A COALITION OF SOUTH BAY BUSINESS LEADERS and anti-regulation advocates is urging Bay Area air regulators to halt a forthcoming ban on gas-powered water heater installations set to take effect next year.
Dozens gathered in front of the Santa Clara County Building Monday afternoon to take part in an event organized by the Silicon Valley Business Alliance. It was a chance to rally opposition ahead of a key vote by the Bay Area Air District board, which adopted a plan to phase out boilers and heaters that emit nitrogen oxide gasses in 2023.
On Wednesday, the district will consider granting one-time exemptions from the ban to several groups, including low-income homeowners as well as those who live in homes that are poorly suited for such retrofits. The opponents of the water heater regulations — which will be followed up in 2029 with a region-wide ban on new gas-powered heaters — argue the measure will take too many homeowners and businesses off guard, forcing them to make costly electrical upgrades.
“Nobody knows how much this will actually cost, or how much time it will consume trying to get upgrades from PG&E. There are so many unknowns with this,” Alliance President Johnny Khamis, a former San Jose Councilmember, told San José Spotlight. “It’s not fair for (the air district) to mandate things when they don’t know how it’s going to affect everyone.”
During the rally, organizers called on participants to make their concerns known to the South Bay elected leaders who serve on district’s board. The 24-member board of directors made up of elected leaders from throughout the bay area includes three members from Santa Clara County — County Board President Otto Lee, Mountain View Vice Mayor Chris Clark and Sunnyvale City Councilmember Linda Sell.
Ban backers say concerns overblown
Concerned that the pressure campaign might succeed, supporters of the ban — which seek to limit polluting gas emissions responsible for serious health ailments — have also been organizing their own outreach effort.
A separate coalition — including a number of South Bay elected leaders, industry professionals, climate advocates, clean air advocates and faith groups — have been writing to district leaders urging them to hold to their original schedule. Organizers say the concerns about the ban’s rollout have been dramatically overblown, arguing that a wide array of rebate programs have brought electric appliance retrofits within financial reach of the vast majority of households. For they rest, they argue, the proposed exemptions, which district officials estimate will apply to 38% of new water heater installations, will offer a sufficient time buffer.
“These appliance rules have been many years in the making,” Angela Evans, a program director at Menlo Spark told San José Spotlight. “Any further delays in implementation will result in more premature deaths and negative health outcomes for Bay Area residents, with young children especially vulnerable.”
District officials have estimated the new standards will prevent approximately 85 premature deaths and 15,000 asthma attacks annually in the Bay Area.
Air district officials acknowledge that heat pump water heaters cost more — on average $3,500 more by the agency’s estimate — to purchase and install than traditional gas-powered counterparts. However, state and local agencies have launched rebate programs to offset that cost. For example, San Jose Clean Energy customers are eligible for rebates of $2,000 to $3,000, according to figures compiled by the district.
But the opponents of the ban argue these figures underestimate the true cost burden many property owners will face. They warn that many older homes with limited electrical capacity will need to shell out for costly electric panel upgrades, or even utility service upgrades, which could add thousands of dollars to a retrofit project.
Dan Pan, who spoke at Monday’s event on behalf of a group that advocates for mom-and-pop Bay Area landlords, warned the costs would be enough to put many out of business.
“The current path does not simply regulate buildings. It threatens the stability of thousands of small housing providers and their tenants who depend on them,” Pan said at the rally. “We cannot stay silent while hardworking families are put at risk.”
Addressing affordability worries
However, supporters of the ban said only a small minority of properties will need major upgrades to install electric appliances.
Urban think tank SPUR cites a survey reviewing 1,700 homes equipped with a 100-amp electrical panel, a capacity often found in older homes. The survey found that 96% of these homes could add both a heat-pump water heater and a heat-pump heating and cooling system without needing a panel upgrade.
The supporters also point to cost estimates that suggest homes with electric appliances save on utility bills.
“The current path does not simply regulate buildings. It threatens the stability of thousands of small housing providers and their tenants who depend on them. We cannot stay silent while hardworking families are put at risk.”
Dan Pan, landlord advocate
“If you’re talking about affordability, you really want the high efficiency electric device, not the gas device,” James Tuleya, a home electrification expert who assists homeowners, told San José Spotlight. “Even though the project up front will cost some more for heat pumps over time, the utility bill savings more than make up for that.”
Over the past several years, a number of South Bay cities — including Campbell, Los Gatos, San Jose, Cupertino, Milpitas and Santa Clara — have taken steps to reduce building emissions, including measures to ban gas hookups in new construction. However, these efforts have been complicated by a 2024 appellate court decision which overturned such a ban in Berkeley.
Supervisor Lee signaled support for the flexibility amendments set for consideration Wednesday.
“I look forward to continuing discussions on flexibility and affordability amendments to ensure low-income residents, small businesses, and those facing infrastructure constraints are supported through this transition,” he told San José Spotlight.
Contact Keith Menconi at keith@sanjosespotlight.com or @KeithMenconi on X.
This story originally appeared in San Jose Spotlight.