We can't meet state or even global climate goals without local action to reduce fossil fuel pollution. In recent years, there has been an increased focus on building electrification as a key strategy to reduce harmful greenhouse gas emissions. Beyond just helping our environment, building electrification policies make economic sense.
For years, studies have shown that for new buildings, all-electric construction is more cost-effective, and with the recent phase out of subsidies for new gas lines, those economics are even more favorable. Finally, abundantly available local (e.g. South Coast Air Quality Management District GoZero), state (e.g. TECH, Equitable Building Decarbonization), and federal (HEAR and maybe HOMES) incentives and rebates make switching out gas appliances with electric appliances increasingly affordable.
The building electrification movement started in cities because that’s where residents are most proximate to power and can best advocate for public health. Berkeley adopted an ordinance requiring all-electric new buildings, spurring over 200 cities nationwide to adopt building electrification ordinances. In California, this included “reach codes” which were more ambitious extensions of the state building code. Federal and state governments only acted after Berkeley and other municipalities jump started the movement. Soon after, California formed the TECH and BUILD programs to fund incentives for electric appliances in single-family homes and direct install electrification programs in multi-family housing. The California Air Regulatory Board committed to pass zero-emissions standards for space and water heating. Finally, the federal government passed the Inflation Reduction Act, with surviving incentives for high efficiency electric appliances like heat pumps.
Following a partially successful legal challenge from the California Restaurant Association (CRA) against the City of Berkely in 2024 and a new law in California, Assembly Bill 130 in 2025, the legal landscape has changed in California. So let's break it all down.
What is AB 130?
California Assembly Bill 130 (AB 130) is a sweeping housing reform signed into law in August of 2025. The bill suspends the next statewide energy code cycle in 2028 and restricts municipalities and counties from updating their own codes.
Prior to AB 130, a city or county could make changes to building standards or adopt more restrictive standards, including green building standards, if the city/county made an express finding that the change or additional restriction was reasonably necessary due to local climatic, geological or topographical conditions.
After the passage of AB 130, and until the end 2031, state law prohibits cities from adopting more restrictions to the state code with two notable exceptions, which are:
- The change is implemented before October 1, 2025
- The change:
- Is necessary to implement a local code amendment that is adopted to align with a general plan approved on or before June 10, 2025,
- permits mixed-fuel (i.e., electric and natural gas) residential construction consistent with federal law, AND
- Is part of an adopted greenhouse gas (GHG) emissions reduction strategy.
How can a city comply with AB 130?
Option 1: Act Quickly
The simplest path is for a city to pass a federally-compliant (i.e. EPCA-compliant) reach code before October 1, 2025. Given that cities often require multiple readings of ordinances and at least 30 days before adoption, this option is difficult to utilize unless cities act quickly and adopt code language that has already gone through rigorous cost-effectiveness and legal analyses, such as CALGreen’s AC-to-Heat Pump (AC2HP) model ordinance (more on this later).
Even still, a reach code passed prior to October 1 will only apply to the current code cycle, the 2022 State Building Code, which ends December 31, 2025. For the 2025 code cycle, cities will have to re-adopt substantially similar reach codes from the 2022 code cycle, with the benefit of not having to jump through the AB 130 hoops outlined in Option 2, below. As long as the re-adopted reach code is “substantially equivalent to changes or modifications that were previously filed,” it should comply with AB 130.
Option 2: Utilize Exception 5
After October 1, the path becomes more complicated but not unwieldy. If a city has (1) a general plan that references building emissions, energy efficiency, or sustainability, and (2) adopts a greenhouse gas emissions reduction strategy concurrently or prior to the reach code, it may confidently move forward with adopting a reach code. These codes must also of course comply with EPCA and 9th Circuit interpretation, meaning they should allow a pathway for gas combustion.
While the general plan language that the reach code “aligns” with must have been adopted before or after June 10, 2025, the greenhouse gas emissions reduction strategy can be adopted concurrently with a reach code.
For example, a city might have a general plan adopted in 2020 where it commits to a “sustainable building stock.” The city may also already have, or choose to adopt, a Climate Action Plan, i.e. a greenhouse gas reduction strategy, that states that the city must “move to reduce greenhouse gas emissions associated with building stock.” That city's reach code would likely comply with AB 130.
To illustrate: Los Angeles’ general plan includes a “city wide element” (or chapter) on Air Quality with a stated policy goal to “[e]ffect a reduction in energy consumption and shift to non-polluting sources of energy in its buildings and operations.” In addition, Los Angeles passed a Sustainable City pLAn, a clear greenhouse gas reduction strategy in 2019. Together, these plans comply with AB 130 allowing Los Angeles to adopt an EPCA-compliant reach code.
What codes can be adopted for all-electric new buildings
Cities can comply with CRA v. Berkeley by adopting reach codes that require electric readiness, that implement fuel-neutral performance standards, or ideally both. As detailed in Sierra Club’s guide to local buildings advocacy post-Berkeley, not only have cities already adopted these standards for new buildings, the California Statewide Codes & Standards Program has a model ordinance with cost-effectiveness analyses and supplied implementation resources.
All that said, the recently passed statewide 2025 Energy Code includes an all-electric baseline for space and water heating starting January 1, 2026. This means that the bulk of potential emissions from new construction will be mitigated by the statewide code. Against this backdrop, cities may choose to focus on electrifying existing buildings.
What codes can be adopted for electrifying existing buildings
The most obvious, most impactful, and easiest to implement reach code impacting existing buildings is the Air Conditioner to Heat Pump Replacement (AC2HP) model ordinance crafted by the California Energy Commission (“CEC”) and included in the 2025 California Green Building Standards Code (“CALGreen”). This model ordinance enables cities to voluntarily “rip and replace” code vetted by the CEC, supplemented by cost-effectiveness analysis provided by the CSCSP, in the same manner that cities typically adopt CALGreen language each code cycle.
Sierra Club’s blog on AC2HP explains in detail why replacing air conditioners with heat pumps is both sensible and necessary, from a climate, public health, affordability, and policy perspective. Cities with municipal utilities and lower electric rates, like Los Angeles, Palo Alto, Long Beach, Glendale, and Sacramento, are particularly good candidates for AC2HP, as they offer customers substantial bill savings through the efficiency gains of installed heat pumps.
Menlo Park, Moreno Valley, and Sunnyvale all acted quickly, passing AC2HP building codes just this month, with codes going into effect before October 1. Find information about other cities that are moving on our blog here.
How has California Restaurant Association (CRA) v. Berkeley impacted building electrification
In 2024 the contested CRA v. Berkeley ruling by the 9th Circuit (over the objection of eleven of the court’s judges) struck down Berkeley’s ordinance and many other ordinances. The judges ruled the ordinances were pre-empted by the Energy Policy and Conservation Act (EPCA), a law intended to set uniform federal efficiency standards for appliances. Despite this setback, many cities, including San Jose, Santa Cruz, and San Luis Obispo responded quickly, introducing EPCA-compliant ordinances that encourage new buildings to be built all-electric.
In the wake of CRA v. Berkeley, the California Statewide Codes and Standards Program (CSCSP), which provides model ordinances and implementation guidelines, and cities like San Jose have shown that there are ways to encourage all-electric building while complying with EPCA’s preemption clause, even as it has been interpreted by the Ninth Circuit.
Of course, cities outside the Ninth Circuit are not bound by the Berkeley decision, and court after court has expressly declined to follow it. Perhaps more significant, a recent California district court decision in Rinnai et al. v. South Coast ruled that CRA’s ruling was very narrow, only preempting regulations that ban gas piping. The court went so far as to say that EPCA and CRA do not touch emissions-based regulations at all.
Are there updates on CRA v. Berkeley? What happened in Rinnai v. South Coast Air Quality Management District?
In Rinnai, the Central District of California confirmed that EPCA is about energy efficiency, i.e. what goes into appliances, not about emissions or public health, i.e. what comes out of appliances. It rejected an industry challenge to a local air district passing zero-emission NOx standards for industrial boilers, and in doing so it made clear that CRA v. Berkeley is a narrow decision that does not preclude local regulators from protecting their own citizens and cleaning up their own air.
With strong language, the court defended the historic regulation of air pollution by non-federal authorities and carved emissions regulation out of the scope of CRA v. Berkeley’s reach. While this case is being appealed to the 9th Circuit, local municipalities should be encouraged that EPCA’s preemption does not reach emissions regulations. Indeed, municipalities now may have an opening to regulate emissions of buildings as another tool in their suite. In 2021, New York did just that, regulating carbon dioxide emissions from buildings with Local Law 154, and earlier this year, that regulation also withstood an EPCA challenge.