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					                                                                                                                               King County Department of
                                                                                                                              Natural Resources and Parks

                                                                                                                       REVIEW AND COST ANALYSIS OF
                                                                                                                        DEMAND REDUCTION PROJECT
                                                                                                                      FOR CARNATION TREATMENT PLANT

                                                                                                                                         DRAFT

                                                                                                                                     December 2004




1218 THIRD AVENUE, SUITE 1600 • SEATTLE,                                                                     WASHINGTON   98101-3032 • (206) 684-6532 • FAX (206) 903-0419
H : \ F i n a l \ K i n g C o _ S E A \ 6 8 8 1 c 0 0 \ D l v \ T m \ W h i t e P a pe r D r a f t . d o c
                               King County Department of Natural Resources and Parks

                    REVIEW AND COST ANALYSIS OF DEMAND REDUCTION PROJECT
                               FOR CARNATION TREATMENT PLANT


                                                         TABLE OF CONTENTS

                                                                                                                                     Page No.

EXECUTIVE SUMMARY..............................................................................................................1

INTRODUCTION..........................................................................................................................1

WASTEWATER COLLECTION AND TREATMENT ....................................................................1
     Supporting Documentation...............................................................................................2

DEVELOPING BASELINE WATER DEMANDS...........................................................................2

DEMAND MANAGEMENT ALTERNATIVES ...............................................................................4
     Flow Impacts of Conservation Alternatives ......................................................................8

COST DEVELOPMENT .............................................................................................................10
      Conservation Program Implementation..........................................................................10
      Wastewater Collection and Treatment ...........................................................................11
      Utilities ...........................................................................................................................12

COST-EFFECTIVE ANALYSIS..................................................................................................12
     Major Assumptions ........................................................................................................13
     Costs Evaluation Method ...............................................................................................13
     Combined Perspective Cost Effectiveness ....................................................................14

DISCUSSION.............................................................................................................................14
     Conservation and Demand Reduction Comparison .......................................................14
     Sensitivity Analysis ........................................................................................................15
     Cost-Effective Perspectives ...........................................................................................17

STUDY CONCLUSIONS............................................................................................................17

                                                             ATTACHMENTS

Attachment A -            Aquacraft Inc.: Task 3 Demand Management Strategies
Attachment B -            Pacific Institute: Demand Management Cost Effectiveness Analysis -
                          Demand Reduction Project for the Carnation Treatment Plant


                                                            LIST OF TABLES

Table ES-1      Comparison of Demand Management Alternatives............................................. ES-1
Table ES-2      Alternatives Cost Perspectives ........................................................................... ES-2
Table 1    Existing Code Compliance Alternative.............................................................................. 5
Table 2    Mandatory Conservation (All) Alternative ......................................................................... 6
Table 3    Mandatory BAT (All) alternative........................................................................................ 7


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Table 5          Annual Average Wastewater Projections for Each Conservation Alternative ................... 8
Table 4          Wastewater Criteria for each Demand Management Alternative ...................................... 9
Table 6          Comparison of Average vs. BAT Fixtures and Appliances ............................................. 10
Table 7          Conservation Program Cost Comparison ....................................................................... 11
Table 8          Combined Perspective Cost Estimates .......................................................................... 14
Table 9          Comparison of Conservation Retrofit Projects................................................................ 15
Table 10         Flow Sensitivity of Annual Average Wastewater Projections at Design Year ................. 16
Table 11         Sensitivity Analysis on Mandatory BAT (All)................................................................... 16
Table 12         County, City, and Citizen Cost Perspectives .................................................................. 17


                                                         LIST OF FIGURES


Figure 1: 2002 City Potable Indoor/Non-seasonal Water Use............................................................. 3




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                          Review and Cost Analysis of Demand Reductions Project
                                      for Carnation Treatment Plant

EXECUTIVE SUMMARY

The study determined the cost implications for King County (County) to employ a water demand
management program in conjunction with the design of the Carnation Wastewater Treatment Facility
(CWWTF). The County is in partnership with the City of Carnation (City) to collect and treat the City’s
sewage at a centralized wastewater treatment facility. The City will install and operate the vacuum
sewer collection system. The County will construct and operate the CWWTF.

Aquacraft Inc. was tasked with evaluating the impact of different levels of conservation measures to
reduce the projected CWWTF flows, as compared to the current engineering design. Based on
range of resulting flows, four alternatives were selected for cost evaluation by the Pacific Institute
(PI).
      Current Design - uses the per capita rates agreed upon between the County and the City
      derived from historical water usage. The rates do not account for future per capita demand
      reductions.
      Existing Code Compliance - assumes water usage remains similar to historical patterns but
      accounts for both natural replacement and new development will meet current plumbing codes
      and install “average” efficient fixtures.
      Best Available Technology (BAT) New Construction - assumes water usage remains similar
      to historical patterns but accounts for 1) natural replacement rate of efficient fixtures and 2)
      enhanced water efficiency building standards will require all new development to install BAT
      fixtures.
      Mandatory BAT (All) - assumes all existing fixtures and appliances will be retrofitted with BAT
      and 2) enhanced water efficiency building standards will require all new development to install
      BAT fixtures.

Conservation implementation costs were also estimated for each alternative. Program costs for
Mandatory BAT (All) included 1) full retrofits for homes and businesses, 2) residential toilet flapper
replacement program and public information budget, 3) non-residential audit/leak repairs and air-
cooled equipment rebate program, and 4) start-up County program staff. Implementation costs for
BAT New Construction do not include a retrofit program and supported conservation maintenance
for new structures only. The resulting annual average flow design impact and corresponding
estimated conservation program implementation cost are summarized in Table ES-1.

    Table ES-1 Comparison of Demand Management Alternatives1
                                Conservation                  Year
                               Implementation    2007         2022                                 2030
ALTERNATIVE                        Cost ($)     (mgd)        (mgd)                                (mgd)
Current Design                       $0           0.21        0.35                                 0.37
Existing Code Compliance             $0           0.21        0.29                                 0.30
BAT New Construction              $ 396,692       0.19        0.25                                 0.26
Mandatory BAT (All)              $1,804,110       0.12        0.20                                 0.21
1
    Flows from Task 3.4 of Aquacraft Letter Report and costs approximated from PI Letter Report


DRAFT - December 7, 2004                                                                              ES-1
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Accounting for current plumbing codes and natural replacement rates for household appliances can
potentially reduce the CWWTF flow by almost 20% at design year. Conservation by stricter
mandated plumbing codes may result in a 27-30% reduction of flow. Mandated conservation
(retrofits and new construction plumbing codes) is estimated to provide a 32-43% flow reduction at
design year.

Flow-dependent impacts and costs were identified for the sewer system, CWWTF, and potable
water system. The findings are based in significant measure on the capital and O&M cost inputs for
the collection system and CWWTF. A sensitivity analysis indicated that other selected input
assumptions have no significant effect on the cost effectiveness comparison to the Current Design.
The cost analysis also evaluated the cost effectiveness from separate costs allocation perspectives.
Costs allocated to the County included the conservation implementation costs, capital, and O&M
costs for the CWWTF. Costs allocated to the City included the capital and O&M costs for the sewer
collection system, energy and chemical cost savings for potable water distribution, and lost revenue
from lower community water usage. Costs credited to the citizen included avoided energy and
potable water costs. Table ES-2 compares the combined and individual perspective costs net
present value of each alternative in 2004 dollars for the design life of the facility (2007 to 2030), with
an assumed annual cost of capital of 5.25%, and an inflation rate of 2.25% per year. The combined
perspective accounts for the sum of all the flow-dependent costs for the County, City, and citizens.

    Table ES-2          Alternatives Cost Perspectives2
    Alternative                                               Net Present Value
                                                                ($ in millions)
                                               Combined    County               City              Citizen
    Current Design                              $22.35     $10.55             $11.80               $0.00
    Existing Code Compliance                    $21.88     $10.17             $12.90              - $1.19
    BAT New Construction                        $21.75     $10.33             $13.52              -$2.10
    Mandatory BAT (All)                         $21.87     $11.36             $14.60              -$4.09
    2
        Tables 4 and 6 of PI Letter Report

Based on the factors included within the scope of the study, cost effectiveness is dependent on the
perspective. The allocation of costs between the City and citizens is difficult to completely assess
within the scope of the study. For example, the City must remain fiscally responsible and any
additional costs incurred by the City may have significant impacts on the water rate structure from
revenue loss. A “net citizen savings” would therefore be significantly lower than the cost savings
identified in Table ES-2

•           From the overall perspective, BAT New Construction is the most cost effective alternative.

•           From the County’s perspective, Existing Code Compliance is the most cost effective
            alternative.

•           From the City’s perspective, Current Design is the most cost effective alternative.

•           From the citizens’ perspective, Mandatory BAT (All) is the most cost effective alternative.




DRAFT - December 7, 2004                                                                                    ES-2
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                            Review and Cost Analysis of Demand Reductions Project
                                        for Carnation Treatment Plant

INTRODUCTION

In an age where populations everywhere are becoming denser, small communities are finding that
the demands on their aging septic systems and drain fields exceed the assimilation soil capacity for
pollutant loads according to current standards. These communities must instead centralize and treat
their sewage at small wastewater treatment plants. The City of Carnation (City), historically on septic
systems, is in a unique situation to potentially take advantage of conservation savings with 1) no
existing collection system 2) no existing wastewater treatment plant 3) compensation for high
construction material costs, and 4) implementation in a small community.

In accordance with the King County (County) Countywide Planning Policies, King County
Comprehensive Plan, and to satisfy the requirements of RCW 90.48.495, the study was
commissioned to determine the cost implications for the County to employ a water demand
management program (retrofits and/or new plumbing codes) in conjunction with the design of the
Carnation Wastewater Treatment Facility (CWWTF). Cost implications were analyzed in two parts: 1)
evaluate the feasibility of using demand management measures to reduce flows to the proposed
CWWTF and 2) evaluate the costs implications of reducing indoor water usage in existing and future
homes and businesses within the City. Aquacraft Inc. (Aquacraft) analyzed the flow impacts and the
Pacific Institute (PI) prepared the cost-effectiveness analysis. These corporations were chosen to
prepare the analysis due to their extensive experience and expertise in water efficiency pilot
programs and studies. Aquacraft was tasked with analyzing flows under five alternatives (Existing
Code Compliance, Conservation New Construction, BAT New Construction, Mandatory
Conservation (All), and Mandatory BAT (All)) to explore the resulting range of flows, which would
result. After a review of the results, the County directed PI to evaluate the cost effectiveness of three
alternatives (Existing Code Compliance, BAT New Construction, and Mandatory BAT (All)) against
the current engineering design (Current Design). The three scenarios include the full range of flows
that might occur, and the largest variation in costs and benefits as well. The following paper directly
summarizes the letter reports prepared by Aquacraft and PI on their findings and are attached for
reference.

WASTEWATER COLLECTION AND TREATMENT

The County is in partnership with the City to collect and treat the City’s sewage at a centralized
Carnation wastewater treatment facility (CWWTF) by 2007. The new treatment plant and associated
facilities will provide wastewater treatment for the City and its Urban Growth Area for a 2030 design
year. The City’s population is projected to increase from 2080 residents in 2000 to 3871 residents by
2017. Historically the City has relied on a system of individual septic tanks and drain fields. Yet,
some areas of the City have grown to a density where the clustered drain fields can no longer
effectively treat the volume of normal residential and commercial wastewater flows according to
current County Health Department codes. Building the CWWTF will preserve public health, maintain
community land use, protect the sensitive environment, and help accommodate projected population


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                                                                                                  1
growth within the City. Construction of a new collection and treatment system will enable the City to
grow in accordance with its approved Growth Management Act plan.

The City will install and operate a system for collection of sewage from the residences and
businesses within the city. The system will primarily function as a vacuum sewer collection system,
but isolated parts of the City will be served by grinder pumps and force mains. Two vacuum pumping
stations are planned by the City, one main station to serve properties within the current city limits
and a second, future station, to serve the northern part of the urban growth area (UGA).

The County will construct and operate the CWWTF. Due to the environmental sensitivity of the area,
the CWWTF will include state-of-the art biological treatment and separation facilities. The CWWTF
will include the following major components:

           • Coarse and fine screening, solids storage, and odor control facilities
           • Liquid treatment facilities
                 ○ Activated sludge with anoxic and aerobic zones
                 ○ Membrane bioreactor (MBR) tanks
                 ○ Ultraviolet disinfection (UV) facilities
           • Chemical feed and storage tanks and appurtenances
           • Laboratory and staff office support facilities

Supporting Documentation

Comprehensive planning documents and technical memoranda were used to develop community
baseline water use, demographic data, and cost analysis input to implement a water demand
management program.

•    Roth Hill Engineering Partners, LLC, 2003 Comprehensive Sewer Plan, April 2004.

•    Roth Hill Engineering Partners, LLC, 2004 Sewer Facilities Plan: DRAFT, August 2004.

•    City of Carnation Water Comprehensive Plan: DRAFT.

•    Carollo Engineers, PC, Technical Memorandum No. 2, POPULATION, FLOW, AND LOADS:
     DRAFT, September 2004.

•    City of Carnation monthly water billing records (2000-2002).

•    Puget Sound Energy Existing Gas and Electrical Utility Pipeline Drawings, July 2003.

•    Correspondence with the King County conservation staff.

DEVELOPING BASELINE WATER DEMANDS

Service area population projections, coupled with historical water consumption data, serve as the
basis for developing wastewater flows in the water conservation analysis. The demand management
analysis further separated the housing stock built before 1992 to account for homes that already
have low-flow toilets, showers and faucets installed due to Uniform Plumbing Code requirements
that went into effect in 1992. Aquacraft analyzed the City’s monthly water billing records for calendar
years 2000, 2001, and 2002 to establish a baseline potable water use within the City’s service area

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                                                                                                 2
for the agricultural, commercial, residential, public schools, Remlinger Farms1, and unclassified
sectors.

From the records, only the indoor demand component contributing to sewage flow projections was
estimated. Indoor use (based on the non-irrigation months of December to February) was
determined to account for nearly 84% of all metered demand and outdoor use (primarily residential
irrigation) accounted for 16.3%. Analysis of water billing data shows that the average expected flows
to a hypothetical wastewater treatment plant in 2000-2002 would have been 0.17 to 0.19 MGD.

The non-seasonal/indoor use component among the five customer categories is shown in Figure 1.
Residential demand accounts for 71% of the total indoor demand. The large majority of the City’s
wastewater flow is primarily comprised from homes. In addition, limited information on the non-
residential sectors was available during the study. Although the analysis was prepared based on all
sectors within the community, the paper focuses on discussing the expected demands within
residential sector. The second largest sector is the unclassified accounts but it is not possible to
accurately determine their conservation potential. Correctly classifying the 84 “Unclassified” water
accounts and incorporating the results into the demand and cost projection components of the
analysis would allow for the sector’s real conservation potential to be accurately evaluated and could
potentially influence the impact of the water conservation plan.

                                                         Agriculture
                                                            0.1%        Commercial,
                                                                    industrial, municipal
                                          Unclassified                      7.0%
                                            20.0%



                           Public schools
                                1.8%




                                                                             Residential
                                                                               71.0%

Figure 1: 2002 City Potable Indoor/Non-seasonal Water Use2




1
  Large local commercial establishment not on City potable water supply, but within the City’s sewer collection system
planning area. Quarterly water willing date from Jan - Sept 2003 was provided by the establishment.
2
  Figure 2 of Aquacraft Letter Report
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                                                                                                               3
Overall, non-revenue water (unaccounted for and unmetered water) is estimated to be 40% of water
produced. Typically, 10 to 20% of water production is not accounted for within a water system3. Of
the 40% non-revenue water within the City, an estimated 15% is unmetered water4. The unmetered
amount is equivalent to 6% of the City’s total water production. Although no information about the
composition of the unmetered demand within the City is available, municipal uses such as streets
and medians and parks dominate the unmetered usage category in other cities. For this study, it is
assumed that the unmetered component will have the same indoor/outdoor contribution as the entire
City. A survey of the unaccounted/unmetered water is recommended to more accurately determine
how much of the demand will enter the new wastewater treatment system.

DEMAND MANAGEMENT ALTERNATIVES

The Criteria for Sewage Works Design manual (Washington State Department of Ecology, 1998)
provides a recommended guideline value of 100 gallons per day for each resident in the state of
Washington. This value includes a normal fraction for inflow and infiltration to the sewers. With the
planned design of a vacuum sewer collection system (negligible inflow and infiltration), the City and
County agreed upon a residential per capita rate of 56 gpcd, based on analyzing the metered
residential water use in 2000, 2001, and 2002. The historical usage also includes a large percentage
of unaccounted water consumption in the City. The current engineering design allows for a per
capita rate for planning of residential wastewater of 65 gpcd, containing an allowance of 15% for
unaccounted water to enter the sewer system, water meter inaccuracies, and a small infiltration and
inflow contingency. The design value does not account for future per capita demand reductions.

Aquacraft analyzed the resulting water demand of five demand management alternatives as
compared to the current engineering design. It is assumed that the alternatives presented requires
compliance by all citizens as a condition of connecting to the wastewater treatment system. Although
flow reductions from full retrofits within small study groups have been well documented, a mandatory
retrofit program for existing customers is a relatively untested concept. Such a mandatory program
requires commitment and cooperation between the County, the City, and the citizens of Carnation.
Citizens must understand and “buy into” the program if it is to be successful.

     Existing Code Compliance – The alternative simulates the demand reduction experienced by
     accounting for 1) a natural replacement (NR) rate5 of efficient fixtures and 2) new development
     will meet current plumbing codes (PC) and install “average” fixtures. The water usage in existing
     homes and the commercial, industrial, and municipal sector remains similar to historical patterns
     with moderate demand reductions due to natural replacement of “average” fixtures at a rate of
     3% per year. Table 1 details the residential and commercial, industrial, and institutional (CII)
     packages.




3
  Water Conservation Measures Fact Sheet, National Drinking Water Clearing House, 1998.
4
  Based on the best-available-local-knowledge-estimate made by the Public Works Director.
5
  The old fixture is replaced by the citizen for reasons other than water conservation.
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                                                                                                4
    Table 1             Existing Code Compliance Alternative6
    End Use              Residential       Existing         New Residential                   Existing/New CII
    Category             Per Capita      Residential
                           Usage7
    Toilets             17 gpcd /     NR with 1.6 gpf      PC with 1.6 gpf                  NR/PC with 1.6 gpf
                        7.9 gpcd /
                        7.9 gpcd
    Clothes             14 gpcd /              NR w/ available       Available              Not applicable
    washers             13 gpcd /              appliances.           appliances. Avg. =     (except in few
                        13 gpcd                Avg. = 35 gal/load    35 gal/load            cases)
    Faucets             9 gpcd /               NR with               PC with                NR/PC
                        9 gpcd /               2.0 gpm (hand sink)   2.0 gpm (hand sink)
                        8.5 gpcd               2.5 gpm (kitchen)     2.5 gpm (kitchen))
    Showers             12 gpcd /              NR with 2.5 gpm       PC with 2.5 gpm        NR/PC with 2.5 gpm
                        12 gpcd /
                        11.4 gpcd
    Dishwashers         1.5 gpcd /             NR w/ available       Available mix of       NR/PC with
                        1.5 gpcd /             appliances.           appliances.            available appliances
                        1.5 gpcd               Avg. = 10 gal/load    Avg. = 10 gal/load
    Leak detect         Leaks:                 No accelerated        No accelerated         No accelerated
    and repair          6 gpcd /               program               program                program
                        4 gpcd /
                        4 gpcd
    Urinals             ---                    NA                    NA                     NR/PC with 1.0 gpf
    Water cooled        ---                    NA                    NA                     NR/PC with mix of
    equipment                                                                               air and water-cooled
                                                                                            equip.
    Other               0.5 gpcd /             NA                    NA                     Nothing
                        0.5 gpcd /
                        0.5 gpcd



      Conservation New Construction - The alternative simulates the demand reduction
      experienced assuming 1) water usage in existing homes and the commercial, industrial, and
      municipal sectors remain similar to historical patterns with moderate demand reductions due to a
      natural replacement rate of efficient fixtures at a rate of 3% per year and 2) new development
      installing high quality fixtures and appliances including: 1.6 gpf toilets, 2.0 gpm showerheads,
      low flow faucet aerators, improved efficiency clothes washers, improved efficiency dishwashers,
      and 1.0 gpf urinals.

      Best Available Technology (BAT) New Construction - The alternative simulates the demand
      reduction experienced assuming 1) water usage in existing homes and the commercial,
      industrial, and municipal sectors remain similar to historical patterns with moderate demand

6
  Task 3.2 of Aquacraft Letter Report6 Per capita usage appliance breakdown for existing residential / natural
replacement / new residential usages
7
  Per capita usage appliance breakdown for existing residential / natural replacement / new residential usages
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                                                                                                                 5
      reductions due to a natural replacement rate of efficient fixtures at a rate of 3% per year and 2)
      new development conforming to enhanced City’s water efficiency building standards by installing
      BAT fixtures and appliances (commercially available today) including: dual flush 0.8/1.6 gpf
      toilets, 1.75 gpm showerheads, low flow faucet aerators, high efficiency clothes washers, high
      efficiency dishwashers, and waterless urinals.

      Mandatory Conservation (All) - The alternative simulates the demand reduction experienced
      assuming all existing homes and commercial, industrial, and municipal sectors and all new
      development will be retrofitted8 and installed with high quality fixtures, respectively. Enhanced
      water efficiency building standards will be required by local code (LC). High efficiency
      dishwashers will be promoted through an incentive program, but excluded from the standard
      retrofit package. Table 2 details the residential and CII conservation packages.

    Table 2             Mandatory Conservation (All) Alternative9
    End Use             Residential        Existing          New Residential                     Existing/New CII
    Category             Per Capita      Residential
                          Usage10
    Toilets             17 gpcd /   Retrofit with 1.6 gpf  1.6 gpf                              Retrofit/LC with
                        7.9 gpcd                                                                1.6 gpf
    Clothes             14 gpcd /   Retrofit w/ <= 30      LC requirement WF                    Not applicable
    washers             8.3 gpcd    gal/load WF11 <= 8.5 <= 8.5                                 (except in few
                                                                                                cases)
    Faucets             9 gpcd /              Retrofit w/              LC requirement           Retrofit/LC
                        8 gpcd                1.0 gpm (hand sink)      1.0 gpm (hand sink)      requirement
                                              2.2 gpm (kitchen)        2.2 gpm (kitchen)        1.0 gpm (hand sink)
                                                                                                2.2 gpm (kitchen)
    Showers             12 gpcd /             Retrofit with 2.0 gpm    LC requirement 2.0       Retrofit/LC
                        11.4 gpcd                                      gpm                      requirement 2.0 gpm
    Dishwasher          1.5 gpcd /            Incentives for <= 8      LC requirement <= 8      NR and LC/LC
                        1.2 gpcd              gal/load                 gal/load                 requirement for
                                                                                                efficient CII kitchens
    Leak detect         Leaks:                New flapper              New flapper              CII audits and leak
    and repair          6 gpcd /              distribution (5-years)   distribution (5-years)   repair every 5 years
                        2.5 gpcd
    Urinals             ---                   NA                       NA                       Retrofit/LC
                                                                                                requirement 0.5 gpf
    Water               ---                   NA                       NA                       Rebates for air-
    cooled                                                                                      cooled equip. / LC
    equipment                                                                                   requirement
                                                                                                prohibits water-
                                                                                                cooled equip. when
                                                                                                similar air cooled
                                                                                                unit exists
    Other               0.5 gpcd /            NA                       NA                       LC, CII audits, and
                        0.5 gpcd                                                                recs. & rebates

8
  Water conservation measures - fixture replacement is implemented before the old fixture is worn out.
9
  Task 3.2 of Aquacraft Letter Report
10
   Per capita usage appliance breakdown for existing residential / retrofit and new residential usages
11
   WF = water factor (number of gallons needed for each cubic foot of laundry).
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       Mandatory BAT (All) – The alternative simulates the demand reduction experienced assuming
       all existing homes and the commercial, industrial, and municipal sectors will be retrofit with BAT
       fixtures and appliances (commercially available today). High efficiency dishwashers will be
       promoted through an incentive program, but excluded from the standard retrofit package.
       Enhanced water efficiency building standards for BAT will be required by local code (LC) for new
       homes and businesses connecting to the sewer system. Table 3 details the residential and CII
       conservation package.

 Table 3                Mandatory BAT (All) alternative12
 End Use                Residential       Existing                    New Residential          Existing/New CII
 Category                Per Capita     Residential
                          Usage13
 Toilets                17 gpcd /   Retrofit with dual                LC requirement        Retrofit/LC requirement
                        6.4 gpcd    flush 0.8/1.6 gpf                 0.8/1.6 gpf           with dual flush
                                                                                            0.8/1.6 gpf
 Clothes                14 gpcd /             Retrofit w/ <= 25       LC requirement        Not applicable (except
 washers                4.2 gpcd              gal/load WF <= 5.5      WF <= 5.5             in
                                                                                            few cases)
 Faucets                9 gpcd /              Retrofit w/             LC requirement        Retrofit/LC requirement
                        7.2 gpcd              0.5 gpm (hand           0.5 gpm (hand         0.5 gpm (hand sink)
                                              sink) 2.0 gpm           sink) 2.0 gpm         2.0 gpm (kitchen)
                                              (kitchen)               (kitchen)
 Showers                12 gpcd /             Retrofit with           LC requirement        Retrofit/LC requirement
                        10.3 gpcd             1.75 gpm                1.75 gpm              1.75 gpm
 Dishwashers            1.5 gpcd /            Incentives for          LC requirement        Rebates and LC / LC
                        1 gpcd                <= 6 gal/load           <= 6 gal/load         for efficient CII kitchens
 Leak detect            Leaks:                New flapper             New flapper           CII audits and leak
 and repair             6 gpcd /              distribution and        distribution and      repair every 5 years.
                        2 gpcd                installation and leak   installation and      Computerized water
                                              evaluation every 5      leak evaluation       billing system leak
                                              years.                  every 5 years.        alerts.
                                              Computerized            Computerized
                                              water billing system    water billing
                                              leak alerts.            system leak alerts.
 Urinals                ---                   NA                      NA                    Retrofit/LC requirement
                                                                                            waterless
 Water cooled           ---                   NA                      NA                    Rebates for
 equipment                                                                                  air cooled equipment /
                                                                                            LC requirement
                                                                                            prohibits water cooled
                                                                                            equip. when similar air
                                                                                            cooled unit exists
 Other                  0.5 gpcd /            NA                      NA                    Local codes,
                        0.5 gpcd                                                            CII audits, and
                                                                                            recs. & rebates



12
     Task 3.2 of Aquacraft Letter Report
13
     Per capita usage appliance breakdown for existing residential / retrofit and new residential usages
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Incentives, such as rebates, have been assumed for the purchase of high-efficiency dishwashers
rather than including the appliance in the retrofit packages. Although, dishwasher accelerated
replacement has not historically been shown to be cost-effective, Aquacraft and PI have concluded
from previous studies that the incremental cost for purchasing a high-efficiency dishwasher is cost-
justified for new development.
The “New Construction” and “All” alternatives allowed the study to encapsulate the resulting flow
demands based on the political will of the City and County. The “New Construction” alternatives
show the impact of no retrofit impacts from the existing homes and commercial establishments while
the “All” alternatives show mandated retrofits. As a result, the overall conservation program for “New
Construction” is considerably less costly.

Flow Impacts of Conservation Alternatives

Based on the baseline water demand analysis performed during the study, Aquacraft determined the
metered per capita residential water use in 2001 was approximately 60 gpcd, inclusive of the
unaccounted/unmetered water sector. The alternatives evaluated were based on existing as 60
gpcd. The residential wastewater unit rate concluded by Aquacraft is directly comparable to the 65
gpcd agreed upon by the County and the City. Table 4 compares the wastewater unit criteria for
each demand management alternative

Using the City’s population projections, the resulting annual average flows for each conservation
alternative are summarized in Table 5.

 Table 5    Annual Average Wastewater Projections for Each Conservation
            Alternative14
                                                      Year
                                2007       2012       2017     2022                           2030
ALTERNATIVE                     mgd        mgd        mgd      mgd                            mgd
Current Design (Baseline)                                0.21   0.33      0.34         0.35   0.37
Existing Code Compliance                                 0.21   0.27      0.28         0.29   0.30
Conservation New Construction                            0.19   0.25      0.25         0.27   0.27
BAT New Construction                                     0.19   0.23      0.24         0.25   0.26
Mandatory Conservation (All)                             0.15   0.22      0.23         0.24   0.25
Mandatory BAT (All)                                      0.12   0.18      0.19         0.20   0.21




14
     Flows determined from Aquacraft’s demand alternative analysis spreadsheet model
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                                                                                                     8
 Table 4                Wastewater Criteria for each Demand Management Alternative
 Sector                    Current Design       Existing Code  Conservation         BAT New                    Mandatory       Mandatory BAT
                                                 Compliance          New         Construction                Conservation          (All)
                                                               Construction                                        (All)
                           Existing  New       Existing   New Existing   New    Existing  New               Existing     New   Existing   New
 Residential
                                 65             65       60/4815   47     60/4815   40     60/4815   32          40     40       32       32
 (gpcd)
 Commercial
                                 30             30         24      20.4     24      20.4     24      18.0       20.4   20.4     18.0      18.0
 (gpcd)
 Agricultural
                                 100           100        210      210     210      168     210      147        210    168       210      147
 (gal/acct/day)
 High
 Schools16,17                     ---           10         NA      3.3     NA       3.3     NA       3.0        NA      3.3      NA       3.0
 (gal/student/day)
 Elem/Middle
 Schools16                    10/1618        10/1618       2.7     2.7     2.7      2.5     2.7      2.2        2.5     2.5      2.2      2.2
 (gal/student/day)
 Unclassified
 Accounts                        NA             NA        419      NA      419      NA      419      NA         335     NA       293      NA
 (gal/acct/day)
 Unmetered/
 unaccounted                     NA             NA         6       NA       6       NA       6       NA          4      NA        4       NA
 use (%)
 Remlinger
                                7661            NA        7661     NA      7661     NA      7661     NA         6512    NA      5363      NA
 Farms (gal/day)




15
   Baseline / natural replacement water demands
16
   Based on the 365 day calendar year, not the academic year.
17
   New high school to be open by the 2007-2008 school year.
18
   Elementary / middle school unit rates per 12 hours.
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COST DEVELOPMENT

To evaluate the feasibility of using demand management measures to reduce flows to the CWWTF,
flows were analyzed for five scenarios. The Existing Code Compliance, BAT New Construction, and
Mandatory BAT (All) alternatives were evaluated for cost-effectiveness against the Current Design
flow. The alternatives encompass the full range of projected flows as well as the largest variation in
costs and benefits. Costs were developed for each aspect for use in the cost-effective analysis.

Conservation Program Implementation

The total “ballpark” costs to implement the various conservation programs were initially estimated for
each alternative by Aquacraft and refined for the cost-effective analysis by PI. The costs do not
consider depreciation or the economic life of the existing fixtures/appliances being replaced, but
assign the full purchase value as a cost to the respective program. Table 6 provides a comparison of
the energy, water, and retail cost differences between standard and BAT appliances and fixtures.

 Table 6       Comparison of Average vs. BAT Fixtures and Appliances19
 Appliance/Fixture Type   Energy Consumption      Average Water     Approximate Retail
                               (kWh/year)              Use             Value20 ($)
 Average

     Toilet                                              ---           1.6 gpf                      $269

     Clothes Washer                                      441           37.5 gpl                     $508

     Dishwasher                                          475            8.2 gpl                     $338

     Showerhead                                          ---           2.5 gpm                     $20.90

     Hand Sink Aerator                                   ---           2.2 gpm                     $1.80

     Kitchen Sink Aerator                                ---              2.5                      $3.56

 BAT

     Toilet                                              ---         0.8/1.6 gpf                    $317

     Clothes Washer                                      215             12.9                      $1,130

     Dishwasher                                          563               6                        $421

     Showerhead                                          ---             1.75                      $10.50

     Hand Sink Aerator                                   ---              0.5                      $2.43

     Kitchen Sink Aerator                                ---             1.75                      $9.70


19
  Task 3.5 of Aquacraft Letter Report and revisions from PI Letter Report
20
  It is anticipated that bulk purchase discounts can be obtained at a minimum cost savings of 15% over retail value.
A 15% bulk purchase discount has been assumed for the program costs.
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                                                                                                             10
Program implementation costs for the Current Design and Existing Code Compliance alternatives
were set to $0. For the conservation alternatives, the County chose to establish a zero net salvage
value of old appliances and fixtures (salvage value offsets the cost of hauling and disposal).
Program costs for Mandatory BAT (All) included 1) full retrofits for homes and businesses, including
a $150 installation cost per establishment and 15% bulk purchase discount, 2) residential 5-year
toilet flapper replacement program and public information budget, 3) non-residential 5-year
audit/leak repairs and air-cooled equipment rebate program, 4) County Program Manager and staff
during start-up (1.5 FTE), and 5) $600 per new home rebate incentive program to compensate for
the incremental capital cost between the best available and average appliances.
Implementation costs for BAT New Construction did not include a retrofit program and supported
conservation maintenance for new structures only. Compared to the Mandatory BAT (All) program,
costs assumed included 1) zero capital costs for existing homes and businesses, 2) non-residential
5-year audit/leak repairs and air-cooled equipment rebate program for new development only,
3) 25% of County staff start-up costs including public information, 4) 50% of cost for toilet flapper
program, and 5) $600 per new home rebate incentive program to compensate for the incremental
residential capital cost between the best available and average appliances.
Annual program O&M costs were conservatively spread evenly over time in the analysis. A more
realistic, but less conservative assumption would weigh maintenance related issues later in the
analysis period as the appliances and fixtures age. Table 7 provides a comparison of the net present
value (NPV) for each program in 2004 dollars.

 Table 7                Conservation Program Cost Comparison21

 Alternative                                                     Net Present Value ($)
 Current Design                                                           $0
 Existing Code Compliance                                                 $0
 BAT New Construction                                                  $ 396,692
 Mandatory BAT (All)                                                  $1,804,110

Wastewater Collection and Treatment

Conservation based demand reductions only affect flow-dependent unit processes, which result in
material reductions. That is, capital and O&M costs for the sewer collection system and CWWTF are
only reduced if the flow savings causes a decrease in equipment rating or material usage. Due to the
relatively small flow to the CWWTF, some equipment and support facilities are negligibly impacted
because the current design already reflects the smallest capacity range. Other aspects of the facility
are either size-constrained by the pollutant load (not reduced on a lb/day basis) or serves on a
support basis independent of the flows. Capital and O&M costs were developed and approved for
use by County staff in a workshop on November 4, 2004. Total costs provided for the study are for
comparison purposes only and do not reflect the absolute costs of any alternative.




21
     Attachment Tables 1, 2, and 3 of PI Letter Report
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                                                                                               11
For the study, a rough approximation of the total project cost for the collection system was made
based on the cost projection tables in the City’s 2004 Draft Sewer Facilities Plan22. Conservative
estimates were made on the potential sewer pipe and valve size reductions, which could be
achieved, based on flow reductions. Estimated total project cost reductions for the CWWTF were
estimated based on the pre-design cost estimate for the facility. The conservation alternatives were
determined to have negligible impact on decreasing the footprint of the screening, odor control,
chemical system equipment, and non-process support facilities. The biological nutrient removal
tanks, aeration system, and solids handling facilities were size-constrained by the pollutant loading.
Only the MBR and UV systems were assumed to be sized based on flow. Likewise, the pipe-sizing
criteria for the sewer system were applied to the effluent discharge pipe. The analysis concluded that
only the estimated Mandatory BAT (All) alternative flow reduction resulted an effluent discharge pipe
size reduction from 8-inch to 6-inch.

Annual O&M cost reductions for the collection system were minimal and estimated based on
decreased pumping requirements (energy) and a slight extension in the life of equipment. Equipment
maintenance replacement costs were assumed as 3% of the total equipment cost for each
alternative. Annual O&M cost reductions for the CWWTF were based on the 2030 flow. Although the
ultimate design year O&M estimate was used for the duration of the present worth analysis, the
impact was negligible given since the maintenance related costs comprised 74% to 78%of the total
cost.

Utilities

Electricity ($0.065/kWh) and natural gas ($0.96/therm) to the City is supplied by Puget Sound
Energy, a regional utility company. Hence, the loss of revenue from avoided power costs is not
categorized as a true cost savings in the cost effective analysis. The potable water supply is owned
and operated by the City. The City’s current water system is comprised of a well with a 700-gpm
capacity, the Springs with a 380 gpm gravity-fed capacity, reservoir for storage, and
transmission/distribution mains. The City’s current water capacity is at 75% of its water right
claim/permit and has sufficient capacity to satisfy projected growth to 2030. At present, the Springs
supply most of the City’s daily water demands. Potable water from the Springs is directed to an
intake structure and chlorinated (the water from the well is not chlorinated) and conveyed to the
central water main network. Analysis of the City’s operating budget indicated an avoided water
supply will save the City at least $0.02 per hundred cubic feet (ccf). The cost savings reflect less
pumping energy and chlorine gas usage.

COST-EFFECTIVE ANALYSIS

A cost benefit analysis is an attempt to assess in monetary units all the costs and benefits
associated with a project, which are then summarized in a single monetary measure. A positive net
benefit means the project is desirable – total benefits exceed total costs. Unfortunately, it is difficult
to monetize all costs and benefits; so meaningful cost-benefit analysis is expensive and time
consuming to perform. Cost-effectiveness analysis involves specifying a level of service, then
comparing the cost and benefits of various ways (alternatives) for delivering that level of service. If

22
     Roth Hill Engineering Partners, LLC, 2004 Sewer Facilities Plan: DRAFT, August 2004.
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                                                                                                    12
an alternative is estimated to be less costly than a cost benchmark or baseline cost estimate (i.e.
Current Design), it is cost effective.

Major Assumptions

The following summarizes the major assumptions made for the cost-analysis evaluation:

•       Retrofits are much costlier per unit of water conserved because the full cost of the appliance,
        and labor to install it, must be “charged against” the water conserved. Under natural
        replacement, only the incremental cost of the better appliance is “charged against” the water
        conserved. Installing better appliances during new construction is economically identical to
        natural replacement.

•       Water conservation in businesses only occurs in common plumbing fixtures such as toilets
        and sinks due to the limited non-residential (existing and future) information available. Other
        opportunities to avoid water or energy costs for the businesses cannot be assessed at
        present.

•       The annual cost of capital is assumed as 5.25%, per County correspondence. An annual
        inflation rate of 2.25% is assumed, because a real cost of capital of 3% (5.25%-2.25%) is
        reasonable given that real long-term interest rates are predicted to rise moderately and the
        current yield of inflation indexed 20-year maturity US Treasury Bonds is about 2.1%.

•       All year 2007 costs are presented in year 2004 dollars. That is, inflation has not been applied
        to the current cost estimates because the pattern of capital spending in years 2005-2007 is
        unclear. For simplicity, all spending is assumed to begin in year 2007. The assumption has
        little effect on the NPV of the alternatives.

•       The City’s current water rates remain constant despite the City experiencing a loss of water
        revenue and the projected sewer rates have not been imposed.

•       Due to the relatively limited electricity and natural gas usage by the City, the energy utility
        (Puget Sound Energy) is not projected to raise its rates to make up for lost revenue when the
        City and citizens purchase less energy.

•       Residential energy usage assumed 25% heated water using natural gas and 75% heated
        water using electricity. Businesses received energy savings solely from water heating in
        showers and sinks. Shower and bath water energy conservation assumes a temperature
        increased from 60 degrees Fahrenheit to 105 degrees Fahrenheit.

Costs Evaluation Method

A table of cash flows was constructed for each alternative of the readily quantifiable costs and
avoided costs from 2007 to 2030. Annual wastewater flows were interpolated from wastewater
demand projections shown in Table 5. For Current Design and Existing Code Compliance, costs
were separated into three categories: capital for wastewater facilities, facilities O&M costs, and water
supply costs. The cost categories were lower for Existing Code Compliance based on flow. For
Mandatory BAT (All), costs were separated into three additional cost categories (six total): capital
costs for conservation measures, annual costs for the conservation program, and avoided energy

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                                                                                                  13
purchase costs by the citizen. BAT New Construction also modeled the six cost categories with the
necessary adjustments made to reflect a conservation program that applies to new structures only.
The NPV from each cost stream was calculated annually from 2007 to 2030, and all costs for each
alternative were independently summed.

Combined Perspective Cost Effectiveness

Table 8 presents the combined NPV of each alternative in 2004 dollars for the design life of the
CWWTF and collection system. The combined perspective accounts for the sum of all the flow-
dependent costs for the County, City, and citizen, regardless of to whom they accrue. From this
perspective, cash flows from the water rate structure are counted as neither benefits nor costs. All
alternatives were determined to be cost-effective overall as compared to the Current Design. The
cost difference between implementing a conservation program and designing to the Existing Code
Compliance alternative result in a 0.6% and 0.05% variation for the BAT New Construction and
Mandatory BAT (All) alternatives, respectively. The differences between the three alternatives may
be smaller than the accuracy of the cost estimates.

 Table 8                Combined Perspective Cost Estimates23

 Alternative                                             Net Present Value      Cost Effective Compared
                                                           ($ in millions)           with Baseline?
 Current Design                                                $22.35                   Baseline
 Existing Code Compliance                                      $21.88                     Yes
 BAT New Construction                                          $21.75                     Yes
 Mandatory BAT (All)                                           $21.87                     Yes

DISCUSSION

Conservation and Demand Reduction Comparison

The demand reductions determined within the study were comparable to conservation and retrofit
projects undertaken by other municipalities. Heatherwood, CO, studied a scientifically selected
sample of residential water customers to determine baseline conservation data and behavioral
changes24. Although toilet flushing and shower duration increased after conservation measures were
implemented, neither was found to be statistically significant at the 90 percent confidence interval.
Based on a three-year study that evaluated water use in 1,188 study homes across 12 cities in the
United States and Canada, the average daily per capita use was found to be 69.3 gallons25. From
the national study, Seattle26, East Bay Municipal Utility District (EMBUD)27, and Tampa28 participated
in follow-up studies to provide further insight into the achievable savings stemming from the

23
   Table 4 from PI Letter Report
24
   Aquacraft, Inc. 1996. Project Report: Measuring Actual Retrofit Savings and Conservation Effectiveness Using
Flow Trace Analysis. Boulder, Colo.: Utilities Division, Office of Water Conservation.
25
   Mayer, P.W., W.B. DeOreo, E.M. Opitz, J.C. Kiefer, W.Y. Dais, B. Dziegielewski, and J.O. Nelson. 1999.
Residential End Uses of Water. Denver, Colo.: AWWA and AWWARF.
26
   Aquacraft, Inc. 2000. Project Report: Seattle Home Water Conservation Study. Boulder, Colo.: Aquacraft, Inc.
27
   Aquacraft, Inc. 2003. Project Report: Residential Indoor Water Conservation Study. Boulder, Colo.: Aquacraft, Inc.
28
   Aquacraft, Inc. 2004. Project Report: Tampa Water Department Residential Water Conservation Study. Boulder,
Colo.: Aquacraft, Inc. 28 Assumes the Mandatory BAT conservation alternative for this study.
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                                                                                                             14
installation of high-efficiency toilets, clothes washers, showerheads, and faucets. Table 9 provides a
comparison of the conservation retrofit study findings.

 Table 9             Comparison of Conservation Retrofit Projects29
  Year            Location   No. of   Baseline    Retrofit      Retrofit             Statistically Significant
                             Homes     Water       Water       Cost per                      Fixtures
                                       Usage       Usage      Household
                                       (gpcd)      (gpcd)         ($)
 200430          Carnation              733              60.0   31.6      $1110 -     NOT DETERMINED
                                                                           $1682
     1995      Heatherwood               14              58.8   46.1       $750     Toilets, clothes washers,
                                                                                     faucets, and leakage
                                                                                            reductions
     2000          Seattle               37              63.6   39.9      $1,211    Toilets, clothes washers,
                                                                                     faucets, and leakage
                                                                                            reductions
     2003         EBMUD                  33              86.2   52.6      $1,084    Toilets, clothes washers,
                                                                                     and leakage/unknown
                                                                                            reductions
     2004          Tampa                 26              77.2   38.5      $1,299    Toilets, clothes washers,
                                                                                        faucets, showers,
                                                                                          treatment, and
                                                                                        leakage/unknown
                                                                                             reductions

Sensitivity Analysis

The flow projection and cost-estimate models were used to analyze the sensitivity of the study
results. The demand management model developed can be used to explore the impact of
community behavioral changes as well as adjust for a predicted community retrofit penetration rate
in lieu of a mandatory conservation retrofit program. The cost-effectiveness analysis evaluated the
sensitivity of major input adjustments.
       Flow Sensitivity

       Behavioral factors of safety can be used to increase (or reduce) per unit water use across all
       sectors and to adjust for theoretical behavior pattern changes or other unforeseen occurrences.
       Table 10 summarizes the projected annual average wastewater flow sensitivity at design year
       (2030). The Best Case projection represents a 10% decrease in demands. The Worst Case
       represents a 10% increase in demands.




29
     Task 3.3 of Aquacraft Letter Report
30
     Assumes the Mandatory BAT conservation alternative for this study.

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                                                                                                        15
 Table 10   Flow Sensitivity of Annual Average Wastewater Projections at Design Year31
                                        Most Likely   Best Case         Worst Case
ALTERNATIVE                                 mgd          mgd               mgd
Current Design (Baseline)                                    0.37           ---            ---
Existing Code Compliance                                     0.30          0.27           0.33
Conservation New Construction                                0.27          0.25           0.30
BAT New Construction                                         0.26          0.23           0.28
Mandatory Conservation (All)                                 0.25          0.22           0.27
Mandatory BAT (All)                                          0.21          0.19           0.23
       Cost-Effective Sensitivity

       A series of sensitivity analysis was performed on less certain inputs or inputs that could
       potentially adversely affect costs. Since the initial analysis determined that the combined
       perspective for all alternatives were found to be cost-effective, the sensitivity analysis
       concentrated on determination whether the Mandatory BAT (All) alternative would NOT be cost-
       effective under any reasonable set of inputs as compared to the Current Design. Under all
       sensitivity scenarios presented, the Mandatory BAT (All) alternative remained cost-effective
       against the Current Design. Table 11 summarizes the sensitivity analysis results for Mandatory
       BAT (All) against the original inputs.

 Table 11               Sensitivity Analysis on Mandatory BAT (All)32
 Alternative                                      Net Present Value               Cost Effective
                                                    ($ in millions)           Compared with Baseline?
 Original Input
   Current Design                                            $22.35                  Baseline
   Existing Code Compliance                                  $21.88                    Yes
   BAT New Construction                                      $21.75                    Yes
   Mandatory BAT (All)                                       $21.87                    Yes
 Mandatory BAT Input Adjustment
   10% of flow                                           $21.86 - $21.88                Yes
   25% higher staff start-up costs                           $21.92                     Yes
   25% of appliance costs                                $21.50 - $21.91                Yes
   50% natural gas households                                $21.97                     Yes
   Avoided water costs at $0.32/ccf                          $21.51                     Yes
   Electricity at $0.075/kWh                               $21.47                     Yes

The input adjustments were then evaluated in combination with each other to evaluate the range of
all favorable and unfavorable variations. The resulting net present values for Mandatory BAT (All)
ranged from $20.68 million to $22.06 million.




31
     Task 3.4 of Aquacraft Letter Report
32
     Table 4 and 5 from PI Letter Report
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Cost-Effective Perspectives

The conservation economics and impacts can be analyzed from several perspectives. An initial
attempt has been made to allocate costs into the County, City, and citizen perspectives. The six cost
categories were allocated as follows:

•         County - Assumes CWWTF, effluent conveyance, and outfall capital and associated O&M
          costs, capital and associated O&M costs for the conservation program

•         City - Assumes collection system capital and associated O&M costs, reduction in water supply
          costs (chemicals and energy), loss of water supply revenue

•         Citizen - Assumes reduction in water and energy costs

Table 12 summarizes the 2004 NPV from each perspective.

    Table 12       County, City, and Citizen Cost Perspectives33
    Alternative                                      Net Present Value 34,35
                                                         ($ in millions)
                                          County              City                               Citizen
    Current Design                        $10.55            $11.80                                $0.00
    Existing Code Compliance              $10.17            $12.90                               - $1.19
    BAT New Construction                  $10.33            $13.52                              -$2.1036
    Mandatory BAT (All)                   $11.36            $14.60                               -$4.09
The assumed allocation of costs is meant to serve as a starting point for discussion between the
three groups. Based on the current allocation: 1) water bill savings for citizens represent lost
revenue to the City, not real savings and 2) real energy savings by citizens are as much as $0.94
million

STUDY CONCLUSIONS

The cost implications for the County to employ a water demand management program in conjunction
with the design of the CWWTF has been presented and the following conclusions were made based
on the study.

      •    Accounting for current plumbing codes and natural replacement rates for household
           appliances can reduce the CWWTF flow by almost 20% at design year. Conservation by
           stricter mandated plumbing codes may result in a 27-30% reduction of flow. Mandated
           conservation (retrofits and new construction plumbing codes) is estimated to provide a 32-
           43% flow reduction at design year.




33
   Table 6 of PI Letter Report
34
   A negative cost is a benefit.
35
   Allocation of costs assumes that water and energy rates do not change and that sewer charges are not imposed.
This does not represent the final allocation of cost burden. It represents the most neutral representation of burden at
this time since rate and other cost-sharing decisions have not been made.
36
   Customer benefits accrue only to owners of new structures.
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     •     Based on the factors included within the scope of the study, cost effectiveness is dependent
           on the perspective. The allocation of costs between the City and citizens is difficult to
           completely assess within the scope of the study. For example, the City must remain fiscally
           responsible and any additional costs incurred by the City may have significant impacts on the
           water rate structure from revenue loss. A “net citizen savings” would therefore be
           significantly lower than the cost savings identified in Table 12.
               o From the overall perspective, BAT New Construction is the most cost effective
                    alternative.
               o From the County’s perspective, Existing Code Compliance is the most cost effective
                    alternative.
               o From the City’s perspective, Current Design is the most cost effective alternative.
               o From the citizens’ perspective, Mandatory BAT (All) is the most cost effective
                    alternative.

     •     The findings are based in significant measure on the capital and O&M cost inputs for the
           wastewater facilities. Sensitivity analysis of the demand management and selected cost
           estimate model inputs did not alter the cost-effectiveness conclusions.




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                                                                                                18
                                                                 Attachment A
                       Aquacraft Inc.: Task 3 Demand Management Strategies




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                                                                       19
                     TASK 3 DEMAND MANAGEMENT STRATEGIES
                      KING COUNTY - CARNATION WASHINGTON
                        WASTEWATER TREATMENT FACILITY
Introduction
Aquacraft, Inc. Water Engineering and Management, working with the Pacific Institute under
subcontract to Carollo Engineers developed the following demand management strategies,
alternatives, and flow projections for the City of Carnation, Washington. The purpose of this effort
was to evaluate the feasibility of using demand management measures to reduce flows to the
proposed King County wastewater treatment facility planned for Carnation.

Aquacraft was tasked with developing and evaluating various demand management alternatives for
Carnation, evaluating the costs associated with implementing these alternatives and researching
comparable demand management program results. This report summarizes the task by task work
effort performed by Aquacraft and summarizes all findings and results.

Baseline water use, planning, and demographic data were provided to Aquacraft by Carollo
Engineers and came from numerous comprehensive planning documents and technical memos
prepared for King County in conjunction with developing the wastewater treatment plant. Historic
water use data for 2000 – 2002 from billing records were also provided.

As part of this project, Aquacraft developed a demand alternative analysis spreadsheet model. This
model (Alternative Demand Analysis – Aquacraft.xls) should be considered a companion piece to
this letter report.

Task 3.2 Evaluate Demand Management Alternatives Relevant to Carnation
Aquacraft and Pacific Institute prepared water demand and cost feasibility analyses based on the
five demand management packages or alternatives described below. It is assumed that alternatives
2, 3, 4, and 5 are mandatory for all customers as a condition of connecting to the wastewater
treatment system. These alternatives are described below and presented in detail in the three tables
below.

Alternatives 4 and 5, as described below, both anticipate little direct effort to update the fixtures and
appliances in the existing homes. It should be pointed out, however, that the rates of replacement of
these devices could be significantly increased in the existing home stock were the town, as part of
its code formulation, to adopt an upgrade on sale requirement. This has been found to be very
successful in California.

    Alternative 1 – Current Design – Water usage in existing homes and the commercial,
    industrial, and municipal sector in Carnation remains similar to historical patterns with moderate
    demand reductions due to natural replacement of “average” fixtures. New homes and
    businesses meet plumbing codes and install “average” fixtures.

    Alternative 2 – Mandatory Conservation (All) - All existing homes and the commercial,
    industrial, and municipal sector in Carnation will be retrofit with high quality fixtures and
    appliances including: 1.6 gpf toilets, 2.0 gpm showerheads, LF faucet aerators, improved
    efficiency clothes washers, 0.5 gpf urinals, and other ICI efficiency measures described below.

Project Report - Task 3 Demand Management Strategies   1                                       Aquacraft, Inc.
Carnation Washington                                                       Water Engineering and Management
    High efficiency dishwashers will be promoted through an incentive program. New homes and
    businesses connecting to the sewer system will conform to enhanced City of Carnation water
    efficiency building standards.

    Alternative 3 – Mandatory BAT (All) - All existing homes and the commercial, industrial, and
    municipal sector in Carnation will be retrofit with the best available technology (BAT)
    (currently available) fixtures and appliances including: dual flush 0.8/1.6 gpf toilets, 1.75 gpm
    showerheads, LF faucet aerators, high efficiency clothes washers, waterless urinals, and other
    ICI efficiency measures described below. High efficiency dishwashers will be promoted through
    an incentive program. New homes and businesses connecting to the sewer system will conform
    to enhanced City of Carnation water efficiency building standards.

    Alternative 4 – Conservation New Construction - Water usage in existing homes and the
    commercial, industrial, and municipal sector in Carnation remains similar to historical patterns
    with moderate demand reductions due to natural replacement of “average” fixtures. New homes
    and businesses connecting to the sewer system will conform to enhanced City of Carnation
    water efficiency building standards.

    Alternative 5 – BAT New Construction - Water usage in existing homes and the commercial,
    industrial, and municipal sector in Carnation remains similar to historical patterns with moderate
    demand reductions due to natural replacement of “average” fixtures. New homes and businesses
    connecting to the sewer system will conform to enhanced City of Carnation water efficiency
    building standards.

Demand Alternative 1-3 Details
The following three tables give the flow or water use requirements of the primary household and
CII end uses necessary to meet the projected demands for the alternatives described above.




Project Report - Task 3 Demand Management Strategies   2                                     Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
Alternative 1 – Current Design
End Use            Existing                        Existing CII              New Residential                   New CII
Category          Residential
Toilets           Natural replacement         Natural replacement           Plumbing codes (1.6          Plumbing codes (1.6
                  with 1.6 gpf                with 1.6 gpf                  gpf)                         gpf)
Clothes           Natural replacement w/      NA (except in few             Available appliances.        NA (except in few
washers           available appliances.       cases)                        Avg. = 35 gal/load           cases)
                  Avg. = 35 gal/load
Faucets           Natural replacement         Natural replacement           Plumbing codes (2.0          Plumbing codes.
                  with 2.0 gpm (hand                                        gpm hand sink, 2.5 gpm
                  sink) 2.5 gpm (kitchen)                                   kitchen)
Showers           Natural replacement         Natural replacement           Plumbing codes (2.5          Plumbing codes (2.5
                  with 2.5 gpm                with 2.5 gpm                  gpm)                         gpm)
Dishwashers       Natural replacement w/      Natural replacement w/        Available mix of             Available appliances.
                  available appliances.       available appliances.         appliances. Avg. = 10
                  Avg. = 10 gal/load                                        gal/load
Leak detection    No accelerated program      No accelerated program        No accelerated program       No accelerated program
and repair
Urinals           NA                          Natural replacement           NA                           Plumbing codes (1.0
                                              with 1.0 gpf.                                              gpf)
Water cooled      NA                          Natural replacement           NA                           Mix of air and water
equipment                                     with mix of air and                                        cooled equip.
                                              water cooled equip.
Other             NA                          Nothing.                      NA                           Nothing.

Alternative 2 – Mandatory Conservation (All)
End Use        Existing Residential   Existing CII                               New Residential                    New CII
Category
Toilets           Retrofit with 1.6 gpf        Retrofit with 1.6 gpf          1.6 gpf                       1.6 gpf
Clothes           Retrofit w/ <= 30            NA (except in few cases)       Local code requirement        NA (except in few cases)
washers           gal/load WF1 <= 8.5                                         WF <= 8.5
Faucets           Retrofit w/ 1.0 gpm          Retrofit w/ 1.0 gpm            Local code requirement        Local code requirement
                  (hand sink) 2.2 gpm          (hand sink) 2.2 gpm            1.0 gpm (hand sink) 2.2       1.0 gpm (hand sink) 2.2
                  (kitchen)                    (kitchen)                      gpm (kitchen)                 gpm (kitchen)
Showers           Retrofit with 2.0 gpm        Retrofit with 2.0 gpm          Local code requirement        Local code requirement
                                                                              2.0 gpm                       2.0 gpm
Dishwashers       Incentives for <= 8          Natural replacement,           Local code requirement        Local code requirement
                  gal/load                     local code for CII             <= 8 gal/load                 for efficient CII kitchens
                                               kitchens
Leak detection    New flapper distribution     CII audits and leak repair     New flapper distribution      CII audits and leak repair
and repair        every 5 years                every 5 years                  every 5 years                 every 5 years
Urinals           NA                           Retrofit with 0.5 gpf.         NA                            Local code requirement
                                                                                                            0.5 gpf
Water cooled      NA                           Rebates for air cooled         NA                            Local code requirement
equipment                                      equipment                                                    prohibits water cooled
                                                                                                            equip. when similar air
                                                                                                            cooled unit exists
Other             NA                           CII audits, recs. &            NA                            Local codes, CII audits,
                                               rebates                                                      and recs. & rebates




1
  WF = water factor (number of gallons needed for each cubic foot of laundry). A lower number indicates lower
consumption and more efficient use of water.


Project Report - Task 3 Demand Management Strategies        3                                                 Aquacraft, Inc.
Carnation Washington                                                                      Water Engineering and Management
Alternative 3 – Mandatory BAT (All)
End Use        Existing Residential                    Existing CII             New Residential                    New CII
Category
Toilets           Retrofit with dual flush      Retrofit with dual flush      Local code requirement        Local code requirement
                  0.8/1.6 gpf                   0.8/1.6 gpf                   0.8/1.6 gpf                   0.8/1.6 gpf
Clothes           Retrofit w/ <= 25             NA (except in few cases)      Local code requirement        NA (except in few cases)
washers           gal/load WF <= 5.5                                          WF <= 5.5
Faucets           Retrofit w/ 0.5 gpm           Retrofit w/ 0.5 gpm           Local code requirement        Local code requirement
                  (hand sink) 2.0 gpm           (hand sink) 2.0 gpm           0.5 gpm (hand sink) 2.0       0.5 gpm (hand sink) 2.0
                  (kitchen)                     (kitchen)                     gpm (kitchen)                 gpm (kitchen)
Showers           Retrofit with 1.75 gpm        Retrofit with 1.75 gpm        Local code requirement        Local code requirement
                                                                              1.75 gpm                      1.75 gpm
Dishwashers       Incentives for <= 6           Rebates, local code for       Local code requirement        Local code for efficient
                  gal/load                      CII kitchens                  <= 6 gal/load                 CII kitchens
Leak detection    New flapper distribution      CII audits and leak repair    New flapper distribution      CII audits and leak repair
and repair        and installation and leak     every 5 years.                and installation and leak     every 5 years.
                  evaluation every 5 years.     Computerized water            evaluation every 5 years.     Computerized water
                  Computerized water            billing system leak alerts.   Computerized water            billing system leak alerts.
                  billing system leak alerts.                                 billing system leak alerts.
Urinals           NA                            Retrofit with waterless.      NA                            Local code requirement
                                                                                                            waterless
Water cooled      NA                            Rebates for air cooled        NA                            Local code requirement
equipment                                       equipment                                                   prohibits water cooled
                                                                                                            equip. when similar air
                                                                                                            cooled unit exists
Other             NA                            CII audits, recs. &           NA                            Local codes, CII audits,
                                                rebates                                                     and recs. & rebates


Implementation of Demand Alternatives
The savings and cost-effectiveness of the Carnation wastewater flow reduction program relies on
two key factors:

    1. A mandatory conservation retrofit of high efficiency fixtures and appliances for all existing
       customers and strict building codes that ensure all new development will implement similar
       (or better) efficiency measures.

    2. The political will of City of Carnation/King County to implement the conservation program.

In order to achieve the flow reductions achievable from Alternatives 2 - 5, the County must
capitalize on the wastewater treatment plant and sewer connection project. Each home that
connects to the new wastewater system must (by regulation) participate in the mandatory retrofit.
Since this will include new fixtures and appliances for existing customers it will likely be a popular
program if it is presented and implemented effectively. Aquacraft and Pacific Institute agree that a
voluntary program would yield far less reliable results.

King County should be aware that such a mandatory program is relatively untested. While flow
reductions from full retrofits are well documented (see Task 3.3 document), a mandatory retrofit
program for existing customers is a new idea. Such a mandatory program requires commitment and
cooperation between King County, the City of Carnation, and the citizens of Carnation. Citizens



Project Report - Task 3 Demand Management Strategies         4                                                Aquacraft, Inc.
Carnation Washington                                                                      Water Engineering and Management
must understand and “buy into” the program if it is to be successful. A mandatory program is a
reasonable and achievable idea, but it must be handled properly.

The idea of strict plumbing and fixture codes for new construction is a well established and tested
idea. If built into the building code and inspection process such a program should be relatively easy
to implement and not particularly onerous for builders and developers. Builders already work with
a wide array of code requirements in construction so this is familiar territory. Furthermore, such
codes have been successfully implemented for more than 15 years in Washington and California.


 Enforcement of Standards and Funding Conservation
 All of these alternatives assume that existing and future customers will be brought up to specific
 standards of efficiency in terms of gallons per day of household or business use. Carnation
 should consider implementing a system of water (or effluent) budget based billing so that
 customers that use more water and contribute more than their “allocation” face significant
 penalty charges on their wastewater utility bill. This would in effect be a wastewater budget
 billing system. Collected penalties could be used to fund enhanced efficiency programs. Such a
 system would give the utility confidence that future customers will not allow their water use to
 rise over time in a way the nullifies the effects of the water conservation efforts.




Project Report - Task 3 Demand Management Strategies   5                                     Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
Baseline Water Demand in Carnation
Metered water use records for the calendar years 2000, 2001, and 2002 were analyzed to evaluate
demands for five sectors in Carnation:

    •    Agriculture
    •    Commercial, industrial, and institutional/municipal
    •    Residential
    •    Public schools
    •    Remlinger Farms
    •    Unclassified

Unclassified accounts include any water customer in Carnation that did not have a specific land use
category assigned. One of the tasks that should be accomplished as part of the next stage of this
study is to evaluate each of the approximately 84 unclassified accounts and make an accurate
customer class assignment so that their real conservation potential can be fairly evaluated.

Water use outdoors for irrigation will not contribute to wastewater flows, so the first task was to
separate non-seasonal (indoor) and seasonal (outdoor) use for each of the five customer categories.
This was accomplished using the standard average winter consumption methodology where
monthly demands during the non-irrigation months (Dec. – Feb.) are averaged and then deducted
from the irrigation months. Tables 1 – 5 show the monthly, annual, seasonal and non-seasonal
demands for each of the five customer categories as well as some standard per account and per
capita use values, calculated from planning data provided by Carollo Engineers and the City of
Carnation 2003 Comprehensive Sewer Plan, updated April 2004 (CSP).

                    Table 1: Metered agriculture demands, Carnation 2000 - 2002
                                                  Agriculture (kgal)*
                                                               2000 2001             2002
                                   Jan                          16.2    6.7             8.2
                                   Feb                          12.7    6.0             8.2
                                   Mar                           3.0    6.0             5.2
                                   Apr                           3.7    6.0             4.5
                                   May                           4.5    9.7             6.0
                                   Jun                           6.0    8.2             6.0
                                   Jul                           8.2    7.5             5.2
                                   Aug                           6.7    6.7             6.0
                                   Sep                           4.5    6.7             6.0
                                   Oct                           6.7    3.7             4.5
                                   Nov                           6.0    6.7             2.2
                                   Dec                           4.5    6.7             8.2
                                   Seasonal                      0.0    4.5             0.0
                                   Non-Seasonal                 82.8  76.3            70.3
                                   TOTAL                        82.8  80.8            70.3
                                   # of accounts                   1      1               1
                                   Indoor/acct/day (gal.)        227   209             193
                                    *The seasonal water use for this account is supplied by well water




Project Report - Task 3 Demand Management Strategies          6                                                   Aquacraft, Inc.
Carnation Washington                                                                          Water Engineering and Management
    Table 2: Metered commercial, industrial, and municipal demands, Carnation 2000-2002
                              Commercial, Industrial, and Municipal (kgal)
                                                             2000      2001     2002
                              Jan                           366.3     341.1    330.6
                              Feb                           359.8     403.9    424.9
                              Mar                           435.1     380.0    424.0
                              Apr                           328.8     356.0    345.0
                              May                           422.2     390.5    324.8
                              Jun                           440.9     453.3    463.6
                              Jul                           498.2     472.0    531.8
                              Aug                           535.6     477.2    594.7
                              Sep                           472.0     390.5    406.9
                              Oct                           481.0     388.2    646.3
                              Nov                           406.2     433.1    419.6
                              Dec                           359.0     336.6    314.9
                              Seasonal                      594.7     320.9    709.1
                              Non-Seasonal                 4510.3 4501.5      4517.9
                              TOTAL                        5105.0 4822.4      5227.0
                              # of accounts                    56        58       59
                              Indoor/acct/day (gal.)          221       213      210
                              # of employees                  433       540      603
                              Use/employee/day (gal.)        28.5      22.8     20.5


                      Table 3: Metered residential demand, Carnation 2000-2002

                             Residential (kgal)
                                                          2000      2001        2002
                             Jan                         3741.9    3821.5      4004.0
                             Feb                         3700.6    3660.0      4245.6
                             Mar                         3948.3    3906.1      3398.2
                             Apr                         3775.1    3815.5      3639.8
                             May                         4063.1    3749.7      3570.2
                             Jun                         4270.4    4781.2      5397.6
                             Jul                         7043.5    5668.3      6476.2
                             Aug                         8781.2    6554.7      7558.5
                             Sep                         4971.2    5159.7      6337.8
                             Oct                         3902.3    3785.6      4030.2
                             Nov                         3696.6    3927.7      3299.8
                             Dec                         3452.0    3722.0      4210.2
                             Seasonal                   10717.2    6846.4     10572.9
                             Non-Seasonal               44629.1   45705.8     45595.3
                             TOTAL                      55346.3   52552.2     56168.2
                             # of accounts                  620       624         637
                             Indoor/acct/day (gal.)         197       201         196
                             Population                   2080      2095        2110
                             Per Capita (gpcd)             58.8      59.8        59.2




Project Report - Task 3 Demand Management Strategies    7                                            Aquacraft, Inc.
Carnation Washington                                                             Water Engineering and Management
                     Table 4: Metered public school demand, Carnation 2000-2002
                                                  Public School (kgal)
                                                             2000        2001       2002
                             Jan                              61.2        56.1       40.4
                             Feb                            104.0         93.5       95.0
                             Mar                              86.0        88.3       98.7
                             Apr                              94.2        84.5     127.2
                             May                              74.8        89.8       59.1
                             Jun                            123.4       207.9        52.4
                             Jul                            108.5       342.6      169.8
                             Aug                              65.8      289.5      362.0
                             Sep                            112.2       264.0      469.7
                             Oct                              98.7      205.7      291.7
                             Nov                            110.7         96.5     114.4
                             Dec                              89.8      118.9        94.2
                             Seasonal                         37.5      861.7      834.8
                             Non-Seasonal                  1091.8      1075.6     1140.0
                             TOTAL                         1129.3      1937.3     1974.7
                             # of accounts                        6          6          6
                             Indoor/acct/day                   499         491        521
                             # of students                   1100        1110       1120
                             Per capita (gpcd)*                 2.7        2.7        2.8
    *These gallons per student per day values are based on the calendar year (365 days) not the
    academic year. They are similar to values found in the AWWA Commercial and Institutional
    End Uses of Water study (2000, AWWA).


                      Table 5: Metered unclassified demand, Carnation 2000-2002
                                          Unclassified Customers (kgal)
                                                              2000       2001       2002
                              Jan                            605.7     1033.0      797.4
                              Feb                            615.5     1165.4     1618.8
                              Mar                            709.3      805.6      703.1
                              Apr                            652.1      783.2      680.7
                              May                            659.3     1033.0      724.8
                              Jun                            605.1      893.1     1172.1
                              Jul                           1064.4     1456.4     1166.9
                              Aug                           1246.5     1648.6     1719.7
                              Sep                            758.2      976.9     1054.7
                              Oct                            570.7      765.2     1012.8
                              Nov                            668.0      778.7     1006.1
                              Dec                            579.0      807.8     1622.4
                              Seasonal                      1074.7     1399.5      422.5
                              Non-Seasonal                  7658.9    10747.3    12856.9
                              TOTAL                         8733.7    12146.8    13279.4
                              # of accounts                     79         84         84
                              Indoor/acct/day (gal.)           266        351        419




Project Report - Task 3 Demand Management Strategies       8                                            Aquacraft, Inc.
Carnation Washington                                                                Water Engineering and Management
A pie chart showing the calculated indoor/outdoor (non-seasonal/seasonal) split in Carnation is
presented in Figure 1. Indoor use accounted for nearly 84% of all metered demand and outdoor use
(primarily residential irrigation) accounted for 16.3%. Outdoor use does not contribute to
wastewater flows, hence this demand is excluded from flow projections and analysis. The non-
seasonal/indoor use component among the five customer categories is shown in Table 6 and Figure
2. Residential demand accounts for 71% of the total indoor demand in Carnation, but the second
largest sector are the Unclassified accounts. This is troubling for this study since it is not possible
to accurately determine the conservation potential of these unclassified customers.


         Outdoor
        (seasonal)
          16.3%




                                                Indoor (non-
                                                  seasonal)
                                                    83.7%

Figure 1: Calculated indoor and outdoor use, Carnation, 2002


                                 Agriculture
                                    0.1%           Commercial,
                                               industrial, municipal
             Unclassified                              7.0%
               20.0%                                                   It is recommended that an
                                                                       effort be made to correctly
                                                                       classify the 84 “Unclassified”
 Public schools                                                        water accounts and then
      1.8%
                                                                       incorporate those results into
                                                                       the demand and cost projection
                                                                       components of this study
                                                                       before final decisions about
                                                                       the water conservation plan or
                                                                       the size of the wastewater
                                                                       treatment plant are made.
                                                        Residential
                                                          71.0%


Figure 2: 2002 Indoor/Non-seasonal water use breakdown


Project Report - Task 3 Demand Management Strategies           9                              Aquacraft, Inc.
Carnation Washington                                                      Water Engineering and Management
Indoor water use steadily increased by nearly 11% in Carnation from 2000 to 2002, as shown in
Table 6. According to demographic data, the population only increased by 30 people (1.4%) in that
time. The Unmetered/Unaccounted for water deserves close scrutiny. According to Carollo
Engineers Technical Memorandum No. 2 and the CSP, unaccounted for water is a significant
problem in Carnation. Overall, non-revenue water (unaccounted for and unmetered water) is
estimated to be 40% of all water produced at the water treatment plant. This is an extremely high
amount of non-revenue water. Many water utilities with non-revenue water greater than 10% have
a program to find and repair leaks and to install meters for unmetered customers.

                        Table 6: Non-Seasonal/Indoor Use, Carnation 2000-2002
         Customer Category                 # of accounts Non-Seasonal/Indoor Use (kgal)
                                                2002        2000       2001       2002
         Agriculture                                   1       83         76         70
         Commercial, industrial, municipal            59    4510       4501       4518
         Residential                                 637 44629        45706     45595
         Public schools                                6    1092       1076       1140
         Remlinger Farms*                              1      NA         NA       2796
         Unclassified**                               84    7659      10747     12857
         Sub-Total                                   787 57973        62106     66976
         Unmetered/Unaccounted***                     ??    3478       3726       3851
         TOTAL (kgal)                                      61451      65833     70827
         TOTAL (mgd)                                         0.17       0.18       0.19
         *Not on City water system, but expected to join wastewater system, hence demand is included
         **Unclassified water accounts did not have a land use category assignment in the water billing database
         ***Unmetered/unaccounted for water is estimated at 6% of total demand (calculated as 15% of the estimated 40%
         unaccounted for water in the system)

Of the 40% non-revenue water, an estimated 15% is actually unmetered water that is used
somewhere in Carnation. The value of 15% is based on the best-avalable-local-knowledge-estimate
made by the Public Works Director. This unmetered amount is
equivalent to 6% of the total water produced for Carnation. In It is recommended that the
many cities, municipal uses such as streets and medians and parks City of Carnation conduct a
dominate the unmetered usage category. No information about the survey to more accurately
composition of the unmetered demand in Carnation is available, determine how much of the
therefore it is not known how much of this unmetered demand will Unmetered/Unaccounted
enter the new sewer system. For this study, it is assumed that the demand will enter the new
unmetered component will have the same indoor/outdoor split as wastewater treatment
the entire city. The Unmetered/Unaccounted water shown in system.
Table 6 is calculated as an additional 6% of water use over and
above the total metered non-seasonal/indoor use.

The analysis of water billing data shows that the average expected flows to a hypothetical
wastewater treatment plant in 2000-2002 would have been 0.17 – 0.19 MGD.




Project Report - Task 3 Demand Management Strategies     10                                              Aquacraft, Inc.
Carnation Washington                                                                 Water Engineering and Management
Water Demands in Carnation Under Five Alternatives
Expected water demands have been calculated for each customer class under the five demand
management alternatives and are summarized below in Tables 7, 8, and 9. Detailed descriptions
of the assumptions in each alternative are presented after the tables.

Table 7: Alternative 1, 4, 5 – Existing residential per capita demands
End Use Category              Average gpcd             With Natural
                                                       Replacement
                                                          (gpcd)
Toilet                                17                    7.9
Clothes Washer                        14                    13
Dishwasher                            1.5                   1.5
Faucet                                 9                     9
Shower/Bath                           12                    12
Leak                                   6                     4
Other                                 0.5                   0.5
Total                                 60                   47.9


Table 8: Alternative 1 – 5, New residential per capita demands
                                                        Average gpcd
End Use Category            Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5
Toilet                           7.9           7.9           6.4           7.9           6.4
Clothes Washer                  13.0           8.3           4.2           8.3           4.2
Dishwasher                       1.5           1.2            1            1.2            1
Faucet                           8.5            8            7.2            8            7.2
Shower/Bath                     11.4          11.4          10.3          11.4          10.3
Leak                             4.0           2.5            2            2.5            2
Other                            0.5           0.5           0.5           0.5           0.5
Total                           46.8          39.8          31.6          39.8          31.6




Project Report - Task 3 Demand Management Strategies     11                                   Aquacraft, Inc.
Carnation Washington                                                      Water Engineering and Management
Table 9: Alternative 1 – 5, Non Residential demands
                        Alternative Alternative Alternative Alternative Alternative Alternative
                          1, 4, 5        1           2         2&4           3         3&5
Customer category and Current         Future     Current      Future     Current      Future
units                   Customers Customers Customers Customers Customers Customers
Commercial, Industrial,    24.0        20.4        20.4        20.4        18.0        18.0
& Municipal (gpcd)
Agriculture                 210         210         210         168         210         147
(gal/acct/day)
High schools                NA          3.3         NA          3.3         NA          3.0
(gal/student/day)*
Elem. And Middle            2.7         2.7         2.5         2.5         2.2         2.2
schools
(gal/student/day)*
Unclassified accounts       419         NA          335         NA          293         NA
(gal/acct/day)
Unmetered/unaccounted       6%          NA          4%          NA          4%          NA
use (%)
Remlinger Farms            7661         NA         6512         NA         5363         NA
(gal/day)


Alternative 1 – Current Design – Water usage in existing homes and the commercial,
industrial, and municipal sector in Carnation remains similar to historical patterns with
moderate demand reductions due to natural replacement of “average” fixtures. New homes and
businesses meet plumbing codes and install “average” fixtures.

The expected demands for the status quo alternative are based on the analysis of metered water
use in Carnation presented above.

Existing Residential Demand. Because residential demand is the most significant demand
component in Carnation, more detailed analysis of expected demands in this sector are provided.
Residential indoor daily per capita water use in Carnation ranged from 58.8 – 59.8 gpcd. For the
purposes of this study, the baseline demand of existing customers is assumed to be 60 gpcd.
Table 7 presents an estimated end use breakdown of per capita water use in Carnation, based
upon Aquacraft end use studies described in Task 3.3. Toilets are the largest component of
demand followed by clothes washers, showers and baths, then faucets.

New Residential Demand. New homes in Carnation will be more water efficient that the existing
stock of homes because of the federal plumbing codes that mandate 1.6 gpf toilets, and LF
showerheads and faucet aerators. Furthermore, there are a large number of popular high
efficiency clothes washers on the market and it is assumed that some new homes in Carnation
will come equipped with these washers. Estimated average daily per capita demand in new
residential development is 46.8 gpcd. Table 8 presents an estimated end use breakdown of this
per capita demand, based upon Aquacraft end use studies described in Task 3.3. Because of the


Project Report - Task 3 Demand Management Strategies   12                                  Aquacraft, Inc.
Carnation Washington                                                   Water Engineering and Management
impact of ULF toilets, clothes washers are the largest component of demand in new homes
followed by showers & baths, faucets, and then toilets.

Non-Residential Demand. Non-residential demand includes all non-residental categories:
      • Commercial, industrial, and municipal
      • Agriculture
      • Public schools
      • Unclassified accounts
      • Unmetered/unaccounted use

Baseline demand for current customers is based on the metered demands from 2000-2002.
Demand for future customers assumes new construction will include mandated high efficiency
fixtures. Demands for current and future customers are presented in Table 9.

    •    Commercial - Current commercial, industrial, and municipal users in Carnation used an
         average of 24.0 gallons per employee per day (based on a calendar year). Because of
         plumbing fixture upgrades and new appliances is it assumed that future customers in this
         category will use 15% less water indoors.
    •    Agriculture - There is only one agriculture customer so their use remains constant.
    •    Schools - Current public school students used an average of 2.7 gpcd from 2000-2002.
         Compared with other schools that have been studied the schools in Carnation rate as
         already efficient. It is assumed that the new high school (scheduled to come on line in
         2007) will also be efficient at 3.3 gallons per student per calendar day, (2000, AWWA
         Commercial and Institutional End Uses of Water).
    •    Unclassified - Unclassified accounts used an average of 419 gallons per account per day
         from 2000-2002. It is assumed that this usage pattern will continue. There will be no
         new unclassified accounts.
    •    Unmetered - Unmetered/unaccounted use is estimated at 6% of total metered demand of
         existing customers. All new customers will be accurately metered so there will be no
         increase in this unmetered contribution to sewer flows.


Alternative 2 – Mandatory Conservation (All) - All existing homes and the commercial,
industrial, and municipal sector in Carnation will be retrofit with high quality fixtures and
appliances including: 1.6 gpf toilets, 2.0 gpm showerheads, LF faucet aerators, improved
efficiency clothes washers, improved efficiency dishwashers, 0.5 gpf urinals, and other ICI
efficiency measures described below. New homes and businesses connecting to the sewer system
will conform to enhanced City of Carnation water efficiency building standards.

Existing and New Residential Demand. Existing homes in Carnation who wish to connect to the
new wastewater treatment system will (by regulation) be retrofit with the conserving appliances
and fixtures described in the alternatives above. New homes in Carnation shall comply with
local building code requirements that ensure the same level and quality fixtures. Estimated
average daily per capita demand in existing and new residential development under Alternative 2
is 39.8 gpcd. Please note that this is quite similar to the value of 41 gpcd estimated for
conserving homes by Carollo Engineers in Technical Memorandum No. 2. Table 8 presents an

Project Report - Task 3 Demand Management Strategies   13                                   Aquacraft, Inc.
Carnation Washington                                                    Water Engineering and Management
estimated end use breakdown of this per capita demand for new and retrofit homes, based upon
Aquacraft end use studies described in Task 3.3. Because of the impact of ULF toilets and
efficient clothes washers, showers and baths are the largest component of demand in new homes
followed by clothes washer, faucets, and then toilets.

Non-Residential Demand. Alternative 2 assumes that fixture and appliance retrofits will be
implemented for non-residential customers (by regulation) as a requirement of connecting to the
wastewater treatment system. Strict building codes will ensure new non-residential development
meets similar standards.

Demands for current and future non-residential customers are presented in Table 9.

    •    Commercial - Current commercial, industrial, and municipal users in Carnation used an
         average of 24.0 gallons per employee per day (based on a calendar year). Because of
         plumbing fixture retrofits, upgrades, and new appliances is it assumed that existing and
         new commercial customers in this category will use 15% less water indoors. (20.4
         gallons per employee per day).
    •    Agriculture - There is only one agricultural customer. Through retrofits their demand
         drops to 168 gpd.
    •    Schools - Current public school students used an average of 2.7 gpcd from 2000-2002.
         This will be reduced to 2.5 gpcd through fixture retrofits. The new high school
         (scheduled to come on line in 2007) will also be efficient at 3.3 gallons per student per
         calendar day.
    •    Unclassified - Unclassified accounts used an average of 419 gallons per account per day
         from 2000-2002. It is estimated that mandatory fixture retrofits will reduce this demand
         by 20% to 335 gal/acct/day. There will be no new unclassified accounts.
    •    Unmetered - Unmetered/unaccounted use is estimated at 6% of total metered demand of
         existing customers. Under Alternative 2 a program to meter and apply efficiency
         measure to all unmetered customers will reduce this to 4%. All new customers will be
         accurately metered so there will be no increase in this unmetered contribution to sewer
         flows.


Alternative 3 – Mandatory BAT (All) - All existing homes and the commercial, industrial, and
municipal sector in Carnation will be retrofit with the best available technology (BAT)
(commercially available today) fixtures and appliances including: dual flush 0.8/1.6 gpf toilets,
1.75 gpm showerheads, LF faucet aerators, high efficiency clothes washers, high efficiency
dishwashers, waterless urinals, and other ICI efficiency measures described below. New homes
and businesses connecting to the sewer system will conform to enhanced City of Carnation water
efficiency building standards.

Existing and New Residential Demand. Existing homes in Carnation who wish to connect to the
new wastewater treatment system will (by regulation) be retrofit with the best available
technology (BAT) conserving appliances and fixtures described in the alternatives above. New
homes in Carnation shall comply with local building code requirements that ensure the same
level and quality fixtures. Estimated average daily per capita demand in existing and new

Project Report - Task 3 Demand Management Strategies   14                                    Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
residential development under Alternative 3 is 31.6 gpcd. This represents a 20 percent
residential demand reduction over Alternative 2. Table 8 presents an estimated end use
breakdown of this per capita demand for new and retrofit homes, based upon Aquacraft end use
studies described in Task 3.3.

Non-Residential Demand. Alternative 3 assumes that BAT fixture and appliance retrofits will be
implemented for non-residential customers (by regulation) as part of connecting to the
wastewater treatment system. Strict building codes will ensure new non-residential development
meets similar standards.

Demands for current and future non-residential customers are presented in Table 9.

Commercial - Current commercial, industrial, and municipal users in Carnation used an average
of 24.0 gallons per employee per day (based on a calendar year). Because of plumbing fixture
retrofits, upgrades, and new appliances it is assumed that existing and new commercial
customers in this category will use 25% less water indoors. (18.0 gallons per employee per day).
    • Agriculture - There is only one agricultural customer. Through retrofits their demand
         drops to 147 gpd.
    • Schools - Current public school students used an average of 2.7 gpcd from 2000-2002.
         This will be reduced to 2.2 gpcd through fixture retrofits. The new high school
         (scheduled to come on line in 2007) will also be efficient at 3.0 gallons per student per
         calendar day.
    • Unclassified - Unclassified accounts used an average of 419 gallons per account per day
         from 2000-2002. It is estimated that mandatory fixture retrofits will reduce this demand
         by 40% to 293 gal/acct/day. There will be no new unclassified accounts.
    • Unmetered - Unmetered/unaccounted use is estimated at 6% of total metered demand of
         existing customers. Under Alternative 2 a program to meter and apply efficiency
         measure to all unmetered customers will reduce this to 4%. All new customers will be
         accurately metered so there will be no increase in this unmetered contribution to sewer
         flows.




Project Report - Task 3 Demand Management Strategies   15                                    Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
TASK 3.3 SUCCESSFUL DEMAND MANAGEMENT STRATEGIES
The following is a brief report on baseline water use studies and studies of demand management
strategies undertaken in recent years where results have been measured scientifically. Per
household cost data is included wherever available and appropriate.

Measuring Baseline Demand
Savings that can be achieved from indoor water conservation measures are determined from data
on baseline water use. Both volumetric data and behavioral data are critical in determining the
extent to which conservation measures will result in water savings in a community. The
American Water Works Association Research Foundation (AwwaRF) Residential End Uses of
Water Study (REUWS), conducted by Aquacraft, Inc., and released in 1999, was a three-year
study that evaluated water use in 1,188 study homes across 12 cities in the United States and
Canada. This study provided specific data on the various end uses of water, including toilets,
clothes washers, showers, faucets and dishwashers. The data included information on the average
volume of each end use, and duration and frequency of usage. Detailed information was gathered
on other factors that might influence water use in the home such as age of the home, number of
residents, numbers, types, and age of fixtures and appliances in the home and attitudes towards
water conservation.

Average indoor per capita use was found to be 69.3 gallons with the average household using
194 gallons per day indoors. Figure 3 shows the gallons per capita per day of each end use in
descending order where toilets and clothes washers comprise nearly 50 percent of indoor water
use.

          Indoor                                                                69.3


          Toilet                                18.5


 Clothes washer                          15.0


         Shower                   11.6


         Faucet                   10.9


           Leak               9.5


  Other domestic       1.6


           Bath        1.2


     Dishwasher        1.0


                   0         10                 20     30   40        50   60   70       80



Figure 3: Average per capita per day usage (gpcd), 1,188 data logged homes




Project Report - Task 3 Demand Management Strategies             16                                        Aquacraft, Inc.
Carnation Washington                                                                   Water Engineering and Management
Measured Savings – Aquacraft Studies
Following the REUWS study residents in several municipalities participated in a conservation
and retrofit project which provided information on the savings achievable from the installation of
water conserving fixtures and appliances in their homes. Two weeks of baseline water
consumption data was gathered from all participating homes at the three sites using a flow meter
(data logger) installed on the water meter and end uses were disaggregated using Trace Wizard™
software. Homes were then retrofit with high efficiency toilets, clothes washers, faucets aerators
and showerheads. Two weeks of flow trace data were collected from these homes about a month
after the completion of the retrofit and then again six months later.

Seattle Home Water Conservation Study
In 2000, thirty-seven homes from the original Seattle REUWS group were chosen to participate
in the retrofit study. Baseline data showed an average use of 63.6 gallons per capita per day
(gpcd), slightly lower than the baseline from the REUWS, but very similar to the metered per
capita demand in Carnation. Following baseline data collection each home was retrofit with high
efficiency toilets, clothes washers, faucets and showerheads. As a result, water use dropped from
63.6 gpcd to 39.9 gpcd, a decrease of 37%.

The retrofit of toilets effected the greatest savings of nearly 11 gpcd or a 58 percent reduction in
water use as shown in Table 10. Savings from toilets was followed by clothes washers (-5.6
gpcd), leaks reduction (-4.3 gpcd), and faucets (-1.2 gpcd) and were the only changes in water
use found to be statistically significant following the retrofit.

Table 10: Seattle mean indoor per capita water use, baseline and post-retrofit – Seattle
                                            Post-       Difference               Statistically
                         Baseline
Category                                   Retrofit     in Means     % Change    Significant
                          (gpcd)
                                           (gpcd)         (gpcd)                  Difference
Bath                         3.7             2.7            -1.0      -27.9%          No
Clothes Washer              14.8             9.2            -5.6      -37.7%         Yes
Dishwasher                   1.4             1.2            -0.2      -13.6%          No
Faucet                       9.2             8.0            -1.2      -13.1%         Yes
Leak                         6.5             2.2            -4.3      -66.0%         Yes
Shower                       9.0             8.7            -0.3       -3.8%          No
Toilet                      18.8             7.9           -10.9      -58.1%         Yes
Other/Unknown                0.2             0.1            -0.1      -46.9%          No
Total                       63.6            39.9           -23.7      -37.2%         Yes
Ave. number of
residents   per             2.54
household

In addition to changes in volumetric use, behavioral changes that might affect water use were
also measured. These included measuring changes in the frequency of per capita toilet flushing,
changes in duration of shower usage and changes in the number of clothes washer loads. Of
particular interest was the amount of toilet flushing that occurred following the retrofits since
there has been anecdotal evidence that low flow toilets do not save water due to the need for

Project Report - Task 3 Demand Management Strategies   17                                      Aquacraft, Inc.
Carnation Washington                                                       Water Engineering and Management
double flushing. This was not borne out and in fact although there was a slight increase in the
number of toilet flushes from 5.17 to 5.46 flushes per capita per day the increase was not found
to be statistically significant at the 95 percent confidence interval. There was a slight increase in
the number of clothes washer loads from 0.36 to 0.38 loads per capita per day and a slight
decrease in showering duration from 7.91 to 7.84 minutes but neither change was statistically
significant at the 95 percent confidence level.

Costs for each of the fixtures and appliances used for this project were:
   • Toilets – $150 - $280; average $215
   • Clothes washers – $556 - $1066; average $811
   • Showerheads – $20 (replacement of all showerheads in the home)
   • Faucet aerators – $15 (replacement of all faucets aerators in the home)
   • Installation charge of $150 (assuming a one time fee by a qualified, licensed plumber)

The average cost per household retrofit in this study was $1,211.

Residential Indoor Water Conservation Study – EBMUD
A 2003 study performed by Aquacraft, in cooperation with East Bay Municipal Utility District
(EBMUD), was comprised of 33 single-family homes from the REUWS study. Again, following
baseline data collection on water use, these homes were retrofit with high efficiency toilets,
clothes washers, faucets and showerheads and water use was re-measured at one month and six
month intervals. Water use decreased from 86.2 gpcd to 52.6 gpcd, a reduction of 39% as shown
in Table 11. The most significant reduction in water use following the retrofits was due to a
reduction in leakage from 25.7 gpcd to 8.9 gpcd. In many homes, particularly those with older
toilets, much of the leakage can be attributed to leaking toilet flappers. Toilet retrofits also
resulted in significant volumetric savings with a decrease from 19.9 gpcd to 9.8 gpcd – a
decrease of 50.8%. The only other end use category targeted by the retrofits and found to be
statistically significant in decreasing per capita water use was clothes washers (-5.1 gpcd).

Table 11: Mean indoor per capita water use, baseline and post-retrofit - EBMUD
                                                            Difference in                    Statistically
                         Baseline        Post-Retrofit
Category                                                       Means        % Change         Significant
                          (gpcd)            (gpcd)
                                                               (gpcd)                         Difference
Bath                         3.0                2.8              -0.2         -6.6%               No
Clothes Washer              13.9                8.8              -5.1         36.7%              Yes
Dishwasher                  1.0                 0.9              -0.1        -10.0%               No
Faucet                      10.5               10.5              0.0           0.0%               No
Leak                        25.7                8.9             -16.8        -65.4%              Yes
Shower                      12.0               10.7              -1.3        -10.8%               No
Toilet                      19.9                9.8             -10.1        -50.8%              Yes
Other/Unknown                0.1                0.4              0.3           75%               Yes
Total                       86.2               52.6             -33.6         -39%               Yes
Ave. # of res.
                            2.56               2.52
per household


Project Report - Task 3 Demand Management Strategies   18                                          Aquacraft, Inc.
Carnation Washington                                                           Water Engineering and Management
Toilet retrofits saved water despite an increase in the number of toilet flushes per capita per day
from 5.15 to 5.58. This increase of slightly more than a half flush per capita per day was found to
be statistically significant at the 95 percent confidence level. The number of clothes washer loads
decreased from 0.36 to 0.32 loads per capita per day.

Costs for each of the fixtures and appliances used for this project were:
    •    Toilets – $160 - $350; average $255
    •    Clothes washers – $55 - $699; average $644
    •    Showerheads – $20 (replacement of all showerheads in the home)
    •    Faucet aerators – $15 (replacement of all faucets aerators in the home)
    •    Installation charge of $150 (assuming a one time fee by a qualified, licensed plumber)

The average cost per household retrofit in this study was $1,084.

Tampa Water Department Residential Water Conservation Study
In 2004, a third group of 26 homes, located in Tampa, was chosen from the REUWS. As with the
other two studies, these homes were fit with high efficiency toilets, clothes washers,
showerheads and faucets. Water use decreased by 50 percent from 77.2 gpcd to 38.5 gpcd. As in
EBMUD, the greatest reduction in water use was due to leakage, from 25.7 gpcd to 8.9 gpcd
followed by toilets, which decreased from 17.9 gpcd to 7.8 gpcd as shown in Table 12. A
significant reduction was also found in clothes washer use (-6.9 gpcd), showers (-3.5 gpcd), and
faucets (-3.2 gpcd) following the retrofits. The results are shown in Table 12. The significant
decrease in faucet and shower use that occurred in Tampa was due to the fact that these homes
were retrofit with fixtures that had even lower flows than those that are federally mandated and
used in Seattle and EBMUD. The showerheads that were installed flowed at 1.75 gpm instead of
2.5 gpm and the faucets flowed at 1.0 gpm rather than 1.5 gpm.

Flushing frequency decreased from 5.01 to 4.89 flushes per capita per day, which was
statistically significant at the 95 percent confidence level. The frequency of washing machine use
decreased from 0.42 to 0.38 times per person per day and shower duration decreased from 7.98
minutes to 7.75 minutes, neither of which was found to be statistically significant.

Costs for each of the fixtures and appliances used for this project were:
    •    Toilets – $165; average $165
    •    Clothes washers – $899 - $999; average $949
    •    Showerheads – $20 (replacement of all showerheads in the home)
    •    Faucet aerators – $15 (replacement of all faucets aerators in the home)
    •    Installation charge of $150 (assuming a one time fee by a qualified, licensed plumber)
         The average per household retrofit in this study was $1,299.




Project Report - Task 3 Demand Management Strategies   19                                       Aquacraft, Inc.
Carnation Washington                                                        Water Engineering and Management
  Table 12: Mean indoor per capita water use, baseline and post-retrofit – Tampa
                                                            Difference in                    Statistically
                         Baseline        Post-Retrofit
Category                                                       Means        % Change         Significant
                          (gpcd)            (gpcd)
                                                               (gpcd)                         Difference
Bath                         2.6                2.4              -0.2         -6.2%               No
Clothes Washer              14.7                7.8              -6.9        -46.8%              Yes
Dishwasher                   0.6                0.5              0.0          -2.0%               No
Faucet                       9.4                6.2              -3.2        -33.9%              Yes
Leak                        18.8                3.7             -15.2        -80.5%              Yes
Shower                      12.7                9.1              -3.5        -27.9%              Yes
Toilet                      17.9                7.8             -10.1        -56.4%              Yes
Treatment                    0.3                0.8              0.5         162.7%              Yes
Other/Unknown                0.2                0.4              0.2          90.1%              Yes
Total                       77.2               38.5             -38.6        -50.0%              Yes
Ave. number of
residents   per             2.91               2.81
household


Measuring Actual Retrofit Savings and Conservation Effectiveness – Heatherwood, Colorado
In 1995 the City of Boulder, Colorado contracted with Aquacraft to collect baseline end use data
on a scientifically selected sample of residential water customers in the Heatherwood
neighborhood that had characteristics that were representative of a large proportion of the city’s
single-family residential customers. Baseline data were collected from a sample of 14 homes
which were subsequently retrofit with a limited number of high efficiency toilets, clothes
washers, showerheads and faucets. The retrofit resulted in a 21.6% reduction of water use from
58.8 gpcd to 46.1 gpcd as shown in Table 13. Leak reduction resulted in the greatest decrease in
water use (-5.5gpcd) followed by toilets (-2.6 gpcd), clothes washers (-2.8 gpcd) and faucets (-
2.6 gpcd). These changes were statistically significant at the 90 percent confidence level.

Table 13: Mean indoor per capita water use, baseline and post-retrofit – Heatherwood
                                                            Difference in                    Statistically
                         Baseline        Post-Retrofit
Category                                                       Means        % Change         Significant
                          (gpcd)            (gpcd)
                                                               (gpcd)                         Difference
Bath                         1.0                2.8               1.8        179.2%               No
Clothes Washer              14.4               11.6              -2.8        -19.1%              Yes
Dishwasher                   1.9                1.7              -0.2        -12.6%               No
Faucet                       9.1                6.5              -2.6        -28.7%              Yes
Leaks                        7.2                1.7              -5.5        -77.2%              Yes
Shower                      10.1                9.4              -0.7         -7.2%               No
Toilet                      15.1               12.5              -2.6        -17.2%              Yes
Total                       58.8               46.1              12.7        -21.6%              Yes
Ave. # of res.
                            2.8                3.0
per household

Project Report - Task 3 Demand Management Strategies   20                                          Aquacraft, Inc.
Carnation Washington                                                           Water Engineering and Management
Behavioral changes were also investigated in this study. Toilet flushing increased from 3.8 to
4.04 flushes per capita per day, shower duration increased from 7.13 to 7.83 minutes however,
neither of these changes is statistically significant at the 90 percent confidence interval. Baseline
data on the number of clothes washer loads per capita per day was not determined but following
the retrofits the number of loads per capita per day was found to be 0.33 – a number that is
consistent with the above retrofit studies.

Three cost alternatives were presented to the city at the end of this retrofit study:
   • Alternative I – a retrofit with identical product penetration to the 1995 Heatherwood
       study. This alternative involves replacing 85% of the bathroom aerators, 80% of the
       kitchen faucet aerators, 65% of the showerheads, 50% of the toilets, and 29% of the
       clothes washers. The estimated average cost per retrofit - $300.
   • Alternative II – a retrofit that involves only the replacement of 50% of the toilets and the
       85% of the bathroom faucet aerators and 80% of the kitchen faucet aerators. The
       estimated average cost per retrofit - $100.
   • Alternative III – a complete retrofit program which would attempt to replace 100% of
       toilets, faucets, showerheads, and clothes washers.

The estimated average cost per household retrofit was $750.


Other Retrofit Studies – Measured Savings
A number of other residential water use studies have been completed and are included in this
report. These studies measured actual water consumption based on field measurements.

Bern Clothes Washer Study
In 1998, the Energy Division of the Oak Ridge National Laboratory performed a comprehensive
study of horizontal-axis clothes washers in the town of Bern, Kansas, for the U.S. Department of
Energy. Conventional clothes washers were replaced with high-efficiency, horizontal axis (h-
axis) clothes washers at 103 sites. Baseline data and post-retrofit data was collected over two
separate two-month periods. Data on the various impacts of the new clothes washers as
compared with the conventional models were studied including pre and post-retrofit water
consumption, energy consumption of the washer itself and the amount of hot water used,
detergent use, “dryness” of loads at the end of the washing cycle, and customer satisfaction.

Prior to the retrofits the range of water use in gallons per load (gpl) ranged from 18 gpl to greater
than 60 gpl with an average of 41.5 gpl. Following the retrofits the total water consumption
ranged from 17 gpl to 37 gpl with an average of 25.8 gpl resulting in a savings of 15.7 gpl or
37.8%. Overall, retrofits at the 103 study sites resulted in a savings of treated water and
wastewater of 50,000 gallons per month.

In this study the clothes washers were donated by the manufacturer, however the average cost for
this clothes washer is $1,066. Charges for delivery, installation and removal of the old appliance
is figured at $50 per machine.



Project Report - Task 3 Demand Management Strategies   21                                      Aquacraft, Inc.
Carnation Washington                                                       Water Engineering and Management
Save Water and Energy Program: SWEEP
Two Oregon cities, Lafayette and Wilsonville, served as models for other communities interested
in an integrated approach to resource efficiency. The study of 50 test homes took place from
1999-2000. Two months of pre-retrofit data were collected followed by two months of post-
retrofit data where home were retrofit with water conserving fixtures and appliances including
clothes washers, dishwashers, toilets, showerheads and faucet aerators.

Detailed results of water savings for clothes washers, dishwashers, toilets and total use are shown
in Table 14.


  Table 14: Mean indoor water use for fixtures and appliances in two Oregon cities

Category                                                               Difference in
                                    Baseline           Post-Retrofit                        % Change
                                                                          Means
Clothes Washer (gpl)                   40.5               25.2             -15.3                37.7%
Dishwasher (gpl)                        9.5                5.8              -3.7                37.8%
Toilet (gpf)                            3.9                1.3              -2.6                66.7%
Total (kgal annually)                 1,819               1,356            -464                -25.5%

The fixtures and appliances used for this project were donated however, costs for these products
used in other studies are given below:
    •    Toilets – $250
    •    Clothes washers – $702
    •    Dishwasher – $350
    •    Showerheads – $20 (replacement of all showerheads in the home)
    •    Faucet aerators – $15 (replacement of all faucets aerators in the home)
    •    Installation charge of $150 (assuming a one time fee by a qualified, licensed plumber)
The average cost for a similar household retrofit is estimated at $1,487.

Dual Flush, Dual Savings
The Canadian Mortgage and Housing Corporation conducted a study of water consumption of 60
Caroma Caravelle dual flush toilets in 2001. The dual flush toilet differs from a conventional
ULF toilet in that it gives the user the option of a full flush volume (6L) for solid waste and a
half flush volume (3L) for liquid waste. The toilets were placed in a variety of commercial,
municipal and residential buildings and replaced either a conventional 13L (3.4gal) toilet or a 6L
(1.6) ULF toilet. Flow meters and counters were installed on the toilets for a one month period in
order to record the flush volume of the high and low flush and the number of each type of flush.
Savings over the baseline that resulted from the dual flush toilets are shown in Table 15.




Project Report - Task 3 Demand Management Strategies    22                                         Aquacraft, Inc.
Carnation Washington                                                           Water Engineering and Management
Table 15: Pre and post retrofit data for Caroma dual flush toilets
                       Post-             Post-                      Additional
                                                        Average
   Baseline          Retrofit           Retrofit                    Savings vs.
                                                         Water
    (gpf)           short flush        long flush                 conventional 6L
                                                        Savings
                       (gpf)              (gpf)                        toilet
      4.34             0.91               1.63              68%         22%


The cost of this project, including inline meters for measuring flush volumes and electronic
counters, was $30,000 dollars (US).


Other Studies – Estimated Savings

Documenting Significant Savings in Apartments in Austin, Texas
In 2001 the City of Austin did a study of water use in 45 apartment complexes to determine the
effectiveness of their toilet retrofit program. A total of 3,463 toilets were installed in 2,902
apartment units used by approximately 5,893 residents. Toilets were installed in apartment
complexes that had been built prior to the 1991 efficient plumbing standards. Winter water use,
the three months from December to February, was used to calculate the savings. Based on winter
consumption data, per capita consumption decreased from 74.5 to 56.6 gallons per day, a savings
of 17.9 gallons per person per day or 25%.

Residential Clothes Washer Programs: A National Success Story
The Consortium for Energy Efficiency (CEE) evaluated the impact that the 2004 federal
standards will have on energy and water use in clothes washers. The primary water savings will
be as a result of changes in specifications of the water factor (WF) – the number of gallons of
water required to wash one cubic foot of laundry per cycle. Implementation of this program is a
two-tiered process with the initial reduction from a WF of 13.3 to 11, followed by a second
reduction to a WF of 9.5.

In 2000 the penetration of efficient clothes washers on the market reached 9.3 percent of the
market with 700,000 clothes washers sold resulting in a savings of 3.4 billion gallons of water
nationally. Market penetration of efficient clothes washers is expected to reach 100% by 2007, in
other words all of the clothes washers manufactured and sold in this country are expected to meet
resource efficient standards set by the CEE by that date.

The lowest cost of a resource efficient clothes washer available in 2001 was found to be $549.
Charges for delivery, installation and removal of the old appliance is figured at $50 per machine
bringing the cost of retrofitting a clothes washer to $599.




Project Report - Task 3 Demand Management Strategies   23                                    Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
REFERENCES

Aquacraft, Inc. 1996. Project Report: Measuring Actual Retrofit Savings and
Conservation Effectiveness Using Flow Trace Analysis. Boulder, Colo.: Utilities
Division, Office of Water Conservation.

Aquacraft, Inc. 2000. Project Report: Seattle Home Water Conservation Study. Boulder,
Colo.: Aquacraft, Inc.

Aquacraft, Inc. 2003. Project Report: Residential Indoor Water Conservation Study.
Boulder, Colo.: Aquacraft, Inc.

Aquacraft, Inc. 2004. Project Report: Tampa Water Department Residential Water
Conservation Study. Boulder, Colo.: Aquacraft, Inc.

Foster, R. 2001. Residential Clothes Washer Program: A National Success Story.
Consortium for Energy Efficiency. Boston, Mass.

Mayer, P.W., W.B. DeOreo, E.M. Opitz, J.C. Kiefer, W.Y. Dais, B. Dziegielewski, and J.O.
Nelson. 1999. Residential End Uses of Water. Denver, Colo.: AWWA and AWWARF.

Sullivan, G. P., D.B. Elliott, T.C. Hillman, and A.R. Hadley. 2001. The Save Water and Energy
Education Program: SWEEP. Richland, Washington: Pacific Northwest National Laboratory.

Tomlinson, J.J. and D.T. Rizy. 1998. Bern Clothes Washer Study. Energy Division of Oakridge
National Laboratory of U.S. Department of Energy.




Project Report - Task 3 Demand Management Strategies   24                                Aquacraft, Inc.
Carnation Washington                                                 Water Engineering and Management
TASK 3.4 POTENTIAL WATER SAVINGS AND SENSITIVITY ANALYSIS2


Most Likely Case – Wastewater flow projections
                                                                                Year
ALTERNATIVE                                                 2002        2007           2022         2030
                                                            mgd         mgd            mgd           mgd
ALTERNATIVE 1 – Current Design                              0.19         0.21          0.29          0.30
ALTERNATIVE 2 – Mandatory Conservation                      0.19         0.15          0.24          0.25
ALTERNATIVE 3 – Mandatory BAT                               0.19         0.12          0.20          0.21
ALTERNATIVE 4 – Conservation New Const.                     0.19         0.19          0.27          0.27
ALTERNATIVE 5 – BAT New Construction                        0.19         0.19          0.25          0.26

Best Case – Wastewater flow projections*
                                                                                Year
ALTERNATIVE                                                 2002        2007           2022         2030
                                                            mgd         mgd            mgd           mgd
ALTERNATIVE 1 – Current Design                              0.19         0.18          0.26          0.27
ALTERNATIVE 2 – Mandatory Conservation                      0.19         0.13          0.21          0.22
ALTERNATIVE 3 – Mandatory BAT                               0.19         0.11          0.18          0.19
ALTERNATIVE 4 – Conservation New Const.                     0.19         0.18          0.24          0.25
ALTERNATIVE 5 – BAT New Construction                        0.19         0.17          0.22          0.23
*Factor of safety = 0.9

Worst Case – Wastewater flow projections**
                                                                                Year
ALTERNATIVE                                                 2002        2007           2022         2030
                                                            mgd         mgd            mgd           mgd
ALTERNATIVE 1 – Current Design                              0.19         0.23          0.32          0.33
ALTERNATIVE 2 – Mandatory Conservation                      0.19         0.16          0.26          0.27
ALTERNATIVE 3 – Mandatory BAT                               0.19         0.13          0.22          0.23
ALTERNATIVE 4 – Conservation New Const.                     0.19         0.21          0.29          0.30
ALTERNATIVE 5 – BAT New Construction                        0.19         0.21          0.27          0.28
**Factor of safety = 1.1

Factors of safety based on 10% increase or decrease in demand.

2
Demand Assumptions for these flow projections are presented in Tables 7 – 9. Planning and growth assumptions
were provided by Carollo Engineers and are identical to those used in other planning documents.

Project Report - Task 3 Demand Management Strategies   25                                           Aquacraft, Inc.
Carnation Washington                                                            Water Engineering and Management
Task 3.5 Cost to Implement Conservation Alternatives
This section is intended to provide “ballpark” estimates of the total financial costs to implement
the various conservation alternatives and to provide data for the more detailed cost analysis
performed by Pacific Institute. They do not include consideration of depreciation or the
economic life of the existing products being replaced, but assign the full purchase value of
product as a cost of the program. In reality customers with older equipment, nearing the end of
its economic life, could be asked to contribute a greater portion of the cost of the devices, which
would reduce the effective cost of the program to the utility.

Alternative 1 – Current Design
Water usage in existing homes and the commercial, industrial, and municipal sector in
Carnation remains similar to historical patterns with moderate demand reductions due to
natural replacement of “average” fixtures. New homes and businesses meet plumbing codes and
install “average” fixtures.

Cost to implement - $0

Cost of Standard (Non-Conserving) Appliances and Fixtures
For comparison purposes, the costs for standard non-conserving appliances and fixtures are
provided in Tables 16 – 20.

Table 16: Standard non-conserving clothes washer models
                                           Water      KWH/yr Ave. Water Approx. Retail
Brand                           Model
                                           Factor                   Use (gpl)          Price
                                                 *
Kenmore             25852                   13.1         529            42              $399
Whirlpool           LSQ9550PW               13.1*        565            42              $389
Amana               NAV3330WH               13.1*        914            42              $390
Fisher & Paykel     IWL 12                  12.86        208            39              $899
General Electric    WHSE5240D               12.09        302           38.1             $419
Kenmore             15954                   12.04        303           37.8             $520
General Electric    WPRB8050D               11.52        346           39.7             $550
Maytag              HAV4657EWW              10.68        361           35.0             $500
Average                                      12.3        441           37.5             $508
*A baseline water factor of 13.1 is the average water factor for washers sold in 1994, as supplied
to the Department of Energy by the Association of Home Appliance Manufacturers.




Project Report - Task 3 Demand Management Strategies   26                                    Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
Table 17: Standard non-conserving dishwasher models
                       Model                                          Ave. Water        Approx.
Brand                                                       KWH/yr
                                                                       Use (gpl)       Retail Price
General Electric       GSC3404G##**                           570         9.3             $374
General Electric       GSM2110FAA                             474         8.0             $329
Kenmore                17259                                  454         8.0             $419
Frigidaire             FDB126RB                               432         7.6             $229
Average                                                       475         8.2             $338

Table 18: Standard showerhead models
                           Model                        Rated Water        Approx.
Brand
                                                         Use (gpm)        Retail Price
Delta                      RP28599CB                        2.5             $13.61
AM Conservation            Spoiler                          2.5             $13.99
Kohler                     Trend                            2.5             $32.00
American Standard          Easy Clean                       2.5             $24.00
Average                                                     2.5             $20.90


Table 19: Standard bathroom faucet aerators
                                 Model                      Rated Water    Approx.
Brand
                                                             Use (gpm)    Retail Price
Whedon                SW3 on/off                                2.2          $3.25
Niagara               N3100T-2.2                                2.2          $0.75
AM Conservation Group AMFA010M                                  2.2          $1.39
Average                                                         2.2          $1.80


Table 20: Standard bathroom faucet aerators

                                        Model                        Rated Water           Approx.
Brand
                                                                      Use (gpm)           Retail Price
Ace                                     Swivel Spray Aerator             2.5                 $6.49
AM Conservation Group                   AMFA013C                         2.5                 $0.75
Creative Energy Technologies            Aerator w/ shutoff button        2.5                 $3.45
Average                                                                  2.5                 $3.56




Project Report - Task 3 Demand Management Strategies   27                                         Aquacraft, Inc.
Carnation Washington                                                          Water Engineering and Management
Alternative 2 – Mandatory Conservation (All)
All existing homes and the commercial, industrial, and municipal sector in Carnation will be
retrofit with high quality fixtures and appliances including: 1.6 gpf toilets, 2.0 gpm showerheads,
LF faucet aerators, improved efficiency clothes washers, improved efficiency dishwashers, 1.0
gpf urinals, and other ICI efficiency measures described below. New homes and businesses
connecting to the sewer system will conform to enhanced City of Carnation water efficiency
building standards.

For Alternative’s 2 and 3 it is assumed that King County will hire a full time project manager to
oversee the entire retrofit and implementation program. The estimated cost for this FTE
(inclusive of benefits) is $60,000 per year. It is assumed this will be a two-year position.

Cost to implement – Residential program                     $1,478,753
                    Non-Residential program                 $ 114,358
                    Project manager                         $ 120,000
                    TOTAL                                   $1,713,111

Details of the different program costs are presented below.

Retrofit of Existing Residential Customers
Tables 21 – 26 provide information on recommended, highly rated fixtures and appliances that
are capable of achieving the water savings projected in Alternative 2. The costs provided are
retail prices. It is anticipated that bulk purchase discounts can be obtained at a cost savings of
15% over retail.

Table 21: Alternative 2 for conserving toilets

                           Model                        Rated Water       Approx.
Brand
                                                         Use (gpf)       Retail Price
Toto                       Drake                            1.6             $259
Vitra                      Corina EL                        1.6             $200
Gerber                     Ultra Flush EL                   1.6             $269
Mansfield                  Quantum                          1.6             $318
Niagara                    Flapperless                      1.6             $299
Average                                                                     $269




Project Report - Task 3 Demand Management Strategies   28                                        Aquacraft, Inc.
Carnation Washington                                                         Water Engineering and Management
Table 22: Alternative 2 high efficiency clothes washers
                                                      Water            KWH/yr            Ave. Water           Approx. Retail
Brand                            Model
                                                      Factor                              Use (gpl)               Price
Bosch                     WFMC3200UC                    5.3               186               16.1                 $1,100
Bosch                     WFR2460UC                    5.73               184               10.6                 $1,099
Staber                    HXW2304                      6.28               186               12.6                  $980
Bosch                     WFL2060UC                    6.47               194               12.0                  $999
General Electric          WPGT9350***                  6.97               422               24.6                 $1,049
Average                                                6.15               234               15.2                 $1,045
*Asterisks indicate that a coding variable may be used in place of the asterisks to indicate a color or feature that does not affect
washer efficiency.


Table 23: Alternative 2 high efficiency dishwashers

                     Model                                              KWH/          Ave. Water             Approx.
Brand
                                                                          yr           Use (gpl)            Retail Price
Maytag               Intelliclean MDB6000A                               629               7                   $460
Jenn-Air             Intelliclean JDB6900A                               629               7                   $540
Whirlpool            Quiet Wash Plus DU920PFG                            630               7                   $400
Whirlpool            Quiet Wash Plush GU940SCG                           638               7                   $430
Kenmore              Quiet Guard Plus 1570                               667               7                   $450
Frigidaire           Gallery FDB949GF(S)                                 636               8                   $445
Whirlpool            Gold Quiet Partner GU980SCG                         652               8                   $480
Average                                                                  634                                   $458

Table 24: Alternative 2 showerheads

                              Model                                Rated Water               Approx.
Brand
                                                                    Use (gpm)               Retail Price
AM Conservation               Pause Spoiler P                          2.0                      $11
Niagara                       N2920V w/soak on/off                     2.0                      $12
SPA 2001                      N2820                                    2.0                      $20
Whedon                        Elight water saver                       2.0                      $13
Average                                                                2.0                      $14


Table 25: Alternative 2 faucet aerators (hand sink)

                                      Model                        Rated Water               Approx.
Brand
                                                                    Use (gpm)               Retail Price
Niagara                               N3210                            1.0                     $3.75
AM Conservation Group                 FAL1A                            1.0                     $1.60
Average                                                                1.0                     $2.68




Project Report - Task 3 Demand Management Strategies            29                                                    Aquacraft, Inc.
Carnation Washington                                                                              Water Engineering and Management
Table 26: Alternative 2 faucet aerators (kitchen sink)

                                Model                       Rated Water     Approx.
Brand
                                                             Use (gpm)     Retail Price
AM Conservation                 FA01C3                          2.2           $1.40
Niagara                         Dual setting w/swivel           2.2           $5.20
Average                                                         2.2           $3.30



Summary of Alternative 2 Residential Retrofit Costs
Table 27 shows the cost of a complete retrofit of the average home in Carnation with high
quality fixtures and appliances, including the cost of installation, storage and disposal. The cost
to retrofit homes built after 1992 is lower because it is assumed that only the dishwasher and
clothes washer will need to be replaced. The total cost to implement the residential retrofit
program is shown in Table 28.

Table 27: Per household retrofit cost
Item                         Quantity       Avg. Retail Price        Total Bulk Purchase
                                                per Unit                Price (-15%)
Toilet               2                     $    269.00           $            457.30
Clothes washer       1                     $   1,045.00          $            888.25
Dishwasher           1                     $    458.00           $            389.30
Showerhead           2                     $      14.00          $              23.80
Hand sink aerator    3                     $       2.68          $               6.83
Kitchen sink aerator 1                     $       3.30          $               2.81
Installation                                                     $            150.00
Warehousing                                                      $              50.00
Disposal                                                         $              25.00
TOTAL                                                            $           1,993.29
TOTAL FOR HOMES BUILT SINCE 1992                                 $           1,502.55

Table 28: Total cost for residential retrofit program1
Category                                                                               Value
# of homes built before 1992                                                            587
# of homes built from 1992 - 2007                                                       146
Total # of households (2007)                                                            733
Total retrofit cost for pre-1992 properties                                       $    1,170,061
Total retrofit cost for post-1992 properties                                      $      219,372
5 year flapper replacement program (4 distributions from 2007 – 2030)             $       39,320
Public information/marketing (2005-2007)                                          $       50,000
TOTAL RESIDENTIAL RETROFIT COST                                                   $    1,478,753
1
  Does not include King County FTE for project management



Project Report - Task 3 Demand Management Strategies   30                                          Aquacraft, Inc.
Carnation Washington                                                           Water Engineering and Management
Summary of Alternative 2 Non-Residential Retrofit Costs
In 2002 there were 59 commercial/industrial/municipal water accounts in Carnation. The total
number of employees was 603, so the average number of employees per establishment was 10.2.
To mirror residential growth, it is assumed that 17% of these establishments were built after
1992 and hence are already equipped with high efficiency toilets, faucets, etc. This suggests that
49 establishments need to be fully retrofit. Given the average number of employees it is
assumed that there are two bathrooms per establishment.

Table 29: Per establishment cost of non-residential retrofits
Item                         Quantity       Avg. Retail Price   Total Bulk Purchase
                                               per Unit             Price (-15%)
Toilet                             2             $269.00          $         457.30
Urinal (0.5 gpf)                   1             $300.00          $         255.00
Showerhead                         1              $14.00          $          11.90
Hand sink aerator                  3                $2.68         $           6.83
Kitchen sink aerator               1                $3.30         $           2.81
Installation                                                      $         150.00
Warehousing                                                       $          50.00
Disposal                                                          $          25.00
TOTAL                                                              $        733.84

Table 30: Total cost for non-residential conservation program
Category                                                                              Value
# of establishments built before 1992                                                   49
Total retrofit cost for pre-1992 establishments                                   $     35,958
Audit and leak repair every 5 years ($300/establishment)                         $      58,800
Air-cooled equipment rebate program ($400 rebate x 49)                           $      19,600
TOTAL NON-RESIDENTIAL RETROFIT COST                                              $     114,358


Alternative 3 – Mandatory BAT (All)
All existing homes and the commercial, industrial, and municipal sector in Carnation will be
retrofit with the best available technology (BAT) (commercially available today) fixtures and
appliances including: dual flush 0.8/1.6 gpf toilets, 1.75 gpm showerheads, LF faucet aerators,
high efficiency clothes washers, high efficiency dishwashers, waterless urinals, and other ICI
efficiency measures described below. New homes and businesses connecting to the sewer system
will conform to enhanced City of Carnation water efficiency building standards.

For Alternative’s 2 and 3 it is assumed that King County will hire a full time project manager to
oversee the entire retrofit and implementation program. The estimated cost for this FTE
(inclusive of benefits) is $60,000 per year. It is assumed this will be a two-year position.


Cost to implement – Residential program                     $1,555,890

Project Report - Task 3 Demand Management Strategies   31                                        Aquacraft, Inc.
Carnation Washington                                                         Water Engineering and Management
                              Non-Residential program                  $ 133,636
                              Project manager                          $ 120,000
                              TOTAL                                    $1,808,526

Details of the different program costs are presented below.

Retrofit of Existing Residential Customers
Tables 31 - 36 provide information on recommended, highly rated fixtures and appliances that
are capable of achieving the water savings projected in Alternative 3. The costs provided are
retail prices. It is anticipated that bulk purchase discounts can be obtained at a cost savings of
15% over retail.

Table 31: Alternative 3 available technology for conserving toilets

                  Model                                                                                 Approx. Retail
Brand                                                           Rated Water Use (gpf)
                                                                                                            Price
Caroma            Caravelle – dual flush                                   0.8/1.6                          $388
Caroma            Tasman – dual flush                                      0.8/1.6                          $270
Kohler            Sterling Rockton – dual flush                            0.8/1.6                          $260
Keralor           Louxor – dual flush                                      0.8/1.6                          $399
Mansfield         Eco-Quantum – pressure assist                            1.0/1.6                          $333
Fortens           Dali – dual flush                                        1.0/1.6                          $250
Average                                                                                                     $317


Table 32: Alternative 3 for high efficiency clothes washers
                                                     Water           KWH/yr            Ave. Water Use               Approx.
Brand                          Model
                                                     Factor                                 (gpl)                  Retail Price
Bosch                   WFMC6400UC                     4.5              178                 13.6                     $1,369
Kenmore                 4493*                          4.1              278                 13.0                     $1,100
Kenmore                 4483*                         4.27              268                 13.6                      $900
Kenmore                 4587*                         4.31              176                 14.2                     $1,000
Kenmore                 4293*                         4.43              286                 14.1                     $1,100
Kitchen Aid             KHWS01P*                      4.28              312                 14.1                     $1,000
LG Electronics          WM2077C*                      3.89              195                 12.5                      $900
LG Electronics          WM2432H*                      4.13              222                 13.3                     $1,300
LG Electronics          WM1812C*                      4.46              184                 13.2                      $900
LG Electronics          WD-324*RHD                    5.04              115                  9.9                     $1,400
Miele                   W1113                         4.49              113                  7.8                     $1,649
Whirlpool               GHW9460P*                     4.15              227                 13.7                     $1,000
Whirlpool               GHW9150P*                      4.3              176                 14.2                      $900
Whirlpool               GHW9250M*                     4.34              285                 13.8                     $1,300
Average                                               4.34              215                 12.9                     $ 1,130
*Asterisks indicate that a coding variable may be used in place of the asterisks to indicate a color or feature that does not affect
washer efficiency.


Project Report - Task 3 Demand Management Strategies            32                                                    Aquacraft, Inc.
Carnation Washington                                                                              Water Engineering and Management
Table 33: Alternative 3 for high efficiency dishwashers

                            Model                           KWH/   Ave. Water      Approx.
Brand
                                                              yr   Use (gpl)      Retail Price
Bosch                       30 series                        546         5           $530
Bosch                       33 series                        575         5           $559
Maytag                      MDB9100                          555         5           $550
White-Westinghouse          Quiet Clean I                    518         6           $300
Whirlpool                   DU912PF                          555         6           $349
Frigidaire                  Precision Wash System            574         6           $345
Amana                       Soft Sound III DWA73A            574         6           $460
Frigidaire                  Gallery FDB636                   587         6           $399
Frigidaire                  Ultra Quiet II FDB635RF          587         6           $300
Average                                                      563                     $421

Table 34: Alternative 3 for showerheads

                           Model                        Rated Water    Approx.
Brand
                                                         Use (gpm)    Retail Price
Niagara                    Prismiere N2817                  1.75          $10
Niagara                    Earth Massage                    1.75          $11
Average                                                     1.75        $10.50



Table 35: Alternative 3 technology for faucet aerators (hand sink)

                           Model                        Rated Water    Approx.
Brand
                                                         Use (gpm)    Retail Price
Whedon                     Ultra SaverAerator               0.5          $3.50
AM Conservation            FAL5A                            0.5           $1.5
Niagara                    N325T                            0.5          $2.30
Average                                                     0.5          $2.43


Table 36: Alternative 3 technology for faucet aerators (kitchen sink)

                           Model                        Rated Water    Approx.
Brand
                                                         Use (gpm)    Retail Price
Delta                       Spray Round Aerator              2.0        $11.88
Niagara                     Dual setting w/swivel            1.5         $7.50
Average                                                     1.75         $9.70




Project Report - Task 3 Demand Management Strategies   33                                     Aquacraft, Inc.
Carnation Washington                                                      Water Engineering and Management
Summary of Alternative 3 Residential Retrofit Costs
Table 37 shows the cost of a complete retrofit of the average home in Carnation with the highest
quality fixtures and appliances currently available on the market, including the cost of
installation, storage and disposal. The cost to retrofit homes built after 1992 is lower because it is
assumed that only the dishwasher and clothes washer will need to be replaced. The total cost to
implement the residential retrofit program is shown in Table 38.


Table 37: Per household retrofit cost
Item                         Quantity      Avg. Retail Price   Total Bulk Purchase
                                              per Unit             Price (-15%)
Toilet               2                     $    317.00           $ 538.90
Clothes washer       1                     $ 1,130.00            $ 960.50
Dishwasher           1                     $    421.00           $ 357.85
Showerhead           2                     $     10.50           $ 17.85
Hand sink aerator    3                     $      2.43           $     6.20
Kitchen sink aerator 1                     $      9.70            $    8.25
Installation                                                      $ 150.00
Warehousing                                                       $ 50.00
Disposal                                                          $ 25.00
TOTAL                                                            $ 2,114.55
TOTAL FOR HOMES BUILT SINCE 1992                                 $ 1,543.35



Table 38: Total cost for residential retrofit program*
Category                                                                            Value
# of homes built before 1992                                                         587
# of homes built from 1992 - 2007                                                    146
Total # of households (2007)                                                         733
Total retrofit cost for pre-1992 properties                                    $    1,241,241
Total retrofit cost for post-1992 properties                                   $      225,329
5 year flapper replacement program (4 distributions from 2007 – 2030)          $       39,320
Public information/marketing (2005-2007)                                       $       50,000
TOTAL RESIDENTIAL RETROFIT COST                                                $    1,555,890
*Does not include King County FTE for project management

Summary of Alternative 3 Non-Residential Retrofit Costs
In 2002 there were 59 commercial/industrial/municipal water accounts in Carnation. The total
number of employees was 603, so the average number of employees per establishment was 10.2.
To mirror residential growth, it is assumed that 17% of these establishments were built after
1992 and hence are already equipped with high efficiency toilets, faucets, etc. This suggests that
49 establishments need to be fully retrofit. Given the average number of employees it is
assumed that there are two bathrooms per establishment.


Project Report - Task 3 Demand Management Strategies   34                                       Aquacraft, Inc.
Carnation Washington                                                        Water Engineering and Management
Table 39: Per establishment cost of non-residential retrofits
Item                         Quantity       Avg. Retail Price   Total Bulk Purchase
                                               per Unit            Price (-15%)
Toilet                             2             $317.00               $ 538.90
Urinal (waterless)                 1             $400.00               $ 340.00
Showerhead                         1              $10.50                $    8.93
Hand sink aerator                  3                $2.43               $    6.20
Kitchen sink aerator               1                $9.70               $    8.25
Installation                                                              $150.00
Warehousing                                                                $50.00
Disposal                                                                   $25.00
TOTAL                                                                  $1,127.27

Table 40: Total cost for non-residential conservation program
Category                                                                             Value
# of establishments built before 1992                                                  49
Total retrofit cost for pre-1992 establishments                                  $     55,236
Audit and leak repair every 5 years ($300/establishment)                        $      58,800
Air-cooled equipment rebate program ($400 rebate x 49)                          $      19,600
TOTAL NON-RESIDENTIAL RETROFIT COST                                             $     133,636



Conclusions and Recommendations
Results from the analysis performed by Aquacraft indicates that there is substantial potential for
water efficiency in the City of Carnation. The cost analysis performed by Pacific Institute
presents an evaluation of demand management in the context of building the new wastewater
treatment plant.

Based on the information gathered by Aquacraft and the analysis performed the following
conclusions and recommendations are made.

1) Residential demand accounts for 71% of the total indoor demand in Carnation, but the
   second largest sector are the Unclassified accounts. This is troubling for this study since it is
   not possible to accurately determine the conservation potential of these unclassified
   customers. It is recommended that an effort be made to correctly classify the 84
   “Unclassified” water accounts and then incorporate those results into the demand and cost
   projection components of this study before final decisions about the water conservation plan
   or the size of the wastewater treatment plant are made.

2) According to Carollo Engineers Technical Memorandum No. 2 and the CSP, unaccounted for
   water is a significant problem in Carnation. Overall, non-revenue water (unaccounted for
   and unmetered water) is estimated to be 40% of all water produced at the water treatment
   plant. This is an extremely high amount of non-revenue water. Many water utilities with

Project Report - Task 3 Demand Management Strategies   35                                       Aquacraft, Inc.
Carnation Washington                                                        Water Engineering and Management
    non-revenue water greater than 10% have a program to find and repair leaks and to install
    meters for unmetered customers. It is recommended that the City of Carnation conduct a
    survey to more accurately determine how much of the Unmetered/Unaccounted demand will
    enter the new wastewater treatment system.

3) The analysis of water billing data shows that the average expected flows to a hypothetical
   wastewater treatment plant in 2000-2002 would have been 0.17 – 0.19 MGD. Under the
   most likely demand future, Alternative 2 would result in demands on 0.25 MGD in 2030.
   Under Alternative 3 demands in 2030 would be 0.21 MGD. This suggests that implementing
   comprehensive water efficiency in Carnation will limit growth if future water demands
   substantially so that they are only slightly higher than what is occurring today.

4) Carnation should consider implementing a system of water (or effluent) budget based billing
   so that customers that use more water and contribute more than their “allocation” face
   significant penalty charges on their wastewater utility bill. This would in effect be a
   wastewater budget billing system. Collected penalties could be used to fund enhanced
   efficiency programs. Such a system would give the utility confidence that future customers
   will not allow their water use to rise over time in a way the nullifies the effects of the water
   conservation efforts.

5) The savings and cost-effectiveness of the Carnation wastewater flow reduction program
   relies on two key factors:

    (a) A mandatory conservation retrofit of high efficiency fixtures and appliances for all
        existing customers and strict building codes that ensure all new development will
        implement similar (or better) efficiency measures.

    (b) The political will of City of Carnation/King County to implement the conservation
        program.

6) In order to achieve the flow reductions achievable from Alternatives 2 - 5, the County must
   capitalize on the wastewater treatment plant and sewer connection project. Each home that
   connects to the new wastewater system must (by regulation) participate in the mandatory
   retrofit. Since this will include new fixtures and appliances for existing customers it will
   likely be a popular program if it is presented and implemented effectively. Aquacraft and
   Pacific Institute agree that a voluntary program would yield far less reliable results.

7) King County should be aware that a mandatory water conservation program is relatively
   untested concept. While flow reductions from full retrofits are well documented (see Task
   3.3 document), a mandatory retrofit program for existing customers is a new idea. Such a
   mandatory program requires commitment and cooperation between King County, the City of
   Carnation, and the citizens of Carnation. Citizens must understand and “buy into” the
   program if it is to be successful. A mandatory program is a reasonable and achievable idea,
   but it must be handled properly.




Project Report - Task 3 Demand Management Strategies   36                                    Aquacraft, Inc.
Carnation Washington                                                     Water Engineering and Management
                                                            Attachment B
                                                    Pacific Institute:
                 Demand Management Cost Effectiveness Analysis -
          Demand Reduction Project for the Carnation Treatment Plant




DRAFT - December 7, 2004
H:\Final\KingCo_SEA\6881c00\Dlv\Tm\WhitePaperDraft.doc
                                                                  20
                               Research for People and the Planet



December 3, 2004

Mr. Jim Hagstrom, Partner
Carollo Engineers
1218 Third Avenue, Suite 1600
Seattle Washington 98101

Subject:       Demand Management Cost Effectiveness Analysis
               Demand Reduction Project for the Carnation Treatment Plant


Dear Mr. Hagstrom:

We’ve revised our analysis of the cost effectiveness of wastewater facilities and possible
in-home and in-business wastewater reduction measures that would serve the community
of Carnation in King County, Washington State, per the comments received by electronic
mail on November 6th from Susanna Leung of your staff, and some further verbal
comments from Susanna on December 1st. The essential finding from this analysis is that
indoor water demand management using best technologies seems to be cost-effective as
compared with the current design. Under very conservative assumptions, mandatory
“best” technology for all homes and businesses in Carnation is estimated to be about 2%
less costly. Under equally plausible but less conservative assumptions, conservation
would have financial costs about 7.5% less. If environmental and other benefits that are
difficult to estimate were included, savings would be even larger.

The report primarily presents the sum of costs for the County, City, and customers,
regardless of to whom they accrue. The report also includes an assumed allocation of
costs for each of these parties as a starting point for discussion. Some important
allocation-related findings are: 1) water bill savings for customers may be as much as
$3.12 million, but these are lost revenue for the City and are mostly not real savings, 2)
real energy savings by customers are as much as $0.94 million, and 3) cost-effective
conservation could involve either higher or lower initial capital investments (between
$0.64 million more and $0.39 million less than the Current Design).

            654 13th Street, Preservation Park, Oakland, California 94612, U.S.A.
     510-251-1600 | fax: 510-251-2203 | email: pistaff@pacinst.org | www.pacinst.org
It is important to recognize that these finding are based in significant measure on
wastewater facility related cost estimates provided in the November 6th e-mail.
Furthermore, non-residential water use and conservation opportunities, both current and
future, are uncertain because the types of businesses in Carnation are not clear. We have
addressed this uncertainty by conservatively assuming that water conservation in
businesses occurs only in common plumbing fixtures like toilets and sinks. There
probably will be other opportunities to save water or energy in the business sector, but we
are unable to assess that at present.

This letter report presents the analysis in six sections and a one-page executive summary
(attached). First, we review some economic terminology that will be helpful in discussing
the results. Second, we describe what we analyzed. Third, we present our method and the
results in full for three comparisons of alternatives (current design versus each of the
following: best available technology, all structures; best available technology, new
structures only, and technologies that satisfy the current plumbing codes, installed as
existing appliances wear out). Fourth, we discuss data inputs. Fifth, we summarize our
results, including sensitivity analysis. Sixth, we present our results by cost perspective
(County, City, and customer).

Some Economic Terms

The phrases cost effectiveness analysis and cost-benefit analysis are often confused. Cost-
benefit analysis is an attempt to assess in monetary units all the costs and benefits
associated with a project, which are then summarized in a single monetary measure. For
example, the net benefit of a project might be $3.7 million. A positive net benefit means
the project is desirable – total benefits exceed total costs. Unfortunately it is difficult to
monetize all costs and benefits, so meaningful cost-benefit analysis is expensive and time
consuming to perform.

Cost-effectiveness analysis involves specifying a level of service, then comparing the cost
and benefits of various ways (alternatives) for delivering that level of service. If an
alternative is estimated to be less costly than a cost benchmark or baseline facility cost
estimate (in this case, the current design, described below), we say that it is cost-
effective. If the alternative is more costly, it is not cost-effective. In practice, this type of
analysis is much easier than cost-benefit analysis because one may be able to evaluate
cost-effectiveness without quantifying some difficult to quantify items. For example, we
did not need to quantify the environmental benefits, or the benefit of reduced exposure to
energy price risk, of the demand management scenarios because even if these benefits
have zero value, the demand management scenarios seem to be cost-effective.

Water conservation measures involving appliance replacement can be implemented
before the old appliance is worn out, or when the old appliance will be replaced for
reasons other than water conservation. The former is called accelerated replacement; the
latter is natural replacement. Accelerated replacement is much costlier per unit of water
conserved because the full cost of the appliance, and labor to install it, must be “charged
against” the water conserved. Under natural replacement, on the other hand, only the

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incremental cost of the better appliance is “charged against” the water conserved.
Installing better appliances during new construction is economically identical to natural
replacement, so we call it that although appliances aren’t actually replaced.

One can analyze the economics of conservation from a variety of perspectives. For
example, what are the costs and benefits that accrue to King County? That accrue to the
City of Carnation? That accrue to customers? One way to answer these questions, used in
this report, is to analyze the combined perspective first, which refers to the costs and
benefits that accrue to King County, the City, and customers, as a group. From this
perspective, customer savings on a water bill, for example, are offset by lost revenue to
the City, so cash flows through the water rate structure are counted neither as benefits nor
costs. What counts are the costs the City does not incur (e.g., electricity, chlorine).

After analyzing the combined perspective, one can describe the County, City, and
customer perspectives as adjustments to the combined perspective. For example, the City
perspective, as we understand it now, is the savings from providing less water (since all
other costs and benefits are borne by or accrue to the County or customers), less lost
revenue from conserved water.

What Was Analyzed?

Aquacraft was charged with analyzing flows under five scenarios:

   1.   Compliance with the existing plumbing code,
   2.   “Efficient” appliances in all homes and businesses,
   3.   “Best” available technology (BAT) appliances in all homes and businesses,
   4.   “Efficient” appliances only in new homes and businesses, and
   5.   “Best” available technology (BAT) appliances only in new homes and businesses.

We were initially asked to evaluate the cost-effectiveness of Scenarios 2-5 as compared
with Scenario 1, and to consider the impact of flows being higher or lower under each
scenario. That is, how sensitive are the economics to inaccuracies in the flow estimates?

After a meeting on the 25th of October with the project team, including King County
staff, and some preliminary analysis on our part, we felt it would be simplest to present
results for only Scenarios 1, 3, and 5, and sensitivity analysis of those results. These
include the full range of flows that might occur, and the largest variation in costs and
benefits as well.

Scenario 3 includes accelerated replacement of appliances in existing homes and
businesses, which we know by experience is more costly per unit of water conserved than
natural replacement. It also involves the “best” technologies for water use, which again
we know by experience are the most costly. Given these facts, and that this alternative
was found to be robustly cost-effective in our initial analysis, we omitted analysis of
Scenario 2 from the draft report.



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Scenario 5 is politically relevant – it shows the impact of leaving all existing homes and
businesses as they are. It also has a considerably less costly conservation program than
Scenario 3 since the most costly element of Scenario 3 -- accelerated appliance
replacement – is not part of Scenario 5. A program of natural replacement of appliances
in existing homes and businesses would fall “between” Scenarios 3 and 5. That is, these
Scenarios span the full range of program alternatives for existing homes and businesses.
Should the County decide at a later time to evaluate programs that replace less than all
but more than none of the appliances in these homes and businesses, the resulting flows
and economic results would probably lie between flows and results for Scenarios 3 and 5.

The County and Carollo Engineers subsequently met to discuss the draft report, resulting
in the comments dated November 6th from Susanna Leung. We were asked in the
comments to rename scenarios 1, 3, and 5 as “Code Compliance,” “Mandatory BAT
(all),” and “BAT New Construction,” respectively. We were also asked to use the
“Current Design” as the baseline for cost-effectiveness comparisons.

Method and Results in Full

Our method for evaluating each alternative was to construct a table of cash flows for each
of the readily quantifiable costs and avoided costs over the time frame 2007-2030. In
Current Design, we modeled two cost categories: capital for wastewater facilities, and
operations and maintenance (O&M) of these facilities. Carollo Engineers provided
estimates of these costs at year 2030 flows of 0.370, 0.298, 0.256, and 0.207 million
gallons per day (mgd). The highest flow (0.370 mgd) is Current Design.

In Code Compliance (0.298 mgd), wastewater capital and O&M costs will be lower. In
addition, flows lower than Current Design imply that water supply costs will be reduced.

In Mandatory BAT (all) (0.207 mgd), wastewater capital, wastewater O&M, and water
supply costs will be yet lower, and three other types of costs are modeled: capital costs
for conservation measures, on-going costs for the conservation program (e.g., toilet
flapper replacement, periodic mailers), and avoided energy purchase costs by customers.

In BAT New Construction (0.256 mgd), all six categories of cost are modeled, with those
adjustments needed to reflect a conservation program that applies only to new structures.

One can calculate the net present value (NPV) of each cost stream from 2007 to 2030,
and then sum up all cost streams that apply to each alternative. This is done in the bottom
row of Table 1 (attached) for Current Design and Code Compliance. The sum of costs for
Current Design is about $22,346,000. Since the sum of costs for Code Compliance (about
$21,878,000) is lower, the Code Compliance alternative is cost-effective.

Tables 2 and 3 (attached) present similar comparisons between Current Design and
Mandatory BAT (all) or BAT New Construction, respectively. Again, both alternatives
are cost-effective. These results are summarized and presented with sensitivity analyses
later in this report.

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Data Inputs

The data and calculations that lead to the results shown in Tables 1, 2, and 3 are
described in a series of bullet lists below. Those inputs that are potentially the least
accurate are discussed below, when relevant. Sensitivity analysis – that is, how the
results change as inputs change – is presented in the next section of this report.

General Inputs:

   •   The cost of capital is assumed to be 5.25%, per County staff.
   •   An inflation rate of 2.25% is assumed, because a real cost of capital of 3%
       (5.25%-2.25%) is reasonable given that real long-term interest rates are predicted
       to rise moderately and the current yield of inflation indexed 20-year maturity US
       Treasury Bonds is about 2.1%. One could apply different rates of inflation to
       different types of expenses (e.g., labor versus energy), but that did not seem
       necessary here. We considered the impact of higher energy prices in one
       sensitivity analysis.
   •   All year 2007 costs are presented in year 2004 dollars. That is, inflation has not
       been applied to our current cost estimates because the pattern of capital spending
       in years 2005-2007 is unclear. For simplicity, we assume all spending begins in
       year 2007. This assumption has little effect on the NPVs of the Scenarios.
   •   Electricity is priced at $0.065 per kilowatt hour (kWh) (Puget Sound Energy)
   •   Natural gas is priced at $0.96 per therm (Puget Sound Energy)
   •   The energy utility does not need to raise rates to make up for lost revenue when
       Carnation customers purchase less energy. This is certainly true given the current
       and future size of Carnation; but it might not be true for a similar program
       implemented over much larger scales (e.g., County-wide).
   •   The net salvage value of old appliances is zero: that is, salvage value offsets the
       cost of hauling away and “disposing of” old appliances.
   •   The incremental replacement cost for new appliances when the new ones installed
       in this program have completed their useful lives is zero. This does not mean that
       future appliances are free. It means that in the future (2017 and beyond since the
       shortest lived new appliance to be installed in the program has at least a 10 year
       useful life), “average” appliances use the same amount of water and energy as the
       “best” appliances today.

Wastewater related inputs, all alternatives:

   •   Wastewater capital and O&M costs provided by Carollo Engineers, November 6th
   •   Annual wastewater flows interpolated from Carollo-provided (November 6th) year
       2007, 2012, 2017, 2022, and 2030 flow estimates, peaking in 2030
   •   Wastewater O&M costs provided by Carollo include only those costs that are
       affected by the plant sizing decision or flow. Consequently, total costs provided in
       this report are for comparison purposes only: they do not reflect the absolute costs
       of any of the alternatives

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   •   Although the O&M costs are estimated for the peak year (i.e., 2030) in today’s
       dollars, we’ve used them as first year costs (2007). Actual first year costs will be
       slightly lower, rising to the estimated figures by year 2030 (plus inflation). But
       the modeling convention we’ve used will not affect the results much since 64-
       70% of the O&M costs provided to us are maintenance related, and therefore will
       not vary over time except due to inflation. The remaining O&M costs in our
       model are energy related, but even some of these may not vary much with flow
       depending on equipment specification decisions not yet made.

Water supply inputs, all alternatives

   •   Avoided water supply will save the City of Carnation at least $0.02 per hundred
       cubic feet (ccf) of water, based on City budget documents. This reflects less
       pumping energy and fewer chemicals for disinfection.
   •   This avoided cost number is extraordinarily low because the City system has
       sufficient capacity to satisfy projected growth, and because labor costs for the
       system probably can’t be reduced below their current level. However, future
       labor costs may not rise as much if less water is delivered than they would rise if
       more water is delivered. This could be a significant source of avoided costs, since
       the current labor cost is about $0.60 per ccf. If labor cost were to rise linearly
       with water supply, the reduction in water supply growth rate would avoid costs of
       about $0.60 per ccf. Even if labor cost were to rise at only half that rate, for
       example, the avoided water supply costs would be much higher than those shown
       in Tables 1, 2, and 3. We address this issue in the sensitivity analysis, below.
   •   Note that the City will lose much more revenue per ccf of conserved water (about
       $2.60 per ccf) than the water supply cost reduction from conservation. This issue
       is discussed in the perspectives section, below.

Mandatory BAT (all) capital cost inputs:

   •   The capital cost of appliances in existing homes and businesses is from Aquacraft,
       adjusted to reflect the zero net salvage value assumption above, removal of the
       warehousing fee, and the omission of dishwashers in the retrofit package for
       existing homes ($1682 for pre-1992 homes; $1110 for post-1992 homes; $1102
       per existing business). This includes installation cost of $150 and a 15% bulk
       purchase discount. Larger discounts are probably available, as discussed in the
       sensitivity analysis below. A cost estimate obtained from a contractor by Mary
       Hansel of Carollo Engineers is roughly comparable to the Aquacraft estimate in
       total. Appliance costs in the contractor estimate, however, are significantly lower.
       We’ve used the higher, more conservative appliance purchase cost data at this
       time.
   •   We were asked in a review comment to note that some costs such as “rotting
       floorboards” are not included in these estimates. However, such costs arguably
       are included. The residential figures above amount to an average of $1592 per
       existing household. By comparison actual costs for similar retrofits in Tampa,
       Seattle, and EBMUD service area were $1299, $1211, and $1084, respectively.

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December 3, 2004 (rev)                                        Cost-Effectiveness Analysis
       Furthermore, we believe it would be unfair to those who eventually pay for these
       programs to have to pay for correction of conditions that are the responsibility of
       any homeowner. Those whose floors are rotten will need to fix them eventually or
       lose money upon sale of the home. This is a financial obligation that has nothing
       to do with water conservation.
   •   Dishwashers were not included in retrofit package for existing homes because our
       work and that of others has consistently found that accelerated replacement of
       dishwashers is not cost-effective. They are included in the package for new homes
       because the incremental cost of purchasing a better dishwasher ($80 in
       Aquacraft’s memo, less in our experience) is justified both by the greater
       longevity of these models (e.g. stainless steel tubs and other components) and
       their energy savings (see sensitivity analysis below).
   •   We’ve assumed start-up labor costs for the County of $181,250. This is 1.5 full
       time equivalents (FTE) at $87,500 per FTE, plus $50,000 for other costs (e.g.
       public relations). This level of effort is the middle of the range provided by
       County staff and is reasonable as an initial estimate for a pilot program. It is
       higher than would be expected in a larger program. It amounts to about $230 per
       existing water account (residential plus non-residential) in Carnation.
   •   The start-up budget should be refined if a program is likely to be implemented.
       For example, it should be reconciled with the contractor labor cost estimate
       obtained by Mary Hansel, which seems to overlap with County staff labor. Our
       estimate treats start-up costs as capital costs, so each dollar change in start-up cost
       affects the NPV of the Scenario by one dollar.
   •   The incremental capital cost of “best” appliances versus average appliances for
       new homes is about $600, including dishwashers. Installation and the base cost of
       average appliances are not relevant since these expenditures will take place with
       or without a conservation program.
   •   The incremental capital cost of “best” appliances in new businesses is zero, per a
       conversation with Peter Mayer and our own experience. In fact some of the “best”
       appliances (e.g., showerheads) cost less, on average, than average appliances.
   •   The timing of installation of appliances in new homes and businesses is based on
       the job and residential “headcounts” in the Aquacraft memorandum. We assume
       one new home for each population increase of 3 persons, and one new business
       for each increase of 10.2 jobs.

Mandatory BAT (all) on-going (conservation O&M) cost inputs

   •   Conservation program operation and maintenance costs are estimated at $1700
       per year and $60 per business (defined as each group of 10.2 employees) per year.
       These figures are calculated from Aquacraft’s estimated cost for toilet flapper
       replacement and on-going audits and leak repair.
   •   These costs should be reviewed carefully if a program is likely to be
       implemented. Their timing is also important. We’ve made the conservative
       assumption that they are spread equally in time, but realistically they will occur
       later than shown because leakage and other maintenance related issues are very
       small at first and rise as appliances age.

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December 3, 2004 (rev)                                         Cost-Effectiveness Analysis
Mandatory BAT (all) avoided customer energy

Water saving appliances often save energy as well. Sometimes this occurs on the
customer side of the water meter. We’ve estimated customer energy savings using the
following data and assumptions:

   •   25% of homes heat water using natural gas, as suggested by Carollo Engineers
   •   75% of homes heat water using electricity, as suggested by Carollo Engineers
   •   We’ve assumed that the only energy savings in businesses is from water heating
       in showers and sinks. We’ve assumed the same energy savings as in residential
       fixtures, which in our experience is very conservative because business fixtures
       are generally used much more than home fixtures.
   •   Shower and bath water conserved would have been heated to 105 degrees
       Fahrenheit (average) from 60 degrees Fahrenheit average. 1.7 gallons per day per
       person are conserved.
   •   New dishwashers (installed in new homes only) save the equivalent of 84 kWh
       per year. This is considerably larger than one would obtain from a comparison of
       data in Aquacraft’s tables of BAT and standard dishwashers. However, the
       Aquacraft table of standard dishwashers includes three models (out of four)
       whose energy use is far less than average model in our experience. The average in
       this table (475 kwh/yr) is also lower than the figures presented in Aquacraft’s
       tables for high efficiency dishwashers (634 and 563 respectively). We believe the
       table does not represent the average model that would be purchased without
       County standards. Instead, we used the average energy use of the less efficient
       models documented on p. 129 of Waste Not, Want Not, our comprehensive
       assessment of the potential for water conservation in California (647 kwh/yr).
   •   New clothes washers installed in new homes save the equivalent of 226 kWh per
       year (Aquacraft comparison of “average” versus “best” clothes washers). This
       figure is very conservative based on our experience.
   •   New clothes washers installed in existing homes save the equivalent of 700 kWh
       per year. This assumes that the average clothes washer in existing homes in
       Carnation has energy use (915 kWh per year) equal to the average new machine
       on the market three years ago.

BAT New Construction conservation program inputs:

   •   Capital costs for existing homes and businesses were assumed to be zero.
   •   Conservation program staff start-up costs were assumed to be 25% of those in
       Scenario 3. Even if existing homes and businesses are not retrofitted, there will be
       program startup costs for design of the procedures and standards that new
       construction will be required to follow. County staff should review our cost
       estimate for this effort. It amounts to either about ½ of a full-time equivalent staff
       person, or somewhat less plus a small budget for printed materials and other
       information for contractors.


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   •   Conservation program operation and maintenance costs for residences were
       assumed to be 50% of those in Scenario 3 since existing homes comprise about
       50% of total homes projected for build-out. This is a very conservative
       assumption since operation and maintenance expenses for new homes will occur
       in later, not earlier years, but are spread evenly over time in the model.
   •   Conservation program operation and maintenance costs for non-residences were
       assumed the same as Mandatory BAT (all) per business per year, but excluded the
       existing 51 business accounts. Again, these are conservatively spread evenly over
       time in the model although they will occur in later years.
   •   There were no energy or water bill savings for existing homes or businesses.

Sensitivity Analysis and Summary of Results

County staff has asked about the impact of actual water savings that are smaller than
estimated. Table 4 summarizes the results for the four alternatives, and presents the
impact of 10% more and 10% less flow on each alternative other than Current Design.
The alternatives are cost-effective even with higher flows, although the differences
between alternatives and variants on them are small on a percentage basis: perhaps
smaller than the accuracy of our estimates. The cost estimates are not sensitive to changes
in flow. For example, the largest change is an increase of $110,000 (about 0.5% of cost)
for 10% higher flow under the Code Compliance alternative. This is because only energy
cost varies with flow, and it is a small percentage of total cost.

Table 4: Summary of Alternative Cost Estimates and Flow Sensitivity Analysis
Alternative              Input Sensitivity    Net Present Value Cost Effective
                         Adjustment(s)        (millions $2004)   Compared with
                                                                 Baseline?

Current Design               None                   $22.35               Baseline
Code Compliance              None                   $21.88               Yes
Mandatory BAT (all)          None                   $21.87               Yes
BAT New Construction         None                   $21.75               Yes

Code Compliance              10% more flow          $21.99               Yes
Code Compliance              10% less flow          $21.77               Yes

Mandatory BAT (all)          10% more flow          $21.88               Yes
Mandatory BAT (all)          10% less flow          $21.86               Yes

BAT New Construction         10% more flow          $21.83               Yes
BAT New Construction         10% less flow          $21.66               Yes

Other sensitivity analyses are also useful. For example, suppose start-up costs are higher
than estimated? One could perform sensitivity analysis on all inputs for each alternative,
but in order to keep this report concise and most useful, we performed additional analyses
on only the Mandatory BAT (all) alternative (Table 5). First we asked the question: “Is

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conservation NOT cost-effective under any reasonable set of inputs?” The answer seems
to be no, as documented in the Table. Three of the inputs discussed above (start-up cost,
conservation program O&M costs, and percentage of homes that heat water with natural
gas) were less certain than other inputs and could affect costs adversely. We evaluated
each of these individually, then as a group. Finally, we evaluated all three and 10%
higher wastewater flow as a group. Mandatory BAT (all) was still cost-effective.

Table 5: Additional Sensitivity Analysis on Mandatory BAT (all)

Alternative              Input Sensitivity           Net Present      Cost Effective
                         Adjustment(s)               Value            Compared with
                                                     (millions        Baseline?
                                                     $2004)
Current Design           None                        $22.35           Baseline
Mandatory BAT (all)      None                        $21.87           Yes

Mandatory BAT (all)      25% higher staff start-     $21.92           Yes
                         up costs
Mandatory BAT (all)      25% higher appliance        $21.91           Yes
                         O&M cost
Mandatory BAT (all)      50% natural gas             $21.97           Yes
                         customers (not 25%)
Mandatory BAT (all)      Three previous              $22.05           Yes
                         combined
Mandatory BAT (all)      Three previous              $22.06           Yes
                         combined, and 10%
                         more flow

Mandatory BAT (all)      25% lower appliance         $21.50           Yes
                         costs, installed (about a
                         35% bulk discount)
Mandatory BAT (all)      Avoided water costs at      $21.51           Yes
                         $0.32 ccf
Mandatory BAT (all)      Electricity at $0.075       $21.47           Yes
                         per kWh
Mandatory BAT (all)      Three previous              $20.73           Yes
                         combined
Mandatory BAT (all)      Three previous              $20.68           Yes
                         combined, and 10%
                         less flow

Mandatory BAT (all)      No flow adjustment; all $20.95               Yes
                         six other adjustments in
                         this table



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We then asked: “Is it possible to save significant amounts with the Mandatory BAT (all)
alternative?” This question naturally arises since the projected costs of a centralized
wastewater system to residents and businesses in Carnation are significant under any
alternative. The answer seems to be yes, as documented in Table 5. Three of the inputs
discussed above (bulk discount for appliances, water supply costs that will be avoided,
and energy cost) were less certain than other inputs and could affect costs favorably. We
evaluated each of these individually, then as a group. Finally, we evaluated all three and
10% lower wastewater flow as a group. This favorable cost estimate would save an
estimated $1.67 million (7.5%) as compared with the Current Design. And these figures
do not include some benefits of conservation (e.g., environmental benefits). Furthermore,
because the Mandatory BAT (all) base estimate was developed conservatively, favorable
outcomes are more likely than unfavorable outcomes. Overall, it seems clear that
Mandatory BAT (all) could potentially reduce costs significantly; and perhaps even more
than the 7.5% found in this sensitivity analysis.

Finally, we were asked by County staff to justify the inclusion of dishwashers in the
package of conservation measures for new homes. Excluding them increases estimated
cost by about $70,000. This is because the energy benefits exceed the incremental cost.
This result probably overstates the benefits of mandatory dishwasher replacement in new
construction because dishwashers installed to replace the first dishwashers in these homes
(e.g., 12 years after construction) will be more efficient anyway, but fine tuning the
model to account for this is too difficult given our budget and schedule. Based on
experience and the details of this situation, we believe that including dishwashers for new
homes in the Mandatory BAT (all) alternative is cost-effective, but the cost impact of
excluding them, should the County decide to do so, is also likely quite small.

Cost Perspectives

The County, City, and customer perspectives on the cost of water conservation programs
are components of the combined perspective. Table 6 presents these perspectives for the
Current Design, Code Compliance, Mandatory BAT (all), and BAT New Construction
alternatives. The sum of each row equals the combined perspective total in Table 4.

Table 6: Costs from the City, County, and Customer Perspectives
                             Net Present Value of Costs (millions $2004) (notes 1 and 2)
Scenario                     County                    City                Customer
Current Design               $10.55                    $11.80              $0.00
Code Compliance              $10.17                    $12.90              - $1.19
Mandatory BAT (all)          $11.36                    $14.60              - $4.09
BAT New Construction $10.33                            $13.52              - $2.10 (note 3)
Notes: 1) A negative cost is a benefit. 2) Allocation of costs assumes that water and
energy rates do not change and that sewer charges are not imposed. This does not
represent the final allocation of cost burden. It represents the most neutral representation
of burden at this time since rate and other cost-sharing decisions have not been made. 3)
BAT New Construction, customer benefits accrue only to owners of new structures.

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At this time, we have assumed that water and energy rates do not change, that sewer
charges have not been imposed, that treatment plant and outfall capital and associated
O&M costs are borne by the County, that collection system capital and associated O&M
costs are borne by the City, that the City suffers a loss of water revenue, and that
customers save on both their water and energy bills. We recognize that this is not an
accurate description of how costs will be allocated, but it is the most neutral way to
present the information in advance of decisions about rates and other cost-sharing
measures.

Note that rates and fees that capture the full financial cost of services from customers in
Carnation (that is, without contributions by taxpayers or ratepayers in other parts of the
County) would cause County and City costs to be zero, and the customer cost to be the
same as the combined perspective NPVs shown in Tables 1-5.

Please also note that the allocation of costs depends on program design decisions that
have not been made yet. For example, requiring new homes and businesses to comply
with new codes without a rebate from the County (which is fair given their future utility
bills will be reduced by more than the extra cost of code compliance) would reduce the
NPV to the County by about $270,000. Another example is that one could phase the
retrofit of existing homes over time in order to hold the initial capital cost for the County
to the same level as the current design. So long as a project is financially desirable in total
(the combined perspective), it is possible to create an allocation of costs that is no worse
than the current design, although some creativity may be required to find that allocation.


We’ve appreciated the opportunity to perform this analysis and look forward to
discussing it with you and the rest of the project team. Please feel free to contact either
myself or Peter Gleick at (510) 251 1600, or through e-mail (gwolff@pacinst.org or
pgleick@pipeline.com) with any questions or concerns.

Sincerely,



Gary Wolff, P.E., Ph.D.
Principal Economist and Engineer

Att:   Table 1: Current Design Versus Code Compliance
       Table 2: Current Design Versus Mandatory BAT (all)
       Table 3: Current Design Versus BAT New Technology
       Executive Summary




Pacific Institute                           12/12              Carnation Demand Reduction
December 3, 2004 (rev)                                          Cost-Effectiveness Analysis
Table 1: Current Design Versus Code Compliance

                                                    Current Design                              Code Compliance
                          Year   Residents   Jobs        Est Flow    WW Capital     WW O&M          Est Flow   WW Capital     WW O&M      Cons Capital   Cons O&M   Avoided Water   Avoided Energy


                      2007           2185     634           0.205    $18,542,300     $216,660          0.205   $18,336,100     $202,270            $0          $0            ($1)              $0
                      2008           2297     701           0.229                    $221,535          0.218                   $206,821            $0          $0          ($110)              $0
                      2009           2410     768           0.253                    $226,519          0.231                   $211,475            $0          $0          ($225)              $0
                      2010           2522     835           0.277                    $231,616          0.244                   $216,233            $0          $0          ($345)              $0
                      2011           2635     902           0.301                    $236,827          0.257                   $221,098            $0          $0          ($469)              $0
                      2012           2747     969           0.325                    $242,156          0.270                   $226,073            $0          $0          ($600)              $0
                      2013           2859    1036           0.329                    $247,605          0.271                   $231,159            $0          $0          ($640)              $0
                      2014           2972    1103           0.332                    $253,176          0.272                   $236,360            $0          $0          ($682)              $0
                      2015           3084    1169           0.336                    $258,872          0.274                   $241,678            $0          $0          ($725)              $0
                      2016           3197    1236           0.339                    $264,697          0.275                   $247,116            $0          $0          ($770)              $0
                      2017           3309    1303           0.343                    $270,652          0.276                   $252,676            $0          $0          ($817)              $0
                      2018           3421    1370           0.345                    $276,742          0.279                   $258,362            $0          $0          ($830)              $0
                      2019           3534    1437           0.347                    $282,969          0.281                   $264,175            $0          $0          ($844)              $0
                      2020           3646    1504           0.350                    $289,336          0.284                   $270,119            $0          $0          ($858)              $0
                      2021           3759    1571           0.352                    $295,846          0.286                   $276,196            $0          $0          ($872)              $0
                      2022           3871    1638           0.354                    $302,502          0.289                   $282,411            $0          $0          ($886)              $0
                      2023           3871    1705           0.356                    $309,308          0.290                   $288,765            $0          $0          ($918)              $0
                      2024           3871    1772           0.358                    $316,268          0.291                   $295,262            $0          $0          ($951)              $0
                      2025           3871    1839           0.360                    $323,384          0.292                   $301,906            $0          $0          ($985)              $0
                      2026           3871    1907           0.362                    $330,660          0.294                   $308,698            $0          $0        ($1,020)              $0
                      2027           3871    1974           0.364                    $338,100          0.295                   $315,644            $0          $0        ($1,057)              $0
                      2028           3871    2041           0.366                    $345,707          0.296                   $322,746            $0          $0        ($1,094)              $0
                      2029           3871    2108           0.368                    $353,486          0.297                   $330,008            $0          $0        ($1,132)              $0
                      2030           3871    2175           0.370                    $361,439          0.298                   $337,433            $0          $0        ($1,172)              $0


2007 NPV (Columns)                                                   $18,542,300   $3,803,909                  $18,336,100   $3,551,264            $0         $0         ($9,126)              $0
2007 NPV (Alternatives)                              $22,346,209                                 $21,878,237
Table 2: Current Design Versus Mandatory BAT (all)

                                                    Current Design                              Mandatory BAT (all)
                          Year   Residents   Jobs        Est Flow    WW Capital     WW O&M          Est Flow    WW Capital    WW O&M      Cons Capital   Cons O&M    Avoided Water   Avoided Energy


                      2007           2185     634           0.205    $18,542,300     $216,660          0.122   $17,793,060     $184,350    $1,386,956       $4,760          ($806)        ($43,512)
                      2008           2297     701           0.229                    $221,535          0.134                   $188,498       $22,957       $5,231          ($947)        ($45,757)
                      2009           2410     768           0.253                    $226,519          0.146                   $192,739       $23,474       $5,723        ($1,093)        ($48,053)
                      2010           2522     835           0.277                    $231,616          0.158                   $197,076       $24,002       $6,234        ($1,246)        ($50,400)
                      2011           2635     902           0.301                    $236,827          0.169                   $201,510       $24,542       $6,766        ($1,405)        ($52,800)
                      2012           2747     969           0.325                    $242,156          0.181                   $206,044       $25,094       $7,320        ($1,571)        ($55,254)
                      2013           2859    1036           0.329                    $247,605          0.183                   $210,680       $25,659       $7,897        ($1,624)        ($57,764)
                      2014           2972    1103           0.332                    $253,176          0.185                   $215,420       $26,236       $8,496        ($1,679)        ($60,329)
                      2015           3084    1169           0.336                    $258,872          0.187                   $220,267       $26,826       $9,120        ($1,735)        ($62,953)
                      2016           3197    1236           0.339                    $264,697          0.189                   $225,223       $27,430       $9,768        ($1,793)        ($65,635)
                      2017           3309    1303           0.343                    $270,652          0.191                   $230,291       $28,047      $10,441        ($1,853)        ($68,378)
                      2018           3421    1370           0.345                    $276,742          0.192                   $235,472       $28,678      $11,141        ($1,907)        ($71,183)
                      2019           3534    1437           0.347                    $282,969          0.193                   $240,770       $29,323      $11,867        ($1,963)        ($74,051)
                      2020           3646    1504           0.350                    $289,336          0.195                   $246,188       $29,983      $12,622        ($2,020)        ($76,983)
                      2021           3759    1571           0.352                    $295,846          0.196                   $251,727       $30,658      $13,405        ($2,079)        ($79,981)
                      2022           3871    1638           0.354                    $302,502          0.197                   $257,391       $31,347      $14,218        ($2,139)        ($83,047)
                      2023           3871    1705           0.356                    $309,308          0.198                   $263,182            $0      $15,064        ($2,198)        ($84,996)
                      2024           3871    1772           0.358                    $316,268          0.200                   $269,104            $0      $15,941        ($2,257)        ($86,990)
                      2025           3871    1839           0.360                    $323,384          0.201                   $275,158            $0      $16,850        ($2,319)        ($89,028)
                      2026           3871    1907           0.362                    $330,660          0.202                   $281,350            $0      $17,794        ($2,382)        ($91,113)
                      2027           3871    1974           0.364                    $338,100          0.203                   $287,680            $0      $18,772        ($2,446)        ($93,244)
                      2028           3871    2041           0.366                    $345,707          0.205                   $294,153            $0      $19,786        ($2,513)        ($95,423)
                      2029           3871    2108           0.368                    $353,486          0.206                   $300,771            $0      $20,838        ($2,581)        ($97,651)
                      2030           3871    2175           0.370                    $361,439          0.207                   $307,538            $0      $21,927        ($2,650)        ($99,930)


2007 NPV (Columns)                                                   $18,542,300   $3,803,909                  $17,793,060   $3,236,641   $1,656,270     $147,840        ($24,211)       ($938,512)
2007 NPV (Alternatives)                              $22,346,209                                 $21,871,088
Table 3: Current Design Versus BAT New Construction

                                                    Current Design                              BAT New Construction
                          Year   Residents   Jobs        Est Flow    WW Capital     WW O&M          Est Flow   WW Capital     WW O&M      Cons Capital   Cons O&M    Avoided Water   Avoided Energy


                      2007           2185     634           0.205    $18,542,300     $216,660          0.194   $18,108,530     $193,920       $45,313        $850           ($108)              $0
                      2008           2297     701           0.229                    $221,535          0.202                   $198,283       $22,957       $1,253          ($272)         ($1,079)
                      2009           2410     768           0.253                    $226,519          0.210                   $202,745       $23,474       $1,673          ($443)         ($2,181)
                      2010           2522     835           0.277                    $231,616          0.217                   $207,306       $24,002       $2,113          ($622)         ($3,309)
                      2011           2635     902           0.301                    $236,827          0.225                   $211,971       $24,542       $2,571          ($809)         ($4,462)
                      2012           2747     969           0.325                    $242,156          0.233                   $216,740       $25,094       $3,050        ($1,004)         ($5,641)
                      2013           2859    1036           0.329                    $247,605          0.234                   $221,617       $25,659       $3,550        ($1,057)         ($6,846)
                      2014           2972    1103           0.332                    $253,176          0.235                   $226,603       $26,236       $4,071        ($1,113)         ($8,079)
                      2015           3084    1169           0.336                    $258,872          0.235                   $231,702       $26,826       $4,613        ($1,171)         ($9,339)
                      2016           3197    1236           0.339                    $264,697          0.236                   $236,915       $27,430       $5,179        ($1,230)        ($10,628)
                      2017           3309    1303           0.343                    $270,652          0.237                   $242,246       $28,047       $5,768        ($1,292)        ($11,945)
                      2018           3421    1370           0.345                    $276,742          0.240                   $247,696       $28,678       $6,382        ($1,316)        ($13,293)
                      2019           3534    1437           0.347                    $282,969          0.242                   $253,269       $29,323       $7,021        ($1,341)        ($14,670)
                      2020           3646    1504           0.350                    $289,336          0.245                   $258,968       $29,983       $7,685        ($1,366)        ($16,079)
                      2021           3759    1571           0.352                    $295,846          0.247                   $264,795       $30,658       $8,377        ($1,391)        ($17,519)
                      2022           3871    1638           0.354                    $302,502          0.250                   $270,752       $31,347       $9,096        ($1,417)        ($18,992)
                      2023           3871    1705           0.356                    $309,308          0.251                   $276,844            $0       $9,845        ($1,466)        ($19,500)
                      2024           3871    1772           0.358                    $316,268          0.252                   $283,073            $0      $10,624        ($1,517)        ($20,020)
                      2025           3871    1839           0.360                    $323,384          0.252                   $289,443            $0      $11,433        ($1,570)        ($20,552)
                      2026           3871    1907           0.362                    $330,660          0.253                   $295,955            $0      $12,274        ($1,623)        ($21,096)
                      2027           3871    1974           0.364                    $338,100          0.254                   $302,614            $0      $13,147        ($1,679)        ($21,651)
                      2028           3871    2041           0.366                    $345,707          0.255                   $309,423            $0      $14,054        ($1,736)        ($22,220)
                      2029           3871    2108           0.368                    $353,486          0.255                   $316,385            $0      $14,995        ($1,795)        ($22,801)
                      2030           3871    2175           0.370                    $361,439          0.256                   $323,503            $0      $15,972        ($1,856)        ($23,395)


2007 NPV (Columns)                                                   $18,542,300   $3,803,909                  $18,108,530   $3,404,662     $314,626      $82,066        ($15,007)       ($148,866)
2007 NPV (Alternatives)                              $22,346,209                                 $21,746,010
                          Executive Summary of
           Demand Management Cost Effectiveness Analysis
      Demand Reduction Project for the Carnation Treatment Plant
         Pacific Institute Letter Report Dated 3 December 2004
Cost-effectiveness analysis involves specifying a level of service, then comparing the cost
and benefits of various ways (alternatives) for delivering that level of service. If an
alternative is estimated to be less costly than a cost benchmark or baseline facility cost
estimate, we say that it is cost-effective.

The Current Design for Carnation will accommodate 0.370 million gallons per day at full
flow in the year 2030. Three alternatives to that design were evaluated: Code Compliance
(0.298 mgd), Best Available Technology (BAT) for New Construction (0.256 mgd), and
Mandatory BAT for all structures (0.207 mgd). Carollo Engineers estimated costs for
wastewater facilities. Aquacraft estimated wastewater flows under the conservation
alternatives, and capital costs for conservation measures. Using these and other data, the
Pacific Institute modeled costs for the alternatives, and performed sensitivity analyses,
for the net present value (year 2004 dollars) from years 2007-2030. All of the alternatives
were found to be cost-effective, even when combinations of unfavorable cost inputs were
used. Under more favorable but plausible assumptions, the most aggressive conservation
program is estimated to save about $1.7 million. Table ES-1 summarizes these results.

Table ES-1: Cost-Effectiveness Summary
Alternative                Input Sensitivity        Net Present Value Cost Effective
                           Adjustment(s)            (millions $2004)  Compared with
                                                                      Baseline?

Current Design               None                   $22.35               Baseline
Code Compliance              None                   $21.88               Yes
Mandatory BAT (all)          None                   $21.87               Yes
BAT New Construction         None                   $21.75               Yes

Mandatory BAT (all)          Less Favorable         $22.06               Yes
                             Assumptions
Mandatory BAT (all)          More Favorable         $20.68               Yes
                             Assumptions

Table ES-1 presents costs from the combined perspective. This is the sum of costs for the
County, City, and customers, regardless of to whom they accrue. The report also includes
an assumed allocation of costs for each of these parties as a starting point for discussion.
Some important allocation-related findings are: 1) water bill savings for customers may
be as much as $3.12 million, but these are lost revenue for the City and are mostly not
real savings, 2) real energy savings by customers are as much as $0.94 million, and 3)
cost-effective conservation could involve either higher or lower initial capital investments
(between $0.64 million more and $0.39 million less than the Current Design).

				
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