The Water/Energy Nexus from the Water Supply Perspective

1. The Water/Energy Nexus from the Water Supply Perspective National Association of State Utility Consumer Advocates 2010 Annual Meeting (Atlanta, Georgia)

2. What is the water/energy nexus? • “Water and electricity are inexorably linked and mutually dependent, with each affecting the other’s availability. Electricity is required to supply, purify, distribute, and treat water and wastewater; water is needed to generate electricity and to extract and process fuels used to generate electricity.” • October 2009 United States Government Accountability Office Report to the Chairman, Committee on Science and Technology, House of Representatives (GAO-10-23)

3. How it plays out: Water Electric • Approximately 4% of total electric sales is to supply water and treat wastewater. (12 U. Den. Water L. Rev. 1) • Approximately 5% of California’s electric consumption for water supply and treatment. (US Dept. of Energy 2006 Report to Congress) • Water withdrawals associated with thermoelectric power generation are roughly 40% of total withdrawals. (12 U. Den. Water L. Rev. 1; US Dept. of Energy 2006 Report to Congress) • Note: Much of the water withdrawn returns to the source.

4. Perhaps it is much bigger than you think. • May 2010, US EPA announces plan to regulate coal ash. • EPA Administrator Lisa P. Jackson: “We’re proposing strong steps to address the serious risk of groundwater contamination and threats to drinking water and we’re also putting in place stronger safeguards against structural failures of coal ash impoundments. The health and the environment of all communities must be protected.” • http://yosemite.epa.gov/opa/admpress.nsf/3ee0a48cce87f7ca85257359003f533d/4eca022f6f5c501185257719005dfb1b!OpenDocument

5. Cooling Water Intake Structures • US EPA is proposing US EPA wants to issue a regulation that addresses both Phase II and III existing facilities. “EPA expects this new rulemaking would apply to the approximately 1,200 existing electric generating and manufacturing plants.” (http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2040-AE95) • What is the final price tag? (And, who pays?) • See, for additional background, Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct. 1498.

6. National Pollution Discharge Elimination System Permits • Section 402 of the Clean Water Act establishes the National Pollution Discharge Elimination System permit program. • Cannot discharge pollutant into navigable water without a permit (and must be in accordance with permit). • A Total Maximum Daily Load (TMDL) is the calculation of the maximum amount of a pollutant that a water body can receive and still meet water quality standards. Note: Applies to “impaired waters.” http://water.epa.gov/lawsregs/lawsguidance/cwa/tmdl/

7. NPDES (continued) • Is it realistic to expect a relaxation in NPDES permitting? • With regard to TMDLs, water systems are dynamic (with a lot of participants). • To the extent that water quality is reduced (remember, NPDES “legalizes” the discharge of a pollutant), what is the trade-off on the water side of the equation in terms of treatment? • Note: Case to watch (basically on the water side): Friends of the Everglades , Miccosukee Tribe of Indians of Florida v. South Florida Water Management District petition for cert. pending. NPDES permits requirement for transfers of water.

8. South Carolina v. North Carolina • Original Action in the Supreme Court of the United States brought by South Carolina for an equitable apportionment of the Catawba River. • Special Master grants Duke Energy Carolina LLC (operates 11 dams and reservoirs on the Catawba River) intervention into the action. • Supreme Court (5-4) overruling South Carolina’s exception : “We conclude, as well, that Duke Energy has demonstrated powerful interest that will likely shape the outcome of this litigation.” • Chief Justice Roberts (dissenting): “Never.” Observing that the Court had never granted intervention in such a case to an entity other than a State, the United States, or an Indian Tribe.

9. In re Tri-State Water Rights Litigation • At issue is the ability of the US Army Corps of Engineers’ operation of Buford Dam and management of Lake Lanier. • Purpose of the project was flood control, navigation, and hydropower (non-consumptive uses). • US Dist. Court Memorandum and Order held that Corps’ decision to support water-supply without seeking authorization from Congress was “an abuse of discretion and contrary to the clear intent of the Water Supply Act.” • Note: Tri-State Water Rights Litigation is not an equitable apportionment action. Litigation is now in Phase 2.

10. Marcellus Shale • “The Marcellus Shale is a layer of deep sedimentary rock, deposited by an ancient river delta, with the remains of it now forming the Catskill Mountains. The vast Marcellus Shale extends from Tennessee, through most of West Virginia, across Pennsylvania and eastern Ohio, and into the Southern Tier of New York, including the Catskills and the West-of-Hudson portion of the New York City Watershed. New York’s portion of the Marcellus Shale is approximately 18,750 square miles and is very deep – over 1 mile below ground.” • http://www.nyc.gov/html/dep/html/news/natural_gas_drilling_overview.shtml

11. Marcellus Shale, natural gas extraction and water supply • Concerns about impact on unfiltered water systems (including the one serving New York City). • Water is required to drill and fracture in the extraction process. There is a potential for the demand for water for extraction to have a material impact on water supply in some areas. • http://www.netl.doe.gov/technologies/oil-gas/publications/EPreports/Shale_Gas_Primer_2009.pdf • See, for additional discussion, R. Timothy Weston - http://www.wvsoro.org/resources/marcellus/Weston.pdf

12. Energy Independence and Security Act of 2007 • Contains mandates for production of renewable fuels. • In terms of ethanol: “Corn cultivation for ethanol production can require from 7 to 321 gallons of water per gallon of ethanol produced depending on where it is grown and how much irrigation is needed.” (The conversion process requires between 3 and 6 gallons of water per gallon of ethanol produced.) • What happens to fertilizer and sediment runoff? • What about the “next generation” of biofuels? • US GAO Testimony before the Subcommittee on Energy and Environment, Committee on Science and Technology, House of Representatives. (GAO-09-862T)

13. Water Energy Nexus from the Water Side: • Decisions relating to extraction of natural resources for the production of energy will impact water quality and, in turn, the cost associated with delivering safe drinking water. • As water scarcity issues move from west to east, the framework for resolving the issues may be quite different (prior appropriation versus regulated riparianism and potential non-state participants in equitable apportionment actions). • Are we actually comparing the trade-offs in a reasonable, reliable manner? • If water and wastewater utilities are called upon to “reduce their carbon footprint” (if energy savings are sought from these utilities), then how will that impact affordability of drinking water?

14. Thank you! • David Edward Spenard • Assistant Attorney General • Kentucky Office of the Attorney General • 1024 Capital Center Drive, Suite 200 • Frankfort, Kentucky 40601-8204 • david.spenard@ag.ky.gov • T 502-696-5457