California May 2023 State Update

In March, the Bay Area Air Quality Management District (BAAQMD) adopted first in the nation rules eliminating nitrogen oxide (NOx) emissions from gas appliances. The rules will ban the sale of NOx-emitting natural gas water heaters in 2027 and prohibit NOx-emitting furnaces in 2029 and large commercial water heaters in 2031.

Legislative: The California state legislature is in session, and building performance related bills include SB 48 (Becker): Building Performance Standard, which builds off of a benchmarking program to implement standards for building efficiency.

Efficiency First California joined other organizations in signing a letter of support for AB 593 (Haney), which requires the CEC to craft a building emissions reduction strategy with milestones; implemented starting 2025.

Regulatory: The California Public Utilities commission is moving away from incentivizing gas measures. The CPUC ruled to phase out gas incentives in ratepayer-funded residential and commercial new construction projects. The ruling applies to projects with no existing gas line, or where gas usage would increase by 30%. This decision is effective January 1, 2024, and efficiency-related gas measures are exempted (i.e. insulation).

California’s 9th Circuit court released an opinion, and found that the Energy Policy and Conservation Act is preempted by Berkeley’s ordinance banning natural gas piping in new construction. If opinion is upheld, this would send the case back to the District court. This opinion could impact only those local ordinances that mirrored Berkeley’s approach for banning natural gas systems in new construction.