Air District Rejects Natural Gas Ban, Feds Weigh In

In a rare win for Californians, the South Coast Air Quality Management District (AQMD) voted down aggressive new regulations that would phase out the sale and installation of gas-powered furnaces and water heaters across Southern California. The proposal, part of the AQMD’s plan to reduce nitrogen oxide (NOx) emissions, would impose zero-emission appliance sales targets beginning in 2027, increasing incrementally to 90% by 2036.

If adopted, these rules would have affected approximately 10 million residential units in a sweeping policy shift with major implications for energy choice, affordability, and infrastructure readiness.

Although staff claimed the initiative would improve public health, critics warn of the significant financial burden on consumers. According to AQMD estimates:

• Electric heat pump system installation: $17,200

• Natural gas furnace installation: $11,000

• Heat pump water heater: $3,700

• Natural gas water heater: $3,300

  
  

To soften the blow, AQMD planned to impose surcharges on non-compliant gas-powered appliances, $100 for furnaces and $50 for water heaters, with higher penalties if sales exceed annual emission cap thresholds. These fees would fund rebates and incentive programs to encourage zero-emission appliance adoption.

Critics of the proposal question whether the hypothetical health benefits outweigh the real, immediate costs to families and small businesses, especially as the state's electrical grid faces reliability issues.

The proposal has already drawn over 14,000 public comments, many voicing concerns about energy affordability, forced electrification, and grid capacity. There is widespread concern that low-income households, renters, and small businesses, especially ethnic restaurants and manufacturing firms, will be disproportionately harmed. AQMD has emphasized that the rules apply only to manufacturers and installers and will roll out gradually.