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“Codes and Standards Issues

Impacting Natural Gas Service

and Appliances”

SGA Residential Marketing ConferenceCovington, Kentucky

July 14, 2004

Jim Ranfone Managing Director, Building Codes & Standards

American Gas Association

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AGA’S Role

• Building Energy Codes and StandardsCommittee

– 34 Member Companies – SGA, APGA, GAMA, GTI, NFPA, NPGA,

etc. Represented

• Set Priorities and Guide Activities• Identifies C&S Research Needs

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AGA’S Role

• Secretariat to the National Fuel Gas CodeCommittee

– ANSI Accredited Committee Z223

– 2002 Edition Published• Partner with the International Code Council

– Co-sponsor the International Fuel Gas Code (IFGC)

– 2003 ICC Code Published

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Can Be

Adopted

Directly

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• AGA Website:www.aga.org

• To Order:1.866.816.9444

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AGA’S Role

• Interact with Voluntary Codes and Standards WritingOrganizations – IAPMO UMC and UPC

• AGA Successful In Blocking ANSI Approval

– Building Code Groups – International Code Council’s IBC

– NFPA 5000 Building Code

– ASHRAE

– Building Efficiency and Ventilation Standards

– ASHRAE 90.1 (Commercial Buildings) – ASHRAE 90.2 (Residential)

– 62.1 (Commercial Buildings)

– 62.2P(Residential IAQ)

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AGA’S Role

• Interact with Voluntary Codes and StandardsWriting Organizations

– CSA International

• Gas Appliance Standards (Some utility representation) – Underwriters Laboratories

• Gas Products Council

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AGA’S Role

• Interact with Federal and StateAgencies – Department of Energy

• Furnace Rulemaking – Federal Trade Commission

• Appliance Labeling

– Consumer Product Safety CommissionInfluence On Product Standards

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AGA’S Role

• Interact with Federal and StateAgencies

– HUD Manufactured Home Standard – State Hearings and Code Adoption

Processes When Requested

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Residential Gas Water Heating

• Importance

• Impacts Of Voluntary Standards

Changes

• Impacts Of New Federal MinimumEfficiency Requirements

• NOx Requirements (Ca & Texas)

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The Residential Market

Importance

• Statistical Trends (2003)

– Gas Water Heater Shipm ents

• 5,124,265 (53%) – Electr ic Water Heater Shipm ents

• 4,429,880 (47%)

•Annual Gas Consumption perhousehold about 34 Mcf

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Major Residential Safety

Standard Changes for Gas Water

Heaters

– ANSI Z21.10.1 Requirements

– Flammable Resistant Requirement – 18” Elevation Label Change

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Effective Dates Established By

CSA International

• July 1, 2003

– Conv. 30, 40, & 50 gallon

• January 1, 2005 (Change) – Power Vent, etc. 30, 40, & 50 gallon

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WH Installation Code Changes

• National Fuel Gas Code

• International Fuel Gas Code

• Eliminated 18” elevation requirement

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New Federal DOE) Minimum

Efficiency Requirements

• New Minimums From a .54 EF to .59 EF (40 gal. GasWater Heater)

• Effective Date: 1/20/04

• Design Changes to Meet

– Heat traps, Increased insulation and flue baffles

– Cost increase $58 (DOE 1/17/01)

– Savings $12.74/year (DOE 1/17/01)

– Can be met with atmospheric type designs but concerns aboutreduced margin of safety

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FT Label

• Does provide Est imated Annual Operat ing

Cost

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Sample FT Label

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Texas Commission on Environmental

Quality Rulemaking

Impact of Rulemaking Limiting NOX Emissions from Residential WaterHeaters

Prepared by GARD Analytics, Inc. under contract to the American Gas Association

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Overview

• TCEQ rulemaking designed to reducenitrogen oxide (NOX) emissions from newnatural gas appliances sold and installed

in Texas. – Rulemaking covers water heaters, small boilers,

and process heaters.

– Objective is to reduce the level of ozone in non-

attainment and near non-attainment areas.

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Overview cont’d.)

– Includes provision that residential waterheaters sold after January, 2005 must becertified to have a NO X emission level no

greater than 10ng/j of heat output (15 ppmv at 3.0% O2 , dry).

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Background

• Ozone (O3) is a photochemical oxidant and themajor component of smog.

– High concentrations of O3 at ground level are a major

health and environmental concern. – O3 is formed through chemical reactions between volatile

organic compounds (VOC) and NO X .

– Both VOCs and NO X are emitted by transportation andindustrial sources, including autos, chemical manufacturing,

dry cleaners, paint shops and other sources using solvents.

Source: EPA Green Book

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Background cont’d.)

Source: EPA Technology Transfer Network

0 5 10 15 20 25 30

Emissions (percent of total)

Metals Processing

Solvent Utilization

Storage & Transport

Waste Disposal & Recycling

Natural Sources

Miscellaneous

Chemical & Allied Product Mfg

Fuel Comb. Other

Petroleum & Related Industries

Other Industrial Processes

Fuel Comb. Industrial

Fuel Comb. Elec. Utility

Off-Highway

Highway Vehicles

Texas Annual NOX Emissions

* Includes emissions from residential natural gas combustion (0.50% of total)

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• 1-Hour Ozone Standard – The ozone threshold value is 0.12 parts per million (ppm),

measured as 1-hour average concentration.

– An area meets the ozone National Ambient Air QualityStandards (NAAQS) if there is no more than one day peryear when the highest hourly value exceeds the threshold.

– To be in attainment, an area must meet the ozone NAAQSfor three consecutive years.

Source: EPA Green Book

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EPA Designations

– Nonattainment - any area that does not meet (or thatcontributes to ambient air quality in a nearby area that does

not meet) the air quality standard for the pollutant. – Attainment - any area that meets the national primary or

secondary ambient air quality standard for the pollutant.

– Unclassifiable - any area that cannot be classified on thebasis of available information

Source: Clean Air Act, Section 107(d)1

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Ozone Classifications – Extreme - Area has a design value of 0.280 ppm

and above.

– Severe 17 - Area has a design value of 0.190 upto 0.280 ppm and has 17 years to attain.

– Severe 15 - Area has a design value of 0.180 upto 0.190 ppm and has 15 years to attain.

– Serious - Area has a design value of 0.160 up to0.180 ppm.

Source: Clean Air Act, Section 181

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Ozone Classifications (cont’d.) – Moderate - Area has a design value of 0.138 up to 0.160

ppm.

– Marginal - Area has a design value of 0.121 up to 0.138 ppm.

– Submarginal - Area has a design value of less than 0.121 parts per million.

– Section 185A - Area has not violated air quality standard for

ozone from Jan. 1987 to Dec. 1989.

– Incomplete Data

Source: Clean Air Act, Section 181

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South Coast Air Quality ManagementDistrict

–Established NO X emission limit for residential gaswater heaters in California of 10ng/j of heat output(Rule 1121)

– GAMA requested that implementation of this provision be delayed until January 1, 2006

– GAMA has proposed similar delay for the TCEQrulemaking

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The Problem

• The impact of the TCEQ rulemaking onthe market for residential gas waterheaters is expected to be dramatic.

•No atmospherically vented units thatmeet the provision’s criteria of the arethought to be commercially available atthis time.

• Only viable substitute, electric resistancewater heaters, would only aggravate thecurrent situation.

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Project Objectives

• Analyze the impact of the TCEQrulemaking concerning the control of air

pollution from NOX, specifically as itpertains to residential water heaters.

• Support Texas utilities efforts to reshapethe debate on NOX reduction in

nonattainment areas.• Help other utilities deal with similar future

legislation in their service territories.

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Analysis Approach

• Obtain more detailed information on thesubject rulemaking, including any analysesused to substantiate the proposed

emission levels• Obtain information regarding the process

for amending the language of therulemaking and its implementation.

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Analysis Approach cont’d.)

• Ascertain the availability and installed costof natural gas water heaters that currentlymeet the proposed NOX emission levels.

• Project NOX emission levels innonattainment areas before and afterimplementation of the rulemaking takinginto account market shifts from natural gas

water heaters to electric resistance units.

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Analysis Approach cont’d.)

• Determine whether the rulemaking’s

objective of reducing the level of ozone in

non-attainment and near non-attainmentareas is achievable with the currentprovisions.

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Project Deliverables

• Report summarizing analysis approach,results and recommendations.

– Support possible AGA filing.

– Resource for other utilities faced with similarlegislative action.

• Presentation materials.

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Who’s Next?

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Commercial Water Heater

Market Trends

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COMMERCIAL WATER HEATER SHIPMENTS: GAMA TEN YEAR

STATISTICAL SUMMARY

0

20000

40000

60000

80000

100000

120000

140000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Fuel Type

U n i t s

GAS

ELECTRIC

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MARKET SHARES FOR SHIPMENTS: COMMERCIAL WATER HEATERS

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Years

% S

h a

r e

GAS

ELECTRIC

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Market Shares: Commercial Water Heaters

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

GAS ELECTRIC

Fuel Type

% S

h a

r e

1991

1992

1993

1994

1995

1996

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PERCENT CHANGE IN MARKET SHARE FOR SHIPMENTS: 1991 BASIS

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Years

P e r c e n t C h a

n g e

GAS

ELECTRIC

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Residential Gas Central Heating

• Importance

• Impacts Of Voluntary Standards

Changes• Impacts Of New Federal Minimum


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The Residential Market Importance

• Statistical Trends (2003)

– Gas Furnace Shipments

•3,265,550 (31.4% Condensing i.e. 88% AFUE +)

– Gas Boilers

• 240,000 (est.)

– Annual Gas Consumption per householdabout 67.9 Mcf

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Major Residential Safety Standards:

Residential Gas Central Heating

Equipment

• ANSI Z21.47 (Furnaces)

• Combust ion Sensors?

• ANSI Z21.13 (Boilers)

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Installation Codes

• National Fuel Gas Code (2002) – Currently Working On the 2005 Edition

– Over 166 Active Proposals

– All 12 AGA Proposals Tentatively Approved

• International Fuel Gas Code (2003) – New requirements for combustion air to provide

reasonable alternatives for builders.

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Current Federal DOE) Minimum


• Effective Date: 1/01/92

• Furnace Minimums 78% AFUE(ICS)

• Boiler Minimum 80% AFUE (Indoor) 75%Steam

• Manufactured Home 75% AFUE

• DOE has been conducting Analysis

• Last Workshops July 17, 2001, & May 8, 2002(Venting issues)

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Status of DOE Rulemaking

• DOE Notice expected this month? Will ithappen?

•

Impact Of DOE Air Conditioner Rule - 13SEER Effective 1/23/06

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Comparing Estimated Annual

Operating Costs

• DOE National Average Energy Cos ts:

2003 2004

– Natural Gas: $ 8.16 $ 9.10 per million Btu – Propane: $13.25 $13.46 per million Btu

– Electricity: $24.65 $25.20 per million Btu

– Oil: $ 8.80 $ 9.23 per million Btu

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FT Label

• Does pro vide AFUE Ranges

• No Est imated Annual Operat ing Cos t

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Sample FT Label Natural Gas

Furnace

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Sample FT Label Electric Furnace

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Summary

For More Information Contact

Jim Ranfone

AGA

202-824-7310

[email protected]

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