Adam, that price does seem high for a hot water heater replacement. A typical/average 40 gallon tank hot water heater costs somewhere between $400-$500 at a big box store. You'll have some additional parts for the flex couplings that usually get replaced as well, but total material costs should be below $600. After materials, some consideration to where the current hot water is located and the age of the piping it's connected to will affect the price. The laws in CO do state that stuff like replacing a hot water heater must be done by a licensed plumber (ignore that the link is from Arvada, it's a State law - CO Plumbing Board Memo. I believe it's from an update to IRC codes back around 2015. Just be aware of that if you are considering doing the work yourself or through a handyman service.
Definitely call some other outfits - gather at least 3 quotes. Some companies out there will charge a fee for them to send a tech out just to provide a cost. Ask about that up front on the phone before they send someone.
I don't have any recommendations for a plumbing service, but have had experience with Applewood and they are pricey. You may have better luck with a smaller company that doesn't have so much overhead to try absorb in their prices.
