In April, the Ninth Circuit held that a city’s ban on new natural gas hookups for new ‎construction was preempted by federal law. This may impact proposed or existing bans in Oregon ‎including in Eugene and Bend, and in Washington where the Washington State Building Code is ‎currently being challenged or where there is an existing ban in Seattle. Developers desiring to ‎provide natural gas to pending or existing projects may wish to evaluate any state or local ‎restrictions on natural gas under the Ninth Circuit’s analysis. ‎

The Energy Policy and Conservation Act (the “EPCA”) establishes a federal program for ‎regulation of consumer appliances, and generally preempts state regulations concerning energy ‎use of “covered products” including gas kitchen ranges and ovens. 42 U.S.C. § 6297(c), 6292. In ‎the recent case of California Rest. Ass’n v. City of Berkeley, No. 21-16278, 2023 U.S. App. ‎LEXIS 9068 (Apr. 17, 2023), the Ninth Circuit found that “[t]he [EPCA], 42 U.S.C. § 6297(c), ‎expressly preempts State and local regulations concerning the energy use of many natural gas ‎appliances, including those used in household and restaurant kitchens.” Id. at *6–7. In doing so, ‎the Court read the EPCA’s preemption clause broadly, which has implications for many state and ‎local regulations. As such, the Ninth Circuit’s decision suggests that jurisdictions aiming to ‎promote “green” building practices in new developments will have to incentivize such practices ‎rather than relying on an outright ban of gas appliances. However, note there is still time to file an ‎appeal of the decision (though none is currently filed), and further review may be sought.‎

At issue in California Restaurant Association was a Berkeley building code that, with ‎limited exceptions, prohibited natural gas infrastructure in newly constructed buildings (the ‎‎“Ordinance”). Id. at *8–9. The Ordinance sought to “‘eliminate obsolete natural gas infrastructure ‎and associated greenhouse gas emissions in new buildings where all-electric infrastructure can be ‎most practicably integrated, thereby reducing the environmental and health hazards produced by ‎the consumption and transportation of natural gas.’” Id. at *9 (quoting Berkeley Mun. Code § ‎‎12.80.020(c)). The Ordinance was challenged by the California Restaurant Association, claiming ‎that the EPCA and state law preempted the Ordinance. The District Court found that “[b]ecause ‎the Ordinance does ‘not facially regulate or mandate any particular type of product or appliance’ ‎and because its impact is ‘at best indirect[]’ on consumer products, the . . . EPCA does not ‎preempt the Ordinance.” Id. at *9. The Ninth Circuit disagreed, reversing the district court and ‎allowing the suit to continue. ‎

In looking at the text of the EPCA, the Ninth Circuit noted that the general preemption ‎clause establishes that “no State regulation concerning the energy efficiency, energy use, or water ‎use of such covered product shall be effective with respect to such product unless the regulation” ‎meets certain exceptions. 42 U.S.C. § 6297(c). The Ninth Circuit found that the Ordinance fell ‎within the preemption clause because, stated simply, “a regulation on ‘energy use’ fairly ‎encompasses an ordinance that effectively eliminates the ‘use’ of an energy source.” California ‎Rest. Ass’n, 2023 U.S. App. LEXIS 9068, at *16. In reading the express preemption clause, the ‎Court noted that by using the word “concerning” Congress intended to broaden the scope of the ‎preemption clause, i.e. it does not just preempt standards concerning energy use but all matters ‎concerning/relating to that subject. Therefore, “States and localities can’t skirt the text of broad ‎preemption provisions by doing indirectly what Congress says that they can’t do directly.” Id. at ‎‎*26–27. Here, the City of Berkley could not ban use of natural gas appliances through the ‎banning of natural gas infrastructure. ‎

It is unclear whether other existing or proposed bans would survive a similar challenge. ‎Developers wishing to incorporate natural gas in projects may wish to seek guidance if met with ‎conflict from local governments. Jurisdictions with an incentive- as opposed to prohibition-based ‎program are unlikely to be impacted. ‎

If you have questions or want to assess a similar challenge to state or local regulations of ‎natural gas infrastructure, you may wish to retain counsel. ‎

This article summarizes aspects of the law and does not constitute legal advice. For legal ‎advice for your situation, you should contact an attorney.‎