ARTICLE · 03 JULY 2026

U.S. Supreme Court Reopens DOE's Rarely Challenged Efficiency Standards

Holland & Knight

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The U.S. Supreme Court has vacated a D.C. Circuit decision upholding DOE's 2023 energy conservation standards for consumer furnaces and commercial water heaters, marking a significant shift in how federal courts review agency interpretations post-Loper Bright. The case challenges DOE's narrow reading of "performance characteristic" under EPCA, which effectively mandates a transition from traditional noncondensing gas appliances to condensing technology.

United StatesGovernment, Public Sector

Matthew B. Welling

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Highlights

The U.S. Supreme Court has granted, vacated and remanded a November 2025 decision by the U.S. Court of Appeals for the District of Columbia Circuit that upheld the U.S. Department of Energy's (DOE) 2023 energy conservation standards for consumer furnaces and commercial water heaters, directing the court of appeals to reconsider its ruling in light of the federal government's changed position.
The petitioning gas associations argued that the D.C. Circuit improperly deferred to DOE's reading of the Energy Policy and Conservation Act (EPCA) rather than exercising independent statutory judgment under Loper Bright Enterprises v. Raimondo and that the standards effectively force a switch to condensing, largely gas-free appliances.

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