The New Water Audit Pilot: A Regulatory Perspective on Fostering New Technologies

Transcription

1 The New Water Audit Pilot: A Regulatory Perspective on Fostering New Technologies Commissioner Robert F. Powelson Pennsylvania Public Utility Commission 5 th National Drinking Water Symposium October 13, 2009

2 Current Paradigm: Integrated Water Resource Management Imperative Implementation of Holistic Approaches and Innovative Technologies is Critical. Application is Essential throughout U.S.: Recurring Drought Resource Sustainability / Stewardship Competing Demands / Limited Supplies in Overly Populated Areas Climate Change Energy Cost Challenges: Water/Energy Interrelationships Today is Ripe for Review and Implementation of Opportunities to Maximize Efficiencies and Green Initiatives

3 In Context: What Can State Economic Regulators Do? PA PUC Focused on Wise Water Use for over 30 years Ongoing Recognition that Efficient Water Usage is in the Public Interest, even in a Water-rich State Since the early 1980 s, the Commission s Comprehensive Water Conservation Policy (52 Pa. Code 65.20) has Addressed: 1. Conservation Education 2. Water Audits for Large Users 3. Water Efficient Plumbing Fixtures 4. Unaccounted-for Water 5. Ongoing Leak Detection and Repair 6. Universal Metering (52 Pa. Code 65.7) 7. A Conservation Contingency Plan (52 Pa. Code 65.11)

4 Energy Policy Objectives in PA Alternative Energy Portfolio Standards (AEPS) Act of 2004 Increase alternative energy supplies by 18% by 2020 Act 129 of 2008 Reduction targets: 1% reduction in overall energy demand by May % reduction in overall energy demand by May % reduction in 100 hours of highest ( peak ) demand by May 2013 Calls for the full deployment of smart meters and other technologies that encourage energy efficiency and conservation (Note: full cost recovery) Creates a marketplace for Curtailment Service Providers (CSPs) Marcellus Shale Stretches ~600 square miles and is estimated to contain as much as 50 trillion cubic feet of recoverable natural gas Nuclear Uprates According to DOE, uprates at PA s nuclear plants could supply 4% more electricity and significantly decrease emissions of CO 2, SO 2, and NO x Carbon Capture & Sequestration Duke Energy project: $2.35 billion, 630-mw facility in Edwardsport, IN, broke ground in 2008 and set to be operational in 2012

5 Governor s Energy Independence Strategy: Results Over 8,000 mw of new generation since 1996: non-incumbent generators, renewable energy, and efficient plant operations Over 300 mw of new renewable generation since 2004

6 Current Opportunities Await Regulatory Support of Innovative Technologies A New Water Loss Control Tool Became Available the International Water Association (IWA) / American Water Works Association (AWWA) Water Audit Methodology Enables Better Water Management while Increasing Fiscal Responsibility PA PUC Chose to Foster its Use Among Jurisdictional Water Utilities Last Fall, PUC Approved a Pilot Program to Implement the New Water Audit Methodology Implementation Now Underway for Large Systems

7 Why Change? PA PUC relied upon standard unaccounted-for-water (UFW) methods for years. Over time, limitations became obvious Standardization was needed: differing interpretations and adjustments occurred routinely Inaccurate levels of reported UFW resulted Inaccurate levels result in ineffective planning and inability to target corrective measures

8 What is the New Audit? An Effective, Standardized Method to Optimize Supply & Financial Efficiencies Audit guides water companies to quantify apparent and real losses in a systemized approach; assigns cost impacts to the losses Includes consistent definitions for major forms of water consumption and loss New performance indicators are calculated that allow reliable benchmarks with other water utilities and sets targets to strategically reduce excessive losses Audit tells us how much of each type of loss occurs and how much it is costing the water utility & ultimately, the ratepayer

9 Audit s Key Concept: No Water is Unaccounted-for All water supplies are accounted-for in the Audit components, listed by using either measured or estimated quantities A cost is placed on each component to assess its financial impact to the utility Operational Efficiencies are Enhanced Improved cost tracking of pumping & treating water that is not revenue producing Water production is tightened to match actual customer demand Water supplies are sustained

10 Benefits, cont. Ancillary opportunities also become apparent dependent upon cost / benefit analysis results, including: Effectiveness of existing billing software Optimum staffing complement Impact of certain pressure reductions Appropriate life cycle for meter change-outs Need for meter right-sizing Optimum time period for leak detection surveys Impact of customer service line leakage - whether rapid repair yields significant reduction in Non Revenue Water

11 Further Benefits Possible Operational Efficiencies improved tracking of costs to pump and treat water that is not revenue producing Tighter control of water production to match actual customer demand Assists in sustaining existing water sources

12 Key Regulatory Tools Implemented in Pennsylvania Recognized as Best Practices - Opportunities Abound for Regulatory Support of Emerging Technologies/Trends Mediation & Settlements Acquisition Incentives Distribution System Improvement Charge (DSIC) Single Tariff Pricing Customer Assistance Programs Low Income Rates Flexible Rate Tariffs Small Utility Assistance: Abbreviated Rate Filing Technical Assistance Operating Ratio Available Emergency Funds Pass-Throughs: Purchased Power, Water, PENNVEST New Water Audit???

13 DSIC: Main Replacement Program Pennsylvania American Water Company Miles of Main Replaced and Years to Replace Mains in Distribution System Prior to DSIC (est.) 80 Years to Replace Mains in Distribution System Miles of Main Replaced

14 THANK YOU