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Smart Savings: Funding Water Projects with Energy Incentives

Created 11/28/2012 by Layne McWilliams
Updated 11/28/2012 by Layne McWilliams
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Saving water means saving energy. In fact, you can actually get paid to save energy through incentives aimed at funding leak detection and repair projects.

How does water equal energy? Well, you put energy into water when it is sourced, treated, and distributed. From an energy standpoint, the calculation used to determine how much energy it takes for your system to produce a gallon of drinking water looks like this:

Every gallon of water leaked from your system represents water that didn’t need to be sourced, and therefore, energy that didn’t need to be consumed in the first place. From the power utilities’ standpoint, this energy could be used elsewhere.  It has real, and not insignificant, value. Through conservation incentive programs, such as BPA’s Energy Smart Industrial, many power utilities will help pay for the leak detection and repair projects based on associated energy savings. The incentives vary by utility, but they range from 10 cents to as much as 30 cents per kWh saved in the first year. Incentives are usually capped at a percentage of the project’s total cost, typically between 50% and 70%.

Remember, anytime you are improving the efficiency of your system, conservation incentives may be available to help with project costs.  It doesn’t cost anything to ask, and the incentives can have a significant impact. You should have your power utility on speed dial!

Incentive Funding for a Hypothetical Leak Repair Project

You already know the amount of water you produce; it’s part of your annual Water Use Efficiency (WUE) report. To determine energy consumption, your power utility’s conservation staff will use annual billing data, pump hour-meters, datalogging, or other methods to estimate the total kilowatt-hours (kWh) associated with sourcing, treating, and distributing water.

Here’s an example of how this would work:

Let’s say you produced 200 million gallons of water in 2011, and you’ve determined that your energy consumption for 2011 was 400,000 kWh. Your system thus consumes 2,000 kWh / MG produced. At an average cost of 7.5 cents per kWh, it costs you about $150 in electricity to produce one million gallons of water.

Now, according to your WUE report, your customers only purchased 150 million gallons last year, and you accounted for 10 million gallons of known, but unbilled, water usage. You estimate that you are leaking around 40 million gallons back into the ground. That lost water is wasting about 80,000 kWh in energy each year, and that costs you $6,000 annually.

Using the same energy factor, if a leak repair project saved 20 million gallons annually, then that would equal an energy reduction of 40,000 kWh, saving you about $3,000 annually in electricity cost. At a hypothetical 18 cents per kWh incentive rate, the incentive would be roughly $7,200, subject to a cap.  If the incentive were capped at 50% of the project cost, and you spent $10,000 to find and repair the leak, then the final incentive payment would be $5,000.

In this example, you’ve spent a net $5,000 to save $3,000 per year, giving you a payback based on energy savings alone of less than 2 years—not to mention you’ve eliminated the operational wear and costs associated with pumping 20 million gallons of water through the system.

Call your utility account representative or conservation manager and ask about incentives for water system improvements. Or, if you buy power from a PUD or municipality in Washington, contact Layne McWilliams, the Energy Smart Industrial program’s Water/Wastewater Sector Specialist, at 971-244-8581, or send an e-mail to layne.mcwilliams@energysmartindustrial.com.

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Comments (1)
Layne McWilliams on 11/28/12 on 02:38 PM (Pacific Time)
The article above is a slightly longer version of an article published in a recent issue of the WaterTap newsletter, which is put out by the Washington State Dept of Health.  We've had some good success stories with small and large systems using conservation incentives to help pay for leak repair projects.  I hope you find this helpful.

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Sector: Industrial
Function: Non-Function Specific

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