Gas industry challenges furnace efficiency standards

Gas industry trade groups have filed a petition with the U.S. Supreme Court requesting a review of a lower court’s decision. The appeals court upheld Biden-era energy efficiency regulations that the groups contend effectively prohibit the sale of non-condensing natural gas furnaces and related products.

Background on Energy Efficiency Rules

The U.S. Department of Energy (DOE) finalized stricter efficiency standards for consumer furnaces in 2023 and commercial water heaters in 2024. These updated standards are intended to improve energy efficiency, but gas industry groups argue that the requirements are so stringent that they would render non-condensing versions of these appliances unmarketable.

Efficiency Comparison

Traditional non-condensing water heaters and furnaces typically achieve efficiency rates of around 80%, while condensing appliances generally operate at 90% efficiency or higher. The increased efficiency of condensing appliances is primarily due to their ability to capture and reuse excess heat, converting it to vapor for additional heating.

Industry Concerns and Market Impact

According to the American Gas Association, American Public Gas Association, and National Propane Gas Association, non-condensing natural gas furnaces represent over half of the U.S. market. The groups assert that these furnaces cannot be readily replaced by alternative furnace types. They warn that removing these products from the market would necessitate costly renovations for homeowners or eliminate natural gas as a heating option entirely.

Legal Challenges and Court Decisions

The gas groups previously challenged the new rules, claiming they violated the Energy Policy and Conservation Act by effectively eliminating a product type or a specific performance characteristic. The U.S. Court of Appeals for the D.C. Circuit rejected this argument, concluding that the venting method of an appliance does not constitute a performance characteristic. The gas groups contend that this decision is both legally flawed and impractical.

Arguments for Supreme Court Review

The gas industry groups argue that the regulations would force homeowners to abandon gas appliances and switch to electric alternatives. They maintain that the Energy Policy and Conservation Act does not permit the government to use efficiency rulemakings to eliminate products that consumers need access to. They state that the regulations eliminate non-condensing gas furnaces and commercial water heaters, which are compatible with existing chimneys and natural-draft venting systems in millions of homes and businesses.

Response from Efficiency Advocates

Advocates for the stricter efficiency rules contend that furnace technology has advanced to the point where the new standards are achievable through proven energy-saving technologies. One advocate described the Supreme Court appeal as a “last-ditch push by gas utilities to keep the least efficient furnace types going into homes, locking families into higher bills.”