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HomeMy WebLinkAboutItem 18 - Proposed Resolution Regarding (SCAMQD)CITY ATTORNEY Sonia R. Carvalho CITY MANAGER Alvaro Nuñez CITY CLERK Jennifer L. Hall 20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org Councilmember-Requested Item Report DATE February 18, 2025 TOPIC Resolution opposing South Coast Air Quality Management District’s (SCAMQD) proposed Amended Rules 1111 and 1121 COUNCILMEMBER-REQUESTED ITEM TITLE Discuss and consider directing the City Manager to direct city staff to bring back the attached Resolution for Council consideration that would OPPOSE South Coast Air Quality Management District's (SCAQMD) proposed Amended Rules 1111 and 1121; Which will have a profound impact and impose significant costs on millions of Southern California homeowners, renters and businesses who are already struggling to make ends meet while providing minimal air quality benefit. DISCUSSION The South Coast Air Quality Management District (SCAQMD) serves as the regional air pollution control agency for Los Angeles, Orange, Riverside, and San Bernardino counties, overseeing the regulation of stationary sources of air pollution. SCAQMD is currently considering the adoption of Rules 1111 and 1121, which aim to regulate air emissions from gas-powered central furnaces and residential-type natural gas-powered water heaters. While the intent of these rules is to reduce air pollution in the region, my office raises concerns about their potential negative impacts on local residents and businesses. These regulations would affect up to 17 million people in the South Coast region, imposing significant financial burdens on homeowners, renters, and business owners while delivering minimal improvements in air quality. The implementation of Rules 1111 and 1121 is expected to result in over $20 billion in costs to consumers. These rules include a ban on natural gas-powered furnaces and water heaters in new construction starting in 2026, as well as a phase-out of existing units by 2027. This would significantly increase construction costs and further exacerbate the housing affordability crisis already affecting Southern California. As local governments face pressure to build more affordable housing, any regulations that raise costs must be carefully examined to ensure that the benefits justify the financial strain placed on residents and businesses. Moreover, the financial burden of complying with these rules is substantial. Homeowners, apartment owners, and businesses would not only need to replace furnaces and water heaters with all-electric models but also invest in costly upgrades CITY ATTORNEY Sonia R. Carvalho ACTING CITY MANAGER Alvaro Nuñez CITY CLERK Jennifer L. Hall 20 CIVIC CENTER PLAZA - P.O. BOX 1988, M31 - SANTA ANA, CALIFORNIA 92702 TELEPHONE (714) 647-6900 - FAX (714) 647-6954 - www.santa-ana.org such as electrical panel changes, new plumbing, and structural modifications. This would increase the cost of both new and existing housing, pricing many potential homeowners and renters out of an already expensive market. Apartment owners would also face significant financial challenges, as the costs of replacing natural gas appliances may be passed on to tenants, driving up rent prices in an already strained rental market. Finally, the transition to all-electric water heaters and furnaces would place additional pressure on California’s already overstretched electric grid. These systems are essential for daily life, and the increased demand from millions of new electric units would heighten the risk of brownouts and power outages. While my office remains committed to supporting sustainable solutions to combat climate change, it is crucial that such measures balance environmental goals with economic realities. SUBMITTED BY Councilmember Penaloza EXHIBIT(S) Exhibit 1 – Draft Motion in Opposition to SCAQMD Rules 1111 and 1121 City of Santa Ana DRAFT MOTION IN OPPOSITION TO SCAQMD RULES 1111 AND 1121 WHEREAS, the South Coast Air Quality Management District (SCAQMD) serves as a regional air pollution control agency for Los Angeles, Orange, Riverside, and San Bernardino counties, tasked with regulating stationary sources of air pollution; WHEREAS, SCAQMD is currently considering the adoption of Rules 1111 and 1121, which would significantly impact up to 17 million homeowners, renters, and businesses in the South Coast region. Rule 1111 seeks to regulate air emissions from gas-powered central furnaces, while Rule 1121 aims to regulate emissions from residential-type, natural gas-powered water heaters; WHEREAS, the implementation of Rules 1111 and 1121 would impose over $20 billion in costs on consumers, while delivering minimal measurable air quality improvements for the four-county SCAQMD service area; WHEREAS, these rules propose a ban on natural gas-powered furnaces and water heaters in new construction beginning in 2026, further increasing construction costs and exacerbating the already significant challenge of housing affordability in Southern California. The rules would also phase out existing natural gas furnaces and water heaters in single-family homes, multi-family housing, and businesses by 2027; WHEREAS, housing affordability remains a critical public policy priority for the City of Santa Ana. Local governments are under increasing pressure to build more housing, particularly affordable housing. Regulations that significantly elevate costs must be thoroughly examined to ensure the benefits justify the financial burden placed on Orange County residents and consumers; WHEREAS, unlike traditional SCAQMD regulations that target large stationary sources of pollution, such as oil refineries and warehouses, Rules 1111 and 1121 specifically impact individual homeowners, apartment complexes, and businesses. This structure places the financial burden directly on hard- working families and business owners; WHEREAS, compliance with Rules 1111 and 1121 would require homeowners, apartment owners, and businesses to invest not only in costly all-electric furnaces and water heaters but also in expensive retrofits, including electrical panel upgrades, extensive new plumbing, and structural renovations to accommodate the compliant units—significantly raising the cost of both new and existing housing and pricing many potential homeowners and renters out of an already expensive market; WHEREAS, the mandate for apartment owners to replace natural gas water heaters and furnaces with all-electric alternatives is financially burdensome. These costs will likely be passed on to tenants, resulting in rent increases that will further strain renters in an already challenging housing market; WHEREAS, transitioning to all-electric water heaters and furnaces will impose a significant increase in electricity demand on California’s power grid, which has demonstrated difficulty in reliably meeting existing demand. Given that water heaters and furnaces are essential for residential and business operations, millions of new electric units would further burden the grid, increasing the likelihood of brownouts and power outages; WHEREAS, the City of Santa Ana remains committed to identifying and implementing sustainable and environmentally friendly solutions to combat the climate change crisis. However, these solutions must be both practical and equitable, balancing environmental benefits with the economic realities faced by residents and businesses; NOW, THEREFORE, BE IT RESOLVED that the City of Santa Ana formally opposes the adoption of SCAQMD Rules 1111 and 1121 due to their significant financial burdens on residents, renters, homeowners, and businesses, their detrimental impact on housing affordability, and the increased strain they would place on California’s electric grid. BE IT FURTHER RESOLVED that the City of Santa Ana urges SCAQMD to explore alternative approaches that achieve meaningful air quality improvements without imposing unreasonable financial hardships on the community, compromising housing affordability, driving out businesses or overburdening the electrical grid.