But for water utilities, especially in California, it’s difficult to tackle energy costs in the midst of a water crisis. Water utilities spend about 30 percent of their total operating budget on energy, and yet have little to no available capital to upgrade systems in order to save money. In California, nearly one-fifth of the state’s energy requirements are water-related.
Honeywell has embarked on a first-of-its-kind project with East Valley Water District (EVWD) that uses a ten-year, $4 million energy performance contract for an energy efficiency and OpenADR demand response project that is expected to deliver more than $500,000 in annual savings.
“They just don’t have the money for capital upgrades,” Mike Taylor, VP of sales in municipal markets for Honeywell, said of water utilities. “They’re very interested in anything we can do to guarantee energy savings while upgrading infrastructure.”
EVWD, which serves about 100,000 customers in San Bernardino County, will receive $500,000 from Southern California Edison for joining the utility’s OpenADR program, which uses automated demand response signals sent to participants to shed load.
“As a water district, we are pleased to have the opportunity to dramatically reduce our energy use, help our state reach its energy reduction goals and increase system efficiencies for our customers,” John Mura, CEO and general manager for East Valley Water District, said in a statement.
Honeywell will install a new operating and control system that will allow for flexibility in the pumping algorithm that moves water between EVWD’s storage tanks, distribution system and wastewater facilities. Honeywell will also upgrade some of the less efficient pumps to newer, more efficient models.
The system will allow the utility to participate in Southern California Edison’s automated demand response program. Honeywell’s Akuacom platform already provides ADR to a few other water districts, such as Cucamonga and Coachella, but this is the first time that demand response and efficiency have been offered in a single performance contract for a water utility.
Water utilities aren't the only entities taking a fresh look at performance contracts. The U.S. Army has recently become a leader in third-party clean energy financing, and LEDs are increasingly being offered with performance contracts. Silver Spring Networks is offering entire smart city networks as a service in Europe.
There has already been another benefit from the contract. For years, EVWD had been looking to upgrade its emergency generator, but could not find the capital in the budget. With some of the savings from the efficiency upgrades, the utility will now be able to afford the new emergency generator it needs.
Honeywell is in discussions with a few other unnamed water utilities, and the sales focus is on California. Taylor said that when in talks with water utilities, the company will "cast the net far and wide to find out what [their] aging infrastructure needs are.” That could include adding renewables, assessing demand response capabilities and evaluating energy efficiency retrofits. “This is not just about energy efficiency,” Taylor said of the project. “It’s all about upgrading infrastructure.”