On June 30, 2026, the United States 2nd Circuit Court of Appeals, covering the states of Connecticut, New York, and Vermont issued its ruling in Mulhern Gas Co. v. Mosley. At stake in the case was the validity of policies that had previously been approved in New York State and New York City that would have eventually required all new buildings in those jurisdictions to be all electric, with only a few exceptions. The court ruled in favor of both the city and state, allowing these policies to remain in place.

New York City’s policy, Local Law 154, was approved by the City Council in late 2021 and required that beginning in 2024 all residential buildings under seven stories be all electric, with the requirement applying to larger buildings on July 2, 2027. New York State soon followed with their own policy that was approved as part of the state’s budget in 2023. This law applied to all low-rise new construction, under 100,000 square feet to be all electric as of Jan. 1, 2026, with larger buildings facing the same requirements as of Jan. 1, 2029. Only very specific types of commercial buildings were exempt from these requirements.

Not long after these measures were approved, a coalition of skilled trades organizations formed a coalition that challenged these laws in court. The coalition argued that the city and state policies were in violation of federal law, more specifically the Energy Policy and Conservation Act (EPCA). That statute includes a preemption provision that prevents state and local governments from enacting policies concerning the energy use of federally regulated appliances. As the state and city were looking to effectively ban gas appliances, the coalition asserted that these policies concerned the energy use of these products.

The case made by the coalition is a familiar one for those following public policy debates on this topic. In 2023, the United States 9th Circuit Court, representing several states in the Western United States, ruled in CRA v. Berkeley that an ordinance passed in that city, prohibiting natural gas connections to new buildings, ran afoul of EPCA and was therefore overruled. There, judges in that court affirmed that the city’s effective ban on gas appliances in new construction had the effect of setting their energy use at zero, an act that was prohibited by EPCA’s preemption provision.

The 2nd Circuit, however, made their ruling based on a different interpretation of EPCA. In their reading of the law, the court determined that the preemption provision only applies to state and local policies that specifically govern the energy efficiency of federally regulated appliances. Since the city and state policies in New York were designed as greenhouse gas emissions reduction measures, they were not contrary to the types of state and local laws that EPCA aimed to prevent.

With this ruling in hand, the city and state now have a green light to once again enforce these measures, as New York Governor Kathy Hochul had placed enforcement on hold pending the outcome of this court case. This hold is why this policy did not take effect statewide on Jan. 1, 2026, as the legislation demanded. What the ruling means for the future of building electrification policies throughout the United States is less certain. Of the nation’s 10 Circuit Court of Appeals, two have now weighed in on this matter and have reached opposite conclusions on how EPCA interacts with state and local policy. If the legal battle on this matter were to continue it would have to be through courts in a separate circuit court region, or at the United States Supreme Court. It is not immediately clear which, if any are more likely.

BWC Government and Regulatory Affairs staff will be carefully watching all developments related to this matter and will certainly keep you informed of the latest information you need to help you plan for your business and your customers. If you have any questions about this situation, or any others pertaining to government and regulatory affairs in our industry, please to do not hesitate to contact us directly at BWCGovReg@bradfordwhite.com.