Fossil fuel heating and cooking systems are prohibited in new construction in New York City under Local Law 154 and throughout New York State under the All-Electric Buildings Act. Two key developments recently occurred that will shape the enforcement of these gas bans: (i) the New York Department of Public Service issued a whitepaper seeking comments on a set of proposed exemptions to the statewide gas ban, and (ii) a federal court upheld NYC’s gas ban, setting up what may be a case for the Supreme Court of the United States.
These developments should inform compliance plans for real estate developers as well as the value proposition for distributed energy resources that can serve electrified buildings. In addition, the impacts of these gas bans directly inform statewide electric and gas supply forecasts, which are the foundational analyses for energy supply planning at every level.
All-Electric Buildings Act – Comments Due on May 19, 2025, on DPS’s Proposed Exemptions
New York State’s gas ban was enacted as part of the 2023–24 budget (Part RR of Chapter 56 of the Laws of 2023).1 It prohibits fossil fuel equipment and building systems in new buildings that are seven stories or less starting on December 31, 2025, and applies to all new buildings starting on January 1, 2029. The law will be implemented through the State Energy Conservation Construction Code (Energy Code), and hearings on its implementation will be held in May 2025.2 The law provides a set of exemptions to this broad rule, which includes, but is not limited to, the following:
- New commercial or industrial buildings greater than 100,000 square feet are exempt until 2029.
- Renovations to preexisting buildings do not necessarily trigger a compliance requirement.
- Backup power, manufactured homes, manufacturing, labs, car washes, laundromats, hospitals, critical infrastructure, wastewater systems, and agricultural buildings have exemptions. However, the exemptions are not absolute and include requirements that buildings limit the use of fossil fuel equipment “to the fullest extent feasible” and be “electrification ready.”
Importantly, buildings are exempt from the ban on fossil fuels if electric service “cannot be reasonably provided by the grid . . . however, that the Public Service Commission shall determine reasonableness for the purposes of this exemption.”3 On February 27, 2025, New York DPS Staff (DPS) issued a whitepaper for comment on how this reasonableness standard should be applied by utilities when regulated buildings request electric service. DPS described, but declined to adopt, an approach where the cost to interconnect under a preset formula would pass the threshold of reasonableness. DPS favored an approach where the additional time to construct electric system upgrades for a fully electrified building would determine whether electric service can reasonably be provided.
DPS suggested that if the electric system upgrades will take 18 months or longer as compared to serving the building without requiring full electrification, then the new construction should be exempt from the ban on fossil fuels. This raises a number of questions, including how cross-utility coordination will work to estimate timelines, whether a uniform methodology for estimating timelines is needed, whether unforeseen issues that come up during construction could retroactively allow a building to be exempt, defining the start and finish times for calculating the 18 months, liability if timelines shift, how multiple service requests in a location could shift a timeline that may otherwise be applicable for a single building, and more.
Written comments are due by May 19, 2025, and utilities will be required to operationalize this reasonableness test before the fossil fuel ban is enforceable on December 31, 2025. Following the initial comment deadline, there will be an opportunity for reply comments, and then ultimately an order issued by the Public Service Commission. In addition, the All-Electric Buildings Act is also being litigated in the US District Court for the Northern District of New York. Plaintiffs claim it is beyond the state’s jurisdiction to enforce, under similar arguments as described below relating to the Local Law 154 in New York City, and this litigation is currently pending.
Please contact Barclay Damon for further details on the DPS proposal and how to participate in this proceeding. Barclay Damon is also available to advise on best practices for real estate developers, DER providers, and building owners to comply with the All-Electric Building Act as these policies continue to shift.
NYC Local Law 154
For buildings under the New York City Building Electrification Law (Local Law 154), the city has prohibited “the onsite combustion of fuels that emit more than 25kg CO2/MMBtu in new construction.” Local Law 154 has a similar structure to the statewide ban. Enforcement for new buildings seven stories or less began in 2024, and the staggered compliance deadlines continue until 2027. In addition, exemptions also include backup power, wastewater treatment, manufacturing, laboratories, laundromats, hospitals, and commercial kitchens.
On March 18, 2025, the US District Court for the Southern District of New York upheld Local Law 154 after it was challenged by a coalition of trade groups and a labor union as beyond the power of the city to enforce due to it being preempted by the Energy Policy Conservation Act of 1975. The court sided with the city, granting its motion to dismiss and finding that the plaintiffs failed to state a claim upon which relief can be granted.
While the details of the preemption claim are beyond the scope of this alert, the court’s ruling did address that the fact that a similar municipal ban on fossil fuels imposed by the City of Berkeley, California, was not upheld in a similar challenge in the Ninth Circuit. The Southern District found that the Ninth Circuit’s ruling on Berkeley’s ban was flawed and disagreed with its findings. With Berkeley’s ban successfully challenged and New York City’s ban upheld, this has set up an immediate conflict in judicial views on municipal gas bans and is expected to be further appealed—potentially up to the US Supreme Court—for final resolution.
For building owners, developers, and service providers subject to Local Law 154, Barclay Damon is available to advise on compliance strategies as these requirements continue to be litigated.
If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; Ekin Senlet, Regulatory Practice Area co-chair, at esenlet@barclaydamon.com; Ben Falber, partner, at bfalber@barclaydamon.com; or another member of the firm’s Regulatory Practice Areas.
1NY State Senate Bill 2023-S4006C.
2New York State Register Volume XLVII, Issue 11, March 19, 2025.
3New York Energy Law § 11-104(7)(e).