|Burlington, Vt., will impose a carbon fee on new and existing buildings that opt for fossil fuel systems and appliances.
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This article is the first of a two-part series on East Coast building gas bans and all-electric codes that advanced in 2023. The second part, covering other parts of New England and the Northeast, is available here.
Efforts to phase out natural gas use in East Coast buildings ramped up in 2023, marking a shift in momentum after the West Coast dominated policymaking for several years.
Climate advocates and local policymakers mounted a coordinated push in Maryland and Washington, DC, to require all-electric construction. Meanwhile, lawmakers in Burlington, Vt., moved closer to restricting fossil fuel combustion in new and existing buildings following years of legislative activity.
But the shift in gas ban momentum to the East Coast has attracted challenges. In October, opponents of New York's state law prohibiting gas use in new buildings sued over the policy. They turned to the legal team that successfully challenged Berkeley, Calif.'s first-in-the-nation gas ban — a legal decision that has reverberated from Southern California to the Pacific Northwest.
Homebuilders and other gas ban opponents also notched a win in Washington, DC. District code officials adopted electrification mandates for new residential construction in 2022, but opponents on its Construction Codes Coordinating Board in September narrowly defeated a proposal to require all-electric construction in new apartment complexes and other commercial buildings.
Maryland gas bans advance at county level
Several Maryland counties are teeing up changes to their building codes that would restrict fossil fuel use in buildings, even as state agencies develop recommendations for all-electric construction mandates and analyze electric grid capacity.
The trend started in Maryland's most populous county, Montgomery County, at the end of 2022. The Montgomery County Council directed the county executive to incorporate an all-electric construction standard into updated building codes. The law required that standard to be in place by Dec. 31, 2026.
In March, the Howard County Council passed the Clean New Buildings Climate Act, directing the county executive to recommend updates to the local building code that would facilitate all-electric standards for new construction, major renovations and additions.
The executive must also evaluate exemptions for building types, develop a net-zero energy standard for county buildings, and present ways for Howard County to reduce public and private sector building emissions 60% from 2006 levels by 2030.
Advocates including the Chesapeake Climate Action Network have launched campaigns in Baltimore and Frederick counties to prohibit fossil fuel use in new construction. In August, Baltimore County Council member Israel Patoka said he intended to introduce legislation to require all-electric building construction.
Passing the legislation at the county level is particularly impactful because Maryland counties establish policies for many or all of the towns and cities within their jurisdiction. There are no incorporated towns or cities in Baltimore and Howard counties, so the policies would apply countywide.
State agencies preparing electrification studies
The two Maryland counties that have passed laws have tied the bills to the state's policy for electrifying both new and existing buildings, outlined in the Climate Solutions Now Act of 2022.
At the law's direction, Maryland's Building Codes Administration is developing recommendations for a statewide all-electric building code, with a final report due to the General Assembly on Dec. 1, 2023. The Maryland Public Service Commission is also finalizing a study on the capacity of the electric and gas systems to continue serving customers during a transition to building electrification. That report was due Sept. 30.
The Howard County executive must incorporate findings from the Building Codes Administration study into its own recommendations. To address concerns about electric system capacity, lawmakers directed the Montgomery County executive to review the commission's study and report on grid investments necessary to accommodate the county's all-electric construction standard.
Exelon Corp. subsidiary Baltimore Gas and Electric Co. and AltaGas Ltd. subsidiary Washington Gas Light Co. distribute gas in the counties where gas bans are under development. S&P Global Commodity Insights has not identified electrification mandates in territories operated by NiSource Inc. subsidiary Columbia Gas of Maryland Inc. or Chesapeake Utilities Corp.
Burlington expands fossil fuel restrictions
After several years of policy development, lawmakers in Burlington, Vt., are advancing an ordinance that would require new construction and large existing buildings to rely on electricity, low-carbon fuels and other renewable sources for thermal energy.
Under the draft ordinance, building owners who cannot use the approved renewable energy sources would pay a one-time, upfront carbon fee on the lifetime greenhouse gas emissions caused by combusting fossil fuels in the building. The legislation set the carbon fee at $150 per ton of GHG, and the levy would increase each year with inflation.
The Burlington Electric Department proposed the carbon fee in 2020. The city received special approval from the state to regulate thermal energy systems at the local level in 2022. After exploring additional building decarbonization options at the city council's request, the electric department recommended the carbon fee approach in December 2022. Voters approved the policy in March.
The bill would block fossil fuel use in all new construction. It would apply to space and water heating system replacements in existing buildings larger than 50,000 square feet, with the exception of existing residential buildings. It would go into effect Jan. 1, 2024, but give new apartment buildings until Jan. 1, 2026, to meet the domestic water heating requirement.
The current draft ordinance would allow buildings to use electric heat pumps for space and water heating and electric appliances for cooking, clothes drying and any other thermal energy process. Buildings can additionally use solar water heating systems and advanced wood heaters that meet state standards.
The law also allows energy purchases from renewables-based district heating systems. Lastly, the ordinance allows Burlingtonians to sign contracts for green hydrogen, renewable natural gas and sustainably sourced biodiesel.
The bill cleared the transportation, energy and utilities committee in August. The ordinance committee resolved to send it to the full city council on Oct. 30.
In a key amendment, the ordinance committee gave electrification and solar power an advantage over low-carbon fuels in new construction. The amendment required builders who opt for primary heating systems that combust the fuels to explain why heat pumps, geothermal systems or solar-powered water heaters were infeasible or economically burdensome.
Vermont pursues other restrictions
Building owners cannot simply opt to pay the carbon fee; they must demonstrate that the cost of a renewable thermal energy system is unduly burdensome.
Proceeds from carbon fees would go into a clean energy fund. The city would make half of the funds paid by existing large building owners available to those owners to invest in emissions-reducing building projects. The remaining funds collected from those owners — and all fees paid by new building applicants — would fund emissions-reduction programs for low-income residents.
The ordinance would expand Burlington's primary renewable heating ordinance, which was passed in 2021 to require new commercial buildings to meet at least 85% of space heating load with renewable energy.
Neighboring South Burlington, the state's second-most-populous city, adopted an ordinance based on the policy in November 2022. The ordinance applied to space and water heating systems in all new buildings. It went into effect in February but gave apartment complexes and commercial and industrial buildings until Feb. 15, 2025, to meet the water heating requirement.
In May, the Democrat-controlled Vermont General Assembly adopted a clean heat standard, which requires fossil fuel distributors to reduce GHG emissions by deploying clean heat measures. Burlington lawmakers sought to align the city's carbon fee ordinance with the state standard.
Vermont Gas Systems Inc. is the only gas distributor in the state.
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