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.  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. 

Eligible Buildings

Incentive payment applicants must meet the following criteria to be eligible for consideration: 

  1. The building must be a customer on Xcel Energy’s steam system in Denver, Colorado, and must submit a current Xcel Energy bill for the subject building to verify that it is on the Xcel Energy steam system. 

  2. The applicant must be the building owner. 

  3. The applicant must be able to implement and complete project within 24 months from date of contract execution. 

  4. The applicant must have obtained technical expertise and quotes to determine the best method for conversion from steam to electric.  Quotes for an electric conversion and a gas conversion are required with the application submittal and schematic design documents are encouraged.  Costs incurred to prepare this application are excluded from the incentive payment.   

  5. The applicant must submit a budget for converting the building from steam power to electricity, including the following:

  • Total costs (labor and equipment) to convert building from steam to electric 
  • Total costs (labor and equipment) to convert building from steam to natural gas 
  • Cost difference between the two identifying the total amount the applicant is requesting for the financial incentive  
  • All prices quoted shall be firm and fixed for the defined SOW and timeline

6. Data to inform a City assessment of greenhouse gas reduction for the conversion.

Evaluation of Applications - Criteria and Weights for Selection

The application will be evaluated according to the criteria described below, with the weights allocated to each criterion set forth in the table that follows.  

  1. Greenhouse gas reduction assessment - Demonstrated reduction in greenhouse emissions by comparing the projected emissions from the all-electric and all-natural gas system options.  CASR will prepare the GHG assessment using data submitted by the applicant, as described in the application. 
  2. Cost effectiveness – Conversion represents a cost-effective opportunity to electrify rather than choosing natural gas when paired with Climate Protection Fund support. 
  3. Non-energy benefits – Conversion captures non-energy benefits such as improved thermal comfort, improved reliability, improved occupant health, reduced noise, etc. 
  4. Teaming plan and workforce standards – Please describe your team and qualifications, and any women and minority owned businesses that are part of your team.  Applicants should also demonstrate, as applicable, how they utilize high road labor standards such as a skilled and trained workforce from certifications or apprenticeship programs; provide benefits such as health care, retirement, and wage standards; use best value/responsible contracting; and have regional targeted and local hire requirements. 

Evaluation Criteria

Points

Greenhouse gas reduction assessment

45

Cost effectiveness

40

Non-energy benefits

10

Teaming plan and workforce standards

5

Total

100

 

The City may request an interview as part of the evaluation process.  Any such interviews will take place after CASR has conducted an initial review of submitted applications.  

CASR encourages applicants to utilize small, minority, and woman-owned businesses on their project team and, where independent contractors are needed, consider utilizing individuals who identify as people of color, Indigenous people, LGBTQ+, people with disabilities, and people whose household income is below the area median.  

Award(s) Notification

CASR will accept applications on a rolling basis and will make award determinations by the end of each quarter.  CASR reserves the right to not award any applications during a quarterly award period.  

Selected applicants will receive an award notice via email and should be prepared to collaborate with the City to establish a formal written agreement utilizing the form of the agreement attached to the application.  The agreement will not be effective or binding on the City until it has been fully executed by all required signatories of the City and County of Denver.  Note that contracts more than $500,000 require City Council approval and will take longer to process.  Contracts will contain reporting and milestone requirements that must be satisfied before the City will reimburse project costs.  

CASR’s maximum award expenditure for calendar year 2021 incentives is $4 million.

Submit an Application

Completed applications and required forms/documentation must be submitted via e-mail to Jan Keleher at Jan.Keleher@denvergov.org and CASR will evaluate applications received on a quarterly basis.  All required forms and supporting documentation must be included at the time the application is submitted. Please review the sample agreement with the City’s standard language and insurance requirements before submitting your application.

Download the Application Form(DOCX, 69KB)

View the Sample Agreement(PDF, 290KB)

View the Full Program Description, Application, and Supporting Documentation(PDF, 554KB)

Point of Contact

Office of Climate Action, Sustainability and Resiliency 

Name: Jan Keleher

About the Office of Climate Action, Sustainability & Resiliency

The mission of the Office of Climate Action, Sustainability, and Resiliency (CASR) is to act with urgency to proactively mitigate climate change by advancing science-based strategies to reduce greenhouse gas emissions on a scale and timeline that align with the recommendations from the Intergovernmental Panel on Climate Change; cultivate resiliency in the face of potential climate change-related emergencies; secure an economically, socially, and environmentally sustainable city for generations to come; and ensure that the setting of goals and metrics and monitoring of results considers equity. 

On November 3, 2020, the people of the City and County of Denver voted in favor of Ballot Initiative 2A, raising the local sales and use tax by 0.25% to create the Climate Protection Fund (CPF).  The CPF is dedicated to eliminating greenhouse gas emissions and air pollution, supporting climate adaptation, and creating new jobs to improve the lives of Denverites.  This program will be funded by the CPF and is intended to address the following allowable CPF uses contained in D.R.M.C. § 2-406: 

  • Upgrade the energy efficiency of homes, offices, and industry to reduce their carbon footprint, utility bills, and indoor air pollution.
  • Increases investments in solar power, battery storage, and other renewable energy technology.
  • Job creation through local workforce training and new careers for under-resourced individuals in clean energy technology and management of natural resources.
  • Adaptation and resiliency programs that help vulnerable communities prepare for a changing climate.