Federal judge upholds MD regulation phasing out gas appliances

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A federal judge this week upheld a state regulation on large buildings that seeks to phase out gas appliances and reach net-zero emissions by 2040.

Maryland U.S. District Judge Deborah Boardman on March 31 dismissed a lawsuit over Maryland’s Building Energy Performance Standards, which require decreasing net emissions from commercial and multifamily residential buildings, ruling that the standards were not preempted by federal law.

Boardman’s decision is the third U.S. District Court ruling upholding local governments’ environmental regulations in the past week. Clean-energy building codes in Montgomery County and Washington, D.C., were upheld on March 25 and 26. A lawsuit against another Montgomery County environmental rule was paused on Tuesday.

A coalition of management companies, utilities and pro-development trade groups sued the Maryland Department of the Environment in January 2025, shortly after the department adopted the standards. The plaintiffs included the Maryland Building Industry Association, the Maryland Multi-Housing Association, The Building Owners and Managers Association of Greater Baltimore, Washington Gas and the management companies of four Montgomery County apartment complexes.

They argued the regulation was preempted by the federal Energy Policy and Conservation Act and would hurt business, drive up costs and worsen the state’s housing shortage.

The standards require commercial and residential buildings over 35,000 square feet to reduce their net emissions by 20% by 2030, reaching net-zero by 2040. Owners are allowed to pay a fee for exceeding the emission limits.

Boardman granted the state’s motion to dismiss the case with prejudice, writing that “there are no facts the plaintiffs can allege to establish that EPCA preempts the BEPS.” She found that the regulation referred to buildings’ emissions and didn’t discuss appliances, and noted that the standards allow building owners to pay fees or install carbon-capture technology rather than replace gas appliances.

“They do not require the installation of more energy-efficient appliances in buildings,” Boardman wrote. “To comply with the BEPS’ greenhouse gas emissions standards, building owners need not replace their appliances at all. Owners can comply in other ways, including by paying a yearly compliance fee — an option that would not require replacement of a single appliance.”

She also distinguished that fee from a penalty.

“Nothing about the BEPS’ alternative compliance fee suggests that it qualifies, literally or functionally, as a penalty,” Boardman wrote. “It is, rather, an elective option — a means of complying with the law rather than a punishment for violating it.”

Maryland’s standards are distinct from a ban on gas stoves that was struck down by a federal appellate court struck in 2023, Boardman ruled.

Washington Gas, which said it was “disappointed” in the ruling and is considering next steps, was the only plaintiff to comment on the ruling. The Building Owners and Managers Association of Greater Baltimore declined to comment; other plaintiffs and their lawyers did not respond.

“We are concerned that these regulations will limit consumers’ energy options and increase housing and energy costs statewide,” Washington Gas spokesman David Loewenberg wrote in an email.

“These standards restrict and ultimately necessitate elimination of gas appliances in certain buildings and will require significant, costly modifications to many existing properties. At a time when electricity and housing prices are rising, preserving access to diverse, reliable energy options is more important than ever.”

Environmental groups, which filed amicus briefs in support of the regulation, celebrated the decision.

“It’s clear that policies to invest in healthier, more affordable homes are legally sound,” Sari Amiel, an attorney with Sierra Club’s Environmental Law Program, stated in a press release.

Anne Havemann, deputy director and general counsel at the Chesapeake Climate Action Network, added, “Communities across Maryland should take note: you have every right to help reduce energy costs and invest in healthier, more affordable homes by pursuing stronger building standards.”