Rethinking Water

Nevada has always been — and always will be — the driest state in the country. As such, it has become progressive about how it manages its resources. The result has been the creation of conservation programs that have led to a 30 percent reduction of overall consumption, despite the population doubling during that same period. This is no small accomplishment considering consumption is historically the primary revenue source for water agencies.

The cost of water in the U.S. is growing at a faster pace than income and inflation. While environmentalists like myself may be inclined to argue that higher prices will drive consumption down, the reality is that when we pay our water bill, we aren’t really paying for the water itself. This is because water isn’t just H20 — it’s the infrastructure we build to manage it, the chemicals we use to treat it, and the energy we use to move, heat and cool it.

Drastically reducing consumption through large-scale (imposed) behavior change has proved to be fairly easy to achieve during a crisis. We saw this in California two years ago. The more important and complex challenge is: How do we sustain revenue loss over time without driving our water agencies to bankruptcy?

There are more than 55,000 regulated drinking water utilities in the U.S. that are set up to finance water resource capital projects — think dams and pipes — rather than finance repairs to existing infrastructure. There’s a huge disconnect between how these utilities operate, what their challenges are, and how they are paid for. If the only way to fund new meters is by raising bills, then communities become apprehensive about investing in their own infrastructure.

The real opportunity today is not in water resource management, but rather water demand management.

A New Model for Innovation

Typically, we like to think about water technology as dams, desalination and pipelines. In Nevada, we have continued to invest in these big, charismatic mega solutions, such as the indirect potable reuse infrastructure that recycles water to return to Lake Mead. These large-scale, innovative approaches have managed to drastically extend our access to water resources over the past 20 years.

Today, however, we are shifting our focus to opportunities to manage demand (i.e. how we use water) through investments of a similar scale of potential.

The City Center complex, developed by MGM Resorts in 2009, represents the kind of opportunity for innovation in demand management. With this project — which was the largest privately funded construction project in the history of the United States — MGM Resorts set new standards for the performance of high efficiency water fixtures. Every sink, toilet and shower had to effectively reduce water consumption without compromising the guests’ experience. These standards have driven a shift in the water fixture industry that benefits communities as well as individual consumers. Today, with other major resort companies following suite, laundry facilities and commercial kitchens on the “Strip” only consume 3 percent of the broader Las Vegas community’s water (Source: Southern Nevada Water Authority).

However, one roadblock to innovation is that the water and utility industry is notoriously risk averse. How do we solve for this?

To de-risk the process, our team at WaterStart created two tools to address three basic criteria:

We worked with our members to identify what they needed but couldn’t find. These priorities determined the types of technology companies we would recruit. The list has now grown to include more than 50 priorities, including the removal of contaminants from groundwater and advanced irrigation control systems. Certain priorities may surprise you, such as applications for the development of “as-built” electrical drawings, or electronic access management for remote facilities. We have quickly come to understand that technologies used to improve the operations of water systems also enables them to be more resilient in the face of larger environmental and economic forces. We created our own pilot fund to spread the risks out across our stakeholders. Once we had a sense of what was missing, we needed a way to deploy and evaluate technology solutions. Installing new technologies for the first time is by far the biggest hurdle. There are many risks associated with trying new things, so we structured the fund similar to an investment syndicate: each stakeholder commits to fund pilots but is free to choose projects based on their own needs and criteria.

The criteria for each stakeholder comes down to a combination of three factors: effectively solving specific priorities; driving further research between industry and scientists; and creating jobs. With this structure, we can bring together funds from public and private entities interested in installing the technologies, as well as from the public agencies interested in the economic benefits of attracting tech companies to the state —all while further improving how we manage water.

As a result of this approach, we reduce the risk for everyone by increasing the chance of success. This is particularly true for tech companies who assume great risk in starting up in the first place, let alone attempting to expand into new markets. All this enables us to be more than just customers. We are leveraging the demand for new solutions to grow and diversify our economic base through a new water innovation ecosystem.