Colorado energy utilities can already adjust a home’s thermostat or turn water heater or clothes dryer on and off to manage the electrical load on the grid — if the household has smart appliances.

Now a new statewide “Model Low Energy and Carbon Code” mandates that all new buildings, both commercial and residential, must be built with control wiring and appliance connections and that certain controllable electric appliances — including heating, cooling, water heating and lighting systems — be installed.

Currently, the utility demand-side energy management programs that would control appliances are voluntary.

Critics said that requiring such systems will eventually lead to mandatory participation in appliance energy demand control.

“We’re enabling utilities in their limited generation to turn around and tell

the consumer, ‘ No, you cannot have heat when we decide you cannot have heat,’ or, ‘ You can only have it when we decide you can only have it,’” said Attorney Paul Seby, an environmental, natural resource and energy partner at Greenberg Traurig.

Seby said he believes that, under this system, utilities would gain the authority to control home energy use and “limit your ability to use our product.”

“That’s no longer a public service,” he said. “It’s a conditioned public service based upon the judgment of the utility that completely flips the whole public utility world on its head.”

He added: “You’re taking the choice to use an appliance away from the consumer or the property owner and giving it to or at least providing a pathway for a third party, the utility or this board to decide when to order you — to force you — not to use the product because it’s deemed not to be acceptable in a period of limited supply.”

The Colorado Energy Office, meanwhile, insisted that such control should be welcomed.

“The code is one of the first in the nation to require heating, cooling, water heating, and lighting systems to be demand response capable, which means they must be capable of automatically responding to a utility signal to reduce electricity consumption during periods of high demand,” the state office said in a news release.

Controlling energy use is not all the new code does.

It also establishes a hierarchy of new residential and commercial energy efficiency requirements.

The energy office’s news release said that adopting a 2024 version of the International Energy Conservation Code to replace the 2021 one commonly used by local building code officials “would reduce construction costs for new homes by between $3,900 (for homes heated by gas) to $6,750 (for homes heated by electric heat pumps), as well as providing ongoing energy cost savings.”

The Colorado Energy Code Board had heavily amended that 2024 version of the code before it was adopted.

Critics said this new amended building code not only increases the cost of housing substantially, but it also violates federal law.

The energy office countered that it offers more flexibility and options, allowing jurisdictions and developers to choose the “right compliance pathway.”

Attorney: Code violates federal laws

Rhett Osko, architecture department manager for Colorado Springs-based Classic Homes, estimated that it will take 78 years for a homeowner to recoup savings equal to the upfront cost of some requirements, such as continuous insulation board. He said the proposed rules could boost sticker prices for some new homes by $25,000 to $35,000.

Seby, the lawyer, said that the changes to the model code by the energy code board violates the federal Energy Policy and Conservation Act (EPCA), which preempts local laws or regulations concerning appliance energy efficiency or energy use.

“The State of Colorado, or any jurisdiction, cannot adopt a code like this when it interferes with and prevents the use of covered products that are licensed by the U.S. Department of Energy because it says that for larger homes, you may no longer use natural gas unless you pay for the privilege,” said Seby.

Treating homes that use natural gas appliances differently from homes that only use electricity violates a “one-forone” rule in the federal law requiring equal treatment of all energy sources, Seby added.

The lawyer argued that the state code aims to reduce carbon emissions, but does so by indirectly penalizing natural gas, thereby conflicting with the federal law’s focus on energy conservation without fuel bias. Similar Colorado regulations, such as its large building energy performance standards, are already facing EPCA preemption lawsuits.

The Colorado Energy Office is focused on eliminating all greenhouse gas emissions by 2050, part of the state’s major push to reduce its “carbon footprint.”

Under Democratic control of the state Capitol, Colorado is seeking to quickly transition away from fossil-fired energy. Supporters argued the transition — while acknowledging 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, given that America is rich in all forms of energy and that nuclear power can provide the state with a viable, sustainable and “green” baseline.

“Encouraging energy efficiency and the use of the highest efficiency heating systems are essential in meeting our economy-wide target of eliminating GHG pollution by 2050,” Colorado Energy Office Executive Director Will Toor said in a news release. “But it must be done equitably and affordably, and this code does that by ensuring greater flexibility and options so jurisdictions and developers can choose the right compliance pathway for them.”

The model code does not itself regulate building codes statewide. But when local jurisdictions update their building codes, which they typically do every three to seven years, they must include the new model energy code as

part of their building codes. They can make their codes stricter than that, but not less strict.

Seby said there’s a penalty that applies to new homes that have gas appliances installed, including furnaces, water heaters, stoves and dryers and that it’s intended to discourage the use of fossil fuels by imposing higher costs over all-electric appliances.

If a house larger than 5,000 square feet has any “combustion equipment” installed, the requirements for other energy efficiency features are increased to offset the use of gas, according to the Colorado Energy Office.

But this penalty doesn’t apply to houses smaller than 5,000 square feet. They can have gas appliances without any additional costs or regulatory burdens. Such homes only have to meet baseline energy efficiency standards, such as insulation and windows, that are in existing building codes.

Houses larger than 5,000 square feet but smaller than 7,500 square feet must achieve 7% to 10% better energy performance than the baseline by creating “credits” through improved building efficiency construction.

Houses larger than 7,500 square feet must achieve “net zero” energy through

building design, on-site solar power and storage, or renewable energy from utilities or by buying renewable energy credits.

A list of 44 energy efficiency construction practices or equipment in the amendments made by the state board can generate credits toward the higher requirements for larger houses, such as by reducing air leakage and increasing wall or ceiling insulation. The number of credits each provides depends on the type of structure and the heating zone the building is located in.

In an email statement to The Denver Gazette, the Colorado Energy Office said that the energy credits are “required for any home, regardless of size or fuel type, that follows the prescriptive compliance pathway of the code.”

“While additional energy credits are required for homes between 5,000 and 7,499 square feet, the number of credits required is the same regardless of fuel type. Any home, whether it is all-electric or mixed fuel, in the 5,000-7,499 square feet size range will be required to achieve 20 energy credits under section R408 of the code,” the office said.

It’s unclear what the reference to section R408 is exactly, as the 2024 International Energy Conservation Code (IECC) and Model Low Energy and Carbon Code (MLECC) have no R408 section. The provisions are found in section R406 for single-family-townhouses and C406 for multifamily homes.

According to the amended MLECC code, as adopted, the statement that “the number of credits required is the same regardless of fuel type” as being 20 credits is incorrect. The credits required for houses between 5,000 and 7,500 square feet with combustion equipment is 146, whereas all-electric houses require only 123 credits.

Houses larger than 7,500 square feet bear an even larger burden with the requirement for “net zero” energy.

The modified code states that most credits needed to meet efficiency standards should come from design and construction that create a mix of efficiency measures, such as improved insulation or more efficient heating and cooling systems, rather than relying solely on solar energy, which are limited to about 3-4% of the needed features.

The bigger the house, the more credits must be generated by the design and structure of the house to comply with the code.