A U.S. Supreme Court order has remanded a legal battle over federal energy-efficiency mandates for gas-fired consumer furnaces and commercial water heaters, sending the case back to the U.S. Court of Appeals for the District of Columbia Circuit.
In a brief statement issued Monday, the high court returned American Gas Association et al. v. Department of Energy et al. to the appeals court and vacated that court’s earlier decision upholding the U.S. Department of Energy regulations.
The mandates at issue ban the manufacture and importing of non-weatherized gas home furnaces, and certain gas commercial water heaters, that have an annual fuel utilization efficiency (AFUE) of less than 95% (96% for tankless water heaters). The compliance date for furnaces is December 18, 2028. For commercial water heaters, the compliance date is Tuesday, October 6, 2026.
Industry groups challenging the rules say the standards would effectively eliminate gas-fired non-condensing consumer furnaces and commercial water heaters. They contend that building owners would be pushed to replace older units with condensing units that would require costly and sometimes unfeasible building modifications because of their venting needs.
In asking the Supreme Court to return the case to the appeals court, the American Gas Association (AGA) argued that the DOE mandates would alter the "performance characteristics" of furnaces and water heaters, which it said is prohibited by the Energy Policy and Conservation Act.
The decision drew support from HVACR industry groups that backed the challenge. PHCC and HARDI filed an amicus brief with the Supreme Court in support of the AGA, and U.S. Solicitor General D. John Sauer also petitioned the court in April to grant a writ of certiorari returning the case to the appeals court. PHCC and HARDI's representatives have weighed in on the situation below.
Chuck White, vice president of regulatory affairs at the Plumbing-Heating-Cooling Contractors - National Association (PHCC), said:
"The Supreme Court’s decision is the first step toward a responsible revision of the DOE’s regulation, which will allow our contractor members to help their clients make the best choice for their space-heating or hot water needs."
White said he’s optimistic that the compliance dates will be extended, but added that overturning the mandates would be a "high bar." He also said the best outcome would be for the mandates to be returned to DOE, which would then engage stakeholders in a negotiated rule-making.
Alex Ayers, vice president of government affairs at Heating Air Conditioning & Refrigeration Distributors International (HARDI), added:
"We are pleased to see the court and the federal government recognize that the original decision was flawed. Sending the case back to the lower court is a strong step toward ensuring this rule receives the scrutiny it warrants."
DOE has proposed delaying implementation of the mandates while litigation continues.
