WG3: March 1, 2011

Commonwealth of MassachusettsWater Infrastructure Finance Commission
Working Group Three

Approved minutes: March 1, 2011

In a meeting duly posted, Working Group Three (innovative water systems, technologies, and infrastructure) convened at approximately noon in room 348 at the State House in Boston.

Members Attending:  Becky Smith, Robert Zimmerman, Dave Terry, Martin Pillsbury, Representative Dykema,

Also attending:  Leah Robins, Sally Schnitzer, Jennifer Pederson (MWWA), Edward Clerico, Dominic Kulik,  Garrett Bringer(reporter for Cape Cod Times), John Clarkeson (EEA),  Valerie Nelson (Coalition for Alternative Wastewater Treatment).

Ms. Smith chaired the meeting in the absence of Chairman Bartlett.

The Commission had a further conversation with Mr. Clerico and Mr. Kulik based on the presentation made to the full Commission earlier in the day.  The principles outlined were intended to develop and deploy innovative infrastructure that is based on natural systems and processes while at the same time delivering financially sustainable systems as long term asset managers and utility operators.

Mr. Pillsbury asked how these practices could be “scaled up” to apply to a larger area than single buildings or facilities.  He noted that one of the problems in Massachusetts is the mentality that every decision is based on community-by-community decision making.

Representative Dykema said that she had to go to caucus, but reiterated that it would be very helpful to understand what, if any, changes to law or regulation would help cities and towns look to these kinds of solutions.  Mr. Kulik and Mr. Clerico indicated they would try to send some suggestions to the Commission.

On the question of scaling up, or applying to whole communities, a far ranging conversation ensued.  Mr. Kulik stated that it helps to look at real examples.  The Government needs to send a signal that these types of solutions are preferred.

Mr. Zimmerman noted that we need to be able to demonstrate real, on the ground successes in order to convince agencies, engineers, municipalities, and others that these solutions can work.  Otherwise the default mechanism will be to continue to do what we have always done.  You must change the regs and you must demonstrate the real economic realities.

Towns have control of their own growth and economy in Massachusetts.  Using transferable development rights, agricultural preservation restrictions, etc. much can be accomplished.  Once success is accomplished, hundreds of towns will follow suit.

Mr. Clerico noted that there are tax credits and other tools that can be leveraged.  Early on, we didn’t anticipate all the savings that would accrue when we began to manage facilities in this new way.  For example, buildings ended up using less energy and less water, which DEP in other states found favorable.

Can there be regulatory incentives?  For example, an incentive rate if you reuse water?  Or if a large residential building ends up using less than some minimum amount of water per capita per day?

Another thing that can be done is to shift the risk to the developer.  The system has to be tested, up and running before final regulatory approval is granted.  This shifts the risk.

The economics of risk and reward are shifting all the time, depending on underlying factors, like the cost of energy.

Mr. Clarkeson noted that if you think about it, who is funding the discount offered to a set of customers who get a lower rate?  It is the other residents.

As rates go higher, conservation happens on its own.

In all of this, we need to be considering the full life cycle costs.

Some examples that may be of interest to Massachusetts include work being done in Schuyler County in the wine country of New York State, or the Research Triangle Park in North Carolina, where urban is more of an issue.

Mr. Kulik stated the important thing to remember is that the questions, approaches, principles, and methods are universal regardless of the size or type of issue you are confronting.

Mr. Zimmerman stated that one of the issues is the length of time for permitting.   He also noted that we need to understand how, over time, we can transition away from the solutions of the past.

Mr. Clerico stated that once you start demonstrating success, the ideas will self propagate.

A question was posed about identifying statutes or policies or incentives that need to change in order to move in this new direction.  One idea was to create a Building Sustainability Board in cities or towns (local level).  Applicants could come to them to seek waivers of existing regulations when necessary.  The Board would then meet regularly to update and change codes and regulations if warranted.  Examples might be…. to allow water reuse or turbines or wind generators.

Mr. Kulik noted that investments require a tight timeframe in order for projects to give a good return on capital.

Use performance standards and incentives.

There was a discussion of how nutrient –related projects have been negotiated in several instances.  Bio-solids and fertilizers can be assets rather than liabilities.

Ms. Nelson asked a question about the future of existing large-plant infrastructure.  Is there a vision about how to retire or abandon those facilities?  Answer:  This will likely be determined on a case-by-case basis, and is difficult to predict.  Mr. Zimmerman pointed out that sometimes old liabilities can be reconceived as new assets.  For example, in Boston, old in-line pipes have been repurposed as an asset.

There was a discussion of how the public/private partnerships can be administered, and what some of the issues are around that.  Sometimes the model is mixed, with partnerships put in place for design and permitting, followed by partnership in running a facility.

There was a discussion of how to maintain and inspect decentralized assets.  Does this work well with a centralized management umbrella?  How is this paid for?

Can a community lease equipment using SRF funding?  John Clarkeson will seek information on this.

Ms. Smith thanked our guests and then introduced a movie where Glann Daiger, President of the International Water Association made a presentation to executives at the World Bank:

There is a need for a new urban water paradigm.  The model has remained very much the same since ancient times.  Pristine waters are collected from outside an urban area, transported and treated, used ONCE, treated again, and returned to the environment usually in a somewhat degraded condition.

Today, this paradigm doesn’t work as well.  Population has grown, resources have been consumed, supplies are no longer pristine.  New technologies are available, to shift the paradigm.

The key is to use water more efficiently in closed-loop systems, while extracting energy, water, and nutrients.

How do we accelerate the change?

We need to change the default .  Assume that the current approach is the exception, not the rule.   We need to support the institutions and champions who can support and drive change.  We need to share successes, get the word out.  We need to create incentives that reward utilities that accomplish new goals.  We need to bury this new paradigm into institutions.

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