TransActions - June 2002 (Vol 402)

New York City saves 250 million gallons of water per day!

Every year, some portion of the U.S. has too much water or too little water. This spring, eastern U.S. cities and states are suffering under severe drought conditions with depleted wells, reduced river and stream flow, and declining reservoir levels. Since April, officials in drought stricken areas have implemented water restrictions, purchased water from other communities, and halted new residential construction projects. While these actions may reduce short-term water use, they do little to ensure the sustainability of long-term water supplies. 

Traditionally water suppliers rely on the development of new water resources and the addition of water treatment plant capacity to meet growing water demands. But as the costs for these water management strategies rise, the need to use water efficiently becomes increasingly important.

The Big Apple's billion dollar savings.
Incorporating water efficiency practices and programs into long-term water management plans can save considerable capital and operating costs for utilities and consumers. 

In her new book, Handbook of Water Use and Conservation, Amy Vickers reports that since the early 1990's, New York City has saved more than 250 million gallons per day in water and sewer flows through a water conservation program that included an aggressive low-volume toilet rebate program involving more than 1 million fixture replacements. These savings allowed the city to avoid spending more than $1 billion to expand a wastewater treatment plant and have indefinitely postponed development of new water supply sources.

The key to achieving significant results with water efficiency practices and programs is to make appropriate planning decisions when developing a water efficiency plan.

Six Steps to Successful Water Efficiency Planning

1. Identify Cost Impacts.

Before a decision to implement a water efficiency planning process is made, a brief review of future demand and growth forecasts, costs for capital improvement plans (water and wastewater), and, if applicable, costs to purchase or develop future water supply should be completed. Additionally, projected customer growth should also be considered. Areas with high growth may have more immediate water supply needs than areas with minimal growth. In some cases, the cost for planned capital improvements and future water supply can be deferred or reduced by reducing peak or average water demand. In such cases, water efficiency planning should proceed. 

2. Establish Goals.

Establishing water reduction goals will direct the selection of the most appropriate water efficiency measures and provide a basis for evaluating the effectiveness of water efficiency planning over time. The two most common goals are 1) the reduction of peak water demand to save water during high use periods and 2) the reduction of per capita water use to lower overall water demand.

3. Develop Water-Use Profiles.

A water-use profile defines when, where, and how water is used. Items addressed in a water-use profile include customer category water use; calculating average annual, daily, seasonal, and peak water demand; identifying top water users, and evaluating system water losses. Once complete, a water- use profile can be easily updated as needed on a monthly or annual basis.

4. Identify, Analyze, and Select Water Efficiency Measures.

Developing a list of all available water efficiency measures provides the basis for selecting measures to implement. For each measure identified, estimated costs, potential savings, expected customer participation rates, and possible benefits are determined. Once each measure is clearly identified and defined, the measures can be analyzed for cost-effectiveness based on the cost and benefits over the life of each measure. Some benefits to consider include: Utility cost savings, customer utility savings (reduced water, sewer, & energy bills), and environmental preservation. Selection criteria will vary depending upon the goals established, budget constraints, and planned capital improvements. For some utilities, forestalling the need to expand water plant capacity may have a higher priority than environmental preservation. In such a case, a water supplier will want to select water efficiency measures that offer a greater opportunity to reduce overall water use rather than a measure that would reduce peak water use periods. 

5. Develop and Implement Water Efficiency Plan.

After selecting water efficiency measures to meet established goals and objectives, stakeholders such as water managers, planners, engineers, financial administrations, the general public, businesses, public officials, and environmental interest representatives should be included in the development of a final plan to ensure public support and acceptance. Getting the public involved in the planning process will boost customer participation and community involvement once the plan is implemented. The selected water efficiency measures define a phased implementation plan, establish a marketing protocol, and define the goals and objectives. Implementation of a plan typically involves approval from elected officials and coordination with other utility departments or programs. 

6. Monitor and Evaluate Effectiveness of Water Efficiency Measures.

Once the water efficiency plan has been implemented, an evaluation schedule should be developed. Evaluating each measure's effectiveness provides an opportunity to revise the water efficiency plan to ensure that the water-saving goals are being met. The evaluation process involves analyzing 1) costs and benefits of implemented water efficiency measures over a selected period of time, 2) customer participation rates, and 3) financial impacts on the utility. Revisions to the plan should be based on performance standards developed during the evaluation process. Evaluating the water efficiency plan provides an opportunity to report water reduction successes to the public on a regular basis, thereby strengthening public support of the water efficiency plan. In order to maintain effectiveness, most plans require revision and adjustment over time. 

Additional Water Efficiency Strategies 

In addition to implementing water efficiency measures that target customer end uses, a water supplier should consider setting a good example by implementing strategies to ensure an efficient water utility. These strategies include:
" Identifying sources of unaccounted for water in order to determine water system leakage. 
" Managing water system pressure so that water is efficiently delivered to all parts of the distribution system.
" Develop a system to detect water leaks and schedule repairs.
Water utilities and suppliers can also incorporate activities that promote efficient water use habits and encourage the adoption of water efficiency measures. Regulations and ordinances can be implemented, which would require certain actions by customers. For example, an ordinance can be enacted that prohibits the waste of water such as running an irrigation system with broken heads or allowing water to run down the street or pond in a parking lot. New water rates can be established to promote more efficient use of water by motivating customers to reduce water use by charging higher rates for high water use. Public information/education programs are critical tools that create community awareness about water efficiency and market water efficiency strategies to customers and can include direct-mail brochures, bill stuffers, school education programs, local workshops/training seminars, and community displays. Such public information materials are readily available from The American Water Works Association, state water agencies, etc. 

How Water Efficiency Planning Works

GDS recently completed a study for the Texas Water Development Board (TWDB) that quantified the effectiveness of various water conservation techniques. The main purpose of the study was to provide sixteen Texas water planning regions with comprehensive water conservation alternatives accounting for regional variation in climate, water usage patterns, and population concentrations. The study revealed the importance of understanding water usage to achieve effectiveness in water efficiency planning. For example, the differences between seasonal and base per capita water use indicates when and where water efficiency measures would be most effective. Seasonal per capita water use occurs during the summer months and base per capita water use is the average of the winter months. In areas with high seasonal per capita water use, water efficiency measures that target outdoor water use would be most effective, as seasonal water use is mainly attributed to outdoor water use. These strategies may include irrigation audits, rainwater harvesting rebates, and rebates for water-saving landscaping. In areas with little seasonal per capita water use water efficiency measures that target indoor usage can be implemented to help reduce base per capita water use. These strategies may include toilet retrofit programs, clothes washer rebates, and distribution of showerheads and faucet aerators. 

Water efficiency planning can be an effective tool in managing long-term water supply beyond times of drought and can be critical to ensuring financial stability during times of drought and growth. With a systematic approach, there can be fewer needs to implement water restrictions, halt new construction projects, and purchase expensive alternative water supplies.

For more information about water efficiency planning, contact Michelle LaVigne, Project Manager in our Austin office at (512) 494-0369.

Electric Aggregation: A Valuable Consumer Option

Electric Aggregation occurs when a group of consumers join together to purchase electricity as one aggregated load. The concept of aggregation is not new or unique to the electric utility business. For years consumers have formed purchasing pools or cooperatives to increase buying leverage and reduce costs of competitive procurement of all types of commodities. In the electric industry, rural electric cooperatives have procured electricity through aggregation of their members for decades and as a result, with few exceptions, electric cooperatives have enjoyed lower power costs than neighboring investor-owned utilities. In states that have implemented retail competition, electric aggregation programs have formed to offer pooled purchasing services to various commercial and public entities including public schools, industrial and commercial business associations, retail franchises, and government agencies.

While the results of aggregation in restructured electric markets have been mixed, in retail markets where competition is vigorous, aggregation programs almost always produce better prices and terms of service than could be achieved by individual customers negotiating on their own with competitive suppliers. There are several reasons for this, the most obvious being that larger electric loads are more desirable to competitive suppliers. From the suppliers' perspective, aggregated loads are not only more predictable to serve, they are also more profitable. This is because customer marketing costs are very high, and with aggregation, a supplier can win many hundreds of customers through a single competitive negotiation. From the buyers' perspective, aggregation provides individual customers with much greater bargaining leverage - due to increased scale - and through participation in the pool, allows even the smallest members to afford expert legal and power supply consulting representation to ensure that the electric supply contracts negotiated on their behalf reflect the best prices and terms available in the competitive market.

One of the biggest successes of electric aggregation has been the savings achieved through aggregation of local government and public school loads. For example, in February of this year, the Electric Utility Restructuring Legislative Oversight Committee in Texas reported that seven aggregation programs serving Texas schools and local governments had already achieved combined electricity savings of more than $150 million per year. At a time when schools and governments are facing budget shortfalls in many regions, these savings have been one of the most tangible and under-publicized public benefits of electric deregulation. 

While electric aggregation programs require significant front end organizational and planning effort, as electric cooperatives have known for years, the rewards of aggregated purchasing of electricity are worth the investment.

For more information about electric aggregation, contact Scott Norwood, Sr. Project Manager and Principal, in our Austin office. (512) 494-0369.

Syd Briggs wins the crystal ball!

In the January issue of TransActions, GDS ran a fun contest to see who could best forecast the price of natural gas ($ per million Btu at Henry Hub on April 30). The winner is Syd "the fortune teller" Briggs of Southwest Arkansas Electric Cooperative. You can see Syd and his crystal ball in full, living color at www.gdsassociates.com/news/transactions/vol.402.html 
There may be a lesson in the price Syd quoted-it was the highest price estimated, $3.43. And even that was lower than at the actual price of $3.64 per $MMbtu.

How'd he do it?

GDS asked Syd to explain his forecasting methods for the good of all. Syd most graciously replied, "I monitored the fuel factors from our power suppliers and forecast our cost of power from our suppliers who primarily use gas generating facilities. For the contest, I observed the normal progression of fuel factors for the time of year and adjusted it for trends I expected from the current price."

Got it? 

By the way, we had a good response to the contest. Price estimates ranged from $1.92 to $3.43. Our 1st runner-up was Steve Bohan of Corn Belt Power Cooperatives ($3.00) and 2nd runner-up was Matthew Reisterer of Matanuska Electric Associates, Inc.($2.96) Thanks to all who participated. Look for future contests in TransActions.