CPUC Petitioned to Develop Methodology to Quantify Costs, Benefits of Energy-Reducing Programs for Water Sector - Petition is Significant to Water Districts Across California

by Best Best & Krieger LLP

The California Public Utilities Commission’s (CPUC) own Division of Ratepayer Advocates (DRA) petitioned the CPUC yesterday to start a rulemaking proceeding that would develop a partnership framework between investor-owned utilities (IOUs) and the water sector to co-fund programs to reduce energy consumption by the water sector in supplying, conveying, treating and distributing water, and by agricultural and industrial customers. The DRA, in its petition, calls upon “the active participation of potential partners from both the energy and water sectors” in the proceeding. The water sector includes all CPUC-regulated water utilities, along with public water and wastewater agencies.

Public comments regarding the petition are due to the CPUC by June 21.

The petition is significant in that it seeks to develop a methodology for determining, in part: (1) the energy cost embedded in water, (2) the benefit to water sector partners, (3) funding sources available to water-sector partners and (4) the methodology for allocating program costs among the IOUs and the water sector. Given that the petition also seeks to coordinate this proposed rulemaking with current and future rulemaking proceedings to “ensure consistent treatment of water-energy nexus programs,” this petition will likely create methodology that is used in future proceedings related to water/energy efficiency. Thus, it is significant for water districts across California.

In its petition, the DRA acknowledges the significant connection between water and energy in the state, stating on the first page that “water and energy are inextricably linked.” Citing numerous sources, the DRA goes on to assert in its petition that the “development and adoption of a framework for co-funding water-energy nexus programs that would allocate costs in proportion to the benefits realized by energy IOUs and their partners in the water sector is essential.” However, the DRA acknowledges that this framework cannot be created without first crafting a methodology by which energy-savings and cost-effectiveness in the water-energy context can be calculated. As such, the DRA proposes that the CPUC initiate a rulemaking proceeding to generate such a methodology.      The DRA is recommending an all-party workshop be held to scope the new proceeding. Given the importance of the proposed proceeding, it is anticipated that a water-sector coalition will be formed to ensure that specific water agency interests are represented at the table during the scoping period and the proceeding itself.

For more details or questions about the petition, joining the coalition to submit joint comments and participate in the proceeding, or CPUC proceedings in general, please contact Sophie Akins or an attorney in the firm’s California Public Utilities Commission group.

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