Financing to Facilitate Industrial Water Reuse

Transcription

1 Financing to Facilitate Industrial Water Reuse December 18, 2013 WateReuse Association Webcast Series 2013 by the WateReuse Association

2 About the WateReuse Association The mission of the WateReuse Association is to advance the beneficial and efficient uses of high-quality, locally produced, sustainable water sources for the betterment of society and the environment through advocacy, education and outreach, research, and membership. For more information, visit

3 Industrial Reuse Committee Committee Interest Areas Cooling Water Manufacturing Food Processing High Purity Reuse Internal Water Reuse To join the committee, Eric Rosenblum Co-Chair Enivrospectives Jon Freedman Co-Chair GE Water & Process Technologies Abigail Antolovich, Webcast Lead UOP LLC

4 The Hon. Mark A. Limbaugh Lobbyist, WateReuse Association Managing Partner for Business Practices, The Ferguson Group Moderator

5 New Options for Federal Financing of Industrial Water Recycling and Reuse Legislation introduced in the 113 th Congress for new federal financing options for certain industrial (private) water reuse projects Water Infrastructure Finance and Innovation Act (WIFIA) S. 601 Only public sponsored privately developed projects Buy American provisions iron, steel, components National Infrastructure Bank - H.R Only public benefit privately developed projects Buy American provisions iron, steel

6 Expanding Industrial Energy and Water Efficiency Incentives Act S.3352 in the 112 th Congress (Bingaman) Tax credit for investment for qualifying efficient industrial process water use project Includes industrial water conservation, recycling, and reuse % investment tax credit for graduated water conservation reductions greater than % per unit produced Interest in the 113 th Congress for reintroducing the legislation (Cardin-Feinstein-Schatz)

7 Private Activity Bonds Qualified PABs provide tax-exempt bonds (through local or state governments) to finance public water infrastructure owned and operated by private utilities and companies Each state is capped on the amount of PABs available to finance projects Removing or raising caps would increase the allowable use of PABs to finance public infrastructure through private development (public-private partnerships)

8 Public Private Partnerships (PPPs) Federal grants/financing programs available to public water entities PPP may utilize federal funding available to public water providers to improve private industrial water reuse/recycling Example: Public water provider cost-shares industrial reuse improvements within service area through federal water conservation grant

9 Today s Agenda Creative Financing for Water Reclamation and Reuse Jonathan A. Lanciani CEO, Sustainable Water Louisiana Water Synergy Project Susan Fernandes Director of Operations, U.S. Business Council for Sustainable Development Metropolitan Water District s Water Savings Incentive Program Bill McDonnell Senior Resource Specialist, Metropolitan Water District of Southern California.

10 Jonathan A. Lanciani CEO, Sustainable Water

11 Creative Financing for Water Reclamation & Reuse Jonathan Lanciani Founder & CEO Sustainable Water

12 Who We Are Water Developer Specializing in Turn-Key Water Reuse Projects Planning/Design/Build Owning/Financing Operations Extending The Lifecycle Of Water

13 Water: The Lynchpin of Life Diverse end-users create market opportunity

14 Water Challenges Availability Rate Pressure Aging Infrastructure Environmental Pressure

15 A more sustainable water cycle Decentralized Reclamation and Reuse Before After

16 Reliability, Capacity & Deployment Using 20 th century strategies to solve 21 st century challenges Leveraging extensive built infrastructure

17 Regulatory Hurdles Slow to accept innovative approaches to reuse

18 Economic Reuse projects are not funding priorities

19 Perception Public perception of water reuse underlines the ick factor

20 Barriers to Implementing Reuse Regulatory Economic Infrastructure Perception How do we overcome all four major obstacles?

21 Bulk User Assessment End-use expertise promotes reuse acceptance

22 Understanding Bulk Customers Conservation plans Water discharged: waste or unharnessed resource? The dialog must yield a collaborative strategy

23 Water Purchase Agreement Flexible project financing arrangements utilizing: ~ Performance Contracts ~ Operating Leases ~ Design-Build Agreements Benefits No up-front capital Innovative Technologies Leverages superior credit rating Immediate, Guaranteed Savings Long Term Pricing Stability No O&M Responsibilities SW bares majority of risk The Process 1. Feasibility / preliminary engineering 2. Develop WPA terms & conditions 3. Sign Final Contract 4. Review & accept design standards 5. Develop Guaranteed Maximum Price 6. Confirm constructability & final budget 7. Permit submission 8. Final design & construction drawings 9. Construct facility & distribution piping 10.Commission facility Water is principal to facility operations How will we manage the risks?

24 Water Use by Type: College or University Cooling 2013 ~15,000,000 3% Irrigation Heating ~165,000, % ~46,000,000 8% 308,987,031 58% Irrigation Domestic/Academic Steam Make up Cooling Make up 530 M gallons Domestic/ Sanitary 42% Considered Non-potable Demand

25 Centralized Reuse ~10+ miles Wastewater Reclaimed Water Water Treatment Facility End user Distribution infrastructure and energy dependent

26 UNC Chapel Hill Distance 3 miles Centralized systems yield substantial benefits

27 Public/Private Reuse Partnership Distance 5 miles The finances make sense, but over a much longer period of time. It was really about being environmentally responsible and securing our supply if there was rationing of potable water. You don t want to contribute to any fresh water shortage. Joe Kava Sr. Director Data Center Construction & Operations Google s Atlanta Data Center uses recycled water for 100% of cooling needs

28 Public/Private Reuse Partnership The reuse water system is an example for other companies and water authorities to emulate and is a bold step in the right direction. - Congressman David Scott It s a win-win for both us, and for the community too. - Michael Patton, Deputy Director of Water & Wastewater Operations, WSA. Private financing reduces impact on local communities

29 A more sustainable water cycle Decentralized Reclamation and Reuse Before After

30 Incorporating Water Reuse in Urban Spaces VS. Decentralization Creates New Dynamics: Safety, Aesthetics, Footprint & Customized Water

31 Sustainable WaterHub Innovation in Design, Technology and Financing

32 Complex, Adaptive Ecosystems Increased Bio-Diversity, Reduced Energy

33 Ecologically-Based Water Treatment Solutions

34 Utility Assessment Water Footprint Assessment & Economic Validation Water balance & use Non-potable demand WW flow projections Economic assessment Utility Water Assessment Equipment inventory Program admin. Water quality needs Reclaimed water modeling Site & Infrastructure Assessment Infrastructure review Regulatory review Prelim. siting & design Lifecycle Savings Validating impact & developing a plan

35 Estimated Daily Use by Month 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Central Campus CoGen Central Campus Cooling Medical Campus CoGen Medical Campus Cooling Based on quarterly make-up numbers

36 Infrastructure & Site Assessment

37 Infrastructure & Site Assessment

38 Infrastructure & Site Assessment

39 Infrastructure & Site Assessment

40 Feasibility Study Overview: Decentralized Cost Savings Discounted water rates Reduced potable water intake Reduced sewer fees Environmental Diversion of water from eco-systems Decreasing wastewater discharge Energy Efficiency Social Benefits Conserves valuable water supplies Reduces stress on Municipal System Improves community water quality End-use expertise determines project viability

41 Water Purchase Agreement (WPA) Flexible turnkey project financing scenarios utilizing performance contracts, operating leases, or Design-Build Agreements Benefits No up-front capital Innovative Technologies Leverages superior credit rating Immediate, Guaranteed Savings Long Term Pricing Stability No O&M Responsibilities SW bares majority of risk Water is principal to facility operations How will we manage the risks?

42 EXTENDING THE LIFECYCLE OF WATER. Jonathan Lanciani NATURE S IDEA. OUR SCIENCE.

43 Susan Fernandes Director of Operations, U.S. Business Council for Sustainable Development

44 Louisiana Water Synergy Project Presentation to Industrial Water Webinar Roundtable Susan Fernandes, US BCSD December 18, 2013

45 ACTION 2020 PRIORITY AREAS Priority Areas are the most important natural and social capital issues that must be addressed to achieve the sustainable future laid out in Vision BUSINESS SOLUTIONS Business Solutions are impactful, measurable, scalable, replicable and beyond business-as-usual. Leveraging the power of business to solve problems to create Business Solutions.

46 OVERVIEW ABOUT THE US BCSD COLLABORATIVE PROCESS ON WATER Part of the WBCSD Regional Network, we create opportunities for our members to work on authentic sustainability projects with industry, government and other key stakeholders who might not otherwise have the chance to collaborate and network. Our projects use established work processes to create a safe zone to build trust and the business relationships needed for detailed information sharing to take action - whether that is about material exchanges, watershed initiatives, or energy. Our Water Synergy Project collaboration forum provides an engine for inventive thinking and action for water quantity, quality and stormwater challenges.

47 LOUISIANA WATER SYNERGY PROJECT MULTI-INDUSTRY FORUM 21 company participants come from different sectors of industry but face similar challenges regarding water issues. Collaborative thinking leads to creative actions to address those challenges.

48 PROJECT OBJECTIVES Provide a multi-industry forum for addressing water management challenges Achieve tangible water synergy benefits related to water quantity, quality, and storm water for the participating companies and the region Link the efforts of the private sector to those underway in the public sector; and Establish a long-term collaboration plan in this region that fosters mutually beneficial solutions to mitigate risks and avoids competitive tensions.

49 LOUISIANA WORKING GROUPS NUTRIENTS WETLANDS GROUNDWATER SYSTEMS SHARING RED MUD reducing nutrients in the Mississippi River and Gulf of Mexico. restoring wetlands by introducing treated water, nutrients, & sediment from near-by facilities. reducing groundwater use and risks in high priority areas. create synergies between facilities through water reuse or shared infrastructure for water supply/water treatment evaluating use of red mud from alumina production to reduce costs of levee construction

50 PROJECT ACHIEVEMENTS Industrial water diversions to conserve wetlands/reduce nutrient discharges Sharing best practices for water efficiency and use of alternative water supplies to reduce groundwater use Sharing technology alternatives for alternative water management methods Shared intake structures Shared wastewater treatment systems Water reuse between facilities Use of wetlands and nutrients markets Public-Private partnerships

51 NEXT STEPS WATER SYNERGY PROJECTS Replicate the project in other water-stressed regions Integrate UVA participatory simulation game Increase awareness & support for this business-led approach for watershed collaboration

52 For more information, find us at:

53 Bill McDonnell Senior Resource Specialist, Metropolitan Water District of Southern California

54 Water Savings Incentive Program (WSIP) Metropolitan Water District of Southern California Bill McDonnell, December 18, 2013

55 Metropolitan Water District of Southern California Regional water wholesaler Includes 6 counties 5,200 square miles 26 member agencies retail water agencies 19 million people Add about 150,000 people/yr Imported water supplies meet about half of retail demands

56 Where Southern California Gets its Water Local Supplies LA Aqueduct (Local) 30% State Water Project 25% Colorado River 45% Local Supplies Los Angeles Aqueduct Groundwater recovery Recycling Desalination Conservation State Water Project Colorado River Aqueduct (Local) Conservation, Recycling, Groundwater Average Rainfall = 15inches per year

57 Metropolitan s Member Agencies

58 Metropolitan Member Agency Cities Anaheim Beverly Hills Burbank Compton Glendale Long Beach Los Angeles Pasadena San Fernando San Marino Santa Ana Santa Monica Torrance

59 Metropolitan Member Agency Water Districts Calleguas Central Basin Eastern Foothill Inland Empire Las Virgenes Orange County San Diego Three Valleys Upper San Gabriel Valley West Basin Western

60 Municipal Water District of OC Cities Brea Buena Park Fountain Valley Garden Grove Huntington Beach La Habra Orange Newport Beach San Clemente San Juan Capistrano Seal Beach Tustin Westminster Water Districts EOCWD El Toro Emerald Bay Golden State IRWD Laguna Beach County Moulton Niguel OCWD Santa Margarita Serrano South Coast Trabuco Canyon Yorba Linda

61 Rebate Program

62 Cooling Tower Controllers Conductivity Controllers Base rebate $625 ph Conductivity Controllers Base rebate $1,750

63 Water Savings Incentive Program

64 Program Overview Target CII & Ag water users Encourage custom projects Encourage water management Incentives: $195/AF for metered water savings $150/AF for engineering estimated water savings Up to 10 year life Up to 50% of eligible project costs

65 Industrial Process Improvements Capture, treat and reuse process wastewater

66 WSIP

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68 Incentive Based on Engineering Estimates Eligible Commercial/Industrial equipment or process improvements Up to 150 MG lifetime savings (incentive up to $69,000) Payment $0.46 / 1,000 g saved/year Up to 10 year life Submit engineering report Complete project in 6 months No water use monitoring One payment upon completion

69 Incentive for Metered Water Savings $0.60/1,000 gal saved/yr Up to 10 year life 12 months monitored water use ½ payment upon completion of installation Balance after 12 month monitoring Monitoring begins after plant establishment period

70 Participation Process Customer submits application with supporting documentation MWD reviews supporting documentation, water savings calculations, discusses project with Member Agency Projects must be supported by Member/Retail Agency If approved, MWD executes agreement with customer and reserves funds for project

71 Process (cont d) Customer implements project Notifies MWD when project is installed and fully operational, or services begin MWD verifies installation, operation Customer submits paid invoices MWD reviews documentation, issues incentive payment(s) to customer

72 Contact Information Bill McDonnell

73 Questions? Please type your questions in the chat box A short survey and a link to download the presentation will appear in this window at the conclusion of the webcast For more information, visit: