Gas Industry Blocks Building Codes Meant To Make Going Electric Cheaper

The natural gas industry pulled off an 11th-hour victory in its campaign to strip climate-friendly rules out of the latest update to the homebuilding guidelines used in most of the United States.

Houses and commercial buildings constructed to this year’s standards were supposed to include the circuitry for hooking up electric appliances or car chargers, potentially adding a few thousand dollars to a new home’s asking price but saving homeowners tens of thousands in renovation costs to rewire existing walls and even more on utility bills.

As the International Code Council — the private nonprofit that convenes local governments, lobbyists and industry professionals together every three years to update the energy codes — finalized this year’s codebook last fall, trade associations representing gas utilities and furnace manufacturers filed formal appeals to strip out the pro-electrification measures.

The ICC’s appeals board rejected all the challenges earlier this month and urged the organization’s board of directors to do the same.

On Wednesday night, the ICC’s board of directors took the unusual step of going against its own experts to side with the fossil fuel companies, scrapping key codes meant to make electric cars, solar panels, induction stoves and heat pumps more affordable.

Instead, almost every code the trade groups challenged will now be relegated to the optional appendix section of the codebook, essentially eliminating the chances of widespread adoption across the country.

Rather than hasten the pace of energy-savings as the country races to cut emissions and shrink rising utility bills, the ruling, which is final, means the 2024 codes will represent far more modest gains in efficiency than the previous 2021 codes, which were widely hailed at the time as a victory in the fight against climate-changing emissions.

It marks a setback for U.S. efforts to speed up the deployment of electric heating and vehicles, and increases the number of buildings that will ultimately require costly retrofits to meet modern energy standards.

“Really bad and surprising news,” Mike Waite, the director of codes at watchdog American Council for an Energy-Efficient Economy and a volunteer who helped author this year’s commercial building codes, wrote in an email. “The ICC Board went against their consensus committees, appeals board and staff.”

The surprise decision to overturn the appeals board’s ruling comes after the ICC violated its own internal policies to give the industry groups extra time to file appeals. Advocates, who called the move a “scandal,” were relieved when the appeals board delivered what seemed like a final verdict. The board of directors has typically followed the appeals board’s recommendations.

Last week, a trio of high-ranking House Democrats sent a letter to the ICC warning it against slashing the contested codes.

The ICC said final hearing would be broadcast for the public over YouTube from its website. The video did not appear at the designated location on the ICC’s website Monday, and as of Wednesday night the organization’s official YouTube page showed no uploads featuring the March 18 hearing. A spokesperson for the ICC did not respond to multiple emails requesting comment Monday and Tuesday.

The Air Conditioning, Heating, and Refrigeration Institute, which had filed some of the appeals, acknowledged the ruling but did not immediately provide a comment. Spokespeople for the American Gas Association and the American Public Gas Association, two groups representing gas utilities, did not respond to emails shortly after the ruling came out.

While the U.S. does not have federally mandated building codes, virtually every state uses the ICC’s codes as a guideline.

In some big states, like Illinois, local law requires regulators to adopt the latest and greenest codes automatically. States like Idaho haven’t meaningfully updated their codes in over a decade and even want to prevent cities and towns from exceeding the low statewide standards.

But even laggards like the Gem State may have new incentives to catch up. President Joe Biden’s landmark climate law, the Inflation Reduction Act, contains $1 billion in funding to give states technical assistance to update codes to the latest standards.

The Biden administration also proposed a rule to upgrade the eligibility requirements for federal loans to buy a new house, requiring that any newly built home comply with the most recent 2021 rules, which were among the greenest in decades.

The rule has yet to be finalized. If enacted, it could affect up to one-sixth of all new homes, since builders in states with lower standards will need to comply with the federal rules to have buyers qualify for federal financing. Biden’s campaign pitch to give first-time homebuyers a $5,000 tax credit may only add to the demand for new houses that meet federal standards.

The latest ICC codes cap off a contentious yearslong proceeding that saw the private organization strip power from local governments in a move critics said eroded the democratic legitimacy of the whole process.

Historically, the ICC’s gatherings to update the codes each year were sleepy affairs. Industry professionals and lobby groups joined municipal building inspectors to debate what should be in the latest codes, but only the local government officials could vote on the final product. For years, that process yielded only 1% increases each time in energy efficiency.

After the 2018 United Nations report on climate change warned that the window to avoid the worst effects of warming through cutting emissions was closing, mayors across the U.S. banded together to take local actions to reduce planet-heating pollution, particularly as the Trump administration pursued an opposite approach at the federal level.

When those governments approved codes that increased energy efficiency from the previous year by double-digit percentages, major industry groups balked and filed appeals. The gas groups appealing the new 2024 codes challenged similar measures in the 2021 codes. Back then, the ICC’s appeals board sided with the fossil fuel firms.

The ICC then decided to overhaul the entire process, eliminating governments’ right to vote on the final product. The Biden administration urged the ICC against making the changes, but the organization followed through anyway.

The new process proved challenging. Early on, an email secretly sent by a gas executive in Missouri nearly tanked one of the major electrification provisions that had still managed to make it into the code.

Critics accused the new system of giving too much say to industry representatives with a financial incentive to slow down the country’s shift away from fossil fuels. Nonprofit workers and municipal building inspectors who volunteer many hours to the code-writing process complained that the new system, based on consensus-minded committees, took far more time than the previous method, making it harder for public interest-minded volunteers to give as much time as lobbyists paid to be there.

Since 2021, advocates and officials concerned over what they saw as the ICC’s capture by the industry players its rules ostensibly regulate began considering alternative codebooks. The ruling is likely spur louder calls to scrap the ICC in favor of another model.