Natural gas industry advocates are taking aim at a trio of U.S. Department of Energy (DOE) rules that petitioners argue would raise prices and eliminate consumer choice.
The American Gas Association (AGA), American Public Gas Association (APGA), the National Propane Gas Association, natural gas utility Spire Inc. and furnace manufacturer Thermo Products LLC filed petitions for review of three DOE final rules in the U.S. Court of Appeals for the District of Columbia Circuit (Case No. 22-1030).
The final rules adopted efficiency standards that would effectively ban non-condensing gas-fired furnaces by 2028 and water heaters by 2026 (Docket Nos. 2021-28007, 2022-10011, 2023-25514). Non-condensing appliances remove exhaust gas via chimneys, while condensing appliances rely on electric venting.
U.S. Energy Information Administration data show that in 2022, about 60% of U.S. homes relied on natural gas for space and water heating, as well as cooking and clothes drying. According to AGA, the non-condensing furnace rule would impact about 55% of U.S. households.
“...The millions of consumers using non-condensing appliances will have limited options when they must replace them,” petitioners said in the filing. “Those consumers will be forced to remodel their homes or businesses to accommodate a condensing appliance, if that is possible, or abandon gas appliances altogether.”
Petitioners also alleged that DOE is violating the Energy Policy and Conservation Act (EPCA), which bans efficiency standards that would eliminate product classes based on performance characteristics.
The EPCA requires an economic justification in order to take certain products off the market. Petitioners argued that DOE’s “economic conclusions are not supported by substantial evidence, much less clear and convincing evidence.”
DOE last year estimated consumers would save $60/year by switching to a condensing furnace. Petitioners noted that “it will take years (in some cases almost a decade) to recoup the replacement costs imposed by the final rules.”
For households that would not be able to remodel, such as apartments and townhomes, DOE’s rule would necessitate electric heaters. According to AGA and APGA, consumers who switch to electric appliances would see monthly costs increase more than three-fold.
“The law is clear – the Department of Energy is explicitly forbidden to set a standard that eliminates an entire class of appliances from the market,” said AGA President Karen Harbert. “The new rules would remove efficient appliance options from consumers, raising costs for those who can least afford it including senior citizens and low-income households.”
In a recent interview with NGI, Harbert noted federal agencies are employing “side-door” tactics to limit gas consumption.
Supporting DOE in the current challenge are states, including Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, and Washington, that also have moved to ban natural gas via building codes or appliance limitations. Supporters also included New York City and Washington, DC, which are members of the National Building Performance Standards Coalition. The coalition was established by the Biden administration in 2021 to reduce greenhouse gas (GHG) emissions via electrification requirements or decarbonization regulations by Earth Day 2024 or 2026.
DOE recently unveiled a plan it said could cut GHG emissions from U.S. buildings by 65% by 2035 and by 90% by 2050. The plan could have implications for natural gas, as DOE would seek to leverage electrification to reduce emissions.
DOE is expected to respond by mid-June.
