Try to find a building in Colorado without a gas connection. It isn’t easy.

According to the National Association of Home Builders, more than 40,000 new homes, including 20,000 in Denver, were permitted in Colorado in 2018 alone. Of those residences, less than two percent – fewer than 300 in Denver and around 600 statewide – can be categorized as net zero energy (NZE) projects.

NZE buildings generate as much energy from renewables as they consume, therefore playing a major role in many cities’ climate goals. The number of NZE residential units continue to grow year-over-year, especially larger multi-unit projects – demonstrating their viability. Still, tens of thousands of homes are added each year to the millions of Colorado buildings already heated with fracked gas.

Almost three quarters of the energy these buildings consume is spent keeping them warm. As energy generation and transportation sectors continue to decarbonize, buildings and related gas infrastructure could eventually surpass these as the top source of greenhouse gas emissions in the state.

Laurent Meillon of the Colorado Renewable Energy Society (CRES) has led the charge for a clean heating bill that’ll promote green building technologies. Representatives from 350 Colorado, Colorado Solar and Storage Association (COSSA), the National Renewable Energy Laboratory (NREL) and the Sierra Club have met with State Senator Mike Foote (Boulder County), Rep. Chris Hansen (Denver), Rep. Chris Kennedy (Lakewood) and other legislators, urging them to cosponsor a clean heating bill in the 2020 legislative session.

“To incentivize clean heating, we need to even the playing field so that citizens who wish to install alternate technologies are not penalized by dated policies, which take into account only a fraction of the benefits of clean heating,” Meillon writes. “We believe the easiest way to accomplish this is through expansion of already existing energy efficiency programs known as Demand Side Management (DSM).”

Using DSM, utilities reduce energy demand with programs such as building efficiency incentives. Existing metrics used by policymakers to compare the cost of DSM programs to their anticipated benefits are antiquated and skewed. And with a cost about six times lower than equivalent electric power, cheap fracked gas impedes building decarbonization.

Meillon proposes to update three metrics to better reflect the true costs and benefits:

1)      Subject gas to carbon cost accounting on parity with current rules for the electric sector. Since the passage of SB19-236 the Public Utilities Commission must consider the social cost of carbon when evaluating electric generating resources. This extends the same standard to gas.

2)      Include the carbon costs of methane leaks from the extraction and distribution of fracked gas for both gas and electric DSM, with a 20-year carbon equivalence.

3)      Lower the discount rate applied to future energy savings of any gas and electric DSM from about 7 percent (cost of capital) to around 3.3 percent (inflation adjustment) to reflect the fact that program costs are borne by rate payers with little or no capital investment by utilities.

Increasing the net present value of DSM measures will benefit most traditional energy efficiency programs and compel the Public Utilities Commission to direct utilities to offer new incentives for renewable energy, deep energy retrofits and building electrification.

Investing in technologies that reduce energy costs over a building’s lifetime lets consumers hedge against rising energy prices. By offering better incentives to offset initial costs, updating DSM metrics will expand clean heating options that should compare favorably to far more prevalent but short-sighted options.

Some argue that local energy codes are better-suited for energy mandates, but local energy codes are slow to adopt and can face strong opposition from builders. In contrast, Meillon’s proposal leverages an existing regulatory framework to expand incentives without mandates.

And whether it be in the State House or at the local level, 350 Colorado’s renewable energy committee remains dedicated to supporting legislation and regulations that promote renewables while ending fracked gas demand.

Ron Bennett, architect
Boulder, CO