Consumer Choice on Trial: Natural Gas Appliance Policies Face Market Reality Test

As state legislatures and regulatory agencies continue to determine which products consumers are allowed to choose, the Heating, Air-conditioning & Refrigeration Distributors International (HARDI) is pushing for consumer choice in natural gas appliances. According to HARDI, consumers should have the ability to select the HVACR and water-heating equipment that best fits their home, business, budget, energy needs, and local conditions.

Courts are divided on whether states can restrict gas appliances, require all-electric construction, or impose emissions standards that effectively eliminate certain products. The U.S. Supreme Court has already shown that federal appliance mandates affecting consumer choice remain unsettled, sending the U.S. Department of Energy's 95% furnace and commercial water heater efficiency standards back to the Court of Appeals for the District of Columbia Circuit for reconsideration.

HARDI's amicus brief in the case argued that the standards would effectively eliminate many commonly used non-condensing furnaces and water heaters. The rule stays in effect for now while the case is reconsidered, but the court's action confirms that federal appliance mandates limiting consumer choice remain very much an open question.

One recent ruling out of New York upheld the state's All-Electric Buildings Act and New York City's Local Law 154 against a federal preemption challenge. This decision may encourage other states to pursue similar all-electric building requirements in 2027.

The market-reality test comes into play, where the question is not only whether a state can impose policies but whether those policies preserve meaningful consumer choice in the real market. If compliant products do not exist or are unavailable in sufficient volume, the policy does not preserve choice.