Stroll: Bay Area electric mandates — a vast expense with minimal benefit

Will you or your landlord need to replace your gas-fired furnace or water heater? Starting in less than two years, it may cost tens of thousands of dollars if the Bay Area Air Quality Management District has its way. And it’s unlikely to make much difference to air quality.

A district report notes that some 120,000 household water heaters turn over in the Bay Area annually. It wants the replacements to be electric starting in 2027.

It offers these rationales:

Along with an electric-heating mandate to begin in 2029, it “will avoid an estimated 37 to 85 premature deaths per year.”

In theory, per the report, average purchase and installation should cost $7,071 before rebates. However, data from September 2024 shows costs ranging from $2,900 to $38,800 when electrical-deficiency or lack-of-space issues arise.

To address the deficiency issue, the district recommends “‘watt diet’ or panel optimization strategies (low-voltage appliances; circuit pausing/sharing; smart panels).” Still, an electric water heater “may necessitate…a higher voltage socket…; ventilation; drainage; and/or appliance relocation,” and that “this work could take weeks.” If a service upgrade is needed, the report muses about how to improve Pacific Gas & Electric (PG&E) wait times.

One wonders how well a toaster, iron or kettle on a watt diet will work, once the wait is over.

The report acknowledges that “from 75 to 90 percent of water heater replacements in California only happen upon failure of the existing appliance.” Its proposed solution? Homeowners should plan in advance for a water heater failure.

The report worries the ban could have “significant negative effects on renter households, including displacement, eviction, stress, and economic hardship,” but expresses satisfaction that owners will have to foot much of the expense, with tenants insulated by rent control policies. It recommends more rent controls “to limit rent increases and/or pass throughs related to (electric) appliance replacements.” Of course, what you burden you get less of, and the rental housing supply is no exception.

When the foregoing is the proponents’ evaluation of these bans, it’s worrisome. Interest groups representing homeowners and landlords have a gloomier take. The Santa Clara County Association of Realtors surveyed contractors who estimated costs per home at $43,950 to $224,000. Its figures rely on replacing stoves and dryers as well as water heaters and furnaces.

Let’s pick a random lower figure and assume the Bay Area Air Quality Management District ban will cost each home $12,000. If 120,000 homes need a new water heater annually, the cost will be about $1.5 billion every year. That is a lot of money to “avoid an estimated 37 to 85 premature deaths,” assuming there’s a basis for that claim.

What could we do instead with that amount of money?

One answer would be to spend $1.5 billion annually to remediate homeless encampments. Encampment fires are ubiquitous in Santa Clara County. San José Spotlight reported in February that “over the past year thousands of non-structural fires have been sparked by homeless camps, causing toxic fumes and safety problems for people and property.”

The proposed Bay Area Air Quality Management District bans should be regarded skeptically. It is hard to believe they will be implemented once citizens start to discern the problems. Assemblymember Carl DeMaio (R–San Diego County) has introduced legislation to override these types of prohibitions. It deserves close consideration in Sacramento. But better not to implement them in the first place.

Ted Stroll served as a judicial staff attorney in the California Supreme Court from 1989 to 2007 and the California Court of Appeal in San Jose from 2007 to 2013. He was a candidate for the state Legislature from San Jose in 2022 and 2024.