Background
On 17 April 2023, in California Restaurant Association v. City of Berkeley, the Ninth Circuit struck down a local ordinance banning natural gas piping in newly constructed buildings. Ultimately, they concluded that federal law preempts the imposed state ordinance. This decision may spell the end for similar regulations banning natural gas in states and municipalities in the Ninth Circuit. Additionally, the decision may have other wide-ranging effects as to the use of natural gas throughout the rest of the nation.
Catching Up
Since then, the Ninth Circuit denied Berkeley’s request to rehear the case and affirmed its decision. The debate over the use of natural gas in residential and commercial buildings has continued to play out throughout the country. Looking forward, these issues will continue to have impacts on energy markets and the development of infrastructure.
Moving Forward with Bans
State and local governments outside of Berkeley have continued to take actions to curb natural gas use in commercial and residential settings. On 7 February 2024, energy officials from nine states, set a shared goal to deploy heat pumps in 65% of new buildings by 2030. Additionally, they agreed to deploy heat pumps to 90% of new buildings by 2040.
New York’s Opposition
On 7 May 2023, New York became the first state to pass legislation prohibiting “fossil-fuel equipment” in new buildings. The New York law partially goes into effect in 2026, applying initially to certain buildings, and expands to all new buildings in 2029. Opposition to the New York gas ban has quickly mounted. In October 2023, gas utilities filed a lawsuit seeking an injunction relying on the same preemption argument that was successful in the Ninth Circuit. If the New York law is upheld, it would set up a circuit split that could find its way to the US Supreme Court.
Washington’s Bans
The Washington legislature failed to enact a state-level gas ban in 2021. However, the State Building Code Council (SBCC), implemented revisions to the state’s building code to achieve a similar result. Those code amendments prohibited, with limited exceptions, fossil-fueled commercial heating, ventilation, and air conditioning systems. They also required the use of electric heat pumps for service of hot water to take effect on July 1, 2023. In response to the CRA decision, SBCC delayed implementation of those code revisions to consider amendments meant to avoid potential preemption issues. On 18 October 2023, SBCC released a revised code that no longer expressly prohibits fossil-fueled HVAC systems or requires the use of heat pumps. Instead, they set energy efficiency requirements on a scoring system dependent on the building’s size which takes effect on March 15, 2024.
