Denver restaurants face $60,000 water heater bills under green mandates

DENVER — A new restaurant opening in Denver could pay $60,000 just for water heaters before a single pipe is connected, according to a veteran plumbing contractor who says the city’s green building mandates are tripling equipment costs for commercial kitchens.

Ben Williams, owner of BENZ Plumbing, Heating, and Cooling, told The Kim Monson Show that his brother is working on a restaurant project in Denver where the city is requiring heat-pump electric water heaters instead of conventional gas-fired units.

“Denver is saying you have to put in water heaters for this restaurant that are, like instead of being fuel fired, they’re electric, but not just electric, they have to be, think of like a heat pump,” Williams said. “These things cost $20,000 a piece. How does that even begin to pay for itself? It doesn’t.”

Three units to do the job of one

Because heat-pump water heaters have lower peak recovery rates than gas-fired equipment, the restaurant will need three electric units to match the output of a single 100-gallon gas water heater, Williams said.

“That’s $60,000 for the cost of the units without any labor,” he said. “How many hamburgers are you going to have to sell to make that up? A lot.”

The cost figures track with publicly available pricing. The A.O. Smith CAHP-120, a 120-gallon commercial heat-pump water heater, lists at $15,721 per unit through distributor SupplyHouse.com. With contractor markup and higher-capacity configurations common in restaurant kitchens, per-unit costs at or near $20,000 are within industry range.

Denver’s code goes beyond state mandates

The mandate stems from Denver’s 2025 Energy Code, which prohibits fossil-fuel and electric-resistance water heaters in new commercial buildings, with limited exceptions. The city code goes further than state law; House Bill 23-1161, signed in 2023, imposes ultra-low nitrogen oxide emissions standards on new gas furnaces and water heaters sold in Colorado starting Jan. 1, 2026, but does not ban gas equipment outright.

“Denver is even ahead of the state of Colorado as far as how radical they are,” Williams said.

The restaurant industry has pushed back. The Restaurant Law Center filed a federal lawsuit against Denver in July 2024, alleging the city’s electrification requirements violate federal energy efficiency preemption law, according to the Denver Gazette.

A regulatory squeeze from both directions

The combination hits Colorado businesses from two directions: state mandates make gas equipment more expensive through compliance costs, while Denver’s local code eliminates gas as an option entirely for new construction.

State Rep. Max Brooks, who serves on the Legislative Audit Committee, said the regulatory climate is a drag on the state’s economy.

“We are the sixth most regulated state in the country,” Brooks said on The Kim Monson Show. “And it’s just absolutely strangling small business.”

A December 2024 study by the Colorado Chamber of Commerce confirmed the ranking, finding that Colorado has nearly 200,000 regulations, with 45% deemed excessive or duplicative. The study, conducted by StratACUMEN economists, found that for every 10% increase in state regulations, Colorado loses an estimated 36,000 jobs and 9,000 firms.

The Common Sense Institute has documented more than $120 million in costs to Colorado building owners and tenants from environmental policies between 2018 and 2021, with state electrification mandates projected to push electricity prices up at more than three times the rate of inflation.

Williams acknowledged that some regulation has value. He recalled growing up in Minnesota with a fuel-oil space heater and said he is glad the industry has moved past those days. But he drew a line at mandates that impose costs without proportional benefit.

“If you read the energy code, there’s a little clause in there that says something to the effect of, all this has to be done … to save energy, unless it’s not cost efficient,” Williams said. “And I don’t know why somebody has not taken that to court to say, hey, this is not cost efficient.”