Colorado moves forward with building efficiency program that could cut energy bills

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State health department, Colorado Energy Office collaborate to reduce harmful greenhouse gas emissions

REMOTE (Jan. 23, 2023): The Air Quality Control Commission has set a hearing to consider new standards that would reduce energy use in buildings over time. The state health department’s Air Pollution Control Division’s proposed program would provide significant savings on utility bills and reductions in greenhouse gas emissions that contribute to climate change. A recent state law established emissions reductions goals for certain buildings and directed the division to create a proposal for how to achieve those goals. Under the proposal, owners of most buildings larger than 50,000 square feet would make improvements to decrease energy use and greenhouse gas emissions. For example, owners could make efficiency upgrades or could  replace natural gas equipment with electric equipment. Colorado would see a benefit of more than $3 for each $1 invested in building efficiency. 

“Making buildings more energy efficient is one of the most important things we can do to protect air quality and address climate change across Colorado,” said Michael Ogletree, director of CDPHE’s Air Pollution Control Division. “The financial benefits of energy efficiency will also mean tangible savings that directly benefit Coloradans.”

The division’s Economic Impact Analysis estimates that the proposal would lead to an estimated $11 billion in economic benefits between 2024 and 2050. This includes energy savings and avoided social carbon costs, like property damage or health impacts caused by climate change. The total initial cost associated with implementing the program is an estimated $3 billion, spread out over a number of years and about 8,000 buildings. There are federal tax credits, utility rebates and incentives, and state funds that can assist with some measures that building owners may use to implement the program. Building owners would be able to apply for those financial assistance programs.

The division’s proposal builds on the work of the Colorado Energy Office. As part of the previously mentioned state law, the CEO convened a task force on building performance standards. The task force delivered its final recommendations in October 2022, which helped inform the division’s proposal. The division developed the regulations and the CEO would be responsible for running the program. The same state law also established the CEO Building Performance Colorado Program, which requires building owners to report how much energy they use every year to the state using a free online tool. 

“The building performance standards under consideration take into account current building energy usage to ensure that the building performance standards are achievable for Colorado building owners, and help them save money,” said Keith Hay, the CEO’s Senior Policy Director. “Building owners might be surprised how quickly they start to see cost savings after making improvements to meet targets.”

Compared to 2021 measurements, this program would help Colorado meet statutory greenhouse gas reduction targets of 7% by 2026 and 20% by 2030 for the buildings covered in the program. That includes large commercial, multifamily, and public buildings. This is important because buildings are one of the five largest sources of greenhouse gas emissions in Colorado. The program would also help the state meet its Greenhouse Gas Pollution Reduction Roadmap goal of reducing economy-wide greenhouse gas emissions 50% statewide by 2030. The program would ensure that building owners explore additional ways to reduce energy use to help meet greenhouse gas pollution reduction targets.

The CEO hosted three public meetings in July 2022 and shared a survey to gather stakeholder input as part of the task force process. The division also hosted a public listening session in December 2022 and a public comment period to inform the proposed building performance standards. The division is working on additional policies to reduce greenhouse gas emissions and address climate change. During the cross-agency statewide climate change listening tour last year, Coloradans expressed that they want to see more policy action to address the climate crisis. As participants requested, the division will provide additional opportunities for Coloradans to get involved in those efforts.

The formal rulemaking hearing on building performance standards with the Air Quality Control Commission will be in May 2023. If the commission adopts the proposed rule, it would take effect later this year. To learn about more opportunities to get involved in the rulemaking process, visit the commission’s website.

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