Department of Energy (DOE) Postpones Appliance Efficiency Standards for Gas-Fired Instantaneous Water Heaters – Requests Additional Written Comments and Information by March 13.

Last Friday,  DOE announced the postponement of the implementation of seven of the Biden-Harris administration’s efficiency standards for home appliances, six electric and one for gas-fired instantaneous water heaters. Additionally, DOE reported that they intend to create a new energy efficiency category for gas-fired instantaneous water heaters, instead of banning non-condensing,  models which was the position of the Biden-Harris administration.  Specifically, on December 26, 2024  DOE published the Federal Register Notice with the Final Rule adopted amended standards for gas-fired instantaneous water heaters less than 2 gallon and greater than 50,000 Btu/hour, at an efficiency level that requires condensing technology. The Notice list “the effective date of this rule as March 11, 2025. Compliance with the amended standards established for gas-fired instantaneous water heaters in this final rule is required on and after December 26, 2029.”  The DOE postponement announcement also states that DOE “is creating a new energy efficiency category for natural gas tankless water heaters. Creating a new category for these popular and low-cost water heaters exempts these products from the Biden-Harris Administration’s onerous rules and gives the American people the power to choose the best option for their homes and budgets.” There are no details on what the new category DOE is considering to issue. Also, today DOE announced that it has delayed the effective date of the gas-fired instantaneous water heaters rule amending issued on December 26, 2024, until March 21, 2025 and is accepting written comments and information on or before March 13, 2025. AGA staff is anticipating developing additional comments in support of our position that DOE should recognize the benefits of maintaining the availability for consumers for non-condensing gas-fired instantaneous water heaters and will keep the committee updated on any new developments.

NAHB and 15 State Attorneys General File Suit Against HUD and USDA’s Energy Efficiency Requirements.

In the April 26, 2024 BECS Update on End Use Codes and Standards, we reported that the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA)  issued a final determination that the 2021 IECC and ASHRAE 90.1– 2019 will not negatively affect the affordability and availability of housing covered by EISA and therefore will be requiring compliance with these standards in HUD and USDA housing financing covered by the Energy Independence and Security Act (EISA). As a reminder, in the June 16, 2023  Update on End Use Codes and Standards, we reported that in the May 18, 2023  Federal Register, HUD had issued a notice announcing a “preliminary determination of HUD and USDA Financed Housing , as required under section 481(d)(1) of the Energy Independence and Security Act of 2007 (EISA), that the 2021 IECC and ASHRAE 90.1–2019 will not negatively affect the affordability and availability of housing covered by EISA”. The Notice stated that “In making this preliminary determination, the first step to ultimately requiring compliance with these standards in HUD and USDA housing covered by EISA, this Notice relies on several studies that show that these codes are cost effective in that the incremental cost of the additional efficiency measures pays for themselves with energy cost savings on a life-cycle basis.”  Of particular concern to the natural gas industry and other stakeholders was the statement: “Building Electrification. While the 2021 IECC did not include building electrification provisions in the final version of the code, provisions are available for adoption by states as amendments to the 2021 IECC: RE147–19, Electrification-Ready; RE126–19. Energy Efficient Water Heating, RE107–19, Eliminate Continuous Burning Pilot Light.”  There were other provisions in the 2021 IECC and ASHRAE 90.1–2019 that were reviewed and identified as not adding to energy efficiency improvements or are not cost effective that we contended should be amended prior to HUD and USDA adopting the codes as a basis for funding by these federal agency programs. On August 7, 2023, AGA and the American Public Gas Association (APGA) filed comments (attached) providing our opposition of including “electrification” and provisions that were not cost effective in the 2021 IECC and ASHRAE 90.1–2019 standard. We cited the June, 2021 Home Innovations Research Labs study for the National Association of Home Builders titled 2021 IECC Residential Cost Effectiveness Analysis that identified those specific provisions in the 2021 IECC.  In this Final Determination, we expressed disappointment that although not required for compliance, the  “Building Electrification” provisions were not deleted, and HUD did not agree with the lack of cost effectiveness of the 2021 IECC and ASHRAE 90.1– 2019 and therefore made no adjustments for compliance to those code requirements for HUD and USDA financed housing.

On January 2, 2025, the National Association of Home Builders (NAHB) and 15 state attorneys general filed a complaint in the Eastern District of Texas seeking to stop HUD and USDA from adopting the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 as the minimum energy-efficiency standards for certain single-family and multifamily housing programs. According to the announcement of the lawsuit, NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan., issued the following statement on the lawsuit:

“Compliance with the 2021 IECC can add more than $22,000 to the price of a new home, but in practice, home builders have estimated increased costs of up to $31,000. Along with 15 state attorneys general, NAHB is the only private entity in this lawsuit seeking to halt HUD and USDA from adopting the 2021 IECC because home builders can document how this egregious regulation will needlessly raise housing costs and hurt the nation’s most vulnerable home buyers and renters. This ill-conceived policy will act as a deterrent to new construction at a time when the nation desperately needs to boost its housing supply to lower shelter inflation costs. It is also in direct conflict with the current energy codes in the majority of jurisdictions around the country.”  “Our lawsuit seeks to show that granting HUD and USDA authority to insure mortgages for new single-family homes and apartments only if they are built to the 2021 IECC or ASHRAE 90.1-2019 was done in an unconstitutional manner.” Click here to view the litigation document . We will provide updates on the litigation as it proceeds through the courts.

State Codes Activity Update.

Attached is a weekly feature of the “Friday Update” covering state code calendar activities as presented by the online utility “Fiscal Note,” which is sponsored by APGA and AGA Code and Standards. Please review the update and determine if there are state code activities that impact your service territory or organization.