If your Colorado building can’t realistically meet the Regulation 28 EUI target through Pathway 1 — or if you’re not sure yet — Pathway 2 requires an ASHRAE Level 2 energy audit as its foundation. Even building owners pursuing other pathways often use an energy audit to identify the most cost-effective improvements.
The problem is that most commercial building owners have never commissioned an energy audit and don’t know what to expect: what it actually covers, how long it takes, what it costs, or how to find a qualified auditor. This guide answers all of those questions.
What Is an ASHRAE Energy Audit?
ASHRAE (the American Society of Heating, Refrigerating and Air-Conditioning Engineers) defines three levels of energy audit, each progressively more detailed:
Level 1 — Walk-Through Assessment: A brief site visit to identify obvious energy waste and provide rough order-of-magnitude improvement estimates. Useful for initial screening but not sufficient for Regulation 28 Pathway 2 compliance.
Level 2 — Energy Survey and Analysis: A detailed assessment of the building’s energy systems, a review of 12–24 months of utility data, identification of Energy Conservation Measures (ECMs) with estimated costs and savings, and a simple payback calculation for each measure. This is what Regulation 28 Pathway 2 requires.
Level 3 — Detailed Analysis of Capital-Intensive Modifications: Engineering-level analysis of major capital investments, including detailed energy modeling. Used for large renovation projects or when a Level 2 audit identifies a major system replacement as the primary ECM.
For Regulation 28 Pathway 2, you need a Level 2 audit at minimum. The audit must be conducted by a qualified energy auditor (defined below) and must cover the building’s full energy systems.
What a Level 2 Audit Covers
A thorough ASHRAE Level 2 audit of a typical Colorado commercial building will include:
Utility Data Review
The auditor reviews 24 months of electricity and natural gas bills, identifies consumption patterns, checks for anomalies (unusually high summer or winter spikes), and calculates baseline Energy Use Intensity. They’ll compare your EUI to CBECS (Commercial Buildings Energy Consumption Survey) benchmarks for your building type and to the Colorado median published by CDPHE.
Building Envelope Assessment
A visual inspection of the exterior walls, roof, windows, and doors. The auditor is looking for obvious thermal bridging, air leakage points, inadequate insulation, and window conditions. For older Colorado buildings — especially those built before 1980 — envelope deficiencies are often significant.
This doesn’t include blower door testing or thermal imaging (those are Level 3 tools), but a good auditor can identify likely problem areas from visual inspection and building vintage.
HVAC System Evaluation
This is usually the most valuable part of the audit for older Colorado commercial buildings. The auditor will review:
- Heating plant: boilers, unit heaters, gas furnaces
- Cooling plant: chillers, cooling towers, DX systems, package units
- Air distribution: air handling units, variable air volume (VAV) boxes, fan coil units
- Controls: pneumatic vs. electronic, presence or absence of a building automation system (BAS), thermostat setpoints and schedules
- Ventilation rates vs. ASHRAE 62.1 requirements
Many Colorado office buildings from the 1970s–1990s have oversized boilers running at poor part-load efficiency, pneumatic controls with calibration drift, and no economizer cycles on air handlers. These are high-value ECMs.
Lighting Assessment
Room-by-room inventory of fixture types, lamp wattages, and controls. The auditor identifies opportunities for LED retrofits, occupancy sensor controls, and daylight harvesting. In older buildings with T12 fluorescent or metal halide lighting, this can be the single highest-return ECM.
Plug Loads and Process Equipment
A review of major plug load categories — server rooms, kitchen equipment, elevators, parking garage lighting and ventilation — and their contribution to overall EUI. For most office buildings, plug loads are 20–30% of total electricity use and harder to address through capital investment, but controls and occupant behavior programs can reduce them.
Energy Conservation Measures (ECMs)
The deliverable of a Level 2 audit is a list of ECMs — specific improvements with estimated implementation costs, annual energy savings (in kWh and therms), dollar savings, and simple payback periods.
A typical ECM list for a 75,000 sq ft Colorado office building might include:
- LED lighting retrofit: $85,000 / 3.2-year payback / saves 42 kBtu/sq ft/yr
- BAS upgrade with optimum start/stop: $55,000 / 4.1-year payback / saves 28 kBtu/sq ft/yr
- Boiler replacement with high-efficiency condensing unit: $120,000 / 6.8-year payback / saves 35 kBtu/sq ft/yr
- Economizer addition to air handlers: $28,000 / 3.5-year payback / saves 18 kBtu/sq ft/yr
The auditor will also estimate the combined impact of implementing all ECMs on your EUI, so you can see whether the full improvement package would bring you into Pathway 1 compliance or whether Pathway 2 (implementing a subset that achieves a defined percentage improvement) is the right approach.
How Long Does a Level 2 Audit Take?
For a typical commercial building in Colorado (50,000–200,000 sq ft), the audit process takes 4–8 weeks from engagement to final report:
- Week 1–2: Utility data collection, document request (drawings, equipment schedules, past maintenance records), auditor site visit (typically 4–8 hours on-site)
- Week 2–5: Data analysis, energy modeling (if applicable), ECM development and cost estimation
- Week 5–8: Draft report review, Q&A, final report delivery
Larger or more complex buildings take longer. Buildings with unusual systems (district energy connections, significant process loads, rooftop solar) require more analysis time.
Plan for 6–10 weeks if you want a buffer. If your compliance deadline is December 2026, you should be engaging an auditor now, not in October.
What Does a Level 2 Audit Cost?
Costs vary significantly by building size and complexity, but rough ranges for Colorado:
| Building Size | Typical Level 2 Audit Cost |
|---|---|
| 50,000–100,000 sq ft | $8,000–$18,000 |
| 100,000–250,000 sq ft | $15,000–$35,000 |
| 250,000+ sq ft | $30,000–$60,000+ |
| Complex/multi-system buildings | Add 20–40% |
These are full-scope audits from qualified engineers. You will see cheaper quotes — sometimes significantly cheaper. Be skeptical of audits under $5,000 for a 75,000 sq ft building; they typically skip system-level analysis and produce generic recommendations that aren’t actionable for Regulation 28 compliance.
Xcel Energy cost-share: Xcel’s commercial energy efficiency program cost-shares audits for eligible customers. Depending on your building size and the audit scope, Xcel may cover 25–50% of the audit cost. Contact Xcel’s Commercial Energy Efficiency program line before engaging an auditor to understand what’s available — this can meaningfully reduce your out-of-pocket cost.
Who Qualifies as an Auditor for Regulation 28?
Regulation 28 and CDPHE guidance require that Pathway 2 audits be conducted by a “qualified energy auditor.” CDPHE defines this as a professional who holds one or more of the following credentials:
- Certified Energy Auditor (CEA) — Association of Energy Engineers (AEE) credential, requires examination and documented experience
- Certified Energy Manager (CEM) — Also AEE; broader credential but widely accepted for Regulation 28 purposes
- Licensed Professional Engineer (PE) with documented energy audit experience — a Colorado PE license alone isn’t sufficient; they need to demonstrate energy audit competence
- LEED Accredited Professional (AP) with energy-specific credentials may qualify for certain building types, but verify with CDPHE
For most covered buildings, the practical choice is a CEM or CEA with commercial building experience in Colorado, or a PE engineering firm that specializes in mechanical/electrical systems and has completed Regulation 28 audits.
Do not use a residential energy auditor (BPI-certified, HERS-rated homes experience) for a commercial building. The systems, analysis, and compliance requirements are entirely different.
Questions to Ask Before Hiring an Auditor
Before engaging an auditor for a Regulation 28 Pathway 2 audit, ask:
- Have you completed audits for Regulation 28 Pathway 2 compliance specifically? Colorado’s regulation has specific documentation requirements. Auditors who have been through the process before know what CDPHE needs.
- What credentials do you hold? Verify CEA, CEM, or PE status and ask for documentation.
- What does your deliverable look like? Ask for a sample report from a comparable building. The ECM analysis should include itemized costs, savings, and payback periods — not just narrative recommendations.
- Do you work with Xcel Energy’s cost-share program? Auditors familiar with the Xcel program can structure the engagement to maximize your cost-share eligibility.
- What’s your timeline from engagement to final report? Get this in writing.
- Can you also help implement the top ECMs? Some engineering firms offer both audit and project management for improvements. This can streamline your compliance project, though it creates a conflict of interest on the ECM recommendations — weigh accordingly.
After the Audit: Next Steps for Pathway 2
Once you have your Level 2 audit report:
- Select ECMs for implementation. Pathway 2 requires implementing measures that achieve a CDPHE-defined percentage improvement over your baseline EUI. Your auditor’s report will show which combination of ECMs gets you there most cost-effectively.
- Apply for Xcel rebates before starting work. Many Xcel rebate programs require pre-approval before equipment is purchased. Don’t miss the window.
- Explore C-PACE financing if capital is a constraint. The audit report is useful documentation for a C-PACE application.
- Document implementation. Keep contractor invoices, equipment specifications, and completion dates. You’ll need this documentation for your Pathway 2 compliance filing with CDPHE.
- Re-benchmark after improvements. Enter a full year of post-improvement energy data into Portfolio Manager to demonstrate the EUI reduction.
For more on financial incentives available for your improvement projects, see our Colorado energy incentives guide. For questions about selecting the right compliance pathway, see our Regulation 28 pathways guide, or contact us for a free consultation.