There is an economic and environmental connection between water use and energy consumption but measuring that interaction is no easy feat. How to align the methodologies of the energy and water sectors to reflect the joint savings from efficiency measures, including the subsidized retrofit of toilets, showers and other plumbing, to measure saved megawatts, acre-feet, and money, was the focus of a July 1 California Public Utilities Commission workshop. The commission has been grappling with how to find common ground on “avoided cost methodologies” of the water and energy industries as part of its ongoing effort to value and divvy up the savings. There’s a huge data gap between the energy industry’s paperwork defining and justifying spending money, and that of the more diverse and larger water sector. The biggest difference is the water industry’s lack of standardization and centralization of that data, said Lorraine White, GEI Consultants water-energy program manager. “We don’t have the same inventory of data—or the depth.” As the commission stated, “It is not prudent to spend significant amounts of [energy] ratepayer funds on expanded water-energy nexus programs until the cost-effectiveness of these programs, and particularly the net benefits that accrue to energy utility ratepayers, are better understood.” Saving water equates to energy savings because the water sector is the biggest electricity user in California. It uses about one-fifth of the power to transport, treat, heat and cool water. Using water more efficiently, particularly during times of drought, cuts energy use, reaping negawatts. It also cuts greenhouse gas emissions. The commission’s goal in its water-energy nexus effort is to essentially enable the conversion of kWh/day costs into gallons/day, noted Navigant director Ralph Zarumba. That is a task far easier said than done. The initial commission focus is on developing a common avoided cost methodology—that is, what consumers are not paying for when water is conserved. It’s not just negawatts, but also “nega acre-feet. “Avoided cost analyses looks at the next increment of supply that would be developed in the absence of efficiency,” according to Navigant Consulting. Avoided cost methodology is well-developed in the energy industry in California. That’s in part because it has long been required as part of the triennial “general rate case” filings at the commission. There appears to be no common avoided cost measurement system within the water sector. Thus, the commission’s effort may be frustrated, or at best elusive, because of differences in the water and energy worlds’ which are being highlighted by the alignment effort. GEI data collection includes assessing differences in water costs arising from geography, including distance to a river, aquifer or ocean. Although the data practice of the two key sectors diverge there are similarities between the two. Water conveyance is like electricity transmission. Both aim to serve demand and enhance reliability, said Zarumba. The similarities largely end there. The commission hired GEI and Navigant Consulting to develop a standard cost measuring tool to be fed into a general model. It is to measure and compare avoided costs or savings from specific actions—be it the energy and water impact of water recycling, desalination, other treatment of surface and groundwater supplies or water savings retrofits. GEI’s White noted the consulting firm is closely tracking available data, which include the construction costs of Poseidon Resource’s desalination facility in Carlsbad. “It is now a billion dollars plus,” White noted, and far above initial construction cost estimates. The Carlsbad desalination project is piggy backing on the old NRG seawater intake at the power plant. The facility hopes to desalt 50 million gallons of seawater/day.
