A proposed state energy reduction rule that could cost large building owners more than $2.5 billion for mandatory building upgrades raised objections from the Colorado Real Estate Alliance.

CREA is a coalition of real estate focused organizations with both residential and commercial interests, including associations and businesses that are involved in real estate construction, service, ownership and management.

The new Regulation 28, up for an Air Quality Control Commission rulemaking hearing beginning August 15, mandates building energy efficiency upgrades for some 8,000 buildings larger than 50,000 square feet of 7% by 2026 and 20% by 2030, below 2021 levels.

This includes condominiums or townhomes that share a building if they have shared centralized heating and cooling systems for water or air conditioning throughout the building, according to an Air Quality Control Commission decision.

The regulation “is a set of inflexible, one-size-fits-all building performance standards that many building owners will be unable to meet in the strict timeline provided” said CREA in an undated fact sheet.

“The costs to comply with these new mandates will potentially push the industry from a position of financial challenge to financial crisis and further contribute to Colorado’s housing affordability challenges,” according to the fact sheet.

Critics also said 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 that violates federal law.

Fines for failing to submit an annual building energy use report, and failing to meet the building performance standards, would result in fines from $500 to $5,000.

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 (building performance standards) and we do not set the rulemaking process. CDPHE (Colorado Department of Public Health and Environment) 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.”

The Colorado Air Pollution Prevention and Control Act established in HB 21-1286 authorizes the Commission to promulgate rules to implement the legislative directions.

The Air Quality Control Commission will be holding a rulemaking hearing from August 15 through 17. Public comments will be heard online only on August 15, from 4:30 p.m. to 7:30 p.m.

Party testimony and deliberations by the Commission will be held August 16 – 17 beginning at 9:00 a.m. Details about participation can be found at cdphe.colorado.gov/aqcc