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2019 Strategic Directions:

Electric Report

Water Reuse: Amid Possible Regulatory Fatigue, Electric Utilities Still Grapple with Water Issues

By Mike Preston and Rachel Swezy

As people become more environmentally conscious and urge industry to do the same, pressure is mounting on the nation’s electric utilities to be on the right side of public opinion beyond simply trying to mitigate what comes out of their smokestacks.

This is a story about water — a lifeblood of many power plants, like the coal or uranium that fuel them — and adhering to tightening regulations, two of the things that continue to command the attention of operators and managers of electric utilities, a new Black & Veatch study shows.

After a decade of scrambling — and in many cases, spending mightily — to meet new federal rules enacted a few years ago to limit wastewater discharges from power plants, the poll suggests many utilities may be fatigued by these regulatory demands. And while they still pursue greater sustainability and resilience while essentially borrowing less from freshwater sources in their power creation, utilities may be taking a breather on new investments.

Nearly half of the respondents to a survey of nearly 900 energy sector stakeholders for Black & Veatch’s 2019 Strategic Directions: Electric Report say that compliance and regulatory concerns are the top drivers for making water management a priority at their site. Water stewardship and sustainability concerns closely followed at 46 percent, with water supply and reliability matters cited by some three of every 10 respondents.

2019 electric sdr data graphic

When asked separately what is considered to be the most-challenging issues facing the electric industry now, aging infrastructure again led the field, with roughly 44 percent. Aging workforce, cybersecurity, renewables and environmental regulation were tightly bunched.

Water Supports Coal-Fired, Nuclear Power Generation

Consistently gaining in popularity, renewable energy sources such as wind and solar photovoltaic power require little to no water in their operations. But water supply is a vital consideration for coal-fired and nuclear power plants, where heat and steam at these sites termed thermoelectric make it all happen.

More than 60 percent of the thermoelectric generating capacity in the United States uses recirculating water in a closed loop as cooling systems, allowing constant reuse of the water. But thermoelectric power and irrigation remained the two largest uses of water in 2015, according to the U.S. Geological Survey. Nearly all of the 133,000 million gallons a day withdrawn by thermoelectric plants came from surface-water sources, mostly freshwater rivers and lakes. That’s roughly 40 percent of the total U.S. water withdrawals.

The 52.8 trillion gallons of water that the federal government says was withdrawn by U.S. thermoelectric plants in 2017 reflected a slight decline in water withdrawal volumes since 2014 and continued an overall trend of steady to declining water demand for power generation despite a steady growth in power supply since the 1970s.

The U.S. Energy Information Administration has said that the average amount of water withdrawn per unit of total net electricity generated fell from 15.1 gallons per kilowatt hour (kWh) in 2014 to 13.0 gallons per kWh in 2017. This is likely due to the changing landscape in power generation, but it also reflects a commitment to water stewardship and sustainability by power-generating utilities.

To no one’s surprise, given water’s intensive role in power generation, electric utilities place great emphasis on being smart about how it’s used. Nearly six of every 10 respondents serving populations of 500,000 to 2 million people define their utility’s water management as extremely important or very important. Nearly half (49 percent) of operators in areas with more than 2 million residents felt that same way. Respondent utility stakeholders in population centers of fewer than 500,000 were less concerned, with roughly one-third of respondents saying they didn’t consider water management important at all — perhaps because they had sustainable water supplies.

From oversight of a utility’s rates to policing of its emissions and water usage and discharge, regulators wield considerable weight in a power plant’s operations. Utilities are obligated to meet state and federal regulations. They also know that stewardship and sustainability perceptions — certainly as they apply to water — among their ratepayers contribute to a larger public image.

Regulations have simply gotten tighter, since the U.S. Environmental Protection Agency (EPA) roughly a decade ago first launched discussions of new draft rules related to pollution thresholds in water discharges by utilities. A few years ago, the EPA finalized the new technology-based effluent limitation guidelines — the first update since 1982 — for thermoelectric power plants that discharge into surface waters. The final regulations still are being discussed, creating uncertainty for power-generating sites.

During the early years of the Obama administration as the regulatory change swirled toward eventual codification, some utilities were early adopters, proactively updating their on-site wastewater treatment. Others held off and deferred committing to the multi-million-dollar upgrades of their water operations until a final rule had been passed.

It’s because of those payouts and regulatory fatigue that utilities appear to be pressing pause on wastewater spending, at least for now. It also may be due to the fact that the remaining thermoelectric facilities recently have modernized their water and wastewater systems. 

According to the Black & Veatch survey, more than one of every five respondents said they anticipate their utility making no investments in water supply and treatment infrastructure in the next three years. Eleven percent envision spending $1 million to $10 million, with just 9 percent anticipating spending more than $10 million. More than half (53 percent) simply don’t know.

2019 electric sdr data graphic

Drilling down a little further, such spending outlooks vary according to the residents of the utility’s service area. Two-thirds of the utilities that serve fewer than 500,000 residents planned to make no investments in the next few years. In population centers of more than 2 million people, more than one-third of utilities — 34 percent — anticipated infrastructure spends of more than $10 million, edging the 32 percent who planned no investments.

Amid that thrift, many utilities are fostering relationships with water and wastewater utilities, specifically to obtain reclaimed water for use in the cooling tower processes. An overwhelming majority of surveyed utilities with populations of 500,000 to more than 2 million said they considered on-site recycled and reused wastewater as their top viable options. Treated municipal wastewater was the second workable option among the same audience.

Without question, such complexities come with a buffet of options and price tags. In a sector clearly not averse to seeking outside advice from companies with a breadth of utility knowledge, one-quarter of respondents say they would value consultation about water and wastewater treatment. Seventeen percent said they would welcome a water supply and management assessment, while 13 percent would embrace advice about engineering, procurement and construction and design-build-operate-maintain capabilities.

With regulations and water resilience concerns continuing to evolve, now may be the time for utilities to reconsider their water-management practices and approaches.

Mike Preston, as a project engineer serving as industrial water treatment section leader at Black & Veatch, leads a group of about 25 chemical engineers specializing in industrial water and wastewater treatment across a variety of industries. The group provides a range of engineering services and project execution approaches, including early water management planning and permitting support, consulting services for existing facilities, and detailed design, startup and commissioning of turnkey projects.

Rachel Swezy is a wastewater process specialist for Black & Veatch’s water technology group. She focuses on wastewater treatment studies and designs plants to meet local, state and federal regulations using the latest technologies.

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