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Credit: Photo: Joe Nattress, CH2M Hill

Wilmington, Del., was spending a huge sum every year keeping levels in a 35-million-gallon reservoir high enough to maintain flow at a 30-mgd plant. Though it required building a $1.7 million low-lift booster pump station, the Wilmington Department of Public Works Water Division is going to earn back that investment by recharging the reservoir with water pumped from the Brandywine River during the electric utility's off-peak hours.

A 20-year real-world example

In 2011 we partnered with environmental consultants Enstrat Inc. and Honeywell Building Solutions to provide a suite of solutions for the Wilmington, Del., Department of Public Works Water Division. In addition to several small projects, the 20-year contract included designing solar power facilities and a cogeneration facility that will reduce wastewater sludge volume from 140 to 30 tons/day while producing 4.2 megawatt hours (MWh) of power.

The contract allowed the three of us to look at the division's spending comprehensively and develop holistic solutions to energy issues and greening goals. As part of the proposed improvements, we found a way to lower pumping costs that probably wouldn't have surfaced without proactive collaboration between the public and private entities involved.

Most (88%) of the division's raw water basin storage volume was unusable because a minimum depth had to be maintained to provide sufficient head to facilitate adequate flow rate through the 30-mgd Porter Water Filter Plant. To maintain water levels, pumps to the basin ran almost continuously. This gave managers a fixed, flat-rate energy cost structure for budgeting purposes and insulated the operation from energy cost peaks, but resulted in large annual energy expenditures.

We developed and negotiated a different type of cost structure: block-and-index, which means buying electricity using both fixed and index rates. "Block" quantities of electricity are purchased for a fixed price. Payment for any additional electricity is hourly or sub-hourly and based on "index" — i.e., market-based — retail prices. This provides significant savings by pumping raw water from the Brandywine River to the basin during off-peak energy periods. To enable the department to utilize most of the basin's depth, a new, low-lift pump station was required for hydraulic purposes and for additional reliability and redundancy at the plant.

Built for $1.7 million, the facility was initially expected to save $500,000 annually. It was commissioned in May 2011 along with the revised rate structure and raw water pump scheduling. But after three months of operation, projected annual savings are more than $580,000.

"Obtaining timely funding for our capital program is always difficult, especially during the recession," says Water Division Assistant Director Colleen Arnold.

Because virtually all — almost $12 million — of the $14.5 million contract was related to water system assets, her team will implement a complete asset management plan to better understand how they're spending operational and capital dollars. "We'll never have the money to replace everything, so we need to know what we need to replace and what we can repair," she says.

"Optimization with regard to energy and chemicals, as well as increased automation trends, will also continue."

With energy costs on the rise and the economy still floundering, performance contracts are important to develop clean energy programs, create much-needed jobs, and address aging infrastructure.

Guaranteed Energy Performance Contracts

When to use GEPCs for water/wastewater projects

  • There's an opportunity for private financing and available funding is to be reserved for a greater need
  • There's a desire to holistically decrease energy consumption and carbon footprint
  • There's a complex project but project details aren't defined, nor is the financing
  • There are overarching "green" goals
  • There are energy savings available but no money to move the project or projects forward

Services often required to complete the project

  • Arranging long-term financing
  • Commissioning
  • Construction management
  • Design engineering
  • Energy audit
  • Operations & maintenance
  • Savings monitoring & verification

Bellamy (bill.bellamy@ch2m.com) is senior vice president, Water Business Group, at CH2M Hill headquarters in Denver. Matichich (michael.matichich@ch2m.com) is global technology leader, Financial Services, for the consulting firm in Washington, D.C.