Can a Texas city require new buildings to install 'electric-ready' wiring even if they run on natural gas appliances?

Plain-English summary

State Senator Kevin Sparks asked the Attorney General whether a provision of the City of Austin's Energy Code conflicts with a state law that bars cities from discriminating against utility services based on their energy source. The provision at issue, section 8.4.5 of Austin's Energy Code, requires new buildings with gas-fired equipment (space heaters, water heaters, stoves, clothes dryers) to also install the electrical wiring and infrastructure needed to run electric versions of that same equipment in the future.

The AG concluded the requirement is unlawful. Texas Utilities Code § 181.903(b) prohibits a political subdivision, including a home-rule city like Austin, from adopting or enforcing any code that has "the purpose, intent, or effect of directly or indirectly ... discriminating against" a utility service "based on the type or source of energy." The AG read "discriminating" using its ordinary dictionary meaning (treating something differently based on a factor other than merit) and concluded that mandating electric-ready wiring only for buildings with gas equipment, and not the reverse, is differential treatment based on energy source. Austin's argument that the code aims only to give customers more options, not to discriminate, did not change the outcome: the AG read the statute as reaching any code with a discriminatory effect, regardless of the city's stated purpose.

Because Austin's home-rule authority does not let it enforce an ordinance inconsistent with a state statute, the AG concluded section 8.4.5 is unenforceable to the extent it discriminates against natural gas utility service.

What this means for you

Austin and other home-rule cities

The opinion holds that a code provision requiring electric-ready infrastructure only for buildings with gas-fired equipment (and not the other way around) has the "purpose, intent, or effect" of discriminating against natural gas utility service under § 181.903(b), which makes that provision unenforceable. The AG's reasoning turns on the general statutory language, not on facts unique to Austin, so any city ordinance built the same way (mandating buildout for one energy source based on the presence of another) faces the same conclusion under this opinion.

Builders, developers, and contractors

Based on this opinion, the specific electric-ready mandate in Austin Energy Code § 8.4.5 (and its subsections 8.4.5 through 8.4.5.4.2) is invalid to the extent it singles out gas-equipped buildings for extra electrical infrastructure. The opinion does not address the rest of Austin's Energy Code, which the AG did not review.

Natural gas and electric utility providers

The opinion enforces § 181.903(b)'s protection against local codes that tilt the playing field toward one energy source. The AG did not resolve whether the code produces a "meaningful reduction" in gas use in practice, and said that showing actual market impact is not required, an effect of discrimination is enough.

Common questions

Q: Is Austin's "electric-ready" building code requirement still enforceable? A: According to this opinion, no. The AG concluded that Utilities Code § 181.903(b) makes section 8.4.5 of Austin's Energy Code unenforceable because it discriminates against natural gas utility service based on energy source.

Q: What Texas law stops cities from favoring one type of utility service over another? A: Section 181.903(b) of the Utilities Code, which bars a political subdivision from adopting or enforcing a code with "the purpose, intent, or effect of directly or indirectly ... discriminating against" a utility service based on its energy type or source.

Q: Does a city violate the law only if it intends to discriminate against natural gas? A: No. The opinion reads § 181.903(b) as reaching purpose, intent, or effect, so a code that produces a discriminatory effect can violate the statute even if the city says its goal was something else, like customer choice.

Q: Does this opinion strike down Austin's whole Energy Code? A: No. The opinion addresses only section 8.4.5's electric-ready mandate. The AG did not review, and this opinion does not resolve, other parts of the Energy Code.

Background and statutory framework

Austin is a home-rule municipality that derives its governing authority from article XI, section 5(a) of the Texas Constitution, which gives home-rule cities the "full power of local self-government" (Tex. Loc. Gov't Code § 51.072(a)). That power is broad but not unlimited: a home-rule ordinance may not contain "any provision inconsistent with the Constitution ... or the general laws enacted by the Legislature," and the Legislature can cabin home-rule authority so long as it does so with "unmistakable clarity" (City of Houston v. Bates, 406 S.W.3d 539, 546 (Tex. 2013)).

Utilities Code § 181.903(b) is one such limit. It bars a political subdivision from adopting or enforcing a code with the purpose, intent, or effect of directly or indirectly banning, limiting, restricting, discriminating against, or prohibiting the connection, reconnection, construction, maintenance, or installation of infrastructure for a utility service, based on the type or source of energy delivered to the customer. Austin's Energy Code, in section 8.4.5, requires buildings with gas-fired combustion equipment for space heating, water heating, cooking, or clothes drying to also install "electric-ready" infrastructure for electric equivalents.

Applying ordinary dictionary definitions of "discriminate" (to treat differently on a basis other than merit) and "against" (in opposition to), the AG concluded that a mandate applied only to gas-equipped buildings, requiring them to build out electric capacity but not vice versa, treats natural gas service differently based on its energy source. The AG rejected Austin's argument that the code's stated purpose was customer choice rather than discrimination, holding that the statute reaches any code with a discriminatory purpose, intent, or effect, not just codes adopted with discriminatory intent. The opinion expressly did not address whether section 8.4.5 also violates the statute's separate bans on "limiting" or "restricting" utility service, resolving the case on the discrimination language alone.

Citations and references

Statutes:

• Tex. Util. Code § 181.903 — bars political subdivisions from discriminating against a utility service based on energy type or source
• Tex. Loc. Gov't Code § 51.072 — home-rule municipality's power of local self-government
• Tex. Loc. Gov't Code § 51.002 — bars home-rule ordinances inconsistent with state law

Key cases:

• Quick v. City of Austin, 7 S.W.3d 109 (Tex. 1998) — home-rule cities derive authority from Tex. Const. art. XI, § 5(a)
• City of Houston v. Bates, 406 S.W.3d 539 (Tex. 2013) — the Legislature must express intent to limit home-rule power with "unmistakable clarity"

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0521
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2026/kp-0521.pdf

Original opinion text

June 26, 2026

The Honorable Kevin Sparks
Chair, Senate Committee on Natural Resources
Texas State Senate
Post Office Box 12068
Austin, Texas 78711-2068
Opinion No. KP-0521
Re: Whether the City of Austin’s proposed energy code conflicts with Texas Utilities Code
§ 181.903 (RQ-0600-KP)
Dear Senator Sparks:
You ask about a possible conflict between provisions in the City of Austin’s Energy Code and the Utilities Code. 1 The provision at issue in the City’s Energy Code is section 8.4.5, which you tell us contains “electric-ready” language that “require[s] builders to create additional electrical infrastructure for hypothetical future electric equipment.” Request Letter at 2. You state that these requirements conflict with subsection 181.903(b) of the Utilities Code because they “clearly discriminate against the use of natural gas service based solely on the type and source of energy.” Id. As such, you ask whether such a conflict indeed exists between these provisions. Id. at 1. The City may not adopt a code that “has the purpose, intent, or effect of directly or indirectly . . . discriminating against” a utility service “based on the type or source of energy.” The City is a home-rule municipality which derives its power from article XI, subsection 5(a) of the Texas Constitution. See Quick v. City of Austin, 7 S.W.3d 109, 122 (Tex. 1998); see also TEX. CONST. art. XI, § 5(a). This classification vests the City with authority to exercise the “full power of local self-government.” TEX. LOC. GOV’T CODE § 51.072(a). Relevant here, the City enacted an ordinance that replaced its Energy Code in Article 12 of City Code Chapter 25-12 with a new Energy Code that includes section 8.4.5 and its subsections. See AUSTIN, TEX., LAND DEVELOPMENT CODE, § 25-12-262 (2025). Section 8.4.5 and its subsections require buildings containing combustion equipment for space heating, service water heating, cooking, and clothes See Letter from Hon. Brian Birdwell, Chair, S. Comm. on Nat. Res. & Econ. Dev., to Hon. Ken Paxton, Tex. Att’y Gen. at 1–2 (May 8, 2025), https://www.texasattorneygeneral.gov/sites/default/files/request-files/request/ 2025/RQ0600KP.pdf (“Request Letter”). 1

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drying to install infrastructure for electric equipment and appliances for these same purposes. Id.
§§ 8.4.5–8.4.5.4.2. The Energy Code defines “[c]ombustion [e]quipment” as “[a]ny equipment or appliance used for space heating, service water heating, cooking, clothes drying or lighting that uses a fossil fuel.” Id. § 3.2. Thus, the City’s Energy Code requires the installation of “electricready” infrastructure in buildings with equipment or appliances that use natural gas for these purposes. Although home-rule municipalities are afforded broad authority to self-govern, City of Richardson v. Oncor Elec. Delivery Co., 539 S.W.3d 252, 261–62 (Tex. 2018), they may not adopt an ordinance that “contain[s] any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State,” TEX. CONST. art. XI, § 5(a); see also Act of May 20, 2023, 88th Leg., R.S., ch. 899, § 11, 2023 Tex. Gen. Laws 2871, 2874 (codified at TEX. LOC. GOV’T CODE § 51.002). 2 The Legislature may thus limit a home-rule municipality’s broad powers so long as “it expresses its intent to do so with ‘unmistakable clarity.’” City of Houston v. Bates, 406 S.W.3d 539, 546 (Tex. 2013) (quoting Dall. Merch.’s & Concessionaire’s Ass’n v. City of Dallas, 852 S.W.2d 489, 490–91 (Tex. 1993)). Subsection 181.903(b) of the Utilities Code is one such limit on the City’s powers. Indeed, it prohibits political subdivisions, including cities, from adopting or enforcing a code with: the purpose, intent, or effect of directly or indirectly banning, limiting, restricting, discriminating against, or prohibiting the connection or reconnection of a utility service or the construction, maintenance, or installation of residential, commercial, or other public or private infrastructure for a utility service based on the type or source of energy to be delivered to the end-use customer. TEX. UTIL. CODE § 181.903(b). Thus, the City may not adopt or enforce a provision which conflicts with subsection 181.903(b) of the Utilities Code. Section 8.4.5 memorializes a preference for electrification and thus has the “purpose, intent, or effect of directly or indirectly . . . discriminating against” the use of natural gas utility services “based on the type or source of energy.” One way in which section 8.4.5 could conflict with subsubsection 181.903(b) is by having “the purpose, intent, or effect of directly or indirectly . . . discriminating against” a utility service

Section 51.002 of the Local Government Code has been the subject of recent challenges but remains good law. That section was codified by the Texas Regulatory Consistency Act in 2023, Act of May 20, 2023, 88th Leg., R.S., ch. 899, § 11, 2023 Tex. Gen. Laws 2871, 2874, and the Austin Court of Appeals recently reversed a district court holding that the Act was unconstitutional, State v. City of Houston, No. 03-23-00531-CV, 2025 WL 2014935, at *8 (Tex. App.—Austin July 18, 2025, pet. filed) (rendering dismissal for want of jurisdiction), reh’g denied, No. 03-23-00531-CV, 2026 WL 1343571 (Tex. App.—Austin May 14, 2026, no pet. h.). 2

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“based on the type or source of energy.” 3 Id. Determining whether a conflict exists between these provisions requires us to ascertain the meaning of the phrase “discriminating against” through the use of established principles of statutory construction. See Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658, 678 (Tex. 2010). In interpreting a legislative act, we strive to “ascertain and give effect to the Legislature’s intent as expressed by the language of the statute.” City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). We look to the “plain meaning” of the statute’s words “as informed by the context in which the enacted text appears.” Am. Pearl Grp., L.L.C. v. Nat’l Payment Sys., L.L.C., 715 S.W.3d 383, 387 (Tex. 2025). “Undefined terms in a statute are typically given their ordinary meaning,” TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011), which is generally discerned by “look[ing] first to dictionary definitions,” Tex. Dep’t of Crim. Just. v. Rangel, 595 S.W.3d 198, 208 (Tex. 2020) (quoting Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018)). The Legislature does not define “discriminating” for purposes of subsection 181.903(b). However, the word “discriminate” commonly means “to make a difference in treatment or favor on a basis other than individual merit.” MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY 358 (11th ed. 2020). A comparative analysis of contemporaneous dictionaries counsels similarly. See, e.g., THE AMERICAN HERITAGE DICTIONARY 31 (5th ed. 2016) (defining “against” as “[i]n hostile opposition or resistance to”); MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY 23 (11th ed. 2020) (defining “against” as “in opposition or hostility to”); NEW OXFORD AMERICAN DICTIONARY 29 (3d ed. 2016) (defining “against” as “in opposition to”). Here, of course, the basis other than individual merit has been specified by the Legislature: The Utility Code prohibits differential treatment that is “based on the type or source of energy to be delivered to the end-use customer.” TEX. UTIL. CODE § 181.903(b). The foregoing makes clear that section 8.4.5 has the “purpose, intent, or effect of directly or indirectly” discriminating against natural gas utility services. This provision mandates the installation of electric-ready infrastructure—based merely on the “type or source of energy,” id.— over others like natural gas. See AUSTIN, TEX., LAND DEVELOPMENT CODE, §§ 8.4.5–8.4.5.4.2 (2025). To be sure, the City suggests that “[t]here is no evidence demonstrating that [its] Energy Code deters the use of natural gas or that it will lead to a meaningful reduction in natural gas installations.” 4 The City also explains that its Energy Code aims not to discriminate but “create affordable building options” and give “the customer more options” when choosing a preferred energy source. Request Letter at 1. But these points miss the mark. There can be no question that the Utility Code neither prohibits meaningful nor intentional discrimination alone; it guards against the adoption or enforcement of any “ordinance, resolution, regulation, code, order, policy, or other measure that has the . . . effect of directly or indirectly . . . discriminating against” utility services As noted above, subsection 181.903(b) also prohibits an ordinance from having “the purpose, intent, or effect of directly or indirectly banning, limiting, restricting[] . . . or prohibiting the” use of natural gas utility services “based on the type or source of energy.” TEX. UTIL. CODE § 181.903(b). We offer no comment on whether section 8.4.5 conflicts with subsection 181.903(b) on these other bases. 3

Brief from Deborah Thomas & Sonya Herrera, City of Austin City Att’ys, to Hon. Ken Paxton, Tex. Att’y Gen. at 2 (Aug. 18, 2025) (“Brief”) (on file with the Op. Comm.). 4

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based on the “type or source of energy.” TEX. UTIL. CODE § 181.903(b) (emphases added). Basic economics likewise belie the notion that mandating electric-ready infrastructure over others—in what would otherwise constitute a free market—would not carry direct or indirect discriminatory effects against utilities that do not deal in electricity. Put simply, we need not dwell on factual disputes regarding the scope, scale, or intent of differential treatment when the Legislature has prohibited the very existence of discriminatory effects in the first place. Id. We therefore conclude that the Utility Code’s broad prohibition renders section 8.4.5 of the City’s ordinance unenforceable.

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S U M M A R Y
Subsection 181.903(b) of the Utilities Code prohibits the
City of Austin from adopting or enforcing a code that has “the purpose, intent, or effect of directly or indirectly . . . discriminating against” a utility service based on the type or source of energy. As such, the City of Austin’s Energy Code cannot lawfully memorialize opposition to the use of natural gas utility services and is invalid to the extent that it does so. Very truly yours,

KEN PAXTON
Attorney General of Texas

BRENT WEBSTER
First Assistant Attorney General
RALPH MOLINA
Deputy First Assistant Attorney General
D. FORREST BRUMBAUGH
Deputy Attorney General for Legal Counsel
MICHAEL C. COTTON
Chair, Opinion Committee
ALLISON FREED
Assistant Attorney General, Opinion Committee