Partnership Funding for Water Reuse Revenue for Municipalities, Insurance for Industry

Transcription

1 Partnership Funding for Water Reuse Revenue for Municipalities, Insurance for Industry Jonathan Sandhu, P.E. Texas WateReuse 2016

2 Overview Industrial Water Demand and Economic Analysis Municipal Effluent =Industrial Water Funding Partnership Examples Additional Considerations Cost Always a Driver Brown and Caldwell 2

3 Industrial Water Demands Refining, petrochemical facilities, food & beverage production, all need water Cooling tower makeup water, boiler feed, process supply water, cleaning water Texas refineries require approximately 1,500 mgd on average 725 mgd for cooling tower makeup alone Among the first to have water supply eliminated in drought Brown and Caldwell 3

4 Industrial Water Risk Assessment What are the operational, regulatory, reputational impacts of no water? What is the likelihood of having no water? What is the true value/cost of water? No Water = No Production Brown and Caldwell 4

5 Water Economic Analysis What is the base cost of water? Purchase Price True Cost How to compare source options? How to compare quality changes? What is the true value of water? Shadow Price Value at Risk How much revenue is at risk? Can a water reuse project be justified as insurance? Brown and Caldwell 5

6 Water Economic Analysis Refinery True Cost $16.00 $14.00 Per 1000 gallons $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $- Potable Reclaimed Brown and Caldwell 6

7 Water Economic Analysis Refinery Value at Risk (VaR) Drought Event Loss of Water Supply Recurrence -10% (10 year event) Loss of Profit -$1MM/day Duration 90 days VaR $90 MM $9 MM/y Insurance Plan Municipal reclaimed water Project TIC $25 MM 30 year amortization Tax write-off 35% Plan <$1 MM/y Brown and Caldwell 7

8 Water Economic Analysis Refinery Water Supply Reservoir Experiences Large Changes in Volume Percent Full Supply Curtailment Possible at 40% Brown and Caldwell 8

9 Municipal Wastewater Effluent Consistent supply Rate changes undesirable Potential capital constraints Reduces strain on potable water system Industrial partnership presents new revenue stream Effluent = $$$ Brown and Caldwell 9

10 Example 1 Industrial Facility Provides Capital Background Refinery A with 4 mgd demand for cooling tower makeup Shut-off clause in potable contract during drought conditions Historical source Purchased potable water Nearby municipal WWTP Brown and Caldwell 10

11 Example 1 Industrial Facility Provides Capital Facilities Required for Reuse Filtration system, chemical facilities, and pump station installed at municipal WWTP Nine mile pipeline to refinery Additional chemical facilities at refinery Brown and Caldwell 11

12 Example 1 Industrial Facility Provides Capital Cost for Reuse Capital Cost: $25 MM Effluent Water: $1.50/1,000 gallons O&M cost included in cost of effluent Existing Potable Supply Cost $2.50/1,000 gallons Brown and Caldwell 12

13 Example 2 Municipality Provides Capital Background Refinery B with 3 mgd demand for cooling tower makeup Low water rights priority during drought conditions Historical source Purchased raw water Nearby municipal WWTP Municipality provided capital Brown and Caldwell 13

14 Example 2 Municipality Provides Capital Facilities Required for Reuse Filtration system, chemical facilities, reuse water storage tank, and pump station installed at municipal WWTP Three mile pipeline to refinery Additional chemical facilities at refinery Brown and Caldwell 14

15 Example 2 Municipality Provides Capital Cost for Reuse Capital Cost: $14.3 MM Effluent Water: $1.70/1,000 gallons O&M cost included in cost of effluent Existing Raw Water Supply Cost $0.48/1,000 gallons Increased cost for increased reliability Brown and Caldwell 15

16 Additional Considerations Environmental Revisions to Title V and NSR air permits o VOC Generation opm from additional TDS Changes to cooling tower blowdown quality Cooling tower chemical program changes Brown and Caldwell 16

17 Additional Considerations Impacts to Existing WWTP Operations If filtration is used, additional solids load from backwash Do changes require compliance with 30 TAC Chap. 217? Compliance with Chap. 210? Additional chemical demands Increased operations staff Brown and Caldwell 17

18 Questions? Jonathan Sandhu, P.E