On May 2, 2023, amendments to New York’s Energy Law were included in the state’s adopted 2024 budget. These amendments prohibit the installation of fossil fuel equipment and systems in most new buildings in New York. The New York State Building Code Council is required to include the prohibition in the state’s Energy Conservation Construction Code.
This code effectively cuts out the potential for propane-fueled appliances to be installed in new construction in the state. Specifically, the energy code “shall prohibit the installation of fossil-fuel equipment” in “any new building not more than seven stories in height, except for a new commercial or industrial building greater than [100,000] square feet beginning Dec. 31, 2025.”
The ban will stretch to “all new buildings” beginning Jan. 1, 2029, and will cover plumbing, heating, air conditioning and refrigeration, among other equipment.
“It is essentially a ban on residential use of propane for things like home heat and water heating. … If put into place, it would basically decimate propane for new residences,” said Steve Kaminski, president and CEO of the National Propane Gas Association (NPGA).
In response, several businesses and organizations have united in a lawsuit to challenge the ban. Plaintiffs include the likes of NPGA, the New York Propane Gas Association (NYPGA), Mulhern Gas Company and the Northeast Hearth, Patio & Barbeque Association, as well as several entities in the plumbing, electrical and transport sectors.
The Lawsuit
Before joining the lawsuit, NPGA worked with NYPGA to draft and submit comments on the propane policy, which went unheeded. The lawsuit was the next logical step.
“This is the next tool in our arsenal — to file this lawsuit,” said Kaminski. “We’re past the point of working with the policymakers in New York. We feel that they have done something that is essentially illegal and our only recourse at this point is to sue them.”
According to a press release supplied to BPN by NPGA, the suit “seeks to declare the ban invalid and to block its enforcement on the grounds that it is preempted by federal energy law, the Energy Policy and Conservation Act (EPCA).”
The EPCA applies a national approach to energy conservation and maintains national uniformity by preempting state and local regulations related to the energy use of federally regulated appliances. Though some exceptions to the preemption do exist, according to NPGA they do not apply in this case.
“The federal regulatory scheme requires a practical approach to energy regulation, maintaining neutrality on energy sources and recognizing the need for a diverse energy supply,” said Kaminski. “This is for good reason: A patchwork approach is unworkable, undercuts a coordinated national energy policy, overlooks the public’s need for reliable and resilient energy, and denies consumers choice.
“As per the U.S. Senate, one of the core reasons EPCA’s preemption provisions are in place is ‘to reduce … burdens on the appliance manufacturing industry through the establishment of national energy conservation standards for major residential appliances’ and to avoid a ‘patchwork of differing state regulations,’” he continued.
The plaintiffs on the lawsuit contend that the EPCA marks New York’s gas ban as invalid and are banking on its provisions for national uniformity to keep New York from enforcing the ban. To prove the scope of the EPCA in this case, the lawsuit will use a precedent set in a recent energy case in Berkeley, California.
How a Legal Precedent Could Be the Answer
When a Berkeley, California, ordinance banned fuel gas piping in new construction, a case disputing it was brought in federal district court in California, and on appeal to the U.S. Court of Appeals for the Ninth Circuit. Only weeks before New York’s gas ban went into effect, the Ninth Circuit struck down the prohibition in a unanimous three-judge panel decision, citing that the ban affected the energy use of appliances covered by the EPCA. The panel said the “EPCA would no doubt preempt an ordinance that directly prohibits the use of covered natural gas appliances in new buildings.”
The plaintiffs for the current lawsuit against New York’s gas ban claim these cases hold striking similarities.
“We feel very strongly that this law falls squarely within the EPCA, which is federal law that prohibits a state from doing exactly this,” said Kaminski. “That is what the Ninth Circuit Federal Court of Appeals found in the Berkeley case. And we feel this is no different. In fact, we hired the same outside legal counsel to represent the plaintiffs in the New York case as were hired by the California Restaurant Association and their partners in the Berkeley case. Our legal counsel is not only familiar with this but has had success.”
What’s at Stake
The decisions in both the Berkeley and New York cases could have significant ripple effects on gas policies across the country. Since the Ninth Circuit struck down the Berkeley ordinance, many of the 30 or so jurisdictions that have enacted gas bans in the circuit’s jurisdiction rolled them back or put them on hold in response to the ruling.
The city of Berkeley has appealed the ruling en banc, meaning to the full court, rather than just the three-judge panel that made the decision. “Assuming the federal courts in New York follow EPCA’s preemption provisions as they should, it will send a strong message to other states to recognize that gas bans are beyond their scope of authority,” said Kaminski.
NPGA’s Legal Action Fund
In light of ongoing legal battles that affect and involve propane, NPGA has established a Legal Action Fund to address the financial needs associated with lawsuits intended to protect the industry. With the industry expecting to see the frequency of these legal battles increase, the establishment of the Legal Action Fund serves as NPGA’s “third pillar of defense, along with NPGA’s critical legislation and regulatory work” against bans and policies that hinder energy choice, according to Kaminski.
“As we continue to see aggressive activity not only from states but also from federal agencies, we anticipate potentially needing to file more suits against government bodies. We want to make sure that we have established a formal mechanism to fund those,” said Kaminski.
That mechanism involves a five-person committee comprised of industry members experienced in law and strategy who will help determine which litigations make the most sense to fund, particularly when NPGA is a plaintiff or is asked to join a coalition. State and regional associations can also find financial backing for suits they are considering.
The Legal Action Fund was first brought forth as a discussion among the 17-member NPGA executive committee in September and was later presented to the board at large in October. It has been formally approved, as has NPGA’s initial commitment of $1 million to legal efforts now, with plans to expand funding to $2.5 million in the coming years.
“We’ve been very active in the executive branch, [meaning the] Department of Energy, the Environmental Protection Agency and the Department of Transportation,” said Kaminski. “We’ve also been extremely active in the legislative branch on Capitol Hill. But we’ve never utilized the court system — the third branch of government — to the extent that we see the need to now. We are in the position now where we need to utilize the judiciary branch of the government much more than ever before.”
