2017 Sustainable Water Management Conference. SUN03 - Benefit Cost Analysis. March 19, 2017 New Orleans, Louisiana

Transcription

1 2017 Sustainable Water Management Conference SUN03 - Benefit Cost Analysis March 19, 2017 New Orleans, Louisiana

2 AWWA Sustainable Water Management Conference Benefit Cost Analysis Workshop Agenda March 19, :00 pm 5:00 pm 1. Introductions and Workshop Goals from Participants 2. Why do a Benefit-Cost Analysis? 3. How to Define Benefits From Water Efficiency 4. How to Navigate the Maze of New Conservation Measures 5. Proven Techniques to Calculate Water Savings 6. Understanding the Challenges of Benefit-Cost Analysis 7. Forming Innovative Programs of Cost-Effective Measures 8. Examples and Exercises 9. Demonstrate Available Software to Perform Calculations *Breaks intended to be approximately at 2:00pm, and 4:00pm

3 Presenter Information Michelle Maddaus, Maddaus Water Management michelle.maddauswater.com Lisa Maddaus, Maddaus Water Management

4 Water Conservation Program Benefit-Cost Analysis Workshop Sustainable Water Management Conference March 19, 2017 New Orleans, Louisiana Lisa Maddaus Michelle Maddaus Maddaus Water Management, Inc. 1 Program Overview 1. Why do a Benefit-Cost Analysis? 2. How to Define Benefits from Water Efficiency 3. How to Navigate the Maze of Conservation Measures 4. Proven Techniques to Calculate Water Savings 5. Understanding the Challenges of Benefit-Cost Analysis 6. Forming Programs of Cost-Effective Measures 7. Software Demonstration 2 Section 1. Why Do Benefit-Cost Analysis? Previous Workshop Participant Suggested Reasons: Optimize available water supplies Develop cost-effective conservation programs Set conservation planning goals Comply with regulations Check if utility s currently running conservation programs are still cost effective Get the most savings for the fewest dollars Gain Board support by showing that conservation is a good idea and proving it, especially since conservation programs require revenue dollars Check a manufacturer claim that a product is cost effective Determine how many years the water savings will take to payback the initial investment Desire to use tax payer dollars wisely 3

5 Conservation Planning Resources (2017) 4 Small and Medium Size Utilities Handbook (2018?) 5 What is Benefit-Cost Analysis? Benefits are the sum of: Avoided costs (capital projects deferral/downsize + O&M) + customer energy benefits + third party benefits (wastewater, environmental, society) Costs are the sum of: Utility costs (program administration, marketing, contracts, materials, labor) + customer costs (purchase, installation) + third party costs (cost-sharing, if any) Compare Benefits and Costs to Identify Economic Efficiency of Conservation Programs 6

6 Other Measures of Cost-Effectiveness Payback often used in CII conservation evaluation Time in months (or years) to recover costs Usually computed as costs/(annual water bill + sewer bill + energy bill savings) Internal Rate of Return (IRR or ROI) Discount or interest rate which makes present value of costs = present value of benefits Return on Assets (ROA) ROA = net income/total assets 7 Overall Evaluation Process Measures Water Savings Costs Benefit Cost Ratios Best Measures For the Plan 8 Audience Participation Write down your agency goals and/or reasons for doing benefit-cost analysis Fill in Below 9

7 Section 2. How to Define Benefits from Water Efficiency Benefits to the Utility deferred capital projects reduced O&M Benefits to the Customer lower water/sewer bill lower energy bill Benefits to the Environment increased stream flows higher groundwater table higher lake levels 10 Overview of Benefit-Cost Analysis Methodology Benefits Planned Projects O & M Costs Avoided Costs Marginal Costs Water Savings Measure Benefits Benefit Cost Ratio Costs Water Use Profile Applicable Measures Market Penetration Unit Costs Measure Costs 11 Organizing Data for Conservation Planning Historical Water Use Patterns Demographic Projections Planning Data Future Water Use Verify Prior Conservation Results 12

8 Information Needed to Evaluate Benefits Demand Projections without and with conservation Avoided Costs capital facilities that can be deferred provide added capacity planned for years from now variable O&M costs Water Savings of New Measures 13 Typical Water System Design Criteria Question: How will conservation impact these parameters? SYSTEM AVERAGE PEAK DAY FIRE FLOW ELEMENT DAY Raw Water Storage Water Pipelines Water Treatment Plants Pumping Stations Treated Water Storage 14 Typical Wastewater System Design Criteria Question: How will conservation impact these parameters? SYSTEM ELEMENT Collection Systems AVERAGE DRY WEATHER FLOW PEAK WET WEATHER FLOW SOLIDS LOADING Interceptors Treatment Plant Disposal to Receiving Water Land Disposal 15

9 Delay and Downsizing of Capital Works Required Capacity Before Conservation DOWNSIZING PEAK DEMAND/CAPACITY (MGD) Existing Capacity Baseline DELAY Demand After Conservation YEAR Design and Construction can start earlier, such that projects can be completed just in time. 16 Section 3. How to Navigate the Maze of New Conservation Measures 1. Identify Conservation Potential and Targets 2. Compile List of Measures 3. Determine Feasible Measures 17 Screen Conservation Measures Develop a Comprehensive List of Potential Conservation Measures Select Screening Criteria, such as 3 to 5 of the following: Technology Readily Available Measure Appropriate for Area Customer Acceptance Cost per Participant Better Measure Available Indirect Society Benefit Other Non-Quantifiable Benefits Score on a scale of 1 to 5 (5 is best) 18

10 Measure Residential Water Survey Toilet Rebate Public Education Commercial Water Audit Res. Smart Controller Rebate Screening Matrix Technology Appropriate to Area Customer Pass Acceptance Unit Cost Score Yes or No Moderate (3) Moderate (3) Low (4) Moderate (3) 16 No 14 No 18 Yes 17 Yes?????? * SFPUC Paper Shows Results of Regional Study Screening Process 19 Handout of Master List of Measures Measure No. Measure Name Measure Description Applicable Category 1 High Efficiency Toilet (HET) Rebate 2 Landscape Requirements Utility will offer customers a rebate of $ to replace a toilet with and HET New Non-single family developments will install landscape complying with City ordinance no. Residential Commercial Institutional Etc. Commercial Institutional 20 Section 4. Proven Techniques to Calculate Water Savings Water Savings, Year n = No. Accounts Year n x Market Penetration Year n x Unit Water Savings (gallons/day/connection or percent of current use) = gallons/day Example: Water Savings (Year 1)= 1,000 accounts x 10% x 50 gal per unit Water Savings (Year 1) = 5,000 gallons per day 21

11 Market Penetration Definition Market Penetration = Installation Rate or Replacement Rate or Conversion to Current Codes & Standards 22 Assess Market Penetration Other Agency Experience Acceptability Incentives Market % Measure Design Promotion $ Current Use Cost of Device Regulations 23 Define Conservation Measure in Detail for Evaluation Applicable Customer Classes Applicable End Uses Percent of Accounts Participating by End of Program Water Use Reduction, gal/day per device or % of current use, gallons/day/account or gallons/day per end use Program Start and End Year Measure Life Utility Cost, $/participant Customer Cost, $/participant 22

12 Analyze Water Use Data and Develop Water Use Profile Industrial 10% Commercial 15% Public 10% ALL CUSTOMERS Single Family 55% Multifamily 10% Outdoor Outdoor 40% Irrigation 40% SINGLE FAMILY Toilets 20% Showers 12% Baths 6% Dishwashing 2% Laundry 12% Other 8% 25 Kitchen Low-Flow Spray Rinse Nozzle Low-flow spray rinse valve retrofit can save up to 200 gal/day. Valves can be found in hotels, grocery stores, restaurants, and more! 24 Example Water Savings from a CII Spray Valve Replacement Replace spray valve in a restaurant, 2.5 gpm maximum flow, used at 2 gpm, 3 hours per day New spray valve, 1.6 gpm, used at 1.5 gpm Use = 2 gpm (not used at maximum) x 180 minutes/day = 2 x 180 = 360 gal/day Use = 1.5 gpm x 180 minutes/day = 1.5 x 180 = 270 gal/day Water Savings Water Savings = = 90 gal/day Cost of Spray Valve to Customer Purchase: $50; Installation: $50 Total: $100 25

13 Example Benefits to Customer from a CII Spray Valve Replacement Retail Cost of Water $6.30/1,000 gallons Typical SF Bay Area Cost Retail Cost of Wastewater Retail Cost of Energy Total Avoided Costs for Customer $10.00/1,000 gallons Typical SF Bay Area Cost $3.60/1,000 gallons Assumes gas heat, $1.00/therm, 80% efficient; raise temperature 40 degrees to 105 degrees F $19.90/1,000 gallons For warm water that ends up in sewer 228 Example Customer Payback from a CII Spray Valve Replacement Cost of Replacement $100 Benefits = Avoided Costs of Water, Sewer and Energy expense $19.90/1,000 gallons Typical SF Bay Area Cost year 2010 Payback Formula Cost/Avoided Costs per year = Cost, $/ (Avoided Costs x water savings in gallons per year/1,000) Payback for Customer = $100/(90 gallons/day x 365 days/year x $19.90/1,000 gallons) = $100/653.7 =.153 years = 1.84 months Very fast! 29 Exercise Compute Water Savings from CII Kitchen Spray Valve Cost of Replacement $50 Retail Cost of Water Retail Cost of Wastewater Retail Cost of Energy $4.00/1,000 gallons $7.00/$1,000 gallons $4.50 / $1,000 gallons Payback =? 30

14 Results of Exercise Answer Cost of Replacement $ months Benefits = Avoided $15.50/1,000 gallons Costs Payback = $50/ (90 gallons/day x 365 days/year x $15.50/1,000 gallons) = $50/509.2 =.098 years = 1.18 months Very fast! 31 Honolulu BWS Pilot Study Results for Pre-rinse Spray Valve Retrofit at Jamba Juice 32 Residential Water Survey Case Study Average use for typical home in U.S. can be higher or lower depending on location 33

15 Example: Water Savings Residential Water Survey One year residential water survey program Number of single family accounts Assumed market penetration 1% Number of single family homes participating in year 1 Average water use per connection 100,000 Participant water savings 10% Total water savings after 1 year 100,000 accounts x 0.01 =1,000 surveys 300 gallons per day (gpd) 1,000 surveys x 0.10 x 300 gpd = 30,000 gpd 34 Concept of Measure Life Year Program; 5 - Year Measure Life Year Program; 5 - Year Measure Life Water Savings Water Savings Time, Years Time, Years Year 1 participants show savings starting in year 2 A program run in year 1-5 would show saving in years Example Water Savings: Residential Water Survey Part 2 Total savings at end of measure life Annual savings decay after program ends Lifetime savings formula Lifetime savings (from the one year investment) gpd = gallons per day MG = million gallons 30,000 gpd per year x 5 years = 150,000 gpd 150,000 gpd per year /5 years = 30,000 gpd Water savings in gpd x 365 days per year x Measure life = Lifetime Savings 30,000 gpd x 365 days per year x 5 years /1,000,000 gallons per MG = 54.8 MG 36

16 Exercise Compute Water Savings from Residential Water Survey Participants 1,000 Water use per home 200 gpd Water savings 10% Measure life 7 years Lifetime Savings =? 37 Results of Exercise Answer 51.1 MG Water savings per day 1,000 surveys x 200 gpd x 0.10 = 20,000 gpd Lifetime savings 20,000 gpd x 365 days per year x 7 years /1,000,000 gallons per MG = 51.1 MG (from the 1 year investment) 38 Section 5. Understanding the Challenges of Benefit-Cost Analysis Benefit-Cost Analysis of Selected Measures Use Sensitivity Analysis to Validate Assumptions Select Best (Cost-Effective) Measures Combine into Overall Program and Plan 39

17 How to Evaluate Benefits Acquire/develop 20-year Capital Facilities Plan Focus on conservation measures that reduce PEAK water demand Identify target projects Use Present Value Analysis for benefits 40 Analyzing Benefits & Costs Use Present Value (PV) Analysis to Account for the Time Value of Money B/C Ratio = PV Benefits/PV Costs PV = Benefits (or Costs) in year n (1+i) n i = discount rate (typically 3-4%) In EXCEL PV= Year one value + NPV(rate [i], value year 2, value year 3, value year n) Program is Cost-Effective if B/C > 1.0 and/or PV of benefits exceeds the costs, i.e. Net Present Value > 0 41 Example Cost of Residential Water Survey Field Labor Materials Publicity and follow-up Administration 2 hours per survey x $25 per hour x 1,000 surveys = $50,000 per year $10 per participant x 1,000 surveys = $10,000 per year $20 per participant x 1,000 surveys = $20,000 per year 25% added to total cost Total annual cost ($50,000 + $10,000 + $20,000) x 1.25 = $100,000 per year 42

18 Cost Sharing Program Cost Sharing (e.g., 25% grant funds, partnerships with wastewater, storm water, or neighboring water utilities) (Line 9 cost share percentage) Net Agency Annual Cost, $/year Cost Share from Other Organizations (assume 25%) $100,000 x 0.25 = $25,000 per year $100,000 - $75,000 = $25,000 per year 43 Example of Benefits From Water Savings Avoided Water Supply Cost Variable Operation and Maintenance Costs $1,750/MG Chemical = $44/MG Energy = $74/MG Total Avoided Costs $1,750 +$44 +$74 = $1,868/MG MG = Million Gallons or 1,000,000 gallons 44 Test Cost-Effectiveness of Residential Survey Program (Method 1) Cost of one year investment Benefit from the one year investment Benefit-Cost Ratio = Benefits/Costs $75,000 Program is cost-effective B/C > MG x $1,868/MG = $102,273 $102,273/$75,000 = 1.4 B/C = Benefits divided by Costs. Also known as Benefit Cost Ratio. 45

19 Exercise Test Residential Water Survey With Changed Parameters Lifetime water savings 51.1 MG from a 1-year investment Total annual cost $100,000 Avoided supply cost $2,500/MG B/C Ratio =? 46 Results of Exercise Annual costs $100,000 Benefits 51.1 MG x $2,500 per MG = $127,750 Benefit-Cost Ratio $127,750/$100,000 = 1.3 Is program cost-effective? Yes! 47 Now Consider a More Rigorous Approach: Account for Projected Time Stream of Benefits and Costs Costs Benefits Benefits and Costs Implementation Planning Time, years 48

20 Evaluating Benefit & Costs over Time Method 2: Setting Up the Present Value (PV) Calculation Present Value (PV) PV Factor Cost of item in year n x PV Factor 1/(1+i) n Define i as discount rate (or real interest rate) Estimate i as cost of borrowed money inflation Typical Value for i range of 3 to 4% 49 Example Present Value Calculation 10-year program with a 5-year measure life Benefits: 15 years Costs: 10 years Discount Rate: 3% Water Savings Year Program; 5-Year Measure Life Time, Years 50 Residential Water Survey Example: PV Benefits Calculate PV Benefits Assume discount rate i = 3% (water savings after year one in gallons per day x number of days per year x dollar benefit per million gallons/convert gallons to million gallons) + (water savings after two years in gallons per day x number of days per year x dollar benefit per million gallons/convert gallons to million gallons) / PV Factor + continue for all 15 years Note: Year 15 PV Factor should be n=14 Total PV Benefits Total PV Benefits (in today s dollars) 51

21 Residential Water Survey Example: PV Benefits Calculate PV Benefits Assume discount rate i = 3% Total PV Benefits $1,409,933 Add values together for all 15 years. Few example years below: Year 1: $0 assume water saving benefits do not start until year 2 Year 2: 30,000 gpd x 365 days per year x $3,200 per MG /1,000,000 gallons per MG +Year 3: 60,000 gpd x 365 days per year x $3,200 per MG /1,000,000 gallons per MG /(1+.03) 2...+Year 6: 150,000 gpd x 365 days per year x $3,200 per MG /1,000,000 gallons per MG /(1+.03) 5..+Year 12: 120,000 gpd x 365 days per year x $3,200 per MG /1,000,000 gallons per MG /(1+.03) 11..+Year 15: 30,000 gpd x 365 days per year x $3,200 per MG)/1,000,000 / (1+.03) Residential Water Survey Example: PV Costs Annual costs for 10 year program PV Costs Assume discount rate i = 3% Total PV Costs Annual $ cost for 10 year program Annual cost in year one + Annual cost in year two /PV Factor + continue for all 10 years. Note: PV Factor in Year 10 is n=9 Total PV Cost (in today s dollars) 53 Residential Water Survey Example: PV Costs Annual costs for 10 year program $75,000 PV Costs Assume discount rate i = 3% Total PV Costs $658,958 Add values together for all 10 years. Few example years below: Year 1: $75,000 +Year 2: $75,000/(1+.03) 1 +Year 3: $75,000/(1+.03) 2.+Year 7: $75,000/(1+.03) 6.+Year 10: $75,000/(1+.03) 9 54

22 Residential Water Survey Example: Benefit- Cost Ratio Method 2 PV Benefits $1,409,953 PV Costs $658,958 Benefits/Costs (B/C) 2.1 B/C > 1.0 Program is still cost effective! Please see provided Excel workbook for an example spreadsheet calculations. 55 Residential Water Survey Example: Net Present Value 1 PV Benefits $1,409,953 PV Costs $658,958 Net Present Value = Present Value of the Benefits Present Value of the Costs $1,409,933 - $658,958 = $750,925 Net Present Value $750,925 1 Net Present Value > 0 is another way of saying program is cost effective Please see provided Excel workbook for an example spreadsheet calculations. 56 Section 6: Forming Programs of Cost Effective Measures Planning Period (20-50 years) Capital Improvement Program May Not Be Available Future Value of Water Reliability of Water Savings Estimates Discount Rate Environmental / Society Benefits

23 Conservation Benefits: Water Savings CONSERVATION WATER SAVINGS ESTIMATES - MEASURE 1 to Total Annual Savings (AF/Year) Year gal/flush urinals in new buildings 12 - CII Rebates - replace inefficient water using equipment 11 - Dishwasher New Efficient 10 - High Efficiency Toilet (HET) 9 - Synthetic Turf Rebate 8 - Offer new accounts reduced connection fees for installing efficient process equipment 7 - Hotel retrofit (w/financial assistance) - CII Existing 6 - Financial Incentives/ Rebates for Irrigation Upgrades 5 - Smart Irrigation Controller Rebates 4 - Financial Rebates for Irrigation Meters 3 - Financial Incentives for Being Below Water Budget 2 - Cash for Grass (turf removal program) 1 - Rain-sensor (shut off device) retrofit on irrigation controllers 58 Conservation Costs $1,400, CONSERVATION COST ESTIMATES - MEASURE 1 to 13 Total Annual Cost ($/Year) $1,200, $1,000, $800, $600, $400, $200, gal/flush urinals in new buildings 12 - CII Rebates - replace inefficient water using equipment 11 - Dishwasher New Efficient 10 - High Efficiency Toilet (HET) 9 - Synthetic Turf Rebate 8 - Offer new accounts reduced connection fees for installing efficient process equipment 7 - Hotel retrofit (w/financial assistance) - CII Existing 6 - Financial Incentives/ Rebates for Irrigation Upgrades 5 - Smart Irrigation Controller Rebates 4 - Financial Rebates for Irrigation Meters 3 - Financial Incentives for Being Below Water Budget 2 - Cash for Grass (turf removal program) 1 - Rain-sensor (shut off device) retrofit on irrigation controllers $ Year 59 Conservation Potential Evaluation Example Conservation Packaging Conservation Package Supply Side Conservation Measures Demand-Side: Programmatic Residential Demand-Side Programmatic Non-Residential A Metering / Meter R&R Public Education Water Audits Pricing B System Audit (includes A) Leak Detection & Repair Water Audits Pricing Incentive Programs C (includes A&B) Reclaimed Water Use Ordinances Incentive Programs Ordinances

24 Evaluating Cost Effectiveness of Alternative Water Utility Costs vs. Savings Programs Cost vs. Savings 700 Program C Water Utility 600 Costs vs. Program B Savings Program A 200 Plumbing Code $0 $5,000 $10,000 $15,000 $20,000 $25,000 Present Value of 2030 Water Saved Conservation Program Costs ($1,000) (mgy) Plumbing Code $0 165 Program A with Plumbing Code $15, Program B with Plumbing Code $17, Program C with Plumbing Code $21, Optimize Balance Between Demand and Supply Retrofit and Rebate Programs Effluent and Stormwater Re-Use Pricing Capital Expansion WATER DEMAND MANAGEMENT WATER SUPPLY AUGMENTATION 48 Conclusion of Benefit-Cost Analysis Benefit-Cost Analysis is a powerful tool! Two methods demonstrated Recommend B/C analysis in designing cost-effective conservation programs 63

25 Open Discussion: Are We Better Prepared to Meet Our Goals? Water Conservation Planning is Improved Through Benefit-Cost Analysis Ability to Demonstrate Program is Cost-Effective More Likely to Have Management and Public Support for Water Conservation Plan 64 Section 7. Software Demonstration Simplified Benefit-Cost Website Calculators EPA Water Sense Indoor domestic equipment only Toilets, Showers, Faucets Calculator available at: Food Service and Technology Center Kitchen equipment only Calculators available at: Energy Star Savings Calculators For equipment that use energy only Ice Machines Dishwashers Clothes Machines Calculators available at: oup&pgw_code=coh 65 Simplified Benefit Cost Models CUWCC BMP Cost Effectiveness Tool (2011) 1 Year Test of cost effectiveness Limited to California BMPs Analyzes one measure at a time and compares measure results Does not create demand forecast with and without conservation CUWCC Model available at: Note: Other software may be available that is not listed above 66

26 67 Sophisticated Benefit Cost Models DSS Model (2016, Maddaus Water Management) Calculates long range projection for demands & conservation water savings Detailed end use model that requires training Can handle programs with groups of measures (good planning tool) Can run up to 50+ measures in model DSS Model available via Conservation Tracking Tool v3.0 (2016, Alliance for Water Efficiency) Calculates water savings based on nation wide factors Calculates benefit cost ratios Not an end use model Does not require or use water billing data Training advisable AWE Model available (for AWE members only) at: Note: Other software may be available that is not listed above 68 Other Software Available CUWCC/AWWARF Direct Utility Avoided Cost (2006) Determines avoided cost of water and calculates benefit cost ratios Not end use model. Requires input of demand forecast No training currently available CUWCC Model available at: CUWCC Environmental Benefits Model (2004) Model created in 2004, No training currently available Determines environmental benefits Not end use model Requires input of demand forecast CUWCC Model available at: Note: Other software may be available that is not listed above 69

27 Available Endorsed Tools and Models DSS Model Demand & Conservation AWE Tracking Tool Conservation Only CUWCC CEA Tool 1-year test 70 Total Production End Use Concept: Why it matters Non-Revenue Water Total Consumption Single Family Consumption Indoor Toilets Clothes Washers Showers 71 DSS Model - Demands 72

28 DSS Model - Conservation 73 DSS Model Demand Analysis 74 34,000 33,000 32,000 DSS Model Overview Water Demands with Conservation Savings Marin Municipal Water District No Plumbing Code Water Demands Plumbing Code Water Demands Program A and Plumbing Code Water Demands Program B and Plumbing Code Water Demands Program C and Plumbing Code Water Demands Program D and Plumbing Code Water Demands Program E and Plumbing Code Water Demands Actual Production without Recycled Water 31,000 Acre feet per Year 30,000 29,000 28,000 27,000 26,000 Year

29 Compare Cost-Effectiveness of Programs and Per Capita Reductions (GPCD) Compare Programs Compare Programs Present Value of Present Value of Water Utility Conservation Program Water Savings Utility Costs Benefit/Cost Ratio Program A with Plumbing Code $16,435,195 $15,656, Program B with Plumbing Code $53,471,064 $17,976, Program C with Plumbing Code $58,923,783 $21,878, Targeted GPCD Check GPCD Goal 190 GPCD Goal Year 2020 GPCD with Plumbing Code in GPCD Program A with Plumbing Code in GPCD Program B with Plumbing Code in GPCD Program C with Plumbing Code in DSS Model Overview Conservation Savings vs. Cost Graph 77 78

30 Efficiency Benchmarks Commercial Kitchens Pre-rinse Spray Valves <1.6 gpm Ice machines air cooled Dishwashers full loads, efficient nozzles Food Steamers - connectionless 81 Large Flight Type Dishwasher 81

31 Resources for Additional Information AWWA Water Conservation Manual M52 AWWA Water Conservation for Small and Medium Utilities (2010) AWWA Water Wiser California Urban Water Conservation Council Alliance for Water Efficiency US EPA Water Sense Maddaus Water Management

32

33 Can Directly Enter Utility Rates 90

34 Regular Updates to Energy Star Specification Information 91

35 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop 1A Device or Program System Audit Every 5 Years Potential Water Conservation Measures Equipment or Program Type Water Loss Measure Applicable Category System Measure Description Conduct audit and adaptively manage for addressing water losses issues. Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 1B Compute ILI on an Annual Basis Water Loss System Conduct an annual audit and adaptively manage for addressing water losses issues. Goal would be to lower the Infrastructure Leakage Index (ILI) and non-revenue water every year by a pre-determined amount based on cost-effectiveness. These programs typically pay for themselves based on savings in operational costs (and saved rate revenue can be directed more to system repairs/replacement and other costs). 2 3 Apparent Loss Reduction Distribution System Pressure Regulation Water Loss Water Loss System System Analyze data for billing system errors, and address meter testing and repair/replacement to insure more accurate meter reads and revenue collection. Install additional pressure regulators to maintain pressure within limits so accounts do not receive excessive pressure. 4 Real Water Loss Reduction Water Loss System Measure covers efforts to find and repair leaks in the distribution system to reduce real water loss and take other actions (such as meter replacement) to reduce apparent water losses thereby improving the system water balance. A ten year program to reduce unaccounted for water to a lower target level such as 10 percent of production or less could be proposed for this measure. Actions could include installation of data loggers and proactive leak detection; accelerated meter replacement and could be done over 10 years. Leak repairs would be handled by existing crews at no extra cost. Specific goals and methods to be developed by Utility. Maddaus Water Management Page 1 of 14

36 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 5 ND Install AMS AMS ALL Require that new customers install AMS meters capable of providing hourly consumption data back to Utility and purchase means of viewing daily consumption inside their home/business either through the Internet (if available) or separate device. The AMS system would, on demand, indicate to the customer and Utility where and how their water is used thereby facilitating water use reduction and help customers identify leaks. This system would require Utility to fully install an AMS system and then use of system to notify customers of a potential leak (based on continuous flow). 6 Conservation Pricing Water Rates SF Indoor / Outdoor Current rates are essentially a one tier system with nearly all customers in the second bloc (> 5 ccf/mo.). Water rates or single family customers would be changed from a two tier block rate to a multi-tier (3-4) inclining block rate (tiered pricing). Utilities with inclining block rates can adjust the tiers or rates in the upper tiers so as to have proper incentives to reduce landscape watering. Would require a water rate study. 7 Water budget based billing Water Rates ALL or Selected categories Outdoor Develop a monthly water budget for all or selected category of customers. Link water budget to a rate schedule that increases unit rate if someone goes above the budget, or decreases the rate if they are below the assigned budget. These rates have been shown to be effective in reducing landscape irrigation demand (AWWARF Reports). 8 Single Family Water Surveys SF Equipment SF Indoor / Outdoor Conventional indoor and outdoor water surveys for existing single-family residential customers. Normally those with high water use are targeted and provided a customized report to the homeowner on how to save water in their home. 9 Mobile Home Park Submetering Metering MF Indoor Require or provide a partial cost rebate to meter all sites within a mobile home park that is currently master metered, pattern after Santa Clara Valley Water District program. Maddaus Water Management Page 2 of 14

37 Device or Program Equipment or Program Type Measure Applicable Category 10 Multifamily Surveys MF Equipment MF Indoor AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Measure Description Indoor and outdoor water surveys for existing multifamily residential customers (2 units or more). Target those with high water use are targeted and provided a customized report to owner. Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 11 ND Require High Efficiency Faucets and Showerheads Showerhead ALL Require developers to install lavatory faucets that flow at no more than 1.5 gpm (public restrooms are 0.5 gpm), kitchen faucets no more than 1.8 gpm, and showerheads at no more than 2.0 gpm. Follows IAPMO Green Building Supplemental Code. 12 High Efficiency Showerhead Giveaway Showerhead SF MF CII Utility would buy showerheads in bulk and give them away at Utility office and community events. 13 High Efficiency Toilet (HET) Rebates Toilet ALL Provide a rebate or voucher for the installation of a high efficiency toilet (HET). HET s are defined as any toilet flushing at 1.28 gpf or less and include dual flush technology. Rebate amounts would reflect the incremental purchase cost and have been about $ High Efficiency Toilet and / or Urinal Bulk Purchase Program Toilet ALL Utility would buy toilets in bulk and give them away or sell them at a discounted price for customers who want to replace a 3.5 gallon/flush toilet. 15 High Efficiency Toilet and / or Urinal Exchange Day Toilet ALL Utility would buy toilets and urinals in bulk and give them away or sell them at a discounted price for customers who want to replace 3.5 gallons/flush toilet or more than one gallon/flush urinal. 16 ND Require High Efficiency Toilets Toilet ALL Require developers and home remodelers with a permit to install high efficiency toilets (HET). HETs are defined as any toilet that flushes with 1.28 gallons or less. Several states (California, Georgia, and Texas) require these toilets. Maddaus Water Management Page 3 of 14

38 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 17 Plumber Initiated High Efficiency Toilet and / or Urinal Retrofit Program Toilet ALL Utility would subsidize installation cost of a new HET purchased in bulk by the utility. Licensed plumbers, prequalified by the Utility would solicit customers directly. Customers would get a new HET installed at a discounted price. Pattern after Sonoma County, California program that replaced over 5,000 toilets in several communities in about six months. 18 Toilet Retrofit on Resale or Name Change on Water Account Toilet ALL Work with the real estate industry to require a certificate of compliance be submitted to the Utility that verifies that a plumber has inspected the property and efficient fixtures where either already there or were installed at the time of sale, before close of escrow. (Model after Utility of Los Angeles and San Diego or Utility of Santa Cruz). Coordinate with new CA law SB 407 but require fixture upgrades rather than notifying new owner of the presence of inefficient fixtures. 19 Install High Efficiency Urinals in Government Buildings Urinals CII Indoor Install high efficiency urinals in Utility facilities. Replacements would include urinals flushing with no more than 0.25 gpf or best available technology (1 pint). 20 ND Require 0.5 gal/flush urinals in new buildings Urinals CII Indoor Require that new building be fitted with 0.5 gpf (or one liter) urinals rather than the current standard of 1.0- gal/flush models. 21 High Efficiency Urinal Rebate (<0.25 gallon) Urinals Existing CII Indoor Provide a rebate for high efficiency and waterless urinals to existing high use CII customers (such as restaurants). 22 High Efficiency Washer Rebate Clothes Washers CII Indoor Provide a rebate for the installation of a high efficiency washer (HEW). Rebate amounts would reflect the incremental purchase cost. Program will be shorter lived as it is intended to be a market transformation measure and eventually would be stopped as efficient units reach saturation. Maddaus Water Management Page 4 of 14

39 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 23 Multifamily Washer Rebate Clothes Washers MF Indoor Provide a rebate to apartment complexes (5 or more units) for efficient washing machines in buildings over a certain size that has a common laundry room. It is assumed that the rebates would remain consistent with relevant state and federal regulations (Department of Energy, Energy Star) and only offer the best available technology. 24 Efficient Dishwasher Rebates Dishwasher SF Indoor Provide a rebate to encourage homeowner to purchase an efficient dishwasher (meeting certain water efficiency standards, such as a limit on the gallons/load) when replacing an existing dishwasher. 25 Garbage Disposal SF Garbage Disposal SF Indoor Encourage 1% of single family homeowners per year to remove garbage disposals. Could provide a rebate. 26 Increase types of permitted gray water use Gray water ALL Work with the State of Ohio to facilitate single family grey water use by allowing single fixture reuse systems without a permit similar to State of California approach. 27 ND Require Plumbing for Future Gray Water Use Gray water SF Outdoor Provide a rebate or require builders of single family homes with gray water system installation. 28 Gray water Retrofit SF Gray water SF Outdoor Provide a rebate to assist a certain percentage of single family homeowners per year to install gray water systems. 29 Hotels/Motels Retrofit w/financial Assistance CII Equipment CII Indoor Following a free water audit offer the hotel a rebate for equipment identified that would save water. Provide a rebate schedule for certain efficient equipment such as aircooled ice machines so hotels could apply without an audit. Pattern after San Antonio, Texas program. 30 Install High Efficiency Toilets, Urinals, and Showerheads in Commercial Buildings CII Equipment CII Indoor Consider direct install program for high efficiency fixtures in all commercial buildings including school buildings. Replacements would include high efficiency toilets, showerhead, and waterless or high efficiency urinals. Maddaus Water Management Page 5 of 14

40 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 31 Water Savings Performance Program CII Equipment CII Indoor Water Districts such as the Metropolitan Water District of Southern California provide about $3 per 1,000 gallons saved to sites within the Water Authority's service area. Incentive is based on the potential for savings over 5 years. Eligible project costs include labor, hardware and up to 1 year of water management fees. 32 Cooling Tower Regulations CII Equipment CII Indoor Prohibit discharge of cooling tower blow down unless the TDS of the water is at least a certain level (that would ensure 5-10 cycles of concentration). Model regulations after the State of Arizona. 33 Rebates for Sub meters on Cooling Towers CII Equipment CII Indoor 34 Dental Vacuum Pump CII Equipment CII Indoor Offer a rebate to buildings that install submeters to measure the make-up and bleed-off water of the facility cooling towers. Provide educational brochures and a phone contact of a knowledgeable person to provide conservation information. Provide a $125 rebate to assist dental offices with installation of dry dental vacuum pumps. 35 Promote Restaurant Spray Nozzles CII Equipment CII Indoor Provide free 1.6 gpm (or lower) spray nozzles and possibly free installation for the rinse and clean operation in restaurants and other commercial kitchens. Thousands have been replaced in California going door to door, very cost-effective because saves hot water. 36 CII Surveys and Top 100 Users Program CII Equipment CII Indoor / Outdoor All CII customers would be offered a free water survey that would evaluate ways for the business to save water and money. The CII surveys would be for large accounts (accounts that use more than 5,000 gallons of water per day) such as hotels, restaurants, stores and schools. Emphasis will be on supporting the top 100 users (e.g., Ohio State University campus, bottling plants, etc.) Maddaus Water Management Page 6 of 14

41 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 37 Customized CII Incentive Program CII Equipment CII Indoor / Outdoor After the free water use survey has been completed at site, the Utility will analyze the recommendations on the findings report that is provided and determine if site qualifies for a financial incentive. Financial incentives will be provided after analyzing the cost benefit ratio of each proposed project. Incentives are tailored to each individual site as each site has varying water savings potentials. Incentives will be granted at the sole discretion of the Utility while funding lasts. 38 Focused Water Audits for Hotels/Motels CII Equipment CII Indoor / Outdoor Proved free water audits to hotels and motels. Standardize on the types of services offered to reduce costs. Included would be bathrooms, kitchens, ice machines, cooling towers, landscaping, and irrigation systems and schedules. 39 School Building Retrofit CII Equipment CII Indoor / Outdoor School retrofit program wherein school receives a grant to replace fixtures and upgrade irrigation systems. Pattern after MWD of Southern California Program. 40 ND Require Plan Review for new CII CII Equipment CII Indoor / Outdoor Require plan reviews for water use efficiency for all new business customers. 41 Public Swimming Pool Audits CII Equipment CII Outdoor Provide water audits of public swimming pools and showers in changing rooms. Proper pool maintenance would be taught to operators. 42 CII Rebates to Replace Inefficient Equipment CII Equipment Existing Customers CII Provide up to a $1,000 rebate for a standard list of water efficient equipment. Included would be x-ray machines, icemakers, air-cooled ice machines, steamers, washers, spray valves, efficient dishwashers, replace once through cooling, and add conductivity meters on cooling towers. Pattern after San Diego County Water Authority or Seattle Water Department programs. Assume 10% market saturation. 43 Require or Rebate Swimming Pool Covers CII Equipment SF, MF Outdoor Provide a rebate through pool equipment supply stores for purchase of a swimming pool cover. Maddaus Water Management Page 7 of 14

42 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 44 Provide Rain Barrel Incentive Irrigation ALL City will evaluate the best methods for distribution of rain barrels and level of incentive to increase customer participation in this innovative program. This could involve rebates or bulk purchase and giveaways of barrels plus workshops on proper installation and use of captured rain water for landscape irrigation. Enhance current efforts with FSWCD. 45 Financial Incentives for Irrigation and Landscape Upgrades Irrigation ALL For SF, MF, CII, and IRR customers with landscape, provide a Smart Landscape Rebate Program with rebates towards the purchase and installation of selected types of irrigation equipment upgrade including smart controllers, water wise plants and mulch. Rebate for residential accounts and up to 50% more for commercial customers Landscape Water Calculator Require New Landscape and Irrigation Requirements Smart Irrigation Controller Rebates Irrigation Irrigation Irrigation ALL ALL ALL 49 Turf Removal Irrigation ALL Increase marketing and promoting on Landscape Watering Calculator and Watering Index. Consider cell phone app with Watering Index, following up in person with large landscape customers on a frequent basis to encourage use of Watering Index. Develop and enforce Landscape Design Standards for Water Conservation. Standards specify that development projects subject to design review be landscaped according to Xeriscape principals, with appropriate turf ratios, plant selection, efficient irrigation systems and smart irrigation controllers. Provide a 50% cost-share for the purchase of a SMART irrigation controller. Provide a per square foot incentive for to remove turf and replace low water use plants or hardscape. For example program see the Southern Nevada Water Authority.. Maddaus Water Management Page 8 of 14

43 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 50 Weather Adjusting Smart Irrigation Controllers and / or Rain Sensors Irrigation ALL If developer is going to install an irrigation system, require that the systems are weather adjusting (Smart) or use a rain sensor. Require developers for all properties of greater than two residential units and all commercial development to provide the latest state of the art Smart irrigation controllers and rain sensors. These Smart controllers have on-site temperature sensors or rely on a signal from a central weather station that modifies irrigation times at least weekly. For examples see Cal Green building code. 51 Xeriscape Demonstration Gardens Irrigation ALL Donate or acquire a portion of public or private land to create a demonstration garden displaying living examples of low water-using gardens and landscaping. The Utility would provide signs and brochures to educate those people visiting the garden. 52 Water Budget Based Billing Irrigation ALL or Selected Categories Outdoor Link water budget to a rate schedule that increases unit rate if someone goes above the budget or decreased rate if they are below the assigned budget. 53 Rotating Sprinkler Nozzle Rebates Irrigation ALL Outdoor Provide rebate for rotating spray nozzle for existing sprinkler irrigation systems properties. 54 Water Group Scheduling Program Irrigation ALL Outdoor Give specific information about how much and how many days to water. Would help with load balancing system demands with planning for water areas can water on what days. Consider water waste enforcement approach. Example: Southern Nevada Water Authority ml 55 Irrigation Water Surveys Irrigation CII Outdoor All public and private irrigators of landscapes would be eligible for free landscape water surveys upon request. Normally those with high water use would be targeted and provided a customized report. Assume 10 percent of large turf areas are surveyed per year. Maddaus Water Management Page 9 of 14

44 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 56 Require Irrigation Designers/Installer be Certified by IA Irrigation CII Outdoor Require installation of irrigation systems that are efficient and installed by trained/certified contractors. Certification to be done by Irrigation Association (IA). Model after Cary North Carolina s program. 57 Artificial Turf Sports Fields Irrigation IRR Outdoor Provide a rebate (up to $10,000) for customer to install artificial grass on sports fields 58 Irrigation Water Budgets Irrigation IRR Outdoor Irrigators of landscapes with separate irrigation account (meter) use would receive a monthly or bi-monthly irrigation water use budget. Assume 10% of accounts receive new budgets per year. Budgets would be repeated every 5 years to remain current. 59 Cisterns/Rain Catchment Irrigation SF Outdoor Provide a rebate to assist a certain percentage of single family homeowners per year with installation of rain barrels or cisterns. Include education information similar to Honolulu Hawaii. 60 Free Rain Sensors Irrigation SF Outdoor Provide a free rain sensor shut-off device for an existing irrigation controller. 61 Require Model Homes Landscaped with Low Water Use Landscaping Irrigation SF Outdoor Enforce a regulation that specifies that at least half of the model homes in a subdivision be landscaped according to Xeriscape principals. Information on Xeriscape would be given to new homebuyers. (Model after Arizona RCM) 62 Require Fixture Replacement by a Deadline Ordinance ALL City or County would pass an ordinance that requires homeowners and businesses to bring fixtures up to efficient standard by a fixed date at their own expense. Deadline could be the date residences and businesses are required to connect to new sewer system. 63 Developer Financed Zero Footprint New Development Ordinance ALL Utility would require developers of new homes to contribute money to the Utility's water conservation program to help generate the water needed to supply their project. Maddaus Water Management Page 10 of 14

45 AWWA Sustainable Water Management Conference Cost Benefit Analyais Workshop Device or Program Equipment or Program Type Measure Applicable Category Measure Description Ranking Criteria and Score (0 to 5) (0 = poor; 5 = excellent) Technology/ Market Maturity Service Area Match Customer Acceptance/ Equity Total Score 64 Prohibit Once through Cooling, Non-Recycling Fountains, Water Wasting Fixtures and Practices Ordinance CII Prohibit certain obvious wastes of water in new facilities, such as those listed. 65 Prohibit Water Waste and Practices Ordinance CII Outdoor Adopt or modify ordinance that prohibits the waste of water defined as gutter flooding and failure to repair leaks in a timely manner. 66 MF Submeter Incentive Ordinance New MF Indoor Provide a rebate (per unit) to assist MF building owners install submeters on each new individual apartment unit. 67 ND Require Multi Family Submetering on New Accounts Ordinance New MF Indoor Require the metering of individual units in new multifamily, condos, townhouses, mobile-home parks and business centers (less than four stories and with water heater in the units). Utility's administer meter read and bill program. 68 Require Efficient Dishwashers Ordinance New SF Indoor Building Code to require efficient dishwasher (meeting certain water efficiency standards, such as gallons/load). 69 Require High Efficiency Clothes Washers Ordinance New SF Indoor Building Department would be requested to ensure that an efficient washer was installed before new home or building occupancy. Utility can enforce conditions of water service that may include efficiency standards for washing machines. 70 ND Require Efficient Dishwashers Ordinance SF Indoor Require developers to install an efficient dishwasher (meeting certain water efficiency standards, such as gallons/load). 71 ND Require High Efficiency Clothes Washers Ordinance SF Indoor Building departments would be requested to ensure that an efficient washer was installed before new home or building occupancy. Utility can enforce conditions of water service that may include efficiency standards for washing machines. Maddaus Water Management Page 11 of 14