14. Water-Energy Nexus Programs
One of the state's largest end uses of electricity is in the treatment, heating, and conveyance of water in California. We recently authorized a series of pilot programs exploring whether energy savings may be realized through water conservation measures. Implicit in this approach is the concept that saving water saves energy. This is dubbed the "water-energy nexus."394 An increase in energy efficiency portfolio emphasis on measures that maximize energy savings in the water sector - such as through leak loss detection and water utility system repair, and through the enhancement of water systems efficiency - may be warranted.395 The Scoping Memo invited parties "to propose and critique additional strategies to overcome barriers to the deployment and adoption of energy efficiency in the water-energy context."396
14.1. Party Positions
All parties who commented on the water-energy nexus discussion support including water-energy nexus measures in the 2013-2014 transition portfolio. The Programmatic Guidance Ruling did not make any specific water-energy nexus recommendations, but a number of parties who commented on the Guidance Ruling echoed this support. In particular, DRA and IEUA recommend that water-energy nexus measures be a high priority in energy efficiency efforts, since 19% of the electricity in the state is consumed in the transmission, treatment, and conveyance of water.397 DRA recommends that water-energy programs in the 2013-2014 transition portfolio be limited to leak-loss detection and remediation and pressure management, which do not typically involve major capital investments and are therefore often highly cost-effective.398
A majority of the commenting parties request that the Commission develop methods to determine the cost-effectiveness of water-energy nexus projects. DRA and parties from both the water and energy sectors specifically request the development of methods to quantify the embedded energy in water and the energy savings associated with energy efficiency efforts to reduce that embedded energy.399 DRA, Irvine Ranch Water District, and West Basin Municipal Water District recommend that the Commission use averaging in developing a method for the quantification of embedded energy in the water supply chain. DRA supports this approach on the basis that man-made water systems and the hydrological cycle do not allow for discrete annual savings profiles for individual water agencies.400
SCE recommends that the methods developed to account for the embedded energy in California's water supply portfolios include the avoided energy and GHG emissions reductions associated with increasing the efficiency of water treatment, storage, transmission and use in particular regions.401 Multiple parties request workshops to address the energy savings potential and cost-effectiveness of water-energy nexus projects.
14.2. Discussion
Several of the existing water-energy nexus programs should continue without modification; many of the programs captured in custom projects have large ancillary water benefts and we encourage the IOUs to document these savings to help better understand their benefits. In addition, several agricultural programs target the water-energy nexus, and these program should continue or be expanded. Thus the recommendations for expansion of water-energy nexus programs should occur under the rubric that successful water-energy nexus programs should be maintained or enhanced. We now provide further guidance on new or expanded efforts. Overall, we expect that expanded programs should produce tangible savings through the investments being made.
We recognize that the pilot programs and embedded energy in water studies402 conducted pursuant to the Commission's direction in D.07-12-050 laid the groundwork for further exploration of the potential for energy savings in the water sector.403 We further recognize the need to develop robust methodologies for measuring embedded energy savings from efficiency measures and determining the cost-effectiveness of energy efficiency projects in the water sector.
The evaluation of the pilots conducted pursuant to D.07-12-050 concluded that the leak detection pilot program generated high energy savings for the utility, and parties recommend that leak detection and pressure management programs be offered by the IOUs in the transition period.404
It is not prudent to spend significant amounts of 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. However, in light of the potential for energy savings identified in the pilots, we will pursue three sets of activities during the 2013-2014 period to support the potential expansion of such programs in the 2015+ timeframe. In comments in the Proposed Decision, Association for California Water Agencies notes that some of these calculations might occur early during the 2013-2014 timeframe and there would be a loss of momentum during this transition period. We recognize this dilemma. In their applications, we ask the IOUs to note ways to accelerate the expansion of cost-effective water-energy nexus programs where possible. Depending on the applications, the Commission may be able to accelerate the timeframe during the transition period of some of the programs.
The parties' comments tend to focus on systems improvements. We view water systems efficiency to be the most critical new strategy to capture additional water/energy nexus benefits in the energy efficiency program. In particular, the IOUs should focus their applications from the source of the water to the distribution point and through the system.405 The IOUs should focus their outreach to target small and medium sized water and wastewater utilities, since they are the least likely to make system improvements without IOU-assisted intervention.
First, the IOUs should develop proposals to increase targeting of agricultural and industrial customers since they are the largest end users of water in the state. Moreover, the IOUs should propose to continue to offer measures and services to the water sector through their calculated energy efficiency savings programs in the 2013-2014 portfolio, as they currently do.
Second, we direct the IOUs to propose 2013-2014 efforts (either through limited, water sector focused pilot programs or through targeted efforts within the existing calculated savings programs) on leak-loss detection and remediation and pressure management services for water entities that are IOU customers. These efforts should build off of the results of the previous pilots. These programs (or projects) should be designed to calculate reductions in water consumption, quantify embedded energy savings, and capture water and energy avoided costs to support cost-effectiveness determinations. Commission Staff's evaluation of this program should report on energy savings, including embedded energy savings, avoided costs, and cost-effectiveness. As noted by Association of California Water Agencies in its comments on the Proposed Decision, this should include the embedded energy from all IOUs.
Third, we direct Staff to develop a robust record in the 2013-2014 application proceedings or in this or a subsequent energy efficiency rulemaking to address strategies to overcome barriers to adoption and deployment of water-energy nexus efficiency programs. The record should address appropriate methods for calculating energy savings and cost-effectiveness in the water-energy context, issues associated with the joint funding and implementation of water-energy programs by the IOUs and water entities, and the development of an updated water-energy cost-effectiveness calculator406 and appropriate methodologies for calculating the GHG emission reductions associated with water-energy nexus programs. This record building may include Commission Staff facilitated workshops focusing on funding sources for water-energy projects, pump and system efficiency projects, and other topics as appropriate.
394 Phase IV Scoping Memo at 7.
395 Ibid.
396 Id. at 8.
397 DRA Programmatic Guidance Ruling Response to Comments at 9 and IEUA Programmatic Guidance Ruling Comments at 9.
398 DRA Programmatic Guidance Ruling Response to Comments at 7.
399 Programmatic Guidance Ruling Comments by Irving Ranch Water District (IRWD) at 6; by PG&E at 9; by DRA at 9; and by SCE at 7-8.
400 DRA Programmatic Guidance Ruling Response to Comments at 7; IRWD Programmatic Guidance Ruling Comment at 6; Wells Branch Municipal Utility District (WBMUD) Programmatic Guidance Ruling Comment at 9.
401 SCE, Programmatic Guidance Ruling Response to Comments at 7-8.
402 "Embedded Energy in Water Studies Pilot Impact Evaluation" (March 9, 2011, ECONorthwest), available at: http://www.cpuc.ca.gov/NR/rdonlyres/51BF9A0B-42C9-4104-9E71-A993E84FEBC8/0/EmbeddedEnergyinWaterPilotEMVReport_Final.pdf;
"Embedded Energy in Water Studies: Study 1: Statewide and Regional Water-Energy Relationship" (August 31, 2010, GEI Consultants/Navigant), available at: ftp://ftp.cpuc.ca.gov/gopherdata/energy%20efficiency/Water%20Studies%201/Study%201%20-%20FINAL.pdf;
"Embedded Energy in Water Studies: Study 2: Water Agency and Function Component Study and Embedded Energy-Water Load Profiles" (August 31, 2010, GEI Consultants/Navigant), available at: ftp://ftp.cpuc.ca.gov/gopherdata/energy%20efficiency/Water%20Studies%202/Study%202%20-%20FINAL.pdf; and
"Embedded Energy in Water Studies: Study 3: End-use Water Demand Profiles" (April 29, 2011, Aquacraft, Inc.), available at: ftp://ftp.cpuc.ca.gov/gopherdata/energy%20efficiency/Water%20Studies%203/End%20Use%20Water%20Demand%20P.
403 Available at http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/76926.pdf.
404 SCE Comment on Phase IV Scoping Memo at 8; Association of California Water Agencies, Comment on Programmatic Guidance Ruling at 6; NRDC Comment on Phase IV Scoping Memo at 8; DRA Comment on Phase IV Scoping Memo at 7.
405 Water utilities are most qualified to focus on their efficiencies and on end-use customers.
406 See http://doe2.com/download/Water-Energy/WaterSavingMeasures-Calculator-v3.pdf.
