Mountain States

Proposed Colorado Building Regulation Targets Gas Appliances

Colorado state regulators are set to consider a new proposal targeting gas appliances this August – the latest in a wave of state and local initiatives that have cropped up across the country.

The $2.6 billion building upgrade rule before the Colorado Air Quality Control Commission would force building owners to comply with a bevy of new energy use restrictions that would likely require the wholesale reengineering of many buildings larger than 50,000 square feet.

Similar to Berkeley California’s failed gas stove ban, AQCC Rule 28 wouldn’t explicitly “ban” gas appliances. Instead, it would accomplish a comparable outcome by mandating draconian reductions in energy use such that landlords of large buildings would be compelled to strip out gas appliances, water heaters, and even HVAC systems to comply with the rule.

That could be a significant problem for building owners and tenants alike who will be forced to bear the projected $2.6 billion cost of implementation by 2030.

Ironically, the administration actually had to restart the approval process after an even more rushed proposal was dropped for reconsideration earlier this year. The new version of Rule 28, however, only got worse according to Paul Seby, who represents the Colorado Apartment Association. Seby spoke to the Denver Gazette recently about the Polis administration “bum rushing” Rule 28 through the regulatory process:

“[Seby] 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.”

Equally odd, Rule 28 proposes to treat the Colorado Energy Office (formerly the “Governor’s Energy Office”) like a regulatory agency to enforce and police this rule. However, according to the Colorado Energy Office’s official website, “CEO is a non-regulatory department within the Governor’s office.”

It remains to be seen whether Gov. Polis ultimately has the authority to use his office’s self-described “non-regulatory” department to enforce this regulation.

Another reason the administration is trying to sprint this proposal across the finish line is that Rule 28 may not be legal, particularly in light of the fact that Berkeley’s de facto gas stove ban was thrown out by the federal 9th Circuit Court earlier this year.

The Berkeley decision at the 9th Circuit stated regulations banning specific energy sources, such as gas stoves, must be supported by a strong scientific basis and a thorough analysis of costs and benefits, which critics argue Rule 28 lacks. Rule 28’s forced electrification requirements may also conflict with federal energy policy guidelines which limit state regulations concerning energy efficiency. If landlords are forced to remove gas appliances to comply with Rule 28, the Polis administration could face credible accusations they are establishing an unlawful appliance zero-emission efficiency standard.

That would be a pretty large problem for the Polis administration, because federal law expressly prohibits states from setting their own efficiency standards for consumer appliances.

BOTTOM LINE: The Polis administration is attempting to bum-rush an unpopular and potentially illegal gas appliance ban through the regulatory process. Coloradans, and particularly renters, deserve to have a fair say in whether they want to have their appliances forcibly removed from their homes and businesses to comply with this onerous mandate.

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