Green Building Law Blog

Performance-Based Energy Code Does Not Eliminate Threat of Preemption

Yesterday, I posted that the District of New Mexico had issued a decision on the remaining open issues in the AHRI v. City of Albuquerque case. The memorandum and order is available for download here.

In the 1970's, the Federal government enacted minimum efficiency standards for certain HVAC equipment, which have been updated periodically since.  In 2007, the City of Albuquerque adopted a new energy conservation code designed to achieve greater energy efficiency in buildings.  The new Code had both a prescriptive path and a performance path for complying with the new energy efficiency requirements.  

The plaintiffs in the AHRI case are HVAC trade associations and contractors.   They alleged that the City of Albuquerque's energy code required HVAC equipment that was more efficient than the efficiency standards set by the Federal government.  As a result, the AHRI plaintiffs argued, the Albuquerque code was "preempted" by the Federal law setting efficiency standards for HVAC equipment. "Preemption" is when a higher level of government (like the Federal government) prohibits a lower level of government (like the states or municipalities) from regulating the same issue.

In 2008, Judge Martha Vazquez granted the AHRI plaintiffs a preliminary injunction, preventing the new energy code from taking effect.  In granting the injunction, Judge Vazquez stated that the Albuquerque Code was, most likely, preempted.

In 2010, Judge Vazquez granted partial summary judgment for the AHRI plaintiffs.  She held that the prescriptive paths for compliance with the energy conservation code mandated HVAC equipment with higher levels of efficiency than the Federal standards.  At the time, she specifically declined to rule on whether the performance path was also preempted. 

The January 25, 2012 decision takes up the issue of whether the performance path was also preempted.  Judge Vazquez did not rule on whether the performance path standing alone was preempted.  Rather, Judge Vazquez decided that it was not possible to sever the prescriptive and performance paths, and therefore "all provisions of the Code concerning HVAC and service water heating equipment are invalid and unenforceable."  She rests her decision on a stipulation by the City that:

Neither Volume I nor II of the Code would have been enacted by the City Council in the absence of the inclusion of the prescriptive compliance paths, and that, accordingly, the prescriptive compliance paths are not severable from the remaining performance-based compliance paths. 

Thus, the Court left unresolved whether a performance-based code that requires overall energy efficiency, but does not specifically require more efficient HVAC equipment, would also be preempted. 

The District Court for the Western District of Washington addressed this issue in BIA v. Washington State Building Council, and ultimately held that the Washington State Energy Code was not preempted.  The Washington State Energy Code did not mandate enhanced energy efficiency of the HVAC equipment.  Rather, it allowed for a point system whereby energy efficient HVAC components were one path for compliance with an overall energy efficiency target.  The BIA complaint alleged that it was essentially impossible to comply with the energy efficiency targets without  installing enhanced HVAC equipment.  This is an interesting twist on the AHRI  case, because in the Washington code it was possible to comply with the Code without running afoul of federal HVAC energy requirements. 

The ultimate lesson from these two cases may be that, with respect to energy efficiency,  performance-based energy codes are preferable.  However, the fact that there is litigation and controversy around energy codes may make local governments wary of adopting more stringent efficiency codes.

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Shari Shapiro, Esq., LEED AP
Cozen O'Connor
Suite 300, Liberty View, 457 Haddonfield Road, P.O. Box 5459
Cherry Hill, NJ 08002-2220,