Federal Appeals Court Upholds New York's Gas Appliance Ban
The U.S. Court of Appeals for the Second Circuit yesterday upheld New York City and New York State laws that restrict the use of gas-powered and other fossil-fuel-powered appliances in new construction.
The decision is a setback for home builders, trade groups and labor organizations that challenged these laws. It also creates a disagreement between federal appeals courts over whether state and local gas appliance bans are preempted by federal law.
The consolidated appeals, Association of Contracting Plumbers of the City of New York v. City of New York and Mulhern Gas Co., Inc. v. Mosley, Nos. 25-977, 25-2041 (2d Cir. June 30, 2026), involved challenges to two separate New York laws.
New York City’s Local Law 154 limits the use of fuels that produce carbon emissions in new buildings. That means many new homes and buildings cannot use natural gas or heating oil for common appliances and systems such as space heating, water heating, cooking and clothes drying.
New York State’s law similarly requires state officials to adopt rules prohibiting fossil-fuel-burning appliances in new buildings. NAHB and the New York State Builders Association are named plaintiffs in the challenge to New York State’s gas ban.
The challengers argued that New York’s laws conflict with a federal law called the Energy Policy and Conservation Act (EPCA). EPCA sets national energy-efficiency standards for many household appliances. The challengers argued that EPCA’s preemption provision prohibits states and cities from adopting laws that effectively ban federally regulated appliances from new buildings.
Two lower federal courts rejected those arguments, and the challengers appealed to the Second Circuit.
The Second Circuit also rejected the challengers’ position. Judge Myrna Pérez, writing for the court, explained that EPCA blocks states from creating their own appliance-efficiency standards. In the court's view, New York's laws do not tell manufacturers how efficient an appliance must be or impose a competing energy-use standard. Instead, they regulate the type of energy that may be used in new construction.
In simpler terms, the court drew a line between two things. Federal law controls appliance-efficiency standards. But, according to the Second Circuit, New York’s laws regulate whether fossil-fuel-powered appliances may be installed in new buildings at all. Because of that difference, the court held that EPCA does not block New York’s laws.
The decision conflicts with a 2023 ruling from the U.S. Court of Appeals for the Ninth Circuit.In California Restaurant Association v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), the Ninth Circuit held that a similar Berkeley gas-hookup ban was blocked by EPCA. The Second Circuit acknowledged the disagreement and explained why it believed the Ninth Circuit read EPCA too broadly.
The disagreement between the two courts turns on how they understand EPCA’s regulation of appliance “energy use.” The Ninth Circuit focused on whether a consumer can actually use a covered appliance in a building. The Second Circuit took a narrower view and focused on EPCA’s appliance-testing and efficiency standards.
It is important to note that New York State’s gas ban does not now immediately take effect. The parties agreed earlier in the litigation to stay the ban until the litigation is complete.
For home builders, the decision is important. In states outside the Ninth Circuit, and especially in New York, Connecticut and Vermont, state and local governments may now have stronger legal support for gas appliance bans and other building electrification requirements. Builders working in multiple states may continue to face different rules depending on where they build, making compliance more complicated and limiting appliance options for home buyers.
NAHB has long opposed state and local bans on gas-powered appliances because they reduce consumer choice and can increase construction costs. With the Second and Ninth Circuits now divided, the issue is a strong candidate for U.S. Supreme Court review.
NAHB has also been working very closely with members of Congress to pass the Energy Choice Act, federal legislation that would preempt state and local bans on natural gas in homes.