A federal appellate court ruling voiding the city of Berkeley, Calif.’s effective ban on natural gas in new buildings could have national impact if it withstands further review, but it doesn’t prevent all local efforts to electrify buildings.

On Monday, the 9th U.S. Circuit Court of Appeals reversed a district court’s ruling and agreed with the California Restaurant Association that the city’s gas ban is pre-empted by the federal Energy Policy and Conservation Act (EPCA), which gives the Department of Energy authority to set energy conservation standards for appliances such as furnaces and water heaters.

But while the three-judge panel ruled unanimously against the law, one of the judges raised concerns in his concurring opinions that could undermine the ruling’s sweep. And most of the jurisdictions that have moved to electrify buildings have taken approaches not affected by the ruling.

“While the 9th Circuit decision does impact some aspects of local authority to electrify buildings, it is far from a knockout blow,” Amy Turner, senior fellow at the Sabin Center for Climate Change Law at Columbia Law School and head of the Cities Climate Law Initiative, wrote in a blog post. “The 9th Circuit decision has different implications for different building electrification requirements depending on location, legal landscape and policy approach.”

Closely Watched Case

Berkeley became the first U.S. jurisdiction to effectively ban new natural gas use in 2019, when it amended its building code to prohibit the installation of natural gas piping within newly constructed buildings. Since then, more than 70 jurisdictions have required or incentivized all-electric new buildings, according to the Building Decarbonization Coalition, with about 25 following Berkeley’s approach.

As evidence of the import of the Berkeley case, the states of California, Maryland, New Jersey, New Mexico, New York, Oregon, Washington and Massachusetts, as well as D.C. and New York City, filed amicus briefs with the court. About 20 Republican-controlled states, meanwhile, have enacted laws to pre-empt gas bans.

Berkeley argued that the EPCA’s pre-emption only covers regulations that impose standards on the design and manufacture of appliances, not regulations that impact the distribution and availability of gas.

DOE’s brief asserted that the EPCA only pre-empts “energy conservation standards” that operate directly on the covered products. It does not “prevent states and localities from adopting health and safety regulations that indirectly affect the quantity of energy or water used by” an EPCA-covered appliance, it said.

The EPCA’s pre-emption clause states that once a federal energy conservation standard becomes effective for a covered product, “no state regulation concerning the energy efficiency, energy use or water use of such covered product shall be effective with respect to such product.”

District Court Overruled

The U.S. District Court for Northern California dismissed the Restaurant Association’s challenge, saying EPCA’s pre-emption was limited to ordinances that facially or directly regulate covered appliances.

“But such limits do not appear in EPCA’s text,” the 9th Circuit wrote. “By its plain text and structure, EPCA’s pre-emption provision encompasses building codes that regulate natural gas use by covered products. And by preventing such appliances from using natural gas, the new Berkeley building code does exactly that.”

The court also rejected the city’s contention that — although a prohibition on natural gas infrastructure reduces the energy consumed by gas appliances in new buildings to “zero” — “zero” is not a “quantity.”

“It is well accepted in ordinary usage that ‘zero’ is a ‘quantity,’” the court ruled. “We doubt that Congress meant to hide an exemption to the plain text of EPCA’s pre-emption clause in a mathematical equation. …

“Put simply, by enacting EPCA, Congress ensured that states and localities could not prevent consumers from using covered products in their homes, kitchens and businesses. So, EPCA pre-emption extends to regulations that address the products themselves and the on-site infrastructure for their use of natural gas,” the court continued. “Congress thus indicated that EPCA pre-empts building codes, like Berkeley’s ordinance, that function as ‘energy use’ regulations. Put differently, EPCA does not permit states and localities to dodge pre-emption by hiding ‘energy use’ regulations in building codes.”

The judges also dismissed Berkeley’s claim that a pre-emption under the EPCA would conflict with the Natural Gas Act, which gives FERC jurisdiction over the transportation of natural gas in interstate commerce and the sale of gas for resale. They noted that the NGA “specifically exempted from” FERC regulation “the ‘local distribution of natural gas.’”

‘Troubling and Confused’

Judge M. Miller Baker (who sits on the U.S. Court of International Trade, but sat on the panel by designation) expressed reservations about the restaurant group’s standing to bring the challenge but joined the panel opinion in full.

In his own concurrence, Judge Diarmuid F. O’Scannlain said that he supported the association’s challenge only because of 9th Circuit precedent.

“I remain concerned that this area of law is troubling and confused, with tensions in the Supreme Court’s precedents, splits in the circuits and important practical questions unanswered,” he wrote. “Greater clarity and further guidance from the [Supreme] Court on how to navigate pre-emption doctrine … would be most welcome.”

The ruling does not apply outside the nine states and two territories of the 9th Circuit. If another circuit rules differently, the issue could make its way to the Supreme Court.

‘Consistent National Energy Policy’

Reichman Jorgensen Lehman & Feldberg, the law firm that represented the restaurant group, said the ruling “underscores the importance of a consistent national energy policy, which was Congress’ intent the whole time.”

“Cities and states should not be permitted to overrule energy decisions that affect the country as a whole,” partner Sarah O. Jorgensen said in a statement. “The panel’s unanimous decision that Berkeley’s ban on natural gas piping is pre-empted by EPCA sets an important precedent for future cases, especially with other cities considering similar bans or restrictions on the use of natural gas.”

The ruling “should invalidate the dozens of gas bans that have been enacted across the country over the past four years,” former Manhattan Institute senior fellow Robert Bryce wrote in a Substack column. “It may also mean that plans by federal authorities, including the Consumer Product Safety Commission, to ban or restrict the use of gas stoves, gas furnaces and other gas-fired appliances are kaput.”

Karen Harbert, CEO of the American Gas Association, which represents more than 200 gas distribution companies, called the ruling “a huge step … that will both safeguard energy choice for California consumers and help our nation continue on a path to achieving our energy and environmental goals. Natural gas has been one of the primary drivers to achieving environmental progress, and any ban on this foundation fuel will saddle consumers with significant costs for little environmental gain.”

“This is a win for consumers, and it’s not over yet,” former California State Sen. Melissa Melendez (R) tweeted. “The California Air Resources Board (CARB) wants to impose this ban on the entire state, so they issued rules that would require people to replace their broken gas water heater or gas furnace with an electric model. Now we wait to see if today’s Berkeley ruling negates the ban set by CARB for all of California.”

Different Approaches

But Columbia’s Turner noted that other jurisdictions chose different approaches than Berkeley, which used its authority to protect health and safety, citing natural gas’ contribution to asthma and climate change.

“In contrast, many other jurisdictions — in California and beyond — used their building code authority to require or incentivize all-electric construction. New York City took a third approach, enacting an air emissions standard for new buildings that was silent on the energy performance of any building or EPCA-covered appliance,” she said.

“Each of these approaches remains an option to at least some local governments looking to electrify new construction. In addition, local governments retain any authority over natural gas distribution they may be delegated by their states.”

She also noted that the EPCA includes a seven-factor statutory exemption to pre-emption for state and local building codes and that the 9th Circuit’s ruling does not automatically apply outside its territory.

“The key to moving forward: Don’t link legislation to specific appliances,” tweeted Claire Wayner, an associate with RMI’s Carbon-Free Electricity Program. “Focus on building-wide efficiency standards, or take the air quality route.”