Solicitor General Urges Supreme Court to Overturn Energy Efficiency Rule on Natural Gas Furnaces and Water Heaters

The U.S. Solicitor General has filed a brief with the Supreme Court, urging it to overturn a recent appellate court decision that upheld a Department of Energy (DOE) energy efficiency standard for natural gas-powered furnaces and commercial water heaters. The standard effectively banned non-condensing units from the market.

The divided panel of the U.S. Court of Appeals for the D.C. Circuit issued its decision in November 2023. While the ruling may have aligned with the Chevron doctrine, it conflicted with the Supreme Court’s recent reinterpretation of statutory interpretation in Loper Bright Enterprises, as highlighted in Judge Rao’s dissent.

At the time, the Trump Administration did not seek to delay the case’s resolution, nor did it request the D.C. Circuit to reconsider the rule while the DOE reviewed it.

In January 2024, a coalition of industry groups, including the American Gas Association, filed a petition for certiorari in American Gas Association v. Department of Energy. On May 23, 2024, the Solicitor General responded, recommending the Supreme Court grant, vacate, and remand (GVR) the case due to the D.C. Circuit’s alleged legal error.

Solicitor General’s Argument for Overturning the Rule

The Solicitor General’s brief states:

Petitioners contend (Pet. 25-30) that the Department's December 2021 interpretive rule and resulting energy-conservation standards reflect an unduly narrow understanding of what constitutes a "performance characteristic[]" under EPCA. Following the change in Administration, the government agrees with that contention. The Court should accordingly grant the petition for a writ of certiorari, vacate the judgment below, and remand for further proceedings (GVR) in light of the government's position in this brief.

A GVR order would:

• Send a clear signal to the D.C. Circuit to prioritize rigorous statutory interpretation.
• Uphold the persuasive reasoning in Judge Rao’s dissent.
• Spare the Trump Administration the administrative burden of rescinding or modifying the rule under the shadow of the D.C. Circuit’s flawed decision.

The panel’s November 2023 opinion complicates the Administration’s ability to reverse or amend the rule, as it suggests the statute does not permit such action. A Supreme Court GVR would resolve this legal uncertainty.