Denver imposes natural gas ban on heating, cooling equipment in commercial buildings, multi

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New building codes in Denver will ban natural gas furnaces and water heaters in new commercial and multifamily construction starting in 2024 in a move that officials said demonstrates the city's commitment to reaching "zero" emissions in two decades but which critics warned would be painful and costly to building owners and tenants.

And by 2027, natural gas will not be permitted for any heating or cooling equipment in new commercial buildings, the city's building officials said in a news release.

These restrictions do not apply to gas stoves.

The new regulations are part of the new building code adopted in January by Denver City Council. City officials claim commercial 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. "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 city's Energize Denver ordinance, which the council approved in 2021, is but the latest in a string of measures at the state and local levels that seeks to quickly transition away from fossil-fired energy. Supporters argue the transition — although they acknowledge it might be painful in the short term — positions Colorado for a more sustainable and energy-efficient future. They also say it helps wean the country from dependence on foreign oil. Ultimately, they add, the transition toward green energy is good for the environment and people's health.

Critics maintain the quick transition is failing to protect American consumers, particularly low-income residents, who already contend with soaring inflation, and that the singular focus on alternative energy is short-sighted.

Starting March 1, the city will require applicants to "provide more information about the feasibility of using electric equipment" when seeking a permit for gas equipment. They will have to demonstrate to the city that they have evaluated the feasibility of using electric-powered equipment, checked for gas line leaks, and ensured gas equipment is sized correctly and efficiently, according to the regulations.

City officials stressed that starting March 1, the new code does not require electrification, and that in 2027 the electrification requirements will only apply to new construction and replacement of failed or end-of-life heating and cooling systems in existing buildings. Building owners will not be required to remove and replace functioning units.

But previous analysis hints the expense will be significant. In its analysis last year of a law that requires the adoption of "green" building codes, the Common Sense Institute said it could cost homeowners statewide between $59 and $68 billion by 2031, exacerbating Colorado's already acute housing shortage. And a state economic impact analysis of a proposed rule that seeks to reduce energy consumption now under consideration by state air pollution authorities could mean thousands of large building owners statewide face spending more than $3.1 billion by 2050 to comply.

Also not known is whether the city's power grid — or a building's electrical system — will be able to handle the additional electrical load or if upgrades to both buildings and distribution systems will be required.

Multi-family housing builder and manager Tim Walsh, CEO of Confluence Companies, said in prior interviews the conversion to electricity, especially in older buildings, could be tremendously expensive.

"Some numbers that have been thrown out there have been about anywhere from $30,000 to $60,000 per unit. You're talking about upgrading electrical systems throughout the building to put in heat pumps," Walsh told The Denver Gazette earlier this month. "It's not just replacing equipment that's the issue. It's getting the power. An electric boiler uses an enormous amount of electrical power. So, most likely you'd be upgrading the electrical service to the building, the transformer outside and all the electrical gear in your building to make this happen. It's not like you just plug the boiler into a wall outlet. This is a big deal."

Denver has put together more than $30 million in incentives to help replace gas-fired heating and cooling equipment with heat pumps in existing buildings. More than half of this funding will be going toward buildings serving those with less access to resources and that may face more barriers adapting to climate change, according to officials.

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