Commissions Explore Energy, Water Nexus

By Published On: March 31, 2006

California officials agreed to apply integrated resource management to water and energy policy to conserve both resources. During a joint agency March 28 workshop, agency and utility officials and other stakeholders from the interrelated sectors concurred that data must be gathered to develop management practices that improve grid and water supply reliability and air quality. The symposium sponsored by the California Public Utilities Commission and the California Energy Commission focused on the energy and water utilities regulated by the CPUC. The private water utilities at issue supply about 20 percent of the state’s water. “We have embarked on a very important quest for ways to reduce energy use,” said Jackie Pfannenstiel, California Energy Commission member. The CEC’s biggest concern focuses on the 50-100 hours of highest use a year, according to Lorraine White, Pfannenstiel’s adviser. Peak use in both water and power occurs simultaneously, she added. The water sector uses about 20 percent of the state’s energy supply. Much of the power is consumed in moving water – predominantly in Southern California. About 21,000 GWh were used to convey water around the state in 2000, according to Gary Wolff, Pacific Institute economist. That equates to about 8 percent of California’s energy use that year. Add in the power used to meet the consumers’ water demand, which includes water heating, industrial processes, and agricultural use, and the number soars to about 61,000 GWh. That equates to roughly 22 percent of statewide energy consumption, which was around 275,000 GWh in 2000, Wolff said. Water efficiency and conservation could rise significantly. About 2 million acre-feet of water savings is possible each year, according to the Pacific Institute. (An acre-foot is 325,851 gallons – or the equivalent of a football field filled with water one foot deep). According to the Department of Water Resources, urban water consumption could be reduced by one-third with existing technologies. Southern California Edison saved hundreds of kilowatt-hours when it put financial incentives in place for businesses to conserve water, according to Dave Brueder, the utility’s nonresidential portfolio manager. Incentives included rewards for pumping efficiencies, joint water and energy audits, and conservation practices, such as at golf courses. It is, however, difficult to measure the relationship between a gallon of water and a kilowatt-hour. For example, water conserved in one area does not equate to the equivalent in energy savings because the saved water is often consumed elsewhere. In addition, according to David Morse, a consultant for California water agencies, a 10 percent increase in conservation results in a 36 percent reduction in water utility earnings. Morse also noted the disparity between efficiency investments by energy and water utilities. Investor-owned utilities spend about 3.2 percent of their revenue on efficiency programs, while private water utilities invest less than 0.5 percent. Furthermore, some water purveyors pay below market costs for their power. Efficiency opportunities identified include giving water pump operators price signals to encourage them to run off peak. Other potential areas are increases in hydropower efficiencies and using renewable energy supplies to move power. Although energy-intensive “pumped storage” – building facilities that move water uphill during times of low energy use and release it as hydropower during peak times – was cited as a way to increase peak power. Other recommendations for increasing water and energy conservation include: – Creating a public-goods program to fund research and development of cross-industry efficiencies. – Changing the water agencies’ rate structure to keep conservation from hurting an agency’s bottom line. – Developing more efficient hot water storage systems. – Creating a water industry equivalent of the Energy Star label that informs the consumer about a device’s water impacts. There was no agreement on how desalination fits into joint resource conservation strategy. Some insisted removing salt from seawater provides a needed potable water supply. Others point to the treatment’s high costs because of the intensive energy use involved. In addition, there was no consensus on creating additional surface water storage infrastructure, with its pros and cons hotly debated. To make real strides in resource and cost savings, agencies and utilities need to be “brave and bold,” said Pacific Gas & Electric’s manager of demand-response programs Bob Kinert. “What would have Leonardo de Vinci accomplished if he painted by the numbers?” he asked. The CPUC will issue an order to institute rulemaking to assess water conservation opportunities to create energy-efficiency savings next month. John Bohn, the lead CPUC member on the issue, said there will be a follow-up workshop on water quality and rates. A date has not yet been set.

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