Denver (CO)

through a combination of regulations and initiatives aimed at enhancing the energy efficiency of its commercial buildings. The Energize Denver ordinance plays a central role in this strategy by setting stringent Energy Use Intensity (EUI) benchmarks for commercial properties larger than 25,000 square feet. To drive compliance, the ordinance mandates that these buildings achieve specific EUI targets by 2030, with preliminary milestones set for 2024 and 2027.

Buildings that fail to stay within their designated energy limits face financial penalties. Specifically, a building that consumes energy beyond its allowed amount is penalized at a rate of $0.30 per kilo British thermal unit (kBtu) shortfall annually during the interim periods. Moreover, Denver can levy fines up to $0.70 per kBtu for buildings that persistently exceed their energy targets. The steepest penalties are reserved for those properties that show no progress towards the 30% EUI reduction goal by 2030 and maintain high energy usage throughout the interim checkpoints.

Consider a typical scenario involving a 500,000 square foot office building in Denver, which, according to CBRE EA data, would typically generate a Net Operating Income (NOI) of $5,180,000 in 2023. If this building were to exceed its energy allowance by 1,000,000 kBtu, it would incur a penalty of $0.30 per kBtu, amounting to a significant 5.8% reduction in its NOI. This example underscores the financial impact of failing to meet energy efficiency targets under the Energize Denver ordinance, emphasizing the economic incentives for buildings to enhance their energy performance.