BOARD MEETING DATE: July 9, 1999 AGENDA NO. 16
PROPOSAL:
Report on Implementation Study Findings and Recommended Action for Rule 1146.2 – Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers
SYNOPSIS:
In January 1998, the Board adopted Rule 1146.2 – Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers. The rule establishes NOx emission limits for water heaters and small boilers rated between 75,000 and 2,000,000 Btu/hr heat input. At the adoption hearing, the Board directed staff to report back on the implementation of the rule. This report summarizes the first phase of the Implementation Study findings for new equipment rated between 75,000 and 400,000 Btu/hr.
COMMITTEE:
Stationary Source, June 18, 1999, Reviewed
RECOMMENDED ACTION:
Receive and file.
Barry R. Wallerstein, D. Env.
Executive Officer
Background
Rule 1146.2 – Emissions of Oxides of Nitrogen from Large Water Heaters and Small Boilers was adopted on January 9, 1998. This rule implements control measure CMB-02B of the 1997 AQMP. It requires emission reductions from large water heaters and small boilers ranging from 75,000 Btu per hour (Btu/hr) up to and including 2,000,000 Btu/hr. While the rule is only applicable to natural gas fired units, this type of equipment is ubiquitous throughout the Basin and located at facilities covering a wide range of industries. This size range of equipment was previously not subject to emissions limits and uncontrolled emissions are estimated to be approximately 14.2 tons per day. When fully implemented, it is estimated that the rule will achieve a NOx emissions reduction of approximately 10.7 tons per day.
At the time of adoption staff was directed to continue studying key issues regarding rule implementation and to report their findings back to the Governing Board. Staff has completed the first phase of this Implementation Study including recommendations.
Implementation Study
Rule 1146.2(i) requires that staff in cooperation with industry and members of the public continue to track the feasibility of specific aspects of the rule. Staff is required to report back to the AQMD Governing Board 18 months prior to the effective date of certain key requirements. The first of these requirements is 1146.2(c)(2) which requires manufacturers and distributors to sell only Type 1 equipment that meets the emissions standards of 40 nanograms per joule or 55 ppm, by January 1, 2001.
After the rule was adopted, an Implementation Steering Committee was formed consisting of manufacturers, distributors, end-user associations, Gas Appliance Manufacturers Association (GAMA), The Gas Company, and AQMD staff. In order to assist the committee in its efforts, a contract was awarded to Energy and Environmental Research Corporation (the complete report for the first phase of the study is available upon request). Pursuant to rule requirements, the work of the committee focused on a number of issues. The findings and staff recommendations relating to each of these issues is summarized below. For a more in-depth discussion of each of these issues, please refer to the attached Staff Report.
Current and Potential Future Availability of Low-NOx Burners and Boilers
| Finding: | There are currently several manufacturers offering a variety of commercially available new low-NOx boilers that meet and in many cases exceed the required emission standard for compliance with the Rule 1146.2(c)(2). |
Cost Differential Between Standard Units and Low-NOx Units
| Finding: | Cost premiums for low-NOx compliant boilers have decreased significantly. Currently, typical price premiums are between 30% to 60% down from 150% initially. In addition, premiums are expected to further decrease. |
Potential Fuel Savings From Low-NOx Units
| Finding: | On average unit efficiencies have improved slightly when comparing new low-NOx equipment and standard new equipment. An increase in efficiency correlates with a decrease in fuel usage. |
Certification and Related Standards Including Safety
| Finding: | Currently, three manufacturers have had 11 different models of low-NOx boilers certified. No issues with regards to safety of Type 1 Units have been raised. Type 1 Units will not have to be retrofitted as an approach to complying with the requirements of the rule. |
Emissions for a Typical Unit
| Finding: | Uncontrolled baseline emissions from the typical Type 1 Unit are approximately 110 parts per million. There are approximately 126,000 units in this size range, resulting in a potential NOx reduction of 1.5 tons per day. |
Appropriate Fuel Use Exemption
| Finding: | Not applicable to this category of units. |
Timing of the Proposed Retrofit Requirements
| Finding: | Not applicable to this category of units. |
Cost-Effectiveness and Cost Impacts on Selected Industries and Small Businesses
| Finding: | Typically, initial premium equipment costs are between $200 and $2,800, depending on the size of the unit. Currently, this represents a 30% to 60% initial price premium. The Type I requirements should have a minimal cost impact on industry and small businesses. |
AQMP and Legal Mandates
Rule 1146.2 implements Control Measure CMB-02B of the 1997 AQMP. In addition, the SIP has been filed and approved for this rule.
Issues
During the Implementation Committee Meetings, a number of issues were raised and discussed regarding Type I Units. Although most issues have been resolved, two remain. These issues are requests by GAMA for additional time for tank type water heaters to comply with the rule, and for an exemption for pool heaters.
These concerns regarding tank-type units were predicated on the basis that no comparable tank-type replacement equipment existed. It has however recently been determined that several comparable replacement models exist. At least 3 manufacturers provide comparable compliant tank-type replacement equipment. Furthermore, the
particular compliant models currently available cover the most popular size range within the tank-type subcategory. Also, this Type 1 subcategory is the most cost-effective at $5,000 to $9,900 per ton of NOx.
From an inventory perspective pool heaters are the single largest aggregate source of NOx emissions and comprise 65% of the Type 1 equipment population. When fully implemented the emissions reductions for this subcategory will be approximately 0.5 tons per day. Pool heaters in this size range are also used in multi-family dwellings not considered residential and some institutional applications where load factors are much higher. Since no other rule currently exists nor would this equipment category be subject to the provisions of any other rule (e.g. NSR), staff recommends that newly manufactured replacement water heaters not be exempted.
Staff Recommendations
Based on the detailed findings of the Implementation Study and the results of the certification program, staff recommends no changes to the rule be pursued at this time.
A. Rule 1146.2 Implementation Steering Committee Meeting Participants
B. Staff Report
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