METROPOLITAN WATER DISTRICT 3 - Laserfiche WebLink

Home Browse Search

r l1li ~:ngPOLlTAN WA TER DISTRICT DF SOUTHERN CALIFORNIA ',,~, ~s BOARD "" '!E';'; ACTION . . Board of Directors Water Planning, Quality and Resources Committee January 13, 2004 Board Meeting 9-1 Subject Authorize long-term regional CommerciallIndustrial/Institutional rebate program and additional $2.5 million to fund existing pilot program until new vendor agreement is executed Description This letter proposes a strategy to transition Metropolitan's Regional CommerciallIndustrialInstitutional (CII) Pilot Rebate Program (Pilot Program) into a long-term program. The Pilot Program has demonstrated an effective approach in providing financial incentives to motivate the business sector to conserve water. In order to assure there is no gap between the Pilot Program and the proposed long-term program, a six-month extension to the existing vendor agreement is needed. Water Resources Opportunity Prior to the Pilot Program, the CII sector had been largely an untapped market for water use efficiency. Within Metropolitan's service area, CII water consumption is estimated to be 900,000 acre-feet per year or approximately 25 percent of total retail demand. Since the Pilot Program's inception, more than 37,000 rebates for water-efficient retrofits such as clothes washers, cooling tower controllers, and ultra-low-flush toilets have been issued. The rebates were established using the $154/AF savings benchmark for conservation, and increased under the Pilot Program to jump-start the CII market and to test rebate levels and customer participation. These retrofits have resulted in water savings of more than 5,000 AFY. Significant opportunity remains to conserve more water through additional device retrofits. By the end of the program, based on trends in the Pilot Program, the rebates are projected to yield between 15,000 and 25,000 AFY. Even after the program, savings will continue to be generated, based upon estimated equipment life that can range up to 20 years. In addition to this program, staff is also working with member agencies to develop other improved approaches to conserving industrial process water and using recycled water in business applications. Pilot Program In March 2000, the Board authorized a three-year consultant services contract for up to $2.5 million with Honeywell DMC Services (Honeywell) for implementation of the Pilot Program. Honeywell was selected through a publicly advertised competitive process. Under the Pilot Program, businesses have received incentives to retrofit equipment with water-efficient devices. Introducing a regional approach, the Pilot Program successfully increased the business sector response to conservation incentives compared to the prior ell program. The Pilot Program has allowed Metropolitan to leverage its funding by receiving more than $2.3 million in co-funding since its inception from the California Public Utilities Commission, the Department of Water Resources, and the United States Bureau of Reclamation. In addition, member agencies and their retailers have co-funded rebates for their CII customers by more than $1 million. Total outside co-funding has almost doubled the program funding level. In May 2002, the Board approved an additional $5.4 million to fund the Pilot Program through June 2004. At that time, staff indicated that it would return to the Board with a long-term regional program founded on experience gained from the Pilot Program and member agency input.