MANAGING THE DOWNSIDE RISKS OF ENERGY MANAGEMENT: THE ENERGY TRADEOFFS CHALLENGING WATER UTILITIES

The water and wastewater sectors are large consumers of electricity. Accordingly, there has been growing attention paid to how water utilities can reduce their energy consumption levels (and manage the timing of power use) as a means to (1) reduce a major component of operating expenses, and (2) reduce pressures on regional power generation and transmission grids that in some key regions are at risk of system failure, especially during periods of peak energy demand.Although there has been growing attention on the cost savings and other benefits to water utilities from better managing their energy demands, there has been relatively little attention paid to (1) the types and levels of risks that water agencies may face in how they manage their energy, or (2) the supply-side options that water utilities have to manage where and how they acquire or produce the energy they use. This paper provides a discussion of on-going work on a research project – jointly funded by the Awwa Research Foundation (AwwaRF) and the California Energy Commission (CEC) – on the risk-benefit tradeoffs emerging in the water sector with respect to how water utilities manage their energy demand and supply options.