Water agencies and businesses raised concerns about the potential of the state’s energy policies to significantly drive up water costs if they fail to account for the complex water-energy “nexus.” Energy is the second largest tab for the water sector, just after capital costs. The state’s water supplies are a huge economic driver. The State Water Contractors and California Business Roundtable Aug. 20 called for better integration of the state energy and water agencies’ climate protection and renewable energy policies and regulations. Moving to carbon-lite energy resources will come with a price tag if state energy and water agencies don’t better coordinate “to avoid unintended consequences,” said Jeremy Carl, Stanford’s Hoover Institute director of research. The water sector is the largest energy consumer in the state, using 20 percent of the electricity. Rob Lapsley, California Business Roundtable president and chief executive officer, noted his organization plans to sponsor a bill seeking better agency integration along with more transparency on energy, climate, water and transportation policies the next legislative session. This session’s effort, AB 1763, which sought to expand the California Energy Commission’s Integrated Energy Policy Report, died in June. Much of the focus at the Wednesday meeting at the state capitol was on the cost impacts of reducing emissions at the massive State Water Project. Operated by the Department of Water Resources, it stretches 600 miles to supply about 2.5 million acre-feet to 25 million families and businesses, and 750,000 acres of farmland. It uses huge quantities of energy to move the water, particularly up hill, with its project hydro plants supplying about 60 percent of needed resources. “The energy services it provides are profound,” said Tim Haines, State Water Contractors’ deputy general manager, energy. He noted that the State Water Project services include flexible power supplies to the state. It typically runs its hydro at peak periods, which helps the grid operator meet demand, and turns on its pumps to move water at night when energy demand is low. Flexible power also is key to the integration of intermittent solar and wind energy resources. In addition, the project is the largest source of demand response in California, with replacement power estimated at $50 million a year. “There is nothing else in the state that the California Independent System Operator can turn to that has that much control to keep the lights on,” Haines added. By 2020, the project expects to supply 70 percent of the power from carbon-free power supplies needed to move water from the Bay Delta to Central and Southern California, much of it from the project’s hydro plants. By 2050, Water Resources aims to have the project power be 100 percent carbon free, with project hydro and hydro imports, as well as solar and other renewable resources part of the mix, said Veronica Hicks, chief of DWR’s Power Planning and Risk Management Office. At issue is the impact on water rates. “We are not suggesting we are suddenly on wrong track but let’s take a pause and take stock of what is front of us and do a course correction,” Haines said. While raising concerns about costs and inadequacies of state agency sensitivity to the water-energy nexus, speakers gave short shrift to energy efficiency and water conservation. Using water more efficiently cuts energy use, reaping negawatts and carbon emission reductions. It also stretches finite water supplies, which is critical during droughts. San Bernardino Valley Municipal Water District manager Douglas Headrick said his agency was getting more serious about water conservation and offering some rebates for water savings measures, including more efficient irrigation. He also noted the problems of lawns in a semiarid region. “The English tea garden is not sustainable,” said Headrick.