Owners of buildings larger than 25,000 square feet can face up to $4.5 million in fines if they ignore or refuse to comply with Denver’s plan to achieve “net zero” carbon emissions intended to eliminate the use of natural gas citywide by 2040, according to Energize Denver program documents.

“Denver’s definition of a net zero energy building is highly energy efficient, all electric, provider of demand flexibility to the grid, and powered by renewable electricity,” according to a draft technical guidance document for proposed revisions to the Energize Denver benchmarking and energy performance requirements from Denver’s Office of Climate Action, Sustainability and Resiliency (CASR) and the Energize Denver Task Force last week.

Denver City Council adopted a new building code in 2021. According to the city, commercial and multifamily buildings are responsible for 49% of Denver’s greenhouse gas emissions.

“These progressive new building codes were the result of a strong collaboration between the city and the community,” said Mayor Michael B. Hancock in 2021 in a news release. “Denver has spoken loud and clear that taking climate action is a top priority – codes like these will help get us to zero emissions by 2040.”

The ordinance requires buildings larger than 25,000 square feet to get to 30% energy savings by 2030. The ordinance also requires adoption of electric heating and cooling systems to replace gas systems over time.

CASR announced the latest proposed updates to the program last week and opened an engagement process as part of the draft changes.

“The engagement process announced earlier this week is to update the rules and regulations that guide the Energize Denver Building Performance Policy,” said Emily Gedeon, CASR director of communications and engagement in a statement to The Denver Gazette. “We’ll also be talking about rebates and resources for building owners. CASR regularly updates these rules and regulations based on community feedback — this will be the 3rd rules update since the policy went into place in 2021. The goal is to add more flexibility to support building owners.”

CASR is taking feedback from now until December 16th, when a formal notice of the changes to the energy efficiency rules and regulations will be posted. Between now and December 16th, CASR is planning engagement sessions with stakeholders.

Details of the engagement sessions can be found at the CASR website.

As Denver advances its electrification goals, stakeholders including commercial and multifamily residential building owners filed a lawsuit in federal district court claiming that the electrification requirements are unconstitutional because they violate federal energy efficiency laws that preempt state and local regulations on appliance energy efficiency standards.

The complaint, filed April 22, 2024, by four apartment, hotel, and construction trade organizations says “Congress intended EPCA (Energy Policy and Conservation Act) to preempt patchwork state or local laws that are unworkable, that undercut a coordinated national energy policy, that overlook the public’s need for reliable and resilient energy, and that deny consumer choice.”

Denver filed a motion to dismiss in the case in June, saying that the plaintiffs have no standing to sue. A decision on the dismissal motion is pending.