Climate activists and gas utilities put forward opposing proposals to modify the Washington state building codes, following a federal appeals court opinion that placed the state's electric heating requirements in legal jeopardy.

Electrification advocates offered surgical changes that would hew closely to the codes' intent: improving energy efficiency and tackling greenhouse gas emissions by restricting natural gas use in new residential and commercial construction. The state's investor-owned gas utilities proposed scrapping electrification requirements altogether and leveraged the court opinion to recommend additional protections for gas use.

In 2022, Washington became the first state in the US to incorporate electric heat pump requirements into its statewide building codes. However, the Washington State Building Code Council (SBCC) in May delayed the impending implementation and opened an emergency rulemaking to modify the codes.

The move was in response to a legal challenge by gas utilities, homebuilders and other stakeholders, who said the code changes violated the federal Energy Policy Conservation Act (EPCA). The challenge leveraged an opinion issued a month earlier by a three-judge panel for the US Court of Appeals for the 9th Circuit, which said the EPCA preempted a pioneering gas ban in Berkeley, Calif. The opinion applies to Washington, which is located within the 9th Circuit.

The EPCA gives the US Energy Department authority to regulate the energy efficiency and use of consumer products while preempting local and state regulation of EPCA-covered products.

Surgical approach

Some SBCC council members believed the codes could come into compliance with EPCA through minor changes. Three stakeholders offered options to that effect.

A proposal by sustainability group RMI would limit the heat pump requirements to the prescriptive compliance pathway, which allows builders to accrue points by choosing from a list of construction options. The proposal would remove the electrification mandates from the performance pathway, which demonstrates a building's compliance through energy modeling.

That change would allow the 2021 code to take advantage of an exemption within EPCA, according to Jonny Kocher, a senior associate with RMI's Carbon-Free Buildings Program. The exemption allows cities and states to regulate EPCA-covered products in performance-based building codes for new construction, provided those codes meet seven requirements.

Critically, the proposal would allow builders to use EPCA-covered gas heating equipment in the performance pathway. However, it would likely be difficult for buildings with fossil fuel combustion equipment to meet the code's energy efficiency targets, according to RMI and SBCC members.

Two other proposed modifications would change the way builders accrue points toward compliance in a way that would be EPCA compliant and maintain an advantage for electric heating. Consultancy Ecotope Inc. and Seattle's energy code and energy conservation adviser put forward the proposals.

Washington law requires the SBCC to adopt energy code updates that reduce annual net energy consumption in buildings by 70% from 2006 levels by 2031. The 2021 edition of Washington's building codes was meant to help the state meet that requirement, as electric heat pumps are up to four times more efficient than conventional gas furnaces, according to the US Environmental Protection Agency.

Gas utilities seek to toss mandate

Three gas utilities proposed throwing out the heat pump requirements. Together, they proposed 31 overlapping modifications, largely aimed at reducing disadvantages for fossil fuel equipment and minimizing considerations of climate impacts within the code.

The companies — Avista Corp.; MDU Resources Group Inc. subsidiary Cascade Natural Gas Corp.; and Northwest Natural Gas Co., which operates as NW Natural — were all parties to the US District Court challenge that led to the 9th Circuit ruling. They largely based their proposals on the Berkeley precedent and the codes' apparent conflicts with EPCA.

The utilities recommended restoring energy credits for high-efficiency gas and propane water heaters. Avista and NW Natural also proposed new credits for installing gas-powered heat pumps, which are not in wide commercial use.

Avista and Cascade said builders that install combustion heating systems should no longer be docked three fuel normalization credits toward compliance, as outlined in the 2021 code. Fuel normalization credits reflect the climate impact of heating options and either increase or decrease a builder's score based on the heating system they install.

NW Natural proposed overhauling the fuel normalization credits system, saying it unfairly advantages electric equipment over gas-fired systems because it is based on carbon emissions. Builders get 1.5 fuel normalization credits for using electric heat pumps, which condition outdoor air to heat and cool indoor space.

"The entire section appears to be in violation of EPCA and needs to be modified to include gas-fired equipment with all credits based on energy efficiency," the Northwest Natural Holding Co. subsidiary said.

Impact of Berkeley rehearing petition

The SBCC's voting council directed staff to reconvene the residential and commercial technical advisory groups in order to review proposed modifications. The council is scheduled to receive a report from the groups on Sept. 15, Kara Klotz, a senior communications manager at the Washington State Department of Enterprise Services, said in an email.

On May 31, Berkeley petitioned the 9th Circuit to review the three-judge panel's opinion. Klotz said the SBCC cannot speculate on the outcome of the court's decision when asked how a rehearing could affect the SBCC's rulemaking process.

A rehearing by the 9th Circuit is unlikely to occur soon enough to affect the SBCC's rulemaking timeline, said Sean Denniston, senior project manager at the New Buildings Institute, which supports the heat pump requirements.

Additionally, the US District Court case is not the only challenge to the code update, he said. In February, stakeholders asked the Superior Court of Washington to declare several climate-oriented codes invalid. State bills would also limit the SBCC's ability to prohibit gas use and address greenhouse gas emissions through code changes.

"The opponents of the new code are categorically opposed, so the 9th Circuit decision is not really a cause of the challenge, but just a useful argument for the challenge," Denniston told S&P Global Commodity Insights.

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