The Denver City Council on Monday approved the biggest contract in the history of the city’s Climate Action, Sustainability and Resiliency office. All the money will be coming out of the city’s voter-approved, sales tax-fed climate protection fund.
The $41.4 million pact with Michaels Energy Inc. is expected to make tens of millions of dollars in incentives available to property owners seeking to install more sustainable, electric heating systems in their large commercial, apartment and condo buildings in the years ahead.
The climate action office, abbreviated CASR., has had major success with its consumer-facing rebate programs for more environmentally friendly technology. The first pot of dollars it made available to Denverites looking to buy electric bicycles was tapped out in just 19 days before that program opened up again with more money on Monday.
The arrangement the city council approved this week is focused on a different demographic: the owners of the kinds of large buildings that are major contributors to pollution in the city. The council previously adopted rules that require building owners to undertake electrification efforts by 2025 and 2027.
“Forty-nine percent of emissions in Denver come from space and water heating in commercial and multifamily buildings,” CASR’s Jeff Tejral told a city council committee last month in explaining the new incentive program.
The climate action office expects the program to reduce greenhouse gas emissions from buildings that take advantage of it by 30% to 70% and make electric heat pumps the new market standard. Other projected outcomes include lowering utility bills for residents in buildings that tap into the incentives and providing more economic stability in vulnerable communities across the city as fossil fuel prices continue to rise over time, Tejral said.
The three-year contract tasks Michaels Energy with three things:
- The creation of a feasibility reports that review if buildings can install electric infrastructure in cost-effective ways.
- Launching pilot programs that include recruiting buildings and doing industry outreach to demonstrate the value and process of conversion.
- Mapping out, creating and administering an incentive program.
The city wants to pay especially close attention to what Tejral called under-resourced buildings. Those are defined, in part, as market-rate apartment buildings in neighborhoods the city already classifies as vulnerable to gentrification, buildings with income-restricted affordable units in them and commercial buildings with human service providers as tenants or owners.
More than 80% of the program budget is set aside to be handed out as incentives. Of that, half is earmarked for under-resourced buildings, Terjal said.
The council approved the contract as part of its consent agenda Monday, a demonstration of broad support and a lack of controversy. Council members lauded the plan at the committee hearing last month.
“I am really exctied to see this get turned on for people to start taking advantage of the incentives,” councilman Jolon Clark said. “We’re seeing that it really does make a difference and it really does change behavior.”
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