AWWA DSS63734

Energy costs for pumping is typically one of the largest expenses in a water utility's operations budget. The capability to effectively forecast demand profile and schedule production can be beneficially used to guide the utility to procure energy products (electricity, diesel or natural gas) in a manner designed to contain costs. Many utilities have procurement flexibility for purchasing energy used for pumping. Potential options may include choice of alternative suppliers, tradeoff between electricity, natural gas, and co-generation, or electricity purchases in a deregulated market. The understanding of, and effective use of, a properly designed forecasting tool to project near term demand and energy load profiles will give the operations and purchasing managers the updated information required to make complex decisions, minimizing the risks and leveraging the benefits. Possible choices facing the utility may include: how much electricity should be purchased on the real time market; how much should the utility "hedge" and procure on long term contracts; should in-house generation be used, and if so, when and for how long; and, how much gas should be purchased on the forward market. The capability to leverage a forecasting tool becomes even more critical as the utility employs system wide optimization strategies to move electrical load in response to pricing to minimize costs while maintaining defined boundary conditions in the service area. All this must be performed without compromising operational reliability or water quality. As energy tariff structures and policies vary from region to region, and no two water distribution systems are similar, a "one size fits all" energy forecasting tool would not be practical. Any forecasting tool must be custom designed for the specific application. Includes figures.