United States
    Environmental Protection

 This document discusses energy issues facing public drinking water systems, steps that systems can take to understand
 and reduce their energy use and costs, and funding resources for energy efficiency. This document is intended for small
 to medium-sized water systems as well as technical assistance providers and state programs that support or regulate
 these systems.
 How much energy do drinking water systems use?
Providing safe drinking water is a highly energy-intensive activity. At the  national level, drinking water and
wastewater systems account for three to four percent of U.S. energy use.1 This is equivalent to 56 billion kilowatt
hours (kWh)  annually,  and  the generation  of almost 45 million  tons of greenhouse  gases  (GHG). At the
community level, drinking water and wastewater systems are typically the largest energy consumers accounting
for  25 to 40 percent of a  municipality's total energy bill." Approximately  80 percent of municipal water
processing and distribution costs are for electricity.1"

For drinking water systems,  energy is needed for  raw water extraction and conveyance, treatment, water
storage and distribution. Energy usage can vary based on water source, facility age, treatment type, storage
capacity,  topography, and system size, which encompasses volume produced and service area. As illustrated in
Figure 1,  energy usage for a typical surface  water drinking water system is 1,500 kWh/million gallons (MG),
broken down as follows: 100 kWh/MG for conveyance; 250 kWh/MG for treatment; and  1,150 kWh/MG for
storage and distribution.IV Public water systems using ground water typically have a higher average energy use
than surface water systems, about 1,800 kWh/MG, primarily due to pumping raw water from aquifers/ Pumping
in total, for either surface or ground water systems, typically accounts for 90-99 percent of energy consumption
at a water system/1
     Figure 1. Average energy consumption in a drinking water system

Treatment  	|\    Distribution
 Why is energy efficiency important?
Water systems face many challenges, including but  not limited to aging infrastructure, increasing threats to
watersheds and aquifers, changing compliance and public-health standards, shifts in population (growth and
loss) and higher customer expectations. Energy efficiency can play a role in addressing all of these challenges by
shifting  staff resources  and  system operating costs  away from energy bills and operation and maintenance
(O&M)  and towards  infrastructure  upgrades,  source  water protection  efforts,  treatment technology
improvements and community outreach.

Fortunately, with energy use monitoring and energy audits, water accounting, and water loss reduction efforts,
water systems can move toward more energy-efficient water production. In turn, by understanding the energy

consumption of a drinking water system and taking advantage of energy efficiency opportunities, water systems
can save money while saving energy. Water systems are encouraged to adopt best industry practices for water
efficiency (for  additional information see  Water Efficiency for Public Water Systems, EPA 816-F-13-003) and
energy efficiency. The level  to which a system adopts  these practices  will  largely  depend on the system's
immediate resources such as staff expertise or access to funding as well  as the most pressing area of concern
such as water loss reduction, immediate savings on energy bills or reducing the system's carbon footprint.
 What are the benefits of reducing energy use at water systems?
1. Energy efficiency saves money. Paying for energy to operate a drinking water system can be expensive and
                         represents a significant portion of drinking water systems' operating budgets.  It is
                         likely that the water sector will use more and more energy at higher prices for a
                         variety of reasons including system  expansions associated with population growth;
                         new or revised regulations that may result in additional treatment or more energy-
                         intensive treatment being added and drought; and climate change impacts that may
                         necessitate use of new water sources of lower quality or of greater depth and/or
                         distance from the end  user. Energy savings can be achieved by improving energy
efficiency, which means using less energy to provide the same level of service and water quality.

2. Energy efficiency extends the life  of existing  infrastructure.  Drinking water systems have found  that
integrating  energy efficiency practices into daily management  and long-term planning contributes to overall
system sustainability. By monitoring  equipment for energy efficiency, water systems  are more attuned  to the
overall state of their infrastructure and can proactively take steps to ensure equipment is operating efficiently. In
turn, this reduces equipment strain and lowers operation and maintenance requirements.

3. Energy efficiency reduces  greenhouse gas (GHG)  emissions. Reducing energy consumption has a  direct
impact  on  reducing  GHG  emissions.  A  number   of
municipalities  and  states  (California,  Texas,  Arizona,
Washington, Utah,  New Mexico, Montana, Maine, New
Jersey, Oregon and Wisconsin) have established initiatives
to reduce carbon  footprints and  GHG emissions over the
next 10 to 30 years.  Drinking water  and  wastewater
systems will play an important role in meeting these goals.

4.  Energy  efficiency  enhances  customer  relations.
Customer  expectations  and  concern  for   water are
                                  increasing.  According to a recent study, 95  percent of Americans  rate
                                  water "extremely important," more than any other service they receive/"
                                  Federal, state; and local agencies; and energy providers are encouraging
                                  energy  conservation  and energy  efficiency in  consumer purchases.
                                  Effectively communicating energy management efforts and successes to
                                  customers and other stakeholders is an opportunity for a water system to
                                  establish itself as an environmental steward in the  community.  It  also
                                  fosters goodwill among customers and elected  officials and cultivates a
                                  greater understanding of water production delivery.

 What steps should drinking water systems take?
Energy can be one of the largest operating costs for drinking water systems. Drinking  water  systems are
recognizing the importance of reducing energy consumption and costs as a  means to optimize overall system
performance and to continue to provide a safe water supply. But water system owners and operators may not
be fully aware of the options available to them to manage their energy budget or to identify, prioritize and fund
energy improvement  projects.  The simple  steps illustrated in Figure 2 stem  from the Plan-Do-Check-Act
approach  of most environmental management  system  (EMS) models, including  EPA's 2008, Ensuring a
Sustainable Future: Energy Management Guidebook for Wastewater and Water Utilities"'" and the joint EPA and
U.S. Department of Energy's ENERGYSTAR® Program. By following these simple steps, drinking water systems of all
sizes can create a successful energy management program and achieve energy savings.
                                        Step 1: establish a
                Step 4: Share your
              successes and REPEAT
improvement projects
                                        Step 3: TRACK and
                          Figure 2. Steps for an Energy Improvement Program
Step 1 involves establishing a baseline of energy consumption and costs. All baselines start with the collection of
energy utility data and a utility bill analysis - or the tracking of monthly and annual energy use compared to the
volume of water produced. The ongoing recording, analyzing and reporting of energy consumption and costs is
often termed  energy accounting.'* Energy accounting will increase knowledge of energy utility rates, possibly
                                    identify billing errors, highlight anomalies in energy use and contribute
                                    to more effective management. To get started, drinking water systems
                                    should collect one to three years of energy bills.

                                    Once  a  baseline has  been established   it  is  important to gather
                                    operational and  equipment-specific  data through an energy audit. An
                                    energy audit can be a useful tool to develop a more thorough energy
                                    baseline, to identify areas of inefficiency and to provide direction for
                                    energy saving opportunities or energy conservation measures (ECMs).
                                    Energy audits vary along a spectrum of scope and robustness based on
the knowledge and expertise of the  person collecting and analyzing the energy information and on the needs

and complexity of the water system undergoing the audit. The audit may involve a phased approach starting
with a questionnaire, followed by a system walkthrough, and moving towards a complex evaluation of energy
consumption at the  process and the equipment level of detail. An energy audit may also include specific ECM
recommendations and the development of an energy action plan.

Water system managers and operators are encouraged to determine their baseline energy use and conduct an
energy audit either on their own or with the help of a technical assistance (TA) provider, energy service provider
or experienced energy consultant.

    *~ RESOURCE: EPA's Energy Use Assessment Tool is a free, downloadable, Excel-based energy audit tool.
      The tool allows both water and wastewater systems to conduct a utility bill analysis, determine baseline
      energy consumption and cost in total and also broken down to the process-level and equipment-level,
      and identify the most energy-intensive areas of the system. In addition, the tool highlights areas of
      inefficiency that users may find useful in identifying and prioritizing ECMs. The tool can be found at:
      http://water.epa.gov/infrastructure/sustain/energy use.cfm.
    *~ RESOURCE: EPA's EnergyStar Portfolio Manager is a free, online tool drinking water systems can use to
      develop a simple energy baseline based on utility bill data and track changes in energy use and GHG
      emissions over time. The tool can be found at:
      http://www.energystar.gov/index.cfm?c=evaluate performance.bus portfoliomanager.
    *~ RESOURCE: Understanding Your Electric Bill is a Wisconsin Focus on Energy Fact Sheet that can be found
      at: http://water.epa.gov/infrastruture/sustain/Understanding-Your-Electirc-Bill.pdf
    *~ RESOURCE: Electric Power Research Institute (EPRI) Energy Audit Manual for Water /Wastewater
      Facilities can  be found at: http://www.ceel.org/ind/mot-sys/ww/epri-audit.pdf.
    *~ RESOURCE: How to Hire an Energy Auditor is a California Energy Efficiency document that can be found
      at: http://www.energy.ca.gov/reports/efficiency  handbooks/400-00-001C.PDF.

Information needed to conduct an energy audit includes:

    •  utility bills from the last 12 to 36 months
    •  design,  average and peak flows
    •  building square footage(s)
    •  operating hours
    •  an inventory of major  equipment  including pumps,
      motors,  drive systems,  lighting  and HVAC equipment
      and the associated nameplate information.

As  mentioned  previously,  pumps  are   often  the  largest
consumers of  energy in  a  drinking  water system.  As such,
operating conditions of pump  systems (pumps, motors and
drive systems)  are  key elements of an energy audit. Table 1  provides a guide to what  pumping  system
information should be collected during an energy audit as well as several key conditions to consider during a
pumping system evaluation. It is  important to note that pumping systems may be inefficient on the merits of the
equipment alone (either poor performance ratings or through wear and tear) or  due to the operation of the
equipment, and both aspects should be weighed. In  other words, a pump system with high efficiency ratings can
still be inefficient if it is being operated at  a rate or duration incompatible with the equipment's best efficiency
point (see Table 2).

              Table 1: Pump/Motor Equipment and Condition Checklist
 Minimum Equipment
Information to Gather
 Additional Equipment
 Information to Gather
Conditions to Consider
Pump style
Number of pump stages
Pump and motor speed(s)
Pump rated head
Motor rated power and
voltage (nameplate)
Full load amps
Rated and actual pump
Operating schedule(s)
Pump manufacturer's pump
Actual pump curve
Power factor
Load profile
Analysis of Variable
 Frequency Drives (VFDs) if
Pipe sizes
Water level (source)
Motor current
Pump suction pressure
Discharge pressure
Maintenance records
(frequent replacement of
bearings and seals)
Consistently throttled valves
Excessive noise or vibrations
Evidence of wear or
cavitation on pump,
impellers, or pump bearings
Out-of-alignment conditions
Significant flow
rate/pressure variations
Active by-pass piping
Restrictions in pipes  or
Restrictive/leaking pump
shaft packing
Multiple pump systems
where excess capacity is
bypassed or excess pressure
is provided intermittent
pump operation
   RESOURCE: Pump System Assessment Tool (PSAT) is a free, online tool developed by the
   U.S. Department of Energy that helps users assess energy savings opportunities in
   existing pumping systems. It relies on field measurements of flow rate, head, and motor
   power or current to perform the assessment. It can be found at:
   http://wwwl.eere.energy.gov/manufacturing/tech deployment/software psat.html.
   Table 2 provides a framework for evaluating a water utility's pump system efficiency.
   RESOURCE: Pump System Improvement Modeling (PSIM) Tool is a free, educational tool
   focused on helping you better understand the hydraulic behavior of pumping systems. It
   can be found at: http://www.pumpsystemsmatter.org/content detail.aspx?id=110.

                      Table 2: Typical Pump System Efficiency"
Pump System
Flow Control2
Efficiency of
30 - 85%
20 - 98%
85 - 95%

             1.  For pumping wastewater. Pump system efficiencies for clean water can be
             2.  Represents throttling, pump control valves, recirculation, and VFDs.
             3.  Represents nameplate efficiency and varies by horsepower.

Step 2 is  the  implementation  of  ECMs. Once  a  drinking water system has determined  its
baseline energy use and conducted an energy audit, the next step is to identify, evaluate and
prioritize potential ECMs. Typical criteria  used to prioritize ECMs include:
   •   Estimated capital or upfront investment,
   •   Expected energy reductions (kWh/MGD) or  percent energy savings,
   •   Simple payback periods - the number of  years of energy savings that it will take to
       account for the costs of the energy efficiency improvement, and
   •   Annual cost  savings (both energy and O&M).

When  making  decisions, a drinking water system can  use this  information to prioritize the
implementation of ECMs over time.  In general,  the shorter the payback period the more
attractive the project is, particularly for drinking water systems where there is limited funding
available. It is important to remember, however, that every piece of equipment has a life cycle
cost associated with it. For example, the initial cost of buying a pump is only 10 percent of its
life cycle cost, whereas the energy costs  and maintenance costs associated with that pump are
45 percent and 37 percent, respectively."' As such,  a high efficiency pump system may cost
more now but have significant savings  over the long-term. Further, it is important to remember
that  energy savings  may  be  gained  by simple,  low-to-no cost  operational  changes  (e.g.,
managing energy demand in treatment and pumping, water loss reduction and water efficiency
efforts) versus technology upgrades.

A drinking water system might want  to consider the  potential  for staged  implementation -
starting with the easier, less expensive projects and  planning forward for larger-scale or more
complex/expensive projects. This approach has multiple  benefits of building confidence and
demonstrating immediate success  in order to maintain and grow both internal and external
support for a continued energy management program.

Water  systems may choose to develop an energy action plan to  document their decisions and
clearly spell out the selected ECMs, both operational and technological. The energy action plan
could   also include  timelines for  funding and completion of  ECMs; listings of the staff
responsible for the associated  changes, technical requirements  for implementation, such as
specific staff training or new standard operating procedures necessary to carry out the  ECMs;
and communication message mapping for stakeholders. Drinking  water systems may also want
to incorporate  objectives or targets and  define performance indicators to measure progress in
the energy action plan. For example, a  water system may choose a simple goal  to improve
overall energy performance by 10 percent above its baseline. The performance indicator would
be kWh/MGD and  could be monitored through follow-up energy audits conducted regularly.
Energy action  plans can be as simple or  sophisticated  as  necessary based on the system's
specific characteristics. To maximize success, the energy action plan should have staff buy-in at
all levels of the drinking water system,  as applicable.

   *~  RESOURCE: EPA's Ensuring a Sustainable Future: Energy Management Guidebook for
       Wastewater and Water Utilities provides guidance to utilities to develop an effective
       and lasting energy management program. It can be found at:

       http://www.epa.gov/owm/waterinfrastructure/pdfs/guidebook si energymanagemerit
   *~  RESOURCE: Improving Pump System Performance: A Sourcebook for Industry, Second
       Edition.  A U.S. Department of Energy (2006) document that can be found at:
   *~  RESOURCE: Consortium for Energy Efficiency RFP Guidance for Water-Wastewater
       Projects provides recommendations and model language for solicitations for energy
       efficiency design services. It can be found at: http://www.ceel.org/ind/mot-
   *~  RESOURCE: 5 Steps to Successful Energy Performance Contracting can be found at:

Step 3  is tracking performance and evaluation. It is important for water systems to periodically
monitor and  measure performance to  review  progress,  refine goals and priorities,  and to
determine  next  steps  for  future energy  improvements   projects.  Comparing  current
performance  to the  pre-determined baseline energy use is a good  way  for drinking water
systems to evaluate  whether  the energy  efficiency improvements or ECMs they have made
have resulted  in energy and cost savings. Simple spreadsheet tracking tools, such as EPA's
Energy  Use Assessment Tool,  might be  useful for  smaller systems, whereas  larger water
systems may  require a  more  complex  program,  such  as an  Energy and Water  Quality
Management  System (EWQMS).  These  evaluations can  be  used  to  inform an  energy
management  program and to justify future ECMs.

   *~  RESOURCE: EPA's Energy Use Assessment Tool is a free, downloadable, Excel-based
       energy audit tool. The tool allows both water and wastewater systems to conduct a
       utility bill analysis, determine baseline energy consumption and cost in total as well as
       broken down to the process-level and equipment-level and identify the most energy-
       intensive areas of the system. In addition, the tool highlights areas of inefficiency that
       users may find useful in identifying and prioritizing ECMs. The tool can be found at:
       http://water.epa.gov/infrastructure/sustain/energy use.cfm.
   *~  RESOURCE: EPA's EnergyStar Portfolio Manager is a free, online tool drinking water
       systems can use to develop a simple energy baseline based on utility  bill data and track
       changes in energy use and GHG emissions over time. The tool can be found at:
       http://www.energystar.gov/index.cfm?c=evaluate performance.bus portfoliomanager.

Step 4 is  communicating successes and making continual improvements.  Communicating
success internally to employees and management as well as externally to consumers and other
stakeholders is a critical aspect of an effective energy management program. Water  systems
can share  their efforts and successes with elected officials,  at board meetings,  on  their Web
site,  through  bill stuffers, in Consumer Confidence Reports,  and through newsletters or other
outreach mechanisms. This establishes rapport with the community (good public  relations)  and
builds  support for future energy improvement  projects. System  operators or managers may
also wish to participate in water association conferences to  trade their experiences with their
peers.  By learning of others' successes and how they addressed challenges and by building a

support network,  water systems  can  continually make  improvements  to  their  energy
management program.
 What ECMs should drinking water systems consider?
There are substantial opportunities to reduce energy costs at drinking water systems. These
savings can be realized through changes in O&M with no-to-low investment costs to technology
upgrades, which may have a high initial investment but may offer life cycle operational savings.

As mentioned previously, pumping represents the largest portion of energy used at a drinking
water  system.   If  resources  are  limited,
improving pump and motor efficiency should
be   the   focus   of  a  system's  energy
management program.  Such  efforts  may
include  correcting for  inappropriate pump
sizing, upgrading standard efficiency motors
with premium efficiency motors or installing
variable  frequency  drives   (VFDs),  where
appropriate. Beyond  pumps  and  motors,
savings can  be  realized through  a range of
ECMs including,  but not  limited  to, energy
demand   management,  water   efficiency
initiatives, renewable and alternative energy
  • Proper equipment sizing
  • Use of premium efficiency motors
  • Install VFDs if applicable
  • Energy demand  management
  • Water efficiency efforts
  • Renewable energy
  • Building upgrades (e.g., lighting and
development or purchases, and HVAC and lighting upgrades. These ECMs will be discussed in
more detail below.

Proper equipment sizing involves matching pumps to their intended duty and flow rate. Often
water systems are intentionally overdesigned as a result of conservative engineering practices
and planning for future population growth projections. Unfortunately, oversized pumps add to
system operating  costs  in terms of both energy and  maintenance requirements.  Further,
sometimes population projections are never fully realized, or, by the time they are realized the
useful  life of the pump  has  been exhausted. The latter is  especially true  in many  rural
communities, which  have experienced consistent population  losses/" further exacerbating the
problem. Here are some  corrective actions that systems can  take to address oversized pumps
   •   Replace the pump/motor with a downsized version;
   •   Replace the impeller with a smaller one;
   •   Install VFDs to match variable speed to load requirements for the pump(s); or
   •   Add a small pump to reduce the intermittent operation of the existing pump.

New communities or communities with growing populations can most efficiently incorporate
energy efficiency during the design phase of new projects or expansion projects, respectively.

Motor efficiency measures can  be realized at the operations  level  with  very  little  capital
expenditure,  such as by maintaining ventilation  and temperature control to  the  optimal
operating conditions provided by  the motor manufacturer. The replacement of  inefficient
motors with higher efficiency models is also a common and effective  way for drinking water
systems to improve their energy performance. Table 3 shows potential  energy savings in kWhs
for a single percentage point improvement  in motor efficiency. While  percent energy savings
are modest when  upgrading motors, they are  reliable - typically resulting in savings of 2-5

             Table 3: Single Percentage Point Motor Efficiency Improvements
                              Motor HP and kWh Savings xv
Full Load Motor Efficiency (%)
Annual Savings
It is important to make decisions before a pump or motor fails and to plan for replacing
standard efficiency motors with premium efficiency motors. A drinking water system may want
to address this in their energy action plan.

    *~  RESOURCE: U.S. Department of Energy factsheet Determining Electric Motor Load and
       Efficiency found at:
    *~  RESOURCE: Consortium for Energy Efficiency Motor Systems Initiative Tool Kit found at:
    *~  RESOURCE: U.S. Department of Energy Motor Challenges Program provides
       downloadable books, tips, and fact sheets on technical and economic topics related to
       motors at: http://wwwl.eere.energy.gov/manufacturing/tech deployment/motors.htm.
    *~  RESOURCE: Consortium for Energy Efficiency Motors and Motor Systems Industrial
       Program provides technical material, links and fact sheets at:

A VFD is an electronic control device that modulates the amount of power being delivered to a
motor to allow for continuous matching of motor speed to load requirements for the pump.
VFDs easily accommodate fluctuating flow demands, avoiding losses from throttled valves and
bypass lines (unless system is designed with static  head), allow "soft starts" (less wear and tear
on the  motor) and provide for more precise control of process. VFDs are often used to increase
motor and pump efficiency in drinking water systems, and case studies suggest that when VFDs

are installed appropriately with premium efficiency motors, savings of 10-50 percent can result
with a  payback of 1-8 years.XVI It is important to note that VFDs are  not a panacea for energy
efficiency; they will not save energy for systems without variability and will yield benefits only
when operated properly.

Managing energy  demand allows a  drinking water system to work  independently or in
agreement with its energy provider to evaluate various  savings scenarios related to pumping
during  off-peak hours. This reduces overall and  peak energy requirements for the  drinking
water  system.  In other  words, significant energy cost savings can be  realized  simply  by
maximizing the use of existing or additional storage capacity and switching water production to
take advantage of time-of-use energy  rates, thus avoiding the highest electricity  costs. For
example, when necessary storage capacity is available and water quality goals can still be met, a
water system may pump  and fill its storage tank at night during off-peak hours, then use the
storage head to offset energy costs associated with distributing the water to the system during
peak hours of the day.

Some energy providers offer incentives and rebates for consultations with them since these
actions can reduce their overall demand too. The utility bill analysis described in Step 1 can also
inform water operators and  managers of load shifting opportunities at their water system. Load
shifting can  result in reduced energy  cost and these savings can  be reinvested  in  energy
efficiency improvement projects.

Water  efficiency efforts can reduce energy use  by reducing the amount of water needed to be
produced, treated and distributed. These savings can be realized through supply-
 .,,,,..       « 4.  /       4.         4..           i       4.  i     i  i     Water saved is
side water efficiency efforts (e.g., water accounting, water  loss control, or leak
                                                                               energy saved.
detection and repair) and through demand-side  water  conservation efforts (e.g.,
public outreach and education  programs to reduce water consumption, free water
audits  for large volume customers, retrofit programs for residential customers, water pricing
and water-use regulations).

    *~  RESOURCE: U.S. EPA WaterSense is a program that sets criteria for labeling water
       efficient products. It also allows water systems to become partners to promote
       WaterSense and water efficiency. Benefits to being a partner include gaining access to
       templates and other WaterSense-developed materials. Information about the  program
       can be found at: http://www.epa.gov/watersense/.
    *~  RESOURCE: U.S. EPA's Control and Mitigation of Drinking Water Losses in Distribution
       Systems, EPA 816-R-10-019, provides guidance on conducting water audits and
       developing water loss control programs. It can be found at:
       http://water.epa.gov/type/drink/pws/smallsvstems/technical  help.cfm.
    *~  RESOURCE: American Water Works Association's (AWWA) Water Audit Software is a
       free,  online tool for water systems that want to conduct a standard water audit. It can
       be found at:

   *~  RESOURCE: AWWA Manual M36 Water Audits and Loss Control Programs found at:

Renewable Energy. A number  of drinking water systems  have installed  solar, wind  or
geothermal systems to generate power and reduce  dependence  on the  energy grid.  While
drinking  water systems are  limited  in  their ability  to generate  power,  there may  be
opportunities such as the use of in-line turbines instead of pressure  reducing valves to generate
energy and power ancillary equipment or the installation of wind turbines  in open spaces
owned by the water system.

   *~  RESOURCE: U.S. EPA Green Power Partnerships found at:
   *~  RESOURCE: U.S. DOE  Energy Efficiency and Renewable Energy Clearinghouse found at:
   *~  RESOURCE: SAVING WATER & ENERGY IN SMALL WATER SYSTEMS is a training program with four
       45-minute presentations and associated resource files specific to small public water
       systems concerning  water conservation, water audit and leak detection,  energy
       efficiency, and the application of alternative energy sources found at:

HVAC.  While the greatest opportunity for HVAC energy savings occurs during the design phase,
drinking water systems can reduce  energy use by 10-40 percent through  the use of high
efficiency air conditioning;  utilizing controls to reduce energy  use; regularly cleaning air filters;
using mixed flow impeller  fans;  adding programmable thermostats; and installing ventilation
fans, low-emittance windows, and reflective coatings on building roofs.

Lighting can  account  for  a significant  amount of a  building's energy  use  (35-45 percent
depending  on hours of operation, occupancy, and fixture type)  even though it  may be a
relatively small component of a drinking water system's total energy load. Drinking  water
systems can install occupancy sensors, upgrade incandescent lamps with fluorescent lights, and
replace mercury lights with  metal halide or high-pressure sodium lights.

These are just a few of the  options and opportunities available to drinking water systems. Since
each drinking  water system is unique, individual approaches to energy needs, energy demands,
and energy efficiency solutions will also be unique.  However, all drinking water systems can
take  steps to improve their  energy efficiency.

 How can a water system fund energy efficiency efforts?
How a drinking water system finances energy efficiency improvements may depend  on the
nature of the  improvement, the ownership status  of the drinking water system (public or
private), the drinking water system's size and credit rating, the availability of federal  energy
efficiency  financing  programs and regional or local incentives.  Fortunately, there are many

opportunities for drinking water systems to obtain financial assistance for projects that reduce
their energy consumption.

Drinking water systems can access internal or external funding sources
to make energy efficiency improvements and fund energy improvement
projects.  Examples of internal funding include rate  increases, impact
fees, system development and expansion  charges and supplements to
the water system's capital budget. It may also  be possible to tap into
fees or assessments  from developers and  manufacturers,  builders,
energy providers, and water customers. External funding options include
capital markets, Energy Service Companies (ESCOs), local and regional
incentive programs, and federal government funding programs. Short-term debt instruments
such as bank loans, anticipation notes (in anticipation of bond, tax, grant or revenues to be
received), commercial paper (taxable or tax-exempt  unsecured  promissory note that can be
refinanced  or rolled  over  for periods exceeding one year) and  floating-rate  demand notes
(notes that allow the purchaser to demand that the seller redeem the note when the interest
rate adjusts) may also be considered. Long-term  debt is frequently in the form of bonds such as
general obligation bonds and revenue bonds.
 What funding options are available to water svstems?
Drinking water systems should explore the financial assistance programs available to meet the
specific energy efficiency needs of their system. Drinking water systems should recognize that
they may need to use a combination of incentive programs and funding sources. A number of
useful Web sites and external financial resources for energy efficiency are provided here:

•  The Drinking Water State Revolving Fund (DWSRF) can provide low-interest loans for a
   variety of energy efficiency and water efficiency projects.  States are encouraged to continue
   to use their DWSRF capitalization grant to fund green drinking  water projects to address
   green infrastructure, water and energy efficiency improvements and other environmentally
   innovative activities.  In FY2010 and FY2011, states were required to use a minimum of 20
   percent of their capitalization grant  for green projects (also known as the Green Project
   Reserve or GPR).  For the FY2012 capitalization grant, designating green projects is at the
   discretion of the state.   Examples of fundable green  projects include energy audits,
   equipment upgrades, leak detection equipment, water meter installation and installation of
   water efficient devices.  Other improvements, which  in  FY2010 and  FY2011 required the
   development of a business case to be designated for GPR, include retrofit or replacement of
   pumps and motors with high efficiency motors, replacement or rehabilitation of distribution
   lines  or installing  Supervisory  Control  and  Data  Acquisition  (SCADA)  systems. These
   improvements may also still be eligible for funding even if they are not designated for GPR.
   Drinking water systems should contact their state DWSRF programs to find out  more about
   the state's priorities and funding options.

*~ RESOURCE: DWSRF Green Project Reserve 2010 Guidance found at:

Many energy utility providers offer financial incentives such as rebates and reduced energy
rates  for  customers who purchase  energy efficient  equipment  or  implement energy
efficiency management practices.

Drinking water systems can use energy performance contracting, an innovative financing
mechanism that allows drinking water systems to install energy conservation  measures
without paying up front. Installation costs are repaid out of guaranteed energy savings. For
example, public agencies, including municipal drinking  water systems, can enter into tax-
exempt lease-purchase agreements (TELPs) to finance energy efficiency improvements and
equipment purchases  using savings captured from the projects to  pay for the associated
upfront costs. The most frequently used type of performance contract is the Guaranteed
Savings Performance  Contract that  incorporates  equipment  and system  performance
guarantees issued by the  contractor.  Performance contracts are not financing vehicles by
themselves, and they often separate financing from the technical services.

State funding organizations offer a variety of financial assistance programs including shared-
cost energy efficiency studies, incentives  for efficiency measures  and renewable energy
projects, and loan funds to reduce the  cost of  installing equipment to improve efficiency
and promote the use of alternate energy sources.

*~ RESOURCE: Database of State Incentives for Renewables and Efficiency (DSIRE) is a
   comprehensive source of information on state, local, utility, and federal incentives and
   policies that promote renewable energy and  energy efficiency. It  can be found at:
*~ RESOURCE: Federal Energy Management Program (FEMP) provides state-by-state
   information on energy efficiency and renewable energy incentives at:

A number  of federal agencies including the U.S. Department of Energy, the U.S. Department
of Agriculture Rural Development Program, and  the U.S. Department of Health and Human
Services Rural Assistance Center also provide funding for various types of projects.
*~ RESOURCE: U.S. Department of Energy
      *~ Save Energy Now Program is an initiative to reduce industrial energy
         intensity. Companies can participate in no-cost energy assessments.
         Information can be found at:
      *~ Energy Efficiency and Conservation Block Grant Program (EECBG)
         information can be found at: http://www.eecbg.energy.gov/.
*~ RESOURCE: U.S. Department of Agriculture

         *~ Rural Energy for America Program Grants/Energy Audit and Renewable
            Energy Development Assist (REAP/EA/REDA) provides grants for energy
            audits and renewable energy development assistance. Information can be
            found at: http://www.rurdev.usda.gov/rbs/busp/REAPEA.htm.
         *~ Rural Development through the Rural Energy for America Program
            Guaranteed Loan Program (REAP LOAN) provides financing for energy
            improvement projects. Information can be found at:
       RESOURCE: U.S. Department of Health and Human Services - Rural Assistance Center
       (RAC) offers funding to help rural communities, including funds for energy audits and
       renewable energy. Information can be found at: http://www.raconline.org/funding/.
 How can State's help water systems become more energy efficient?
States can play a significant supporting role for water systems by helping them understand the
importance of energy efficiency, assisting them with energy audits and/or energy action plans
and finding funding vehicles that will work for their situation. States may also develop energy
programs that encourage and support energy management programs in drinking water systems
through technical and financial assistance. Two examples of such state programs are described

•  New York State Energy Research and Development Authority (NYSERDA) is a public benefit
   corporation created in 1975 whose aim is to help New York meet its energy goals. Currently,
   NYSERDA  is primarily funded by state rate payers and  is governed by a board of 13
   members. NYSERDA's  programs  and services  provide a  vehicle for  the state to work
   collaboratively with stakeholders with funds allocated towards energy-efficiency programs,
   research and development  initiatives,  low-income energy programs,  and environmental
   disclosure activities. Information can be found at: http://www.nvserda.ny.gov/.

   *~  RESOURCE: NYSERDA Water & Wastewater Energy Management Best Practices
       Handbook found at: http://www.nvserda.nv.gov/Page-Sections/Commercial-and-

•  Wisconsin's Focus on Energy is a state program that works with eligible Wisconsin residents
   and businesses to install cost-effective energy efficiency and renewable energy projects. Its
   efforts help Wisconsin residents and businesses manage rising energy costs, promote in-
   state economic development, protect  the environment, and control the state's  growing
   demand for electricity and natural gas. The program was developed under a State Act that
   prescribes that the investor-owned electric and gas utilities collectively establish and fund
   the statewide  energy efficiency and  renewable energy programs and  can be found at

   *~  RESOURCE: Find it with Focus search tools can be found at:
 Case studies
Oswego, New York. The  City of Oswego  Water Department provides potable  water to
approximately 29,000  customers. The  water is supplied from Lake Ontario, and the City's
conventional water treatment plant has a capacity of 20 million gallons  per day (MGD) and
average flow rate of 5-10 MGD. The water system consists of a raw water pumping station, the
water treatment plant with finished water pumping station, three booster pump stations and
water storage tanks with a combined capacity of 11 million gallons.  The six buildings total
approximately 50,000 square feet and employ 20 people. The City hired an energy performance
contractor to provide energy evaluations, energy grant services  and design,  bidding,  and
construction services for the rehabilitation of the raw and finished water pumping stations and
booster pump stations. The annual electric cost was approximately $500,000, and the annual
natural  gas  cost was  approximately $50,000. Based  on  contractor  recommendations, the
following improvements were made:
       Rebuilt two 450 horsepower (hp) finished water vertical turbine
       Rebuilt one 350 hp finished water vertical turbine pump,
       Replaced motors and variable speed drives at the finished water
       and raw water pump stations (7 motors from 125-450 hp),
       Installed VFDs to modulate pump speeds to maximize energy
       Installed a SCADA system with remote telemetry,
       Upgraded the filter valve actuators,
       Upgraded the coagulant chemical feed system, and
       Replaced the lighting system.
While improvements cost $2.4 million, the City obtained approximately $270,000  in energy
incentives through various NYSERDA programs. The  improvements reduced the peak-electric
demand at the facility by 1,463 kW and resulted in an annual electric savings of 1,474,664 kWh
and an annual energy cost savings of $95,892. In addition, operation and maintenance savings
is approximately $60,000 annually.
Darlington, Wisconsin. The City of Darlington Municipal  Water Department provides  potable
water to approximately 2,500 customers. The water system consists of two ground water wells,
seven pressure reducing valve (PRV) stations, two booster pumps and two storage towers with
a combined  capacity of 600,000 gallons. The water is supplied from ground water 800 feet
below the surface. One well pumps at 300 gallons per minute (GPM) and the other at  550 GPM.
The  water is  chlorinated  and fluorinated  prior  to distribution. The  water  system  used
Wisconsin's Focus on Energy to develop a baseline assessment and employed a consulting

engineer to help with an  energy audit.  Based on their findings, the  following improvements
were  made:  reduced water loss through main  replacement and resizing;  balanced  the  PRV
stations; installed a SCADA system to maximize off-peak pumping; and added a  VFD to  one  well
and switched two-thirds of  use to  the  more  efficient well  pump.  The annual  energy  usage
dropped 406 MWh to 208  MWh and the annual electric cost fell from approximately $30,000 to
approximately $13,350.
' Electric Power Research Institute (EPRI). 2002.  Water & Sustainability (Volume 4): U.S. Electricity Consumption for Water
Supply & Treatment - the next half century. http://mvdocs.epri.com/docs/AdvancedCooling/BR EnergyWaterPubs Final 2008-
07 1016965.pdf
" ICF International. 2008. Water and Energy: Leveraging Voluntary Programs to Save Both Water and Energy.
'" Electric Power Research Institute (EPRI). 2002. Water & Sustainability (Volume 4): U.S. Electricity Consumption for Water
Supply & Treatment - the next half century. http://mydocs.epri.com/docs/AdvancedCooling/BR EnergyWaterPubs Final 2008-
07 1016965.pdf
lv /Asset Management Research Needs Roadmap. http://www.waterrf.org/ProiectsReports/PublicReportLibrarv/91216.pdf
 Electric Power Research Institute (EPRI).2002.  Water & Sustainability (Volume 4): U.S. Electricity Consumption for Water
Supply & Treatment - the next half century. http://mydocs.epri.com/docs/AdvancedCooling/BR EnergyWaterPubs Final 2008-
07 1016965.pdf
  Naumick, Gary. Sustainable Water Infrastructure, Water-Energy Linkage, American Water Institute of Public Utilities, 40*
Annual Regulatory Conference, December 11, 2008.
v" ITT Corporation. 2010. Value of Water Survey: Americans on the U.S. Water Crisis. White Plains, NY.
http://www.itt.com/valueofwater/water survey.htm
   U.S. Environmental Protection Agency. 2008. Ensuring a Sustainable Future: Energy Management Guidebook for
Wastewater and Water Utilities.
http://www.epa.gov/owm/waterinfrastructure/pdfs/guidebook si energymanagement.pdf
lx California Energy Commission. 2000. Energy Accounting:  A Key Tool in Managing Energy Costs, P400-00-001B.
 U.S. Environmental Protection Agency. 2010. Energy Conservation Measures and Technologies for Municipal Wastewater
Treatment Facilities, October 2010. http://water.epa.gov/scitech/wastetech/upload/Evaluation-of-Energy-Conservation-
 Noll, Pete. 2008. Determining the real cost of powering a pump. World Pumps, January 2008 edition.
x" McGranahan, David A. and Calvin L. Beale. 2002. Understanding Rural Population Loss. Rural America, Volume 17, Issue 4.
xl" US Department of Energy. 2006. Improving Pumping System Performance A Sourcebookfor Industry, Second Edition.
  Consortium for Energy Efficiency, National Municipal Water and Wastewater Initiative.
xv U.S. Department of Energy. 2005. Tip Sheets, Motor Systems.
http://wwwl.eere.energy.gov/manufacturing/tech deployment/motors.html
Office of Water (4606M)                      EPA 816-F-13-004                     July 2013