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HomeMy WebLinkAboutagenda.council.worksession.20250929AGENDA CITY COUNCIL WORK SESSION September 29, 2025 4:15 PM, City Council Chambers 427 Rio Grande Place, Aspen I.Work Session I.A Board and Commission Interviews I.B Building Electrification Code Updates II.Council discussion of the items published in the most recent information update, as needed Zoom Meeting Instructions Join from PC, Mac, iPad, or Android: https://us06web.zoom.us/j/86596331212?pwd=Weat3AF99faDS2EUamXLVJ8yiXN6bZ.1 Passcode:81611 Join via audio: +1 346 248 7799 US Webinar ID: 865 9633 1212 Passcode: 81611 International numbers available: https://us06web.zoom.us/u/kdFheznm7o Board Commission Interviews MEMO - 9-29-25.pdf Building_Electrification_Code_Updates_-_Work_Session_9.29.2025_FINAL.pdf 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Electrification Work Session September 29, 2025 Page 1 of 10 MEMORANDUM TO: Aspen City Council FROM: Bonnie Muhigirwa, Chief Building Official Tessa Schreiner, Environmental Health & Sustainability Manager Clare McLaughlin, Sustainability Manager Hailey Roedel, Deputy City Engineer Erin Loughlin Molliconi, Director of Utilities THROUGH: Ben Anderson, Community Development Director Tyler Christoff, Deputy City Manager MEMO DATE: September 22, 2025 MEETING DATE: September 29, 2025 RE: Building Electrification Code Updates _____________________________________________________________________ REQUEST OF COUNCIL: This work session’s purpose is to arrive at Council direction for the creation of possible amendments to city code regarding electrification of the built environment. These potential amendments could touch several areas within Aspen’s municipal code. Staff’s engagement on these topics is pursuing three outcomes: • Continuing to deliver on Council’s previously established science-based greenhouse gas emissions reductions. • Setting up Aspen for compliance with State of Colorado requirements for amendments to building and energy codes that are anticipated to come into effect in 2026. • Responding to customer desires in both commercial and residential properties to pursue electrification for their mechanical systems. With direction on a series of specific policy questions for Council, staff will return later in 2025 and 2026 with proposed changes to relevant sections of Aspen’s Municipal Code. These policy questions are categorized into two related topics with background information and potential solutions that staff could bring back to Council for further review: 34 Electrification Work Session September 29, 2025 Page 2 of 10 1) Removing barriers to electrification in existing City code • Height and setbacks related to energy efficient and/or electric mechanical equipment. • Site planning requirements to better fit electric equipment space needs • Potential uses of the Right-of-Way (ROW) for locating new or additional transformers in certain circumstances. 2) Preparing for state building and energy code updates in 2026 for both new and existing buildings • Electric-ready state minimum code requirements or alternative electric codes for new construction • Limits for electric capacity in residential buildings and further limits on exterior energy use. • Meeting state code minimum requirements for major renovations or above state minimum codes. At the conclusion of this memo and as the focus of the work session discussion are specific questions that Council will be asked to guide staff’s future work in this area. SUMMARY AND BACKGROUND: Why Electrification Matters: • Buildings account for the largest portion of the Aspen community’s emissions, at 47%. Aspen Utilities’ electric grid has been 100% renewable since 2015, and Holy Cross Energy will provide 100% renewable energy by 2030 and has already achieved over 80% renewable energy as of 2025. Thus, most emissions from the built environment, by 2030, will be from gas equipment. • This provides a unique opportunity for the Aspen community to reach emissions goals in the built environment by incrementally converting gas mechanical equipment and appliances to electric equipment. • In addition, builders, tenants, and property owners are voluntarily and increasingly choosing to go all-electric. Previous Council Direction: • Aspen’s Science-based Targets. In January 2022, Aspen City Council signed on to Race to Zero and adopted new science-based targets, or greenhouse gas emissions reduction goals, that reflect Aspen’s fair share of global greenhouse gas 35 Electrification Work Session September 29, 2025 Page 3 of 10 emissions needed to keep global heating below 1.5 degrees Celsius. These targets use 2017 as the baseline year and are 63.4% reduction by 2030 and 100% reduction by 2050 • Aspen Sustainability Action Plan (ASAP). In February 2023, Council approved the updated Aspen Sustainability Action Plan that includes objectives and action items specific to supporting and incentivizing building electrification. The plan has been updated annually since 2023. • Electrification Task Force. In January 2023, as part of the 2021 building and energy code adoption, Council directed staff to create an Electrification Task Force, whose charge is to research and provide recommendations for a comprehensive building electrification roadmap. Council also directed staff to come back with energy code updates on a 3-year cycle, which would fall in 2026. • Building IQ. In April 2022, Aspen City Council passed the Building IQ ordinance. This addresses emissions from existing buildings in a two-phased approach: benchmarking and developing a building performance standard for Council consideration. Building IQ overlaps with electrification in multiple ways, but electrification itself is a standalone topic, as many of the questions for Council today are a precursor to considering a building performance standard. Additional Relevant Background: • 2025-2027 Council Goals and Principles. This work to proactively remove barriers to electrification in the community hits on two council goal principles: Improvement of core service delivery through process improvement with the customer in mind and outcome focus. It is also relevant to Council’s resource and infrastructure resilience goal. • Colorado State Code changes: Under state law, cities and counties with building codes must adopt the 2021 IECC along with the model electric ready and solar ready code when adopting or updating any building code between July 1, 2023, and June 30, 2026. Aspen adopted the 2021 IECC January 24, 2023, but has not adopted the model electric ready and solar ready code. Beginning July 1, 2026, any building and energy code adoption in Colorado must meet or exceed the Colorado Low Energy and Carbon Code and the Electric and Solar Ready Code, which is based on the 2024 IECC. • Community demand: Community members, businesses, and builders have already demonstrated market interest in building electric or partially electric buildings. In addition, staff and community members have identified various areas where current city code presents barriers to voluntarily developing electric or partially electric buildings. 36 Electrification Work Session September 29, 2025 Page 4 of 10 In summary, current city code presents barriers to electrification, yet for the City to honor its commitments and goals, meet state codes, and address community needs, a pathway to electrification is imperative. DISCUSSION: Over the last year, through the work of the Council-directed Electrification Task Force, stakeholder and customer feedback, and a cross-departmental team with representation from Engineering, Utilities, Planning, Building, Environmental Health and Sustainability, and Parks, City staff have aligned on several key policy questions for Council on electrification, categorized into two topics: 1. Removing barriers to electrification in existing City code, and 2. Preparing to meet or exceed state building and energy code updates in 2026 for new and renovations to existing buildings The section below includes policy questions for Council consideration to provide context for solutions that staff could bring to Council with further detail in future meetings. 1. Removing barriers to electrification in existing City code Policy Question 1: Is Council supportive of adjusting height and setback restrictions to accommodate high efficiency electric equipment? • Background: Equipment, including electric equipment such as heat pumps, is getting larger, and current code is restrictive for this type of equipment. Due to Aspen’s tight lots, setbacks and roofs are often the only remaining area to put equipment. • Potential solutions for future review: o Provide greater allowances in setbacks for equipment enabling electrification in existing buildings. o Provide height allowance for equipment enabling electrification in new buildings and in major renovations to existing buildings. o Require new buildings to locate equipment outside of setbacks. Policy Question 2: Is Council supportive of changing site planning requirements to better fit electric equipment space needs? • Background: New buildings do not always plan for adequate space on property for mechanical equipment resulting in more equipment located in 37 Electrification Work Session September 29, 2025 Page 5 of 10 setbacks. Existing buildings often have site constraints and will need additional flexibility. • Potential solution for future review: o Require new construction to allocate space for mechanical equipment on property with minimum or no use of setbacks as a foundation to the planning process. o Create new standards and potential for flexibility for existing development. Policy Question 3: Is Council supportive of allowing transformers to be placed in the right-of-way (ROW) in certain circumstances? • Background: Increased electric demand will most likely require larger capacity and/or additional transformers. The number of physical connections available for customer service in each transformer is limited. In cases where there are no more available connections in a transformer, an additional transformer would be necessary to serve the increased electric demand. For some existing buildings, there is insufficient space to support additional transformers on property. Current Aspen Engineering Standards do not allow transformers in the ROW. Locating transformers in the ROW has the tradeoff of impeding current or hindering future development of pedestrian, bicycle, and utility corridors. • Potential solutions for future review: o Require new construction to locate transformers outside the ROW o Allow transformers in the ROW for existing buildings in some circumstances via an approved variance to engineering standards 2. Preparing for state building and energy code updates in 2026 for both new and existing buildings Background on State code requirements and timeline State law requires the City to adopt building codes that are at least as stringent as state model codes. Currently, there are two model codes: the Model Electric and Solar Ready Code (effective until June 1, 2026) and the Low Energy and Carbon Model Code, which becomes the standard thereafter. Without modifications, adopting the state model codes 38 Electrification Work Session September 29, 2025 Page 6 of 10 presents implementation challenges in Aspen and falls short of meeting the City’s climate goals. The state codes mandate that all new buildings install infrastructure as if the building were to be all-electric (electric-ready). This requires installing sufficient panel capacity, space, and pre-wiring for electric systems like heating, cooking, and drying. In Aspen, this could lead to significant increases in electric infrastructure for all building types, especially in single-family homes with luxury features (see Policy Question 5 for impacts on the electric distribution system). Moreover, since the model codes require infrastructure but not electric equipment, they do not directly reduce emissions. Installing electric systems would cut building-related emissions thanks to Aspen Electric’s 100% renewable energy. Infrastructure alone adds embodied carbon and cost, without ensuring a shift to electric equipment or actual emissions reductions. In summary, the City can either adopt the State’s model codes or pursue modified codes that meet state code minimums while addressing Aspen’s unique built environment. Council direction on the policy questions below will guide staff on which code options to bring back to Council for detailed consideration. A. Policy questions for new construction Policy Question 4: Is Council supportive of pursuing an all-electric code for new construction? • Background: Requiring new construction to be all-electric will have the greatest impact on lowering Aspen’s emissions in the built environment. Comparatively, the state electric ready code will have large and expensive impacts to buildings and the grid, presenting barriers to implementation, without reducing emissions in the near term. City staff have been investigating the challenges around building electrification for several years and while it will require design changes and application of new technology, it is achievable, particularly if the City addresses the code conflicts outlined in topic 1 (above). • Potential solutions for future review: o Require new buildings to be all-electric, which could include exceptions for cooking, fireplaces and emergency generators. 39 Electrification Work Session September 29, 2025 Page 7 of 10 o Pursue an electric-preferred code, which would allow gas but apply additional requirements to buildings with gas to encourage all- electric construction. Policy Question 5: Is Council supportive of limiting electric capacity for residential buildings (and should options include further limits on exterior energy use)? • Background: All-electric buildings and even electric-ready buildings (which would be required by the State’s model code) often require larger service sizes (demonstrated through a recent study with Pitkin County). This is compounded in Aspen’s context due to significant electric demands for amenities in large luxury homes. The growing electric demand driven by electrification and continued development will have implications for Aspen Electric’s infrastructure and operations. One implication of larger service sizes for all-electric or electric-ready customers is the need for larger and/or additional transformers (see Policy Question 3). Another implication is oversizing transformers to meet all- electric demands, which have not been optimized to consider non- concurrent demands, or to meet future all-electric loads as required in the electric-ready code. This could have the effect of obligating infrastructure and system capacity to an unused or future load, which could impact the distribution system’s electrical line losses, particularly when considered at a system-wide scale, due to continuous standby energy consumption. • Potential solutions for future review: o Pursue a residential electric capacity limit. The water utility has set a potential precedent for this with the single-family residential equivalent capacity unit (ECU) cap. An electric capacity limit would help mitigate the impacts and challenges of building electrification. Exploring different energy capacity limits for all-electric or electric- ready buildings could be a way to incentivize efficient, electric buildings. This could be explored in an all-electric code or as part of an electric-preferred code that incentivizes electrification. o Set a limit on service size based on house size or another metric 40 Electrification Work Session September 29, 2025 Page 8 of 10 B. Policy questions for major renovations Policy Question 6: Does Council want to meet the state code minimum for major renovations or pursue above state minimum codes? • Background: Existing buildings pose additional challenges because it can be complex to convert existing gas heating systems and space for new equipment is often limited. The state electric-ready code requirements apply to major renovations, and jurisdictions can set their own definition for a major renovation. The vast majority of development in Aspen involves renovations to existing buildings, and facilitating their move to fully or partially electric heating and cooling systems will have a significant impact on reducing emissions. • Potential solutions for future review: o Electric-ready requirements for major renovations (state minimum) o Partial-electrification option for major renovations to electrify the biggest end uses with existing gas systems as back up. FINANCIAL IMPACTS: While pursuing policy and code changes have and will incur the expense of staff time, the main financial considerations are for the costs associated with the development and operations of new and existing buildings. Electrification of buildings can be a more expensive alternative than fossil-fuel appliances in some circumstances due to infrastructure upgrades, appliance cost, and delivery cost of electricity versus gas. A separate information-only memorandum on industry drivers, including the state all-electric code and Clean Energy Plan, affecting the city’s electric wholesale purchase power has been included in the packet for the September 30th Regular Meeting. The City of Aspen has processed multiple projects which have considered all-electric designs and encountered code conflicts inhibiting such design choices. Resolution of these code conflicts will lower the financial impacts by avoiding challenging workarounds and limits on equipment choice. Some studies show all-electric new construction is less expensive than that of a building using gas systems (source: Eagle County Energy Code Modeling Report). Financial impacts may be greater for single family homes or commercial buildings with a large amount of luxury amenities, including exterior energy systems. Colorado’s minimum electric-ready standard requires all new buildings install 41 Electrification Work Session September 29, 2025 Page 9 of 10 electrical infrastructure as if the building was to be “all-electric.” Under these conditions, the addition of gas infrastructure would be unnecessary and add costs to the project. Electrification of existing buildings, if selecting high-efficiency all-electric equipment designed for Aspen’s climate, can be more expensive than replacing like-for-like natural gas equipment. However, Colorado’s minimum standard requires Aspen to apply the model electric readiness provisions to “major renovations.” In such cases, exceeding those baseline code standards to require electrification of a portion of space and water heating systems, while enabling fossil gas systems to stay in place for resilience, can offer a more cost friendly approach. Carbon pollution from building energy use imposes a societal cost that should be considered in decision-making. This metric captures “a variety of negative economic effects to the world and the national economy, including Colorado. Examples include costs of flood prevention and mitigation, health care costs associated with excessive heat, and fire prevention, control, and damages.” The State of Colorado uses a Social Cost of Carbon (SCC) metric to embed the societal cost of emitting carbon pollution into transportation planning per Colorado Senate Bill (SB) 21-260 (source: Colorado Department of Transportation Social Cost of Carbon Analysis Guidance). Using the figure the State set for 2025, the SCC is $60/ton of carbon dioxide equivalent. Recognizing that the City of Aspen’s municipal electric grid is powered by 100% renewable energy, there are no carbon emissions from the use of electricity in electrical equipment in the City of Aspen. Therefore, there is no associated social cost to all-electric buildings. Conversely, fossil gas systems release carbon pollution at a consistent rate when burning fossil gas for their operation. The carbon pollution released from these systems has an associated social cost that could be calculated on a per building or community-wide scale. ENVIRONMENTAL IMPACTS: Encouraging and expanding building electrification would have the single biggest impact in meeting the City’s GHG goals. Buildings emit 47% of Aspen’s GHG emissions; with Aspen Electric’s 100% renewable energy and Holy Cross Energy’s 100% renewable energy by 2030, electrification is the next step to reduce emissions from this sector. Electrification of buildings has co-benefits to the environment and community including improved air quality and public health and increased comfort in the spaces where community members live, work, and play. 42 Electrification Work Session September 29, 2025 Page 10 of 10 ALTERNATIVES: Meeting future State of Colorado building and energy code requirements will be necessary, but other aspects of Aspen’s efforts to transition to electrification of the built environment could be slowed or paused. RECOMMENDATIONS: Staff requests Council direction on the following policy questions: 1. Removing barriers to electrification in existing City code. • Policy Question 1: Is Council supportive of adjusting height and setback restrictions to accommodate high efficiency electric equipment • Policy Question 2: Is Council supportive of changing site planning requirements to better fit electric equipment space needs? • Policy Question 3: Is Council supportive of allowing transformers to be placed in the right-of-way (ROW) in certain circumstances? 2. Preparing for state building and energy code updates in 2026 for both new and existing buildings • Policy Question 4: Is Council supportive of pursuing an all-electric code for new construction? • Policy Question 5: Is Council supportive of limiting electric capacity for residential buildings (and should options include further limits on exterior energy use)? • Policy Question 6: Does Council want to meet the state code minimum for major renovations or pursue above state minimum codes? CITY MANAGER COMMENTS: 43