About five years ago, I wrote about project developer who specializes in energy tax deductions and rebates. We call him "Dr. EPAct" because he knows how to navigate and attain substantial tax deductions and rebates, which pay for most (if not all) of a project's cost. His highly tangible skills in accounting are typically "outside" of an energy manager's core strengths, but definitely worth knowing. This month, Dr. EPAct (Bill Bissmeyer) is contributing again in this article! He will help explain the Federal Tax Extenders Act, which was signed on December 18, 2015 into law. More importantly, Bill presents a case study showing the economics and tax advantages that you have available to you. Frankly- you cannot afford to skip this article because it may be the key you need to get your project funded.
This article provides a brief comparison of the public sector vs. private sector in terms of characteristics, applicable incentives, and decision- making criteria for participating in new, untried endeavors like demand-side programs, using water agencies in California as the public sector example. Recommendations on characteristics of utility demandside programs likely to be attractive to public agencies are provided.
Water utilities are facing a number of issues: droughts and climatic variations in water supply, rapidly rising operating costs, demands for increasingly expensive investments in treatment for fresh water and wastewater, heightened customer expectations in both service and environmental impacts, and the need to replace aging infrastructure. This has spurred interest among water suppliers in managing water demand, capturing all revenue, minimizing distribution system and customer water losses, and increasing customer support and information. A change in their metering systems is one of the primary tools to do this.
You think you're about to be a hero by entering into an Energy Savings Agreement, (which is supposed to fund improvement projects based on savings). Your long-time law firm reviewed the contracts, and your engineers have signed off. Everything seems positive. So what can go wrong? Actually, quite a bit... and your knowledge can be the difference between having a glowing success or abject failure that could cost you a job, reputation or worse.
Smart meters have been prominent in the energy utility world, and are beginning to make substantial inroads in the water utility world. Smart meters are probably more useful for the water sector than for the energy sector, and the old days of billing total water consumption during the last month or two is being phased out with the introduction of time-of-use water consumption information. Smart meter installations have reported numerous benefits, both operational and on the customer side (see Table 1). Aside from the obvious savings from reduced need for onsite meter reading, the ability to identify not just the volume of water consumption but also the timing of that consumption has significant benefits, particularly to customers, and may be a linchpin for enhanced water conservation efforts.
One of the state of California's largest end uses of electricity is in the treatment, heating and cooling, and conveyance of water. In 2005, the California Energy Commission estimated that water-related energy accounts for almost 20% of the state's electricity requirements. The California Public Utilities Commission (CPUC) followed this observation by authorizing water-energy pilot projects designed to validate claims that saving water can save energy and explore whether energy savings may be realized through water conservation measures and incorporated into electric utility energy efficiency programs (http://www.cpuc.ca.gov/PUC/energy/Energy+Efficiency/Water+Energy+Nexus+Programs.htm).
A joke long popular among disaffected employees and humorists in the power industry asks, "What is the difference between an electric utility and a group of Boy Scouts in the woods?"