Federal judge rejects effort from Avista, other Washington natural gas purveyors and construction firms to delay heat pump requirement

A federal judge in Yakima this week declined to wade into state rulemaking that will require most new construction to be heated electrically starting later this year, even as uncertainty remains about whether the new rules are permissible under federal law.

The new rule will cost Avista Corp. thousands of new natural gas customers both in homes and commercial buildings, according to materials the utility filed with the court, and has the potential to increase home prices in the area, according to the Inland Northwest Association of General Contractors. But the state attorney general’s office, supported by a coalition of environmental groups, successfully argued to Judge Stanley Bastian that the rules should not be tossed out, in part because of the climate threat posed by the continued burning of fossil fuels, and because state regulators have delayed implementation of the rules following a federal court ruling out of California.

“We had strongly supported the building electrification codes,” said Jan Hasselman, senior attorney with the group Earthjustice that is arguing the case on behalf of the environmental groups that include the Lands Council and the Sierra Club. “It’s good for the climate and good for the economy.”

Bastian denied Tuesday a request from the utility companies and builders that he enter an order stopping the rules from taking effect. They argued the codes conflicted with federal law and would cause cost increases, harming efforts to provide affordable housing.

The Washington State Building Code Council last year approved codes that require electric heating in new construction, with some exceptions, and they were set to take effect July 1. Then, the U.S. Ninth Circuit Court of Appeals decided earlier this year in favor of a California restaurant trade organization that challenged an ordinance passed by the city of Berkeley banning gas hookups to new construction.

That decision could have ramifications for Washington’s codes, and in May the council delayed the effective date to October to determine whether changes were necessary while the California case is decided. At the same time, the utilities and builder groups, which also include the Spokane Home Builders Association and Garco Construction, filed their lawsuit seeking to prevent the new ban from taking effect.

Hasselman said the building and gas companies were requesting a delay that already had been given them by state regulators because of the legal uncertainty.

“It comes down to this legal cloud that has been created by the Ninth Circuit decision in California,” he said. “Everyone is trying to figure out exactly what the scope of this Ninth Circuit decision means.”

Avista, which is a purveyor of natural gas in addition to providing electricity, said in court filings it stood to lose nearly 13,500 new natural gas customers between 2024 and 2030 if the new codes took effect. Avista has also argued that electrification of home heating would potentially put a strain on the grid and require an increase in utility rates.

“We respect the Court’s decision and look forward to engaging in the rest of the legal process,” Greg Hesler, Avista’s senior legal counsel, said in a statement Wednesday. “We also continue to engage in the State Building Code Council’s process to revise the rules to ensure they comply with the law, which factored heavily into the Court’s decision, and are hopeful that process will yield meaningful and productive results.”

Cheryl Stewart, executive director of the Inland Northwest Association of General Contractors, wrote in an email Wednesday the nonprofit was evaluating its next steps following Bastian’s ruling, and the anticipated future rulemaking by the code council.

“We continue to have concerns with a natural gas ban and what impact that will have on the affordability of projects, timelines and future investments,” Stewart said.

Joel White, executive director of the Spokane Home Builders Association, said in court filings that added costs of construction would price families out of homes built locally.

Hasselman said environmental groups do not object to the pause until the California legal issues can be resolved and the state’s Building Code Council has a chance to meet and determine if any changes need to be made. The group is scheduled to meet next in September.