Accounting for the Social Benefits of Recycled Water

1. Accounting for the Social Benefits of Recycled Water Workshop 3: CPUC Recycled Water Order Instituting Rulemaking (R. 10-11-014) Eric Rosenblum, PE Envirospectives, Inc. January 19, 2012

2. Guidelines for Preparing Economic Analysis for Water Recycling Projects Prepared for the State Water Resources Control Board By the Economic Analysis Task Force for Water Recycling in California Technical Authors: Sachi De Souza JosuéMedellín-Azuara* Nathan Burley Jay R. Lund Richard E. Howitt UNIVERSITY OF CALIFORNIA, DAVIS CENTER FOR WATERSHED SCIENCES APRIL 2011 http://www.swrcb.ca.gov/water_issues/programs/grants_loans/water_recycling/docs/econ_tskfrce/eagd.pdf

5. Economic vs Financial Analysis ECONOMIC ANALYSIS FINANCIAL ANALYSIS Guidelines for Preparing Economic Analysis for Water Recycling Projects, Economic Analysis Task Force for Water Recycling in California (State Water Resources Control Board, 2011) Do project benefits exceed its costs for California? Purpose – compare alternatives based on benefits and costs Broader perspective, numerous points-of-view Will project make money? Is it affordable? Purpose – determine project’s financial feasibility Cash flow and debt payments Water and wastewater rates Narrower perspective, project proponent only

6. Direct Benefits and Costs Based on Guidelines for Preparing Economic Analysis for Water Recycling Projects, Economic Analysis Task Force for Water Recycling in California (State Water Resources Control Board, 2011) Direct Benefits • Additional Water Supply • Reliability • Local Control • Avoided Cost of Other Projects • Diversion of Effluent Discharge • Regulatory Certainty Indirect Benefits • Environmental Changes • Recreation • Nutrient Value • Property Values • Resilience • Greenhouse Gas Reduction/Energy Conservation • Integrated Resource Management

7. Economic Analysis – Identify Benefits and Costs from Presentation on Guidelines for Preparing Economic Analysis for Water Recycling Projects, Economic Analysis Task Force for Water Recycling in California (State Water Resources Control Board, 2011) • Environment • Restoration • Downstream habitat • Source water protection • Air quality (GHGs) • Recreation • GW balance/protection

8. Financial Analysis Identify and Estimate Costs User Purpose A SCRB Approach from Economic Analysis User Allocate Financial Costs User Purpose B User Bonds Develop Capital Financing Mechanisms Loans Design Revenue Scheme from presetnation on Guidelines for Preparing Economic Analysis for Water Recycling Projects, Economic Analysis Task Force for Water Recycling in California (State Water Resources Control Board, 2011)

9. Water Reuse: Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater Committee on the Assessment of Water Reuse as an Approach for Meeting Future Water Supply Needs COMMITTEE ON THE ASSESSMENT OF WATER REUSE AS AN APPROACH TO MEETING FUTURE WATER SUPPLY NEEDS RHODES R. TRUSSELL, Chair, Trussell Technologies, Pasadena, California HENRY A. ANDERSON, Wisconsin Division of Public Health, Madison, Wisconsin EDMUND G. ARCHULETA, El Paso Water Utilities PSB, El Paso, Texas JAMES CROOK, Environmental Engineering Consultant, Norwell, Massachusetts JÖRG E. DREWES, Colorado School of Mines, Golden, Colorado DENISE D. FORT, University of New Mexico, Albuquerque, New Mexico CHARLES N. HAAS, Drexel University, Philadelphia, Pennsylvania BRENT M. HADDAD, University of California, Santa Cruz, California DUANE B. HUGGETT, University of North Texas, Denton, Texas SUNNY JIANG, University of California, Irvine, California DAVID L. SEDLAK, University of California, Berkeley, California SHANE A. SNYDER, University of Arizona, Tucson, Arizona MARGARET H. WHITTAKER, ToxServices LLC, Washington, D.C. DALE WHITTINGTON, University of North Carolina, Chapel Hill, North Carolina NRC Staff STEPHANIE E. JOHNSON, Study Director, Water Science and Technology Board SARAH E. BRENNAN, Program Assistant, Water Science and Technology Board http://www.nap.edu/catalog.php?record_id=13303

10. A New Paradigm for Water Supply “As the world enters the 21st century, the human community finds itself searching for new paradigms for water supply and management in light of expanding populations, sprawling development, climate change, and the limits of existing conventional supplies.” Water Reuse: Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater National Academy of Science, 2012

11. Financial v. Economic Costs Financial costs involve how much the utility has to pay to construct and operate the project, including interest costs. Economic costs account for all of the costs to whomever they may accrue. These include the financial costs of carrying out the project, as well as costs that take the form of impositions on or losses to anyone who is affected by the project. Water Reuse: Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater National Academy of Science, 2012

12. Possible Nonmonetized Costs and Benefits of Reuse • Table 9.3, Water Reuse: Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater National Academy of Science, 2012

13. Possible Nonmonetized Costs and Benefits of Reuse • Table 9.3, Water Reuse: Expanding the Nation's Water Supply Through Reuse of Municipal Wastewater National Academy of Science, 2012

14. Types of Water Reuse Projects that Maximize Benefits, Minimize Costs • Nonpotable reuse by large water customers • Industrial reuse • Collocation of industries • Decentralized treatment and reuse • Design of subdivisions, neighborhoods to maximize local reuse • Indirect potable reuse • Potable water reuse

15. Questions For consumer advocates and environmentally concerned parties, please discuss your concerns with the cost, pricing, customer classes, regional markets, and other arenas, circumscribing the wholesale and retail sale of recycled water to and by IOU water customers.