WATER DEMAND COMMITTEE
2.	PROVIDE DIRECTION TO STAFF ON REBATE PROGRAM AMENDMENTS
Meeting Date:		June 22, 2011	Budgeted:	N/A
From:		Darby Fuerst,	Program/	N/A
		General Manager	Line Item No.:
Prepared By:		Stephanie Pintar	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: In April 2011, the Water Demand Committee reviewed the history of the Rebate Program, an overview of the funding mechanisms, outreach program, approval and participation rates and staffing requirements. The committee members discussed the program and agreed to revisit potential revisions to the program in the future. The Rebate Program in the California American Water system has been suspended pending future funding through the California Public Utilities Commission (CPUC). Funding in the amount of approximately $2.1 million is anticipated in January 2012.

At the June 22, 2011 meeting, staff will present information regarding an increase in the Rebate for High Efficiency Clothes Washers (HECW) to $500. In addition to deliberating a potential change in the HECW Rebate, the committee should discuss the amount of the Rebate offered for installation of Synthetic Turf and Lawn removal and whether the Board should limit the amount of Rebate dollars available for these programs. Guidelines for Lawn removal Rebates were adopted in April 2011 in Ordinance No. 148 (attached as Exhibit 2-A) and cost/benefit information was provided at the April 5, 2011, Water Demand Committee meeting. Finally, the committee requested information regarding a previously-proposed Rebate for three-way valves for Graywater Irrigation Systems.

DISCUSSION: The price for replacement of an older Clothes Washer with a HECW ranges from approximately $500 to $2,000 or more. The District’s experience with Rebates indicates that current prices for HECW have dropped and that models can be purchased for between $500-$700. Although water savings vary depending on an individual’s circumstances, the District can anticipate a cost per acre-foot (AF) of water saved to be approximately $1,040 at the current $250 Rebate amount. Increasing the Rebate for HECW to $500 would increase the cost of water savings to approximately $2,100/AF, still below the cost of water (approximately $2,400 as used by CPUC Division of Ratepayer Advocates in reviewing the Rebate Program budget for the 2012-2014 General Rate Case). An individual purchasing a HECW for $500 could expect to save approximately 105 units of water year at a cost of $0.46/unit in the second Residential rate tier. Energy savings would also contribute to monetary benefit. Simple payback for a HECW is approximately eleven years at this rate. The benefit of increasing the Rebate amount and obtaining higher installation rates is that the savings are consistent and would reduce community water consumption.

Three-way valves are used to direct Graywater from emptying into a sanitary sewer into a Graywater Irrigation System. The Water Demand Committee considered a Rebate for three-way valves when it provided direction on amendments to the Rebate Program in 2010. At that time, the regional Graywater Roundtable managed by the Monterey County Business Council recommended that the District Rebate for installation of a Graywater Irrigation System rather than a three-way valve. The recommendation was based on the premise that it would be easy to confirm installation of a Graywater Irrigation System through inspection by the local Building Inspector. The Rebate Program was subsequently amended to add Rebates for Graywater Irrigation Systems consisting of up to four Bathrooms and a Clothes Washer.

Staff is not recommending changes to other Rebate amounts at this time.

RECOMMENDATION: The Water Demand Committee should receive and discuss amendments to the Rebate Program and provide direction to staff. Staff will prepare a preliminary draft ordinance for review by the committee in July.

BACKGROUND: The minutes on the Rebate Program discussion from April 5, 2011, is shown below. The information referenced in the previous paragraph is ripe for discussion at this time.

The committee members discussed this issue and agreed to continue this item to a future meeting. A summary of their discussion follows. (1) Staff intends, sometime in the future, to develop an estimate of the amount of water savings achieved through installation of ultra-low-flow fixtures such as washing machines. (2) Increase the rebate for ultra-low-flush washing machines. (3) Consider reducing the rebate offered for installation of artificial turf. (4) Are the current rebates associated with replacement of fixtures that will save the most water? (5) Limit the amount of money that will be set aside for specific rebates such as turf or toilets. (6) Water use at a site that has received a rebate should be monitored to determine how much water has been saved by the retrofit. (7) Reach out to the community to determine why compliance with the rebate program is small. (8) Should develop a payback period on different systems. (9) Reduce lawn rebate by 25 percent. (10) Staff should develop a chart that depicts expected water savings from a fixture, cost reductions associated with the retrofit, and the period of time needed to recover the cost to retrofit. (11) Consider offering a rebate for purchase of the 3-way valve used in a laundry to landscape system. (12) Committee should review any suggestions to increase the rebate amount for specific fixtures. (13) Could staff determine the number of households that have installed ultra-low water using washing machines, and the number of households that have the potential for additional water savings by retrofitting to low-water using washing machines? (14) Should remind the public that rebates can also be obtained from PG&E. (Minutes of April 5, 2011, Water Demand Committee meeting)

EXHIBITS

2-A Ordinance No. 148

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