Optimizing Statewide Benefits from Public Investments

Appropriate valuation of all resource, environmental, and economic benefits created through customer-side Distributed Water Resources programs is crucial, but there are significant legislative and regulatory hurdles to overcome.

The Correct Statewide Perspective is Holistic

In May 2012, as part of its water-energy nexus rulemaking, the CPUC authorized recognition of “embodied energy,” or “energy embedded in water,” for purposes of CPUC energy efficiency programs. Specifically, the CPUC agreed with stakeholders’ testimony that the sum of all energy inputs by all energy providers to water and wastewater that could be avoided (saved) by saving water should be included when computing incentives for energy efficiency programs.

Recognition of energy inputs to water and wastewater both upstream and downstream of an energy customer’s site is a departure from prior CPUC policies that recognized only on-site energy savings. In adopting the concept of “embodied energy” in water, the CPUC’s primary caveat was that since unregulated energy utilities do not pay into the regulatory public purpose program that funds customer energy efficiency projects, only energy provided by the State’s regulated energy utilities can be included in the embodied energy computation.

Tulare County is a marked example: This is a clear example of how jurisdictional boundaries can result in sub-optimal results.

The CPUC stopped short of a holistic methodology that recognized all benefits created for the State because it has no jurisdiction over unregulated energy utilities, nor does it have specific responsibility for protecting ratepayers of unregulated energy utilities.

While other state agencies such as the Energy Commission, the Department of Water Resources, and the Air Resources Board do have a statewide perspective, each is constrained by its authorized mission that requires optimizing outcomes for single resources (energy, water, and climate, respectively).

As noted by the Energy Commission in its 2005 IEPR, most State programs are presently managed from a single utility perspective - water, wastewater, electric, or gas – resulting in sub-optimal investment decisions.

Recognition of all value streams created by distributed water resources is essential to the success of a Distributed Water Resources program. A new model is needed that enables optimizing the state’s investments (i) for the state, as a whole, and (ii) across water, energy, and climate.

Optimizing Statewide Benefits from Public Investments

The Correct Statewide Perspective is Holistic

Tulare County is a marked example: This is a clear example of how jurisdictional boundaries can result in sub-optimal results.

The CPUC stopped short of a holistic methodology that recognized all benefits created for the State because it has no jurisdiction over unregulated energy utilities, nor does it have specific responsibility for protecting ratepayers of unregulated energy utilities.

While other state agencies such as the Energy Commission, the Department of Water Resources, and the Air Resources Board do have a statewide perspective, each is constrained by its authorized mission that requires optimizing outcomes for single resources (energy, water, and climate, respectively).

Figure 7. Multiple Benefits Created by Distributed Water Resources

Simple

Complex

Technology Scenario 1

Treat, recycle and reused Oxnard ice cream facility's process water effluent

Technology Scenario 2

Remove solids & reduce nutrients from dairy manure effluent to enable conversion from flood irrigation to drip