A movement to phase out natural gas-burning appliances in houses and condos as well as commercial buildings to help with climate change is shifting gears in the face of legal challenges.
Officials in Berkeley, California, unsuccessfully asked voters just this week to impose a tax on buildings of at least 15,000 square feet that use natural gas. While it exempted single-family houses, proceeds from the tax were to be used to retrofit these homes with electric heating and ventilation systems and appliances. It was the latest strategy Berkeley embraced after an attempt to ban builders and property owners from installing gas appliances such as furnaces, water heaters and stoves in new homes ran into legal trouble.
The U.S. Ninth Circuit Court of Appeals ruled in 2023 that a Berkeley ban was preempted by a 1970s federal law, the Energy Policy and Conservation Act, that set energy efficiency standards for appliances. As long as appliances meet those standards, the appeals court said, local governments can’t regulate them — leading some California cities besides Berkeley to step back from gas bans for new construction.
Around the country, cities and states are looking to restrict the use of gas, but not by simply attempting to vote to do so or putting in blunt bans. Instead, a number of state and local code commissions are updating building and energy codes because the Energy Policy and Conservation Act exempts the codes if builders are given a set of options to meet energy goals provided certain requirements are met.
It comes as the National Association of Home Builders recently joined several other parties in suing Washington, D.C., and Montgomery County, Maryland, for outlawing gas in new construction, citing the same federal law that was at issue in the Berkeley case.
“This legal action is necessary to protect the right of customers to choose the affordable, reliable energy sources that meet their needs and budget,” the NAHB said in a statement. The group did not respond to a request for an additional comment.
Gas bans
Natural gas use in the U.S. was responsible for about 36% of carbon dioxide emissions from fossil fuels in 2020, according to a report by the Rocky Mountain Institute, a research organization focused on energy efficiency. Commercial and residential buildings make up 11% of those emissions through burning gas for heating spaces and water, as well as for cooking. So homes and other structures are a key target for local governments as they see switching from gas to electric as a way to ward off the worst effects of climate change.
Elected officials on Washington’s city council approved a gas ban in 2022 in commercial buildings, including residential structures over three stories, to take effect in 2027. In response, the city’s code commission, appointed by Mayor Muriel Bowser, is reviewing the energy code to incorporate a standard that says no appliances can be installed in new buildings if they add to the greenhouse gas level in the atmosphere. Gas-burning devices like stoves and furnaces can’t meet that standard, so they are effectively outlawed in favor of electric-powered appliances such as heat pumps.
Building codes like the one officials in Washington are amending are exempt from the federal preemption that tripped up Berkeley, according to Daniel Carpenter-Gold, an attorney at the Public Health Law Center at the Mitchell Hamline School of Law in St. Paul, Minnesota.
He said the NAHB lawsuit doesn’t take into account the distinction between what Berkeley and Washington are doing.
“The arguments are copied and pasted from one legal challenge to the other,” Carpenter-Gold said in an interview.
Other cities such as Seattle have approved building performance standards that regulate emissions from buildings, rather than from individual appliances. This is another way to avoid the legal problem Berkeley ran into, Carpenter-Gold said.
Builder incentives
The Inflation Reduction Act passed by Congress and signed by President Biden in 2022 provides incentives for builders to include all-electric appliances in new homes, according to the Rocky Mountain Institute report. The law includes more than $50 billion in provisions to move away from fossil fuels, including a $2,000 tax credit for new homes that include an electric heat pump.
“The tax credit will help lower the cost gap between heat pumps and gas furnaces,” according to the report.
The up-front cost of devices powered entirely by electricity is comparable to the cost of a home that uses a mix of electric and gas, the report said. But homeowners save money with an all-electric house because there's no need to build a pipe to connect a house to a gas main in the street. In nine large cities around the U.S., the report found, an all-electric new single-family home costs less to build and operate than a new home that uses a mix of electric power and gas.
Whether electric appliances can be competitive with gas devices on price depends on where the consumer lives and the cost of energy in their area, said Julia Eagles, director of regulatory strategy for the Institute for Market Transformation, a group that supports moving away from fossil fuel consumption.
Another factor is what local and state government incentives are available to switch from gas to electric, beyond the ones in the Inflation Reduction Act.
The Home Builders and Remodelers Association of Massachusetts cautioned the state in a 2023 report from moving too quickly to ban gas appliances or to make other far-reaching changes to building codes. The group estimated that if the state continued on its current path, the median cost of a single-family home would rise by $10,000 to $23,000 and put homeownership out of reach for thousands of households.
Story corrected Nov. 11 to say the D.C. code commission is reviewing the energy code.