NAIOP Colorado is part of a coalition that has filed a federal lawsuit challenging the building performance standard requirements of the Energize Denver program and state Regulation 28. The lawsuit contends that the mandated reductions of greenhouse gas emissions are unrealistic and in violation of the federal Energy Policy and Conservation Act (EPCA). The Act is intended to establish consistent, nationwide energy efficiency standards.

The collective mandate under the state and local programs requires “covered buildings” of 50,000 square feet or larger to reduce greenhouse gas emissions by 7% by 2026 and 20% by 2030 from a 2021 baseline, and effectively serves to ban natural gas as source of heat and hot water within existing buildings. Meeting the requirements will result in a substantial expense for commercial real estate owners forced to extensively retrofit many of their buildings. There is also concern with the reliability of the electric grid in complying with building electrification mandates.

The coalition, which includes NAIOP Colorado, Apartments Association of Metro Denver, Colorado Apartment Association and the Colorado Hotel and Lodging Association, participated in the regulatory process because of their commitment to sustainability and the realities of implementation within the real estate sector. Their input was largely ignored, resulting in the federal lawsuit.

The coalition is optimistic for a favorable court decision following the 9th Circuit Court decision in California that overturned the ban on natural gas in the city of Berkley because it was preempted and in violation of the EPCA. The decision in the Colorado lawsuit will have national implications in other states and localities attempting to establish similar building performance standards under the EPCA.