Denver has postponed a deadline for large building owners to comply with a major energy reduction plan and also terminated compliance targets due in three years.

Denver’s Office of Climate Action, Sustainability and Resiliency announced the series of actions on Monday. First, the “Energize Denver” target for 2025 compliance was moved to 2026, while the 2027 compliance target was eliminated.

The 2030 final compliance target remains, but the city said that, if needed, buildings may establish an alternative timeline through the “Energize Denver” process.

Manufacturing, agricultural, and industrial (MAI) buildings in the MAI alternate compliance option will stay on the 2026/2030 timeline.

Denver allows these facilities to apply for an MAI designation. Owners can then choose a compliance pathway tailored to their operations.

Elizabeth Babcock, executive director of CASR, said the changes resulted from concerns voiced by the business community during feedback sessions.

“The city is working to make improvements to make Energize Denver more easily implementable,” said Babcock. “The proposed updates to the Energize Denver Building Performance Policy are still in review.”

Approved by the Denver City Council on Nov. 22, 2021, “Energize Denver” aims to reduce greenhouse gas emissions from buildings larger than 25,000 square feet by 80% by 2040. The city said 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 in 2023. “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.”

“Energize Denver” was among a string of measures approved at the state and local levels that sought to quickly transition away from fossil-fired energy. Supporters argued the transition — although they acknowledged it might be painful in the short term — positions Colorado for a more sustainable and energy-efficient future. They said it would help wean the country from dependence on foreign oil. Ultimately, they added, the transition toward green energy is good for the environment and people’s health.

Critics maintained 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.

The city has never released an estimate of the costs to building owners to meet the standards, although the ordinance provides avenues for financial assistance.

Buildings outside of Denver are not included in this postponement, but buildings in the city are still required to meet the state energy performance standards if they are larger than 50,000 square feet.

The Denver ordinance is similar to the Polis administration’s large building energy performance standards regulations that apply to more than 8,000 buildings statewide larger than 50,000 square feet.

That regulation went into effect September 6, 2021. It requires a 7% reduction in greenhouse gas emissions by 2026 and a 20% reduction by 2030.

The state, in its economic impact statement for Regulation 28, estimated the cost of compliance for some 8,000 buildings that fall under the regulation at $3.1 billion.

Both the state and Denver are being sued in federal court by developers claiming that both laws are unfair and costly.

The court challenges alleged that the ordinance effectively requires conversion from natural gas to electricity by setting impossible-to-meet energy savings targets and that this violates the federal Energy Policy and Conservation Act that reserves the setting of energy use standards for appliances, including furnaces, water heaters and stoves, to the federal government.

The complaint, filed on April 22, 2024, by four apartment, hotel, and construction trade organizations, argued that Congress “intended EPCA to preempt patchwork state or local laws that are unworkable, that undercut a coordinated national energy policy, that overlook the public’s need for reliable and resilient energy, and that deny consumer choice.”

According to the complaint, the standards set by Denver and the state are both impossible to achieve at any reasonable cost and are not mere energy usage requirements, as the state suggests.

Instead, the plaintiffs argued, the intent — and practical effect — of the regulations would be to set energy use standards so low that only full building electrification and the elimination of natural gas use can meet the standards.

The case, Colorado Apartment Association et al v. Ryan et al, is s being heard in U.S. District Court for the District of Colorado before judge Regina M. Rodriguez.