We need to socialize the value of water

By Joe Gysel
President EPCOR Water USA

I agree that we need to high grade the action items and the two that we have identified to tackle immediately represent tough challenges that have been in play for a long time as well as the important attention to the appropriate funding of the Water Resources dept.  They send a good message that the group is both forward thinking and practical in its approach.

Personally I believe that the Kyl Center for Water policy can also fill a much needed role in socializing the value of water, it’s importance as well as the economic realities regarding cost of water and pricing.  As independent academic think tanks they can tackle sensitive issues that need to be discussed and addressed for Arizona to move to sustainable water supply and demand.  The Arizona Water Consciousness Challenge is the beginning of raising awareness and will need further ongoing support from both Morrison Institute and Kyl Center to gain meaningful ground and momentum on this topic.

Re the water action items short and medium term 3,4,5&6. It looks like you have combined some groupings and edited.  My comments are as follows:

Action 4 -  Increased use of treated waste water – Currently treated waste water is put to use at many facilities.  At EPCOR AZ, we are responsible for about 10.5 MGD of waste water.  All is treated to required standards with 4 MGD used for recharge, 3 MGD used of golf courses, water features/common areas (schools and parks) and 3.5MGD is sent to APS via Tolleson.  The move to direct potable has a number of benefits and moves us up the value chain however we do take away from other uses currently developed.  We need to address the whole picture including current uses for treated waste water.  States and countries ie Singapore where they are using direct potable are a response to a severe lack of water supply source. AZ is not there at this point in time so we need to focus on setting standards and socializing the acceptability of direct potable waste water reuse should we be faced with critical supply shortages.  The major issue is consumer acceptance and as we are fortunate not to be on the “burning platform” we should begin efforts to ensure future supply constraints which force alternate sources are socialized so that with Direct potable reuse is an acceptable result.

Action 5 – Conservation  (including messaging on water scarcity issue) – I raised the controversial issue of water pricing at our session.  There were pros and cons on priority from various members of the group.  I feel that it is an essential part of any conservation or sustainable consumption plan in order drive the right behavior.  As pointed out it is a very complicated subject however who better than Morrison Inst and Kyl Center to set the tone on the right pricing mechanisms.  If lead by private water it is viewed as greedy profits, if lead by municipalities it is another tax.  The cost of water will be going up in all areas.  CAP water will face increased costs of pumping based on Navajo generating station changes.  Desalination costs, while declining are still well above any costs we face for surface or ground water.   EPCOR’s cost of ground water at plant averages $.42-.72/kgal and current surface water treated at our White Tanks and Anthem plants averages $1.23 - $1.69/kgal based on current CAP pricing.  Ocean desalination by comparison currently ranges from $7-$10/kgal depending on energy costs.  These are all a plant gate costs so one can imagine the impacts on water rates and associated concerns by consumers if not prepared for prices that could increase 5 fold or more.
Further complicating the issue of pricing are the traditional rate structures that have bundled infrastructure costs with those of the commodity and tend to mask the true cost of water.  This makes it difficult to incent the right consumption behaviors as conservation efforts are largely driven through tiered pricing which puts utility financial stability at risk.
Water pricing needs to be part of this conversation and the value of water.  

Longer term – Action 7 - Augmentation of water resources.  In addition to looking at traditional models new funding mechanisms leveraging the private sector should be explored.  P3 projects continue to gain momentum in many infrastructure sectors including water and waste water.  Tightening  municipal, state and federal budgets make this form of project delivery attractive.  EPCOR recently won the $200M waste water treatment plant project in Regina Sask under this model.  The City of San Antonio recently approve their estimated $3.4 billion P3 contract to develop a new large scale water supply project for the city which will deliver 168,970 m3/day of water (50,000 acre-feet per year) through a 142 mile pipeline.  The consortium will deliver the project under a 30-year concession agreement which involves the design, build, finance, operation and maintenance of new production wells from the Carrizo and Simsboro Aquifers, pumping stations, raw water collection, storage tanks and transportation. For large infrastructure projects these delivery models present attractive alternatives and can supplement traditional models.