Steam to Electric Conversion Incentive Program

The price of steam in Denver recently increased by nearly 40% due to an Xcel Energy rate change approved by the Colorado Public Utilities Commission. This change has prompted owners of buildings on the steam loop system to explore disconnecting from it and instead obtain energy by either connecting to the natural gas system or electrifying building heating equipment. Denver's Office of Climate Action, Sustainability and Resiliency (CASR) would like to encourage building owners to choose the electrification option because it will deliver significant benefits to the city and its residents above and beyond those that would be achieved by converting to natural gas, including the following: 

1. Reducing fossil fuel consumption and greenhouse gas emissions in commercial and residential buildings. 
   An electric space and water heating system installed today will generate 15% to 66% fewer emissions over its lifetime compared to a gas space and water heating system. This is largely driven by Xcel Energy increasing the share of electricity that comes from renewable sources, as well as the increased efficiency of electric end uses. By 2030, the Xcel Energy electric system will be powered by 80% renewable sources, which means that in 2030, an all-electric building will emit 44% fewer greenhouse gases per year than a building that is utilizing gas for its space and water heating needs.
2. Evaluating strategies that lead to significant reduction in climate-forcing emissions in commercial and residential buildings. 
   The incentives awarded in this program will serve as valuable case studies for future conversions. 
3. Improving life safety and indoor air quality by removing natural gas equipment in commercial and residential buildings. 
   Fumes from the burning of natural gas leak out of all equipment at varying rates, presenting a health risk to occupants, which is why the state requires all buildings to have carbon monoxide detectors. 
4. Protecting public health and survivability for communities most burdened by climate change impacts, specifically low-income communities, people of color and Indigenous people, and people living with chronic health conditions. 
   Emissions of greenhouse gasses cause climate change, and one result of climate change is an increase in temperatures in Denver and, specifically, more days over 90 degrees and for longer durations.  Hotter temperatures for longer periods exacerbate chronic health conditions and unhealthy living conditions for people living in low-income communities, which tend to have less green space outdoors and less access to in-home cooling (both are respites from heat). Further, more of Denver’s residents who identify as people of color tend to live in these climate-vulnerable communities. As part of the global effort to combat climate change, and in alignment with the targets set by the Paris Accord, Denver’s goal is to reduce citywide emissions 80% by 2050 to reduce this strain on residents. This program is one of many strategies Denver is implementing to achieve this goal. 

To achieve the benefits stated above, CASR has established the goal of reducing greenhouse gas emissions from each steam-powered building funded by this program by at least 20% as compared to the emissions of the average of the prior three years of typical operations. CASR intends to meet this goal by offering a financial incentive encouraging building owners who wish to disconnect from steam to choose electricity over natural gas.  The program will provide a monetary incentive payment to buildings owners who choose to convert their buildings from steam to electric fuel systems by funding the incremental cost differential incurred by electing to implement an electric fuel building conversion at cost parity to a gas alternative.