On February 18, 2025, the Ashland City Council unanimously approved an ordinance imposing impact fees on the installation of natural gas appliances in new residential constructions, ignoring thousands of Ashland residents who contacted the council in opposition. This policy discourages the use of fossil fuels, including natural gas, and promotes full electrification to meet the city’s climate goals. The council’s decision is fraught with challenges.
Economic Implications
The new fees significantly increase the cost of building homes with natural gas appliances. For instance, installing a gas furnace will now add a fee of $4,118.40, a hot water heater $1,396.60, a range $374.40, a clothes dryer $145.60, and a gas fireplace $728. These fees are in addition to, and in some cases double, the cost of the appliances.
Moreover, the increased construction costs will exacerbate housing affordability. Ashland, like many communities, faces challenges in providing affordable housing. The added fees will be passed on to homebuyers, making it more difficult for low- and middle-income families to afford new homes. In fact, access to a new home with natural gas be limited to those who can afford the extra costs resulting in energy equity issues. This is especially true when considering that all-electric homes, while cheaper to build in some cases, may not offer the same energy cost savings in regions where electricity rates are high.
Legal and Regulatory Concerns
The legality of the ordinance is also in question. Similar policies have faced legal challenges elsewhere. In Eugene, Oregon, a proposed mandate for all-electric appliances in new homes was stalled after a federal appeals court struck down a comparable law in Berkeley, California. These precedents suggest that Ashland’s ordinance might also face legal scrutiny, potentially leading to costly and protracted legal battles.
Impact on Energy Infrastructure and Reliability
Transitioning away from natural gas may have unintended consequences for energy infrastructure and reliability. Natural gas has been promoted as a highly reliable and cost-effective energy source. Reducing its use could strain the electrical grid, especially during peak demand periods or emergencies. This concern is particularly relevant given that natural gas cooktops, water heaters and fireplaces can continue to operate during power outages, providing a measure of resilience that all-electric homes lack.
Environmental Considerations
It is much more efficient to use natural gas directly in homes and businesses than it is to convert natural gas to electricity for the same uses. Electrification aims to reduce greenhouse gas emissions, but the environmental benefits depend on the energy source for electricity generation.
Consumer Choice and Market Dynamics
The ordinance will limit consumer choice by financially discouraging the installation of natural gas appliances. Homebuyers who prefer gas appliances for cooking or heating may find their options restricted, leading to dissatisfaction. Additionally, the policy could disrupt the market dynamics for appliance manufacturers and suppliers, potentially leading to economic ripple effects in related industries.
The NW Gas Association opposed this ordinance and submitted comments to the elected leaders of Ashland outlining their concerns with the proposal. NWGA asked the Council to further study the long-term impacts of the ordinance, because Ashland’s citizens deserve to know the full impact of the proposal on their lives, including:
Perform a comprehensive economic analysis to fully understand and appreciate the impact of the proposal on the city’s cost of housing, on its businesses and on the community’s economy at large.
Conduct an analysis of the actual GHG reductions that will occur as a result of this ordinance, and by when.
Consult with the local electric utility to determine the impact that this ordinance will have on the overall reliability of the total energy system for Ashland.
Study the long-term impact of this ordinance on the cost of energy. Ashland citizens deserve to know how this ordinance will affect the cost of the utilities they depend on.
Gain a robust understanding of the many opportunities for decarbonization by utilizing rather than abandoning the existing safe, reliable natural gas system currently serving the community.
Complete a legal analysis to determine whether the ordinance violates state and/or federal law and recent federal court decisions regarding similar restrictions on energy choice. Ashland citizens deserve to know the legal risks (and costs) associated with this ordinance.
Conclusion
Ashland’s decision to impose fees on natural gas appliances in new residential construction raises economic impact, legal, reliability, environmental efficacy, and consumer choice concerns. A more balanced approach would embrace an all-of-the-above strategy by making use of existing energy infrastructure to optimize renewable energies of all kinds and energy-efficient technologies. Unleashing all of the tools available to achieve the community’s environmental objectives makes more sense than restricting energy choice options and potentially saddling Ashland taxpayers with litigation fees.
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