Energize Denver is a City and County of Denver regulatory effort to address climate change by decreasing commercial and multi-family building energy use and eliminating natural gas for heating. As outlined in its 80×50 Climate Action Plan, Denver aims to reduce its greenhouse gas (GHG) emissions 80% by 2050. Buildings are the largest GHG emission contributor out of any sector, producing 51% of city and county GHG emissions. Denver’s goal is to shrink building energy use intensity (EUI – kBtus/sf/year) 30% by 2030 and natural gas heating emissions 50% by 2040 in order to achieve overall GHG emission reduction goals.
The city tracks EUI through utility meter data. GHG emissions are expected to drop by implementing energy efficiency measures, adopting electrification and embracing renewable energy sources, such as on-site solar panels. Building owners failing to meet city energy targets in the coming years will face significant fines and penalties.
To many facility owners, Energize Denver presents a daunting task. U.S. Engineering Construction is prepared to walk you through the steps you need to take to comply with Energize Denver. Here are five things you need to know to get started.
The Energize Denver policies apply to all commercial and multifamily building owners within the City of Denver. The City of Denver has sent compliance notices to all building owners about their current energy consumption benchmark as well as their 2030 EUI targets.
Different rules apply to two sizes of buildings.
A “covered building” is defined as a commercial or multi-family building that is occupied during the 12-month period. Exceptions are provided for buildings that are being remodeled, are under financial distress, or are used primarily for K-12 education, government, manufacturing, agriculture or industrial processes.
You don’t have to get to your target all at once. But you need to start now. Denver will look at benchmarking each year to determine if a building is making progress toward the EUI target goal. Building owners must make progress toward interim goals in 2024 and 2027. EUI targets vary by primary property types such as laboratories, healthcare facilities, multi-family housing, offices or restaurants. A full list of EUI targets for every building type are listed here.
Denver is allowing a one-year timeline adjustment, so the first compliance notice will apply in 2025. Adjustments to the 2030 energy performance targets can be applied for various reasons:
Denver is also incentivizing the elimination of natural gas for heating and cooking purposes, otherwise known as electrification. If a building reaches 80% electrification by 2030, Denver will offer the building owner a 10% bonus, raising the EUI target by 10%. For example, a target EUI of 50 would increase to 55, allowing the owner to use more energy per building area.
Renewable Energy Credits (REC) will be offered as incentives for on- or off-site solar or wind power generation to offset energy use. Proof of installation, interconnection, or third-party lease will be required.
The goal of Energize Denver is to significantly reduce GHG emissions within the jurisdiction of the City and County of Denver. To enforce the Energize Denver ordinance, the City and County will penalize building owners up to $0.30/ft2 for each kBtu when a EUI target is not achieved by the 2024, 2027, and 2030 deadlines. Maintenance penalties will also accrue if a building owner fails to meet the 2030 target EUI after that deadline. Penalties may be assessed for inaccurate data or failing to provide benchmark reports by the annual deadline.
The penalties are higher than the costs to make energy efficiency and electrification alterations in many cases. In this way, Denver hopes to persuade building owners to improve building performance through energy efficiency investments in mechanical systems, and controls, electrification and/or renewable energy.
The cost of doing nothing is significant. The example below represents the average building energy efficiency for a 200,000 ft2 facility with an 80 EUI. Failing to achieve the EUI targets by the interim and final deadlines, not seeking electrification or renewable energy credits and not applying for a timeline adjustment in 2024 results in cumulative penalties reaching $2.8 million.
So what can you do? A good first step is to talk with us. Our sustainability experts have been improving energy efficiency in our customers’ facilities for decades, and we’ve immersed ourselves in the details of Energize Denver and its new regulations.
In fact, last year, we initiated the Legacy Project, U.S. Engineering’s effort to form and execute a sustainability plan that will benefit our customers, communities and our own organization. We’ve already begun this work for our own facilities and business practices, and now we’re primed to help guide you through your journey to lower your facilities’ carbon footprint.
Finally you may be wondering “how will I pay for these required upgrades?” You’re not the only one with that question. The good news is, you have options.