GREEN BUILDINGS COMMITTEE

Is This Colorado Lawsuit the Next CRA v Berkeley?

Building Performance Standards in Colorado are being challenged in court using the same legal arguments that overturned local all-electric new building ordinances in California.

July 8, 2024

Over the past two years, lawsuits or threats of lawsuits have been used to slow progress toward reducing pollution from buildings. Emboldened by the California Restaurant Association’s success in the Ninth Circuit Court of Appeals against Berkeley gas ban, lawsuits have been filed in Washington State, New York, and Colorado to block green building policies. We were among the earliest to raise the alarm about the Berkeley lawsuit and are sharing this case as another to watch.

Building Performance Standards (BPS) appear to be the next big thing in local green building policy, but they also face legal challenges. BPS policies apply to large buildings — usually 20,000 or 50,000 square feet or larger — which have disproportionate emissions. They typically include a long-term efficiency or emissions goal for existing buildings (e.g. zero emissions by 2045), with interim milestones. Building owners have a clear view of future requirements and broad latitude of how to reach the targets, allowing them to choose which building improvements are most effective and when they should make them.

Because BPS impact the largest buildings, they can have a large impact on energy usage and emissions, while impacting relative few buildings, making them a powerful tool for reducing the overall impact of buildings on the climate.

Cities and states such as New York City, Washington, D.C., and both Denver and the state of Colorado, have implemented Building Performance Standards. In California, Santa Monica has been working on developing a BPS policy for more than a year, and the California Energy Commission (CEC) is starting their own process to develop BPS. The U.S. Green Building Council California (USGBC-CA) has also convened a working group to develop best practices for jurisdictions that want to implement BPS.

Predictably, these policies have been opposed by fossil fuel interests and some of the building owners who will need to comply with the policies. In April, the Colorado Apartment Association sued the state and Denver over their BPS policies.

As explained by Daniel Carpenter-Gold, the Colorado Apartment Association is using the same argument that ultimately brought down Berkeley’s ban on gas hookups for new buildings. Denver and Colorado have both passed BPS policies that require large buildings to reduce energy use or greenhouse gas emissions by a specified amount over a period of years. The lawsuit argues that the federal Energy Policy and Conservation Act (EPCA) prevents the city and state from enforcing their BPS.

In the Berkeley case, the Ninth Circuit Court of Appeals ruled that EPCA’s preemption of local energy conservation standards on covered appliances applied to the city’s ban on gas hookups because it essentially forbade gas-fueled appliances that met federal efficiency standards, even though the ordinance did not mention appliances or efficiency. The Denver and Colorado BPS policies differ from Berkeley’s gas ban because they apply to existing buildings (rather than new construction), do not disallow gas, and offer multiple compliance pathways.

Carpenter-Gold argues that the Apartment Association’s case is weak because they claim without evidence that the BPS policies will require building owners to install appliances that are more efficient than EPCA standards, ignoring alternative-compliance options built into the BPS standards that give building owners flexibility.

He also points out that Colorado is not part of the 9th Circuit, and therefore the courts do not need to follow the lead of the Ninth Circuit, whose decision was a departure from traditional interpretations of EPCA.

While Carpenter-Gold may be right that the Apartment Association case is likely to fail, just the threat of this lawsuit could slow adoption of Building Performance Standards elsewhere (Santa Monica has delayed theirs several months, for example). Furthermore, even a loss could allow the Supreme Court to weigh in. Because Colorado is in the 10th Circuit, if the Apartment Association loses they could ultimately appeal up to the Supreme Court, which could decide that different standards between circuits (albeit in very different circumstances) merit their involvement to settle the differences.

This won’t be the last lawsuit. As reported by Colorado Public Radio News, the National Propane Gas Association is considering a plan to sue Denver as well, again relying on EPCA preemption. They plan to sue even though apparently none of Denver’s commercial or multi-family buildings even rely on propane.

- Michael Rochmes
Chair, Green Buildings Committee

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