Phasing out furnaces? Washington board to vote on major restrictions for new commercial buildings, including apartments

Traditional heating systems that use natural gas or electricity will be significantly restricted in future commercial buildings if two revisions to the state’s energy code are adopted by the State Building Code Council. Instead, new businesses and apartments mostly would use heat pumps to warm air and water.

The proposals would require most new commercial construction after July 1, 2023, to use heat pumps for heating air and water. The plan would effectively ban HVAC systems in most new commercial construction that use fossil fuels like natural gas – including most standard furnaces – or systems that use electric resistance, such as baseboard heaters, wall heaters, radiant heat systems and electric furnaces.

The council will meet Friday to consider a slate of energy code revisions that will affect future commercial construction, including businesses and multifamily structures like apartments. The council is a body of gubernatorial appointees representing construction interests and tasked by law to create the standards builders must follow when constructing new buildings.

The proposals garnered questions from associations representing builders while getting support from organizations promoting policies to address climate change.

The Building Industry Association of Washington is concerned about the feasibility of the limitations, citing the financial impact on the housing market and the electrical grid. Janelle Guthrie, communications director for the association, said the revised code doesn’t allow flexibility to provide for renters and homeowners.

“We have a variety of customers across the spectrum,” she said. “Some of them want the uber green net-zero home while others want to be able to afford the starter home – we have to take into consideration the people across the spectrum.”

Proponents of the energy code revisions cite the effect it would have on reducing carbon emissions and improving energy efficiency. Brian Henning, director of the Center for Climate, Society, and the Environment at Gonzaga University, said the negative impacts natural gas has on the environment and on health calls for a quick transition away from the resource.

“It’s clear, according to every major scientific organization, that we need to move as quickly as we can away from using fossil fuels,” he said. “We are in a pretty deep climate hole – we need to stop digging. So, the idea of transitioning to begin to stop installing new hookups for gas in buildings, makes a lot of sense.”

The provisions include exceptions that allow for electric resistance to heat a space or water system in specific situations approved by a code official. Some exceptions also would be allowed for space heating using a fossil fuel, but to a lesser extent than electric resistance.

Andrea Smith, policy and research manager with the Building Industry Association of Washington, said the exceptions cover only a small fraction of buildings and still amount to a ban on natural gas that comes with a cost.

“Anybody but schools and hospitals are the ones that are not receiving exemptions,” Smith said. “If we’re concerned about the cost added to a hospital or school district, we should also be concerned about the cost added to housing and to the rental market.”

Similar proposals for natural gas limitations in space and water heating also are being suggested for future residential construction, which are also prompting concern from builder associations. Residential energy code proposals will be heard at a future meeting.

In explaining the limitations, the proposals cite two state laws from 2009 that set a goal of building zero fossil-fuel greenhouse gas emission structures by 2031 and require a 70% increase in annual net energy efficiency to meet that goal. A preliminary cost benefit analysis marked the proposals as having “significant impact” in meeting state energy standards.

Guthrie said their biggest concern is the significant impact the limitations would have on housing affordability. There needs to be a balance between the provisions and the ability for people to rent an apartment or own a home, she said.

According to the Washington Center for Real Estate Research at the University of Washington, the average cost of apartment rent in Spokane County was $1,247 a month in the fall of 2021 – up from $1,098 a month in the spring. The median home price at the end of 2021 was $401,000, up about 20% from the previous year.

The Building Industry Association of Washington estimates that 81% of families in the Spokane area cannot afford to purchase a median-priced, newly constructed home. At a time when living costs are on the rise, Guthrie said, the state should reconsider mandates that could add to the price of building and operating homes.

David Drake, professor at the school of design and construction at Washington State University, said the ongoing housing affordability and availability crisis is more complex than any code or policy. The challenge is the result of multiple factors such as stagnant wage growth and increasing land costs, not just recently increasing labor and material costs. A big part of housing affordability, he said, is utility and maintenance costs.

“If we increase the energy and performance of housing, we reduce those monthly bills in terms of utility payments,” Drake said. “If we mitigate climate change, which is causing extreme weather events – and those are just going to get worse – then we mitigate the costs of increased maintenance, we mitigate the costs of things like wildfires, storm events and flooding.”

The U.S. Department of Energy considers heat pumps to be an “energy-efficient alternative” to furnaces and air conditioners. A 2019 study of heat pump water heaters in the Pacific Northwest found the heaters were able to provide a significant amount of energy saving compared to their electric resistance water heaters.

“In terms of the homeowner, it’s actually likely that they would have more stability and potentially lower costs by using electrified heating,” Henning said. “Over time, people will just find it perfectly normal to be able to just use electric heat.”

Smith said electricity infrastructure is more susceptible to extreme weather events like the ones in Eastern Washington. With natural gas infrastructure located underground, she said, it is more reliable. Smith also expressed concern about the ability for the electrical grid to handle the increased electricity use created by the proposals.

In a statement, Avista said while the company is committed to carbon reduction and a clean energy future, eliminating the direct use of natural gas makes decarbonization “more challenging.” Increased reliance on electricity can’t be handled with solar and wind power alone, the company said, and heavy electricity use in the winter would require big improvements to their distribution infrastructure.

“In order for Avista to serve the equivalent winter heat load using electricity to replace natural gas, it would require changes to the electric grid, including new and/or replaced transmission lines, new and upgraded substations, and significant distribution upgrades to have enough capacity to prevent cold weather outages,” the statement said.

Henning said the gradual transition away from natural gas, starting with new construction, gives time for utility companies to build the capacity to address increased demand. A gradual transition now will be better than a quicker transition in the future.

“If we keep waiting and the climate crisis continues to get worse, then the need to make even more dramatic, more quick, more disruptive changes becomes more and more necessary,” Henning said. “So it really is to everybody’s benefit, including Avista’s, to do it gradually, in which case they could have no problem in meeting the demand over time.”

Dozens of local officials across the state, including Spokane City Council President Breean Beggs and Councilwoman Lori Kinnear, signed on to a letter supporting the proposals. The officials said local proposals across the state to reduce carbon emissions from buildings need to be bolstered by a uniform, statewide standard. Meeting the state’s clean energy goals with the natural gas proposals ensures “that our communities are sustainable, equitable, and healthy, now and in the future,” the letter said.

Guthrie said the builders they work with receive education on creating energy efficient buildings, but the standards aren’t recognized as meeting energy code requirements.

“There’s certainly not an aversion to building green or building energy efficient homes,” Guthrie said. “It’s having the expertise and knowledge and flexibility within the code to be able to build the best homes that we can within the budgets that people have.”

Drake said builders have historically found ways to continue providing affordable and high-quality homes even in the face of ever-changing codes. Those code changes, he said, push buildings to be better for consumers.

“What we’ve seen over and over again is that when change comes, it’s good for all of us,” he said. “Buildings don’t catch on fire the way they used to. Buildings are safer than they used to be. Buildings are more energy efficient, which means cheaper to operate and cheaper to maintain than they used to be. Buildings are simply a higher quality product than they were decades or a century ago.”

The hearing to adopt the commercial energy code will start at 10 a.m. Friday. Those wishing to attend can do so via Zoom, with a link provided on the building code council’s website.

Editor’s note: A previous story incorrectly spelled Janelle Guthrie’s name.