More than 8,000 large building owners facing a multi-billion-dollar regulatory requirement for mandatory energy savings will get another chance to convince the Colorado Air Quality Control Commission not to impose a new regulation that some say is impossible to comply with and others say would violate federal law.

Regulation 28, the Building Benchmarking and Performance Standards rule, was originally to be heard May 16-19 by the AQCC.

After some heated debate over the original rule both in the press and in comments submitted by affected parties, on April 28 the AQCC issued an order continuing the proceedings until August. It then released revised, and according to critics, even more stringent standards.

Critics allege the commission appears to be starting all over again, culminating in a new rulemaking hearing scheduled for August 16 and 17.

Denver environmental and natural resources lawyer Paul Seby represents the Colorado Apartment Association, a trade association that represents more than 3,600 owners and managers, and the Apartment Association of Metro Denver, an association of local apartment building owners that promotes the multifamily rental housing industry.

He’s previously stated that the Polis administration is giving it a “classic bum’s rush” through the regulatory doorway. Seby told The Denver Gazette Thursday the new schedule is just as unfair as the first one.

The original bill, House Bill 21-1286, was signed into law by Gov. Jared Polis in June 2021 and the commission announced the proposed rule 18 months later, on Jan. 20, 2023, requiring applications to be submitted no later than Feb. 13 — allowing only 17 business days for affected property owners and the public to review, assess and respond to the original rule.

With the new hearing deadline in August and the new proposed standards, Seby reiterated his concerns with the accelerated process. This time there are 75 working days between the notice of proposed rulemaking and the hearing. However, pre-hearing letters were due by June 5, 25 working days from the new announcement of rulemaking.

“It may meet the minimum process timelines, but their notice and proposed rule hide the ball about key assumptions behind the new more stringent proposed standards,” Seby said. 

One of the principle arguments by critics is that the regulation, by mandating reductions in energy use of 7% by 2026 and 20% by 2030 below 2021 levels, in effect sets new “efficiency standards” for consumer appliances that are already regulated by the federal government.

The Energy Policy and Conservation Act says, “(N)o State regulation concerning the energy efficiency, energy use, or water use of such covered product shall be effective with respect to such product…”

Critics say that the new regulation would, in many cases, force building owners to remove gas appliances and replace them with electric ones. They claim this amounts to setting an unlawful efficiency standard for existing gas appliances of zero emissions.

In a unanimous April 17 decision, the federal 9th Circuit Court ruled that a Berkeley, Calif. ordinance banning the connection of natural gas lines to new construction violates that federal law.

Judge Patrick J. Bumatay said: “By completely prohibiting the installation of natural gas piping within newly constructed buildings, the City of Berkeley has waded into a domain preempted by Congress. Instead of directly banning those appliances in new buildings, Berkeley took a more circuitous route to the same result. It enacted a building code that prohibits natural gas piping into those buildings, rendering the gas appliances useless.”

In their pre-hearing submissions, both the AQCC and the Colorado Energy Office said that the regulation is mandated by the duly-enacted statute and they are only doing what the law requires, and that any defect lies in the law itself. Notwithstanding the Berkeley decision, they go on to say that until the underlying statute is challenged and overturned, they have a legal duty to forge ahead.

The proposed regulation applies to all buildings in the state larger than 50,000 square feet, including parking areas. Some buildings — including agricultural, manufacturing, industrial, storage facilities, and unheated stand-alone parking garages, or hangars — would be exempt from the rule.

Colorado Energy Office spokesperson Ari Rosenblum, in a statement to The Denver Gazette said: “First, I want to note that the Energy Office’s role is to implement the BPS standards and we do not set the rulemaking process. CDPHE is learning from places across the country that have already adopted building performance standards requirements and working to ensure this rule benefits Coloradans and reduces greenhouse gasses from buildings, as required by state law.”

Rosenblum noted that the estimated costs and benefits have changed since the previous draft.

“If the rule is adopted as currently drafted, we anticipate its impact and the overall benefit-to-cost ratio would largely remain the same: Colorado would see a benefit of more than $3 for each $1 invested in building efficiency. These new numbers take into account the latest benchmarking and energy savings data:”

• Total electricity bill savings

o Previous estimate: $8,331,892,958

o Current estimate: $6,683,640,217

• Total natural gas bill savings

o Previous estimate: $753,237,579

o Current estimate: $773,811,785

• Total energy savings

o Previous draft rule: $9,085,130,536

o Current estimate: $7,457,452,002

• Total cost

o Previous estimate: $3,118,511,672

o Current estimate: $2,559,800,130