involves a determination of whether CEQA applies at all. If the project is exempt, the process does not need to proceed any further, and a Notice of Exemption may be prepared (State CEQA Guidelines § 15002 (k)(1)).
Proposed Rule 1146.2 will establish emission limits for NOx for water heaters and small boilers rated between 75,000 and 2,000,000 Btu/hr heat input. It is estimated that the proposed rule will reduce NOx emissions in the AQMD by about nine tons per day. The proposed rule provides an air quality benefit without adversely impacting any other environmental category. Therefore, the proposed project is exempt from the requirements of CEQA because it can be seen with certainty that the proposed rule has no effect on air quality or any other environmental category pursuant to State CEQA Guidelines § 15061 (b)(3) and AQMD CEQA Implementation Guidelines § 5.1 (b)(3).
A Notice of Exemption has been prepared in accordance with State CEQA Guidelines § 15062 and AQMD CEQA Implementation Guidelines § 5.2 - Notice of Exemption, and a copy has been included in the Public Hearing agenda item. The Notice of Exemption will be filed with the county clerks immediately following the adoption of the proposed rule at the Public Hearing.
Socioeconomic Assessment
A Socioeconomic Assessment for Proposed Rule 1146.2 is included as an addendum to the Staff Report. The assessment estimates that the total annual cost of the proposed rule is $1.73 million. Proposed Rule 1146.2 is projected to result in approximately 20 jobs forgone annually, on average, between 2000 and 2015. The cost-effectiveness of the proposed rule ranges from a net cost of $8,400 per ton for a 500,000 Btu/hr unit (retrofit) to a net cost savings of $2,900 per ton for a 1,900,000 Btu/hr unit (new or replacement). The proposed rule implements control measure CMB-02B, which was ranked 10th in the order of cost-effectiveness and is considered for adoption in the order provided in the 1997 AQMP.
Implementation Study
To further address concerns raised by several industry groups, a three-phase implementation study (each phase lasting for approximately 18 months) will be conducted to further evaluate technology advancement, cost impacts, and overall cost effectiveness of the following units:
|
• New Units |
75,000 - 400,000 Btu/hr |
|
• Retrofit |
1,000,000 - 2,000,000 Btu/hr |
|
• Retrofit |
400,000 - 1,000,000 Btu/hr |
The study of each grouping of units will be completed approximately 18 months prior to its implementation date in the rule, and the results will be presented to the Board at the completion of each phase of the study.Resolution. The study will be conducted in coordination with industry, the public, and trade associations, through the formation of an Implementation Steering Committee.
Implementation Plan
existing rules. An extensive outreach program will be included as part of AQMD’s source education program. Working with other interested parties including manufacturers and The Gas Company, staff will identify impacted facilities and provide information and compliance options.
AQMD Resource Impacts
No additional resources will be required as a result of the proposed rule. The requirements for review of certifications and inspections will be accommodated within existing staffing levels.
Attachments (1.518 kb)
Summary of Proposed Rule
Key Issues and Responses
Rule Development Process
Key Contacts
Resolution
Proposed Rule Language
Final Staff Report
Final Socioeconomic Assessment
CEQA Analysis
ATTACHMENT A
SUMMARY OF PROPOSED RULE
|
Rule 1146.2 |
|
1. Establishes emission limits for large water heaters and small boilers rated from 75,000 Btu/hr up to and including 2,000,000 Btu/hr based on existing Rules 1121 and 1146.2. 2. Extends Rule 1121 limits (40 nanograms of NOx per joule of heat output) for units rated up to and including 400,000 Btu/hr manufactured after January 1, 2001. 3. Extends Rule 1146.1 limits (30 ppm NOx @ 3% 02, dry and 400 ppm CO) to units rated from 400,000 Btu/hr up to and including units rated at 2,000,000 Btu/hr manufactured after January 1, 2000. 4. Establishes a new unit certification program for units beginning January 1, 2000. 5. Requires existing units rated >400,000 Btu/hr to meet NOx and CO limits beginning July 1, 2002. 6. Provides exemptions for low usage units, mobile home units, RECLAIM facilities, and residences. |
ATTACHMENT B
KEY ISSUES AND RESPONSES
|
Rule 1146.2 |
|
1. What is the purpose of this proposed rule. The purpose of this proposed rule is to implement Control Measure CMB-02B of the 1997 AQMP, and in the process reduce emissions from boilers and heaters that are rated between 75,000 and 2,000,000 Btu/hr. Currently units rated over 2,000,00 Btu/hr are regulated under Rule 1146.1, while units rated below 75,000 Btu/hr are regulated by Rule 1121. 2. One manufacturer stated that the rule could require a more stringent NOx concentration limit. The proposed rule achieves substantial NOx control, while allowing the use of a variety of burner types. Increasing the stringency would greatly reduce the number of available technologies, while achieving minimal additional emission reductions. 3. The rule should not apply to retrofits. Retrofit requirements have already been required (down to 1,000,000 Btu/hr) in Ventura County. Many companies in the Basin have also retrofit for operational considerations. The technology for retrofits already exists, has been demonstrated for several years, and has been documented to reduce fuel usage. Absent a retrofit program, emission reductions could not be captured in a timely fashion. 4. The rule does not comport with the AQMP which mentioned a study on retrofit units. Staff does agree that additional studies beyond the extensive current evaluation would be useful in the implementation of the rule. Staff is, therefore, proposing a multistage economic study to evaluate the impacts of the rule on new units of less than 400,000 Btu/hr and the impact of all retrofit requirements. |
KEY ISSUES AND RESPONSES
(Continued)
|
Rule 1146.2 |
|
5. A concern was raised over including units of less than 400,000 Btu/hr rated heat input in the proposed rule. The technology to meet the 40 nanogram/joule limit for units of less than 400,000 Btu/hr is the same as has been required for years under Rule 1121. Moreover, the technology is currently in the market place as it is offered by many manufacturers. Control of this segment will reduce NOx emissions by over one ton per day by the year 2010. 6. The cost effectiveness values for new and retrofit units is too low (specifically baseline emission rate capacity factor and fuel savings). Staff based cost effectiveness values on documented sources and survey data.
Capacity Factor
|
KEY ISSUES AND RESPONSES
(Continued)
|
Rule 1146.2 |
|
Fuel Savings
7. Safety. Concerns over safety have been raised by several manufacturers and industry trade groups, particularly in reference to retrofits. Safety is always a concern, however, this proposed rule relies on commercially available and proven technology that has been operating in a safe manner for a number of years. Proposed Rule 1146.1, covering units over 2,000,000 Btu/hr, currently has required hundreds of boilers to successfully retrofit in a safe manner. In estimating costs, an additional safety factor was included to cover equipment such as additional sensor and control devices for safety. |
KEY ISSUES AND RESPONSES
(Continued)
|
Rule 1146.2 |
|
8. Enforcement may be difficult for unpermitted sources. It will be challenging to create a level playing field for new and retrofit units. Enforcement will be a critical factor of the Rule 1146.2 compliance program. Staff will use techniques developed from our survey to identify and field verify units in the subject size range. These techniques have minimal impacts on existing resources. Compliance will also be simplified as many of these units already exist at permitted facilities which receive periodic inspections. Staff will also randomly test manufactures to verify new unit performance. Staff will work with stakeholders through an extensive implementation outreach effort to ensure compliance with the proposed limits. |
ATTACHMENT C
RULE DEVELOPMENT PROCESS
Rule 1146.2 - Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers
Preliminary Background Research
February 1996-June 1996
Secondary Data Collection
April 1996-August 1996
Primary Data Collection - Study Designs
May 1996-July 1996
Meetings with Boiler Manufacturers and The Gas Company
May 1996-October 1997
Survey of Industries and Sampling Implementation
May 1996-October 1997
Data Verification and Analysis
September 1996- August 1997
Meetings with Apartment Associations
August 1997-October 1997
Meetings with End User Groups
August 1997-October 1997
Public Workshop
September 10, 1997 (38,000 Notices Mailed)
Field Verification Studies
October 1997-November 1997
Public Consultation Meeting
October 1997 (38,000 Notices Mailed)
Set Hearing: November 14, 1997
Public Hearing: December 12, 1997
Total Time Spent in Rule Development
Pre-Board Hearing: 20 months
ATTACHMENT D
KEY CONTACTS
• Equipment Suppliers/Distributors/Contractors
Alzeta Corporation
Debinaire Company
L. O. Schuelke Co., Inc.
Superior Boiler Works, Inc.
• Consultants
Arthur D. Little, Inc.
Benrich Service Company
Combustion Associates, Inc.
Lincoln Residential Services
Pro Star Mechanical
Sares Regis Group
Shea Business Properties
• Manufacturers/Industries/Regulated Community
Ajax/Ace Boiler, Inc.
Clayton Industries
Dixon Boiler Works, Inc.
Elmco Delaney (Lochinvar)
Fulton Boiler Works, Inc.
General Boiler - Steam Equipment Company
McKenna
Miura Boiler West, Inc.
Parker Boiler Company
Raypak
Rite Corporation
SGBM, Inc./SCHOTT, Inc.
Teledyne-Laars
Thermo Steam Boiler, Inc.
VKES, Inc.
Zwick
• Associations/End Users
Apartment Association California Southern Cities, Inc.
Apartment Association Greater Inland Empire
Apartment Association of Greater Los Angeles
CALSEIA
Downtown Los Angeles Property Owners Association
Gas Appliance Manufacturers Association (GAMA)
Irvine Apartment Communities
• Governmental Associations
Air Resources Board (ARB)
EPA Region IX
Santa Barbara County Air Pollution Control District
State of California Energy Commission
Ventura County Air Pollution Control District
• Other Interested Parties
Pacific Enterprises
The Gas Company
/ / /