On January 5, 2026, the Trump administration filed suit in the U.S. District Court for the Northern District of California against two California cities, Morgan Hill and Petaluma, seeking to invalidate local ordinances requiring new buildings to be "all-electric." The U.S. Department of Justice (DOJ) complaint alleges the ordinances "as a practical matter . . . function to ban all use of gas appliances" in new buildings and are preempted by the federal Energy Policy and Conservation Act (EPCA). 

The Administration emphasizes that this action follows from two Executive Orders (EOs), Unleashing American Energy (EO 14154) and Protecting American Energy from State Overreach (EO 14260), which make "American energy dominance" and challenging state and local actions deemed to "threaten" such dominance central policy objectives. From a legal perspective, the suit relies heavily on California Restaurant Association v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), holding EPCA preempted a similar local ordinance prohibiting the installation of natural gas piping in new buildings. 

Key Takeaways

• Municipalities with similar ordinances should reassess their programs in light of EPCA preemption, recent Ninth Circuit precedent, and potential challenges from DOJ.
• Developers, building owners, natural gas appliance manufacturers and suppliers, and energy providers may see increased opportunities to challenge local fuel-restriction requirements.
• The lawsuit also signals the Trump administration’s aggressive posture toward local energy regulations perceived to conflict with federal energy policy.

Practical Implications for Regulated Entities

This case underscores that the Administration appears to be actively scrutinizing state and local mandates that restrict fuel choice or indirectly ban federally regulated appliances under EPCA. The complaint notes that in recent years "[n]umerous other California cities have repealed or suspended their equivalent of similar gas bans," citing actions by Los Angeles, Encinitas, San Luis Obispo, and Santa Cruz. 

Press reports included statements from the cities that they had not been enforcing the ordinances in question, so the case seems unlikely to be contested or to lead to a published opinion. The action against Morgan Hill and Petaluma reflect the heightened risk that state and local electrification mandates that remain on the books will be challenged by the Administration. This risk could extend to:

• New York's All-Electric Buildings Act, which takes effect this year and requires most new buildings up to seven stories in height to use electric heat and appliances.
• Montgomery County, Maryland's "all-electric" building code for new construction that takes effect beginning in 2027 (Chapter 8, Sec. 8-14B).
• Ordinances adopted by ten Massachusetts communities under the State's Municipal Fossil Fuel Free Building Demonstration Program, authorizing them to require new construction or major renovation projects "to be fossil fuel free."