Energy and Water Resources Policy Principles – Adopted Jan. 2019 Feb 15, 2019 Policy Documents In January 2019, ACWA released its updated policy principles on “Energy and Water Resources” in California. The updated principles will help guide ACWA’s ongoing advocacy efforts on energy-related issues that impact the greater water community. The nine policy principles are intended to cover broader, overarching concerns, such as local control and cost-effective energy supplies, but also focus on more specific technologies and strategies that water agencies may wish to utilize in the future. The policy principles also envision ACWA members’ diverse energy generation as part of the State’s zero carbon energy future. ACWA’S ENERGY AND WATER RESOURCES POLICY PRINCIPLES: Local Control: The primary mission of water agencies is to provide a reliable water supply. Long-term water supply adequacy and reliability are critical to maintaining public health and safety and the economy. Decision-making authority regarding water supply, infrastructure investment, water management, and operational energy management must remain with local water agencies in any of the State’s statutes, regulations and policies. ACWA may advocate for policies that recognize energy generation and consumption are among the many factors water agencies must consider in their decision-making although the weight given to each factor will vary depending on each agency’s particular circumstances. Cost Effective Energy Supplies: To responsibly manage water, water agencies need access to affordable and dependable energy supplies to ensure the safe and reliable delivery of water to their customers. ACWA supports policies and programs that promote and ensure cost-effective energy supplies, grid reliability, and transmission, and reasonable, predictable, and competitive utility rate designs. Greenhouse Gas Emissions: Climate change poses a significant threat to California. ACWA supports the State’s goals of reducing greenhouse gas (GHG) emissions and adapting to climate change. Incentive funding, including cap-and-trade revenues, should be accessible to water agencies for projects that further the State’s climate change goals Water-Energy Nexus: ACWA recognizes the importance of the water-energy nexus and will support programs that educate Californians about the relationship between water and energy. ACWA supports policies and programs that appropriately recognize energy use within the water sector. ACWA supports incentives that help improve energy efficiencies within the water sector and that also promote water supply reliability, safety, quality, and cost effectiveness. State polices must not require water agencies to make water management decisions or water delivery decisions based solely on embedded energy, GHG emissions or energy consumption, as energy is only one factor in water management decisions and only two percent of the State’s total energy use is attributable to water conveyance, treatment and distribution. Diverse Energy Portfolio: The State’s goals and associated policies should recognize that diverse energy generation sources are critical for ensuring energy reliability and cost effectiveness, and achievement of the State’s climate change goals. ACWA supports policies, programs, tariffs, and incentives that promote voluntary new investments and preserve existing investments in diverse and cost-effective energy generation, including all hydropower, solar, wind, geothermal, biogas, and biomass—all of which should be recognized in the State’s zero carbon energy portfolio. As the State transitions to a zero carbon future, policies and programs must be developed in a manner as to ensure grid resiliency and that energy is available locally during times of emergencies. Energy Generation and Storage: ACWA member agencies have invested and continue to invest heavily in energy generation. They are often owners and operators of resources that can facilitate energy storage opportunities that help to meet the State’s long-term zero-carbon resource objectives. ACWA recognizes that members’ energy generation resources help with the State’s climate change goals while providing an opportunity for agencies to reduce energy costs and water rates for customers. ACWA promotes policies, integrated planning processes programs, tariffs, and incentives that encourage and preserve the financial integrity of water agency investments, ensure predictable energy markets, and incentivize effective distributed energy generation and storage projects that enhance grid stability and competitiveness of water agency assets. Policies should also enable and encourage ACWA member agencies to develop energy storage projects, including battery storage, pumped storage and bulk storage, for on-site or grid-level electric reliability that are cost-effective and economically viable for water agency customers. Demand Response and Load Shifting: ACWA supports policies that incentivize water agencies to voluntarily reduce non-critical electric usage during times of grid emergency and promote grid reliability by voluntarily shifting water agency usage to off-peak times or during times of over generation, while ensuring the delivery of reliable water supplies. Role of Hydropower in California’s Energy Portfolio: Large, small, and in-conduit hydropower are all important to achieving climate change goals, while ensuring energy reliability throughout the State. ACWA advocates for policies that promote each of these types of hydropower, balance the need to protect existing hydropower assets and to promote additional hydropower investments, and recognize them as consistent with the State’s zero-carbon resource goal. Efficient and Timely Regulatory Approvals: ACWA supports reducing the regulatory and economic burdens associated with developing energy projects. ACWA advocates for efficient and streamlined utility interconnections, Federal Energy Regulatory Commission relicensing, land use and environmental permitting, and all other regulatory processes. Regulatory burdens should be reduced to protect water agency investments in energy infrastructure and to incentivize water agencies to maintain existing and develop new energy projects.