Why Are Reliable, Sustainable Water and Energy Costs Rising?

Laguna Beach CA

22 February, 2022

7:25 PM

Description

The Longest Yard: Paying For Cleaner Energy and Healthy, Sustainable Water Supplies The longest yard wasn't the LA Rams miraculous effort at Super Bowl LVI: It's the distance necessary when a hand goes from being enthusiastically raised in favor of a secure future, paying a little more for healthy, sustainable water supplies, greener, cleaner energy, and then lowered down to a checkbook. With national inflation around 10% last year, we live in unprecedented times: Everyone expects healthy, fresh tasting, safe water to always come from their taps. They want the lights to always work when they hit a switch but seem oblivious to how these things come about. A majority seem stoked about alternative, renewable energy sources but reject rate increases. Three (3) projected, related rate increases are converging and shouldn't dampen that ratepayer fervor. One was covered recently by Noah Biesiada from the Voice of OC in the 2/09/2022 edition. Biesiada focused upon the now-being-recalibrated-rate structure regarding the emerging cleaner, potentially greener OC Power Authority (OCPA). Caveat: Forecasts (especially long range ones), relying on past modeling during fluctuating times, both have their vulnerabilities in every field, especially like in the OCPA's case, when breaking new collaborative ground. "OC Residents Face Electricity Rate Hike As New Clean Energy Agency Prepares To Launch" https://voiceofoc.org/2022/02/... Meanwhile, under-publicized but on the docket at Metropolitan Water District of Southern California's (MET) Finance & Insurance Committee on Monday, January 7, 2022, was a proposed biennial (2-year duration), 8% per annum rate increase that starts January 1, 2023. Read the justification(s), the rationale yourself, this Committee Power Point is very educational (Hint, go to slide 25): https://mwdh2o.legistar.com/Vi... There are several workshops planned and according to the list of multiple sources from the industry that I interviewed for this article, budget approval is expected at the April MET hearing. This too is a result of the volatility, the ups and downs, feast and famine conundrum of the water supply world. Broken down, IF your electricity is/will come from the OCPA, IF MET is your utility's dominant, raw drinking water provider, and IF in addition you pay for recycled water to conserve, free up drinking water via reuse supplements, plus pay a sewerage fee? THEN energy costs will increase, directly and/or indirectly: · Electricity for your home, your business, regional hospitals, institutions, restaurants, grocery stores, et al · Electricity to move (wheel) water, that is transport, distribute and deliver to consumers, and · Electricity to treat your wastewater to regulatory compliance standards then dispose of what's not reclaimed in an ecologically correct manner. Water has been under-valued and taken for granted by Californians, rates relatively inexpensive, in spite of inflation and whatnot, all things considered. Unfortunately, this has created unsustainable expectations that due to drought cycles and population growth, ridiculously low historical rates cannot possibly be maintained or sustained. Less water from our major sources, up north and from the Colorado River, due to our drought cycles play havoc on long-term budgeting. Plus lower flows=Less hydroelectric production. MET Water District Sources and Service Supply Area If you pay a water bill and MET is your utility's wholesaler, whether as one bill, through your property taxes or a combination thereof, early next year, your supplier is going to be paying more: 8% more. At first glance, that might give you sticker shock, but if your provider has been prudent in their forward planning and contingency policies, it won't be as bad as it looks. Granted, the MET wholesale increase is ≈ double the usual 3-4% per annum increases of the past. One prudent and savvy OC utility which I monitor closely anticipated 5% per annum, so the net difference (3%) won't be as painful for their clients. "All-inclusive costs" for typical districts, i.e., imported water (≈.5 cents/gallon), necessary O & M expenditures, fixed fees, price of doing business overhead, repair, remove & replace with updated infrastructure, plus disposal and reclamation of surplus/waste treatment are usually in the 3.5-4 cents/gallon range. My online research revealed that the same OC utility I track closely, the one who prudently planned their budget? My computations using online, raw data, reveal that they bundle, can do it all for 2-2.5 cents/gallon! Economy of scale plays a large role in any district's ability to keep all-in costs down, which is why more utility consolidations/joint power authorities (JPAs) seem intuited. Translation: The typical shower takes ≈20 gallons, so obviously the price range varies between purveying utilities, the difference once multiplied by say a 4-member family, is significant over a year's budget time. In my world, "that depends" is a commonly uttered maxim by industry professionals. The "triple threat" is real for those signing or already signed up for the OCPA and also for those purchasing MET drinking water from its county distributor, Municipal Water District of Orange County (MWDOC). MWDOC members can and do influence indirectly, but do not dictate MET rates. https://www.mwdoc.com/about-us... One that isn't well understood by the public, but does eventually affect ratepayers, are: "Pass-Through Charges" (PTC). Some snidely refer to them as "Pass Along," (literally pass the painful extra bucks like a kidney stone) but the result is the same, ratepayers end up with the tab, having no direct say-so, just local board members that they elect. Not that you voted for all, maybe only 1 or 2 of them. Together, convened boards of groups like MET are composed of, for want of an official phrase "proxy proxies." Crazy, huh? You chose local water board members, with only some, not all seated by district because some are still at-large elections. Who in turn with others in the region you may NOT have voted for, select a representative through a very esoteric and IMO archaic system. The behind-the-scenes positioning to become a MET Board member can feature months of increasing tension, arm twisting, can and does cause friction between rivals, not to mention intense lobbying out of public stakeholder view. A PTC covers unforeseen increases in wholesale charges for imported water, groundwater management, and electrical services to support infrastructure which may be passed through to the customer as they occur. My homework reveals that such PTC are NOT subject to Prop 218 challenges as long as a utility has the right paperwork filed. Which is complicated, believe me, but your eyes are probably glazed over by now anyway, right? Ever observed those enormous dams and turbines, those pump stations that must push billions of gallons of water daily, keep it moving over hill and over dale, via either Northern California or the Colorado River Aqueducts respectively? Water and wastewater (sewer) utilities must use pumps to either distribute drinking water they purchase and/or direct wastewater to treatment facilities. Secondary and tertiary (3rd level advanced/recycled) waste treatment plants need a lot of electricity to be successful. They operate 24/7/365 and, if in addition they're not just dumping it into the ocean outfall pipes (affluent discharges), if they're reclaiming influent (wastewater) and compliant with irrigation standards, they are energy intensive and need a lot of grid juice. The drought that started in 2000 is now purportedly the driest two decades since 800 A.D. Indirect and Direct Potable Reuse (IPR & DPR) wastewater facilities that complement or supplement utility drinking water portfolios will become the norm or at minimum more sought-after contingency Capital Improvement Projects by local providers: https://www.cnn.com/2022/02/14... Even when totaled, we're looking at small percentage increases of modest existing bills, not "A Fistful of Dollars." Living in what's arguably the most beautiful and environmentally correct state, "For A Few Dollars More" our communities mutual future will be more efficient and less polluting. Roger E. Bütow is a 50-year resident of Laguna Beach CA. He's the Founder and Executive Director of the 24-year old NGO, Clean Water Now. His professional fields of expertise are land use & regulatory compliance consultancy plus as a retired general contractor, he offers environmental & construction advisory services. His CV/Résume is at: https://www.linkedin.com He can be contacted at: [email protected]