Energize Denver Ordinance: What You Should Know in 2025

May 09, 2025

Blog is updated from its original August 2023 and subsequent April 2024 publishing to provide expanded and revised details.

The direct relationship between increasing levels of carbon dioxide in our atmosphere and the increase in frequency and severity of weather-related stressors is well documented. Over the last decade, tremendous efforts to reduce greenhouse gas emissions have been made across the energy production, transportation, industrial, and agriculture sectors in the US resulting in a net-emissions decrease of over 11% from 2010 levels.* However, with global warming trends continuing to escalate at unprecedented (and historic) levels, leading to drought, heat stress, sea level rise, and stronger storms, to name a few, it is clear that more needs to be done. While this is truly a global problem, the most effective solutions must begin at the community level. Whether this means a carrot or a stick approach, the goal is the same—to reduce emissions in meaningful ways.

Joining other cities and states, Denver, Colorado has shown that it, too, is at the forefront of the fight against climate change. The city has taken bold steps to address this global challenge by implementing regulations and programs that prioritize equity while enhancing energy performance in commercial and multifamily buildings. With over 49% of carbon emissions coming from commercial and multifamily buildings, Energize Denver** has targeted these property types in order to have the largest impact in achieving a lofty decarbonization goal. Energize Denver is the result of a diverse task force with a goal to improve health and equity, create jobs, and achieve an 80% reduction in carbon emissions reductions across Denver's building stock by 2040. This ambitious initiative will not only lead to lower energy bills but also have a positive impact on public health outcomes.

The Energize Denver Ordinance focuses on three energy-related efforts. (See FAQ for more information).

1/ Annual benchmarking of energy use
2/ Energy performance requirements
3/ Electrification requirements when replacing space and water heating equipment, when cost effective. Specifically, the ordinance applies to commercial and multifamily buildings in the following ways:

Buildings 25,000 square feet (SF) and larger

Buildings 25,000 square feet (SF) and larger must submit annual benchmarking data and reduce energy use by 2030 (with interim targets set for 2024 and 2027) compared to the 2019 Energy Star published baseline Energy Use Intensity (EUI). The overarching goal for the Energize Denver Building Performance Policy is to achieve a 30% total reduction in weather-normalized site energy consumption across all covered buildings. No building is required to reduce its energy consumption by more than 42%. Failure to meet these performance requirements could result in fines as much as $0.35/kBtu over the limit. Additional fines could be incurred for not submitting a benchmarking report or maintaining the energy consumption reductions after 2030. Refer to the Energize Denver Hub for more information.

Timeline Extensions: In early 2025, Denver’s Climate, Action, Sustainability and Resiliency (CASR) office released an update to the policy so that when submitting the building’s benchmarking report in the 2025 reporting year, owners have an option to request and receive a timeline extension for any building experiencing compliance challenges. The timeline extension will shift the deadlines as follows:

• The first interim target would be due in 2028.
• The 2027 interim target would be eliminated.
• The final target would be moved from 2030 to 2032.
• The targets for manufacturing, agricultural, and industrial (MAI) buildings under the MAI alternate compliance option would align with the updated timeline of 2028/2032.
• Buildings requiring additional timeline extensions may utilize Section 7’s alternate compliance procedures.

Options for buildings to extend deadlines beyond 2032 –through developing a long-term plan for compliance; reasons include:

• End of HVAC system service life.
• Energy service capacity limitations.
• Downtown steam loop system infrastructure planning.
• Major renovations to building.

Compliance Holds: As of 2025, a new option exists for buildings to place a two-year hold on compliance requirements due to short-term circumstances.

• Financial Distress & Vacancy: Buildings facing financial hardship or high vacancy rates can receive a two-year compliance delay, with annual check-ins.
• Redevelopment Areas: Buildings within formerly designated redevelopment zones may delay retrofits for up to two years if a redevelopment plan is in place.
• Lease expirations: Buildings with major leases expiring near target deadlines can receive a hold until the new tenant moves in.

Tailored Adjustments for Condos & HOAs: As of 2025, homeowners associations (HOAs) receive greater flexibility in compliance planning to align with fundraising and capital improvement schedules.

HVAC System Flexibility: Buildings are not required to replace HVAC systems before the end of their useful service life. If HVAC equipment has exceeded 50% of its useful life, owners receive flexibility in replacement timing while still meeting efficiency goals.

Targets and Incentives: Several adjustments were made to the energy efficiency targets and available incentives.

• Custom Targets: Creating the ability to adjust a building’s energy efficiency target beyond standard target adjustments.
• Incentivizing Reuse: For adaptive reuse projects, adjusting energy efficiency targets when converting buildings for new uses.
• New Incentive for Decarbonized Thermal Networks: Additional target incentives for buildings that connect to non-emitting thermal energy networks (e.g. district geothermal systems and other types).
• Expanded Renewable Credit Options: Off-site solar investments can now be located anywhere in Colorado (previously limited to Denver. On- or off-site renewables owned within Denver now count at a 1.5x credit instead of 1:1.

Buildings 25,000 square feet (SF) and larger

Buildings between 5,000-24,999 SF must meet prescriptive lighting or renewable energy requirements.

Buildings under 5,000 SF

Buildings under 5,000 SF are not subject to meeting specific performance requirements but must partially electrify buildings when it’s time to replace gas-fired heating and cooling systems, when it is cost effective. Electrification considerations apply to all buildings, not only buildings under 5,000 SF.

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Energy reduction strategies are critical pieces to achieving these goals, though these measures will not be sufficient in achieving the longer-term goals of the city. This will require investments in renewable energy along with building electrification in anticipation of these carbon-free energy sources. Under Energize Denver, onsite and offsite renewable energy certificates (RECs) and solar power are counted fully as an energy reduction strategy, as this carbon-free energy will be directly subtracted from the energy used, lowering the energy use intensity of the building.

By design, the compliance metric, EUI, is relatively easy to obtain, both for benchmarking as well as the annual compliance submissions. However, identifying actual strategies to meet the reduction requirements can be a much more difficult effort, especially considering that these often require capital investment. Engaging with qualified engineers to perform an energy audit, a carbon emissions audit, an electrification assessment, and a solar feasibility study will help building owners better understand the options available to a particular property—the potential savings, the implementation cost, and the return on investment—in a way that not only helps to meet their performance goals but also allows them to prioritize and create an optimal implementation plan.

It should be noted that the city is giving economic consideration by developing incentive programs as well as leveraging existing incentives that Xcel Energy currently offers for energy efficiency assessments, upgrades, and solar installations. Extra support for under-resourced buildings is offered by the city as well.

Curious to see how other buildings might be performing relative to yours? Now you can visit www.energizedenver.org to see how a certain building types are performing.

Energize Denver FAQ

What are the benchmarking requirements?
As a key part of the ordinance’s requirements, benchmarking reports verify for the city that building owners/operators are meeting interim and final performance requirements using a metric called Energy Use Intensity (EUI), which is a measurement of energy consumption per square foot. All large buildings must submit this report by June 1 annually. If the EUI is higher than the requirement, actions need to be taken to reduce energy use or there will be fines/penalties.

What are the energy performance requirements?
Applicable buildings over 25,000 SF shall reduce energy consumption by no less than 30% by 2030/2032, with interim targets set for 2024 and 2027 (or one interim target in 2028). Failure to submit a benchmarking report, meeting the performance requirements, or maintaining the reductions after 2030/2032 will result in fines as outlined within the Energize Denver hub. In addition, building owners must electrify space and water heating equipment at the end of the existing equipment's useful life, when cost effective.

For small buildings classified as being between 5,000 and 24,999 SF, prescriptive requirements are in place in lieu of specific energy reduction targets. Small building owners either need to install LED lighting to cover at least 90% of the building’s lighting load, install lighting that meets 2019 Denver Building and Fire code requirements for lighting power density, or install or purchase renewable energy to account for at least 20% of the building's annual energy usage.

For all existing buildings, including buildings under 5,000 SF, at the end of a building's HVAC equipment's and water heater's useful service lives, owners must consider electrification of equipment. Quick permits for equipment replacement will no longer be available, and ownership must complete an Electrification Feasibility Report (EFR) to determine the cost effectiveness of a gas-fired equipment replacement with an electric alternative. While the city will still require EFRs to be submitted for the permitting process, the Electrification Feasibility Report requirement has been removed as part of the timeline extension request.

How do you benchmark multiple buildings that share a utility meter?
Owners can benchmark all included buildings as a single building, though it may be advantageous to install equipment to submeter usage if one or more of these buildings are particularly poor performers. This may also be the case for retail strip malls typically benchmarked as a single building.

Does Energize Denver preclude other city and state green building requirements?
No, buildings over 25,000 SF are still required to meet the Denver Green Building Ordinance and buildings over 50,000 SF must report their benchmarking to the State of Colorado.

Does Energize Denver apply to new buildings?
No, buildings built to comply with Denver's 2022 building code should be ready to perform at the target performance level making it unnecessary for them to comply within the first 12-months of operations. After this period, the building is considered an existing building and will be subject to Energize Denver requirements.

What are the penalties for non-compliance?
For not benchmarking, the penalty is $2,000 per year. In addition, for the performance requirements, there are two main types of penalties: a target penalty and a maintenance penalty.

The performance target penalties for commercial and multifamily buildings were originally calculated across three target-year measurement periods (two interim targets and one final target). With the update to the rules and regulations in April 2025, the maximum number of compliance periods is two target-year measurement periods, or if the building is new or a timeline extension is approved, the number of compliance periods could be reduced to one. The following table reflects the performance penalty rate depending on how many measurement periods the building has, or if the building has not submitted a benchmarking report for evaluation.

What are the requirements for disclosure before and upon sale?
When a building 25,000-square feet and larger in gross floor area is listed for sale, including any listings, notices, advertisements of sale, term sheets, and contracts of sale, the current owner is required to disclose the building’s compliance status with the benchmarking and performance requirements, including all energy efficiency targets, any approved alternate compliance options, documentation, and any penalties assessed, to a prospective buyer prior to the sale of the building. When the building’s sale is finalized, the previous owner is required to transfer the ENERGY STAR Portfolio Manager benchmarking account to the new owner. To facilitate transparency and simplify transactions, CASR will provide a compliance status letter within 10 days of the request that contains information that CASR has on file on the building’s compliance with the Energize Denver benchmarking and performance requirements, including:

• If the building is currently compliant with benchmarking requirements.
• Current EUI metric and future energy efficiency targets
• If target adjustments were applied or an alternate compliance option was approved
• If an alternate compliance plan was approved, a copy of the building’s compliance plan is on file

This status letter and the transfer of the ENERGY STAR Portfolio Manager account to the new owner will satisfy compliance with the disclosure requirements.

Navigating Compliance

It’s important to understand the nuances of programs like Energize Denver that are popping up around the country and how to ensure no stone is left unturned. At Marx|Okubo, we continually learn through helping many clients with this type of compliance in Denver—and across the US—to help them navigate issues, evaluate energy efficiency, and prioritize spending. For example, recently:

• In Denver—our team has prepared and submitted Electrification Feasibility Reports (EFRs) for the City of Denver's Electrification Pilot Program, assessing the feasibility of replacing heating, ventilating and air conditioning (HVAC) equipment including one gas-fired package rooftop unit and two roof-mounted gas-fired makeup air units with electric alternatives. In addition, we perform ASHRAE Level II and ASHRAE Level III Energy Audits for existing buildings to determine the energy consumption and energy conservation measures to reduce the annual energy consumption of the buildings. We also provide consulting work for our clients for timeline extensions as well as developing compliance plans to meet Energize Denver requirements.
• In Chicago, Denver, and Washington, D.C., we have used the Carbon Risk Real Estate Monitoring (CRREM) Tool to assess the required reduction in carbon emissions for assets alongside our due diligence property condition assessments.
• In Chicago—as the city is one of many that requires annual benchmarking of certain building types (based on occupancy/usage and size), we performed ENERGY STAR Building Performance Verification for retail and office buildings. This professional verification can ultimately be used for ENERGY STAR certification.
• In Phillipsburg, NJ—Marx|Okubo has assisted in reviews of proposed photovoltaic systems such as a review of a 5-MW photovoltaic system installed at the roof of a warehouse. Our team provided a preliminary project review of the proposed system, considering the existing building characteristics (such as roof warranty and load capacity, existing electrical, etc.). Marx|Okubo also observed and monitored the project during construction.

The State of Colorado’s Energy Performance for Buildings Statute

The “Energy Performance for Buildings” Statute (House Bill 21-1286) passed the Colorado General Assembly on June 1, 2021, and went into effect on September 6, 2021. This law requires owners of large commercial, multifamily, and public buildings 50,000 square feet or more to annually benchmark their whole-building energy use to the Colorado Energy Office. The purpose of the Building Performance Colorado (BPC) is aimed at increasing energy efficiency and decreasing greenhouse gas (GHG) emissions in the building sector. Read our blog on the Colorado Building Performance Standard for more details.

To learn more about measuring performance, identifying high-performance strategies, or navigating the Energize Denver Ordinance specifically, contact Michael_Silverman@marxokubo.com or Jamie_Rivera@marxokubo.com.

*https://www.statista.com/statistics/183943/us-carbon-dioxide-emissions-from-1999/

**https://www.denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Climate-Action-Sustainability-Resiliency/High-Performance-Buildings-and-Homes/Energize-Denver-Hub