CHAPTER 9 WATER AND RENEWABLE ENERGY GENERATION IN THE WESTERN UNITED STATES--AN OVERVIEW OF CURRENT CHALLENGES AND OPPORTUNITIES

• Jurisdiction: United States

Water-Energy Nexus: Acquisition, Use, and Disposal of Water for Energy and Mineral Development
(Sep 2012)
CHAPTER 9
WATER AND RENEWABLE ENERGY GENERATION IN THE WESTERN UNITED STATES--AN OVERVIEW OF CURRENT CHALLENGES AND OPPORTUNITIES
Maria O'Brien
Christina Sheehan
Modrall Sperling
Albuquerque, New Mexico

MARIO O'BRIEN is a shareholder with the law firm of Modrall, Sperling, Roehl, Harris & Sisk, P.A., in Albuquerque, New Mexico. She is a member of Modrall Sperling's Natural Resources Department. She represents clients from both the public and private sector, primarily in the areas of water resources, water quality, and related regulatory matters including NEPA and Endangered Species Act compliance. Her practice includes permitting of water projects, the purchase and lease of water rights, water utility matters, litigation involving protection and acquisition of water resources and water planning. Ms. O'Brien attended Connecticut College where she graduated, cum laude with a B.A. in Human Ecology. She completed an M.S. degree in Botany at the University of Rhode Island, magna cum laude, and received her J.D. from the University of New Mexico, magna cum laude.

I. INTRODUCTION

Development and generation of energy throughout the West presents many challenges. Endangered species protection, climate change, navigating and harmonizing local, state and federal regulation are just a few. Assessing, identifying, acquiring and maintaining the water supply necessary to support energy development and generation is one of the challenges that can readily determine success or failure. With limited exception, as with traditional fossil fuels, securing and maintaining the water necessary to support the development and generation of renewable energy poses numerous challenges as well as opportunities. These are rendered more complex given that most renewable resources (solar, wind, geothermal) are abundant in the western United States where water is as scarce as wind, solar and geothermal are plentiful.

This paper will explore emerging challenges and opportunities with regard to water supply and renewable energy generation in the western United States. The paper will discuss relative water consumption related to renewable energy generation and provide examples of existing and developing state and federal policies and regulations affecting the acquisition of water supplies necessary to support such projects. Additionally, the paper will discuss considerations for siting projects in light of water demands and relevant state and federal policies and regulations.

II. WATER USE RELATED TO GENERATION OF RENEWABLE ENERGY

Virtually every western state has a renewable portfolio standard that it imposes on the utilities it regulates.¹ These standards require a utility to provide between 15%² and 33%³ of the

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power it supplies from renewable energy sources, depending on the state in which it is located. Although these renewable energy standards are aimed at "greening" the western United States' energy supply on a state-by-state basis, generally, at least at inception, the standards were devoid of consideration of water demand related to renewable energy generation. The water demands of renewable energy generation can rival or exceed those of traditional fossil-fuel based generation. Water demand is dependent upon the renewable resource at issue and the type of technology employed. Table 1 presents the relative water demands of renewable energy versus fossil fuels on a MW basis.

Table 1. Water Intensity of Electricity by Fuel Source and Generation Technology⁴

Generation Technology	Wet Cooling Water Consumptiona (gal/MWh)	Other Water Consumptionb (gal/MWh)
Solar Trough	760-920	8
Solar Tower	750	8
Photovoltaic Solar	0	5c
Wind	0	0
Fossil	300-480	35-104
Biomass5	300-480	Highly variable depending on whether biomass is irrigated
Nuclear	400-720d	75-180
Natural Gas Combined Cycle	180	18-21
Geothermal	1,400	Not available
Coal Integrated Gasification Combined-Cycle (IGCC)e	200	140
Hydroelectric	Highly variable, avg. 4,500 due to evaporation

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The West, the most water-scarce region of the United States, also has the most available sources of renewable energy generation - sun, wind and geothermal. With regard to solar energy in particular, the U.S. Department of Energy's National Renewable Lab (NREL) projects concentrated solar development to occur predominately in California and Arizona.⁶ However, those same locations identified by NREL also have been identified as the most water constrained.⁷ Compounding this fact is that many of the choice locations for renewable projects from an energy generation perspective will require use of non-renewable groundwater as opposed to renewable surface supplies.

In response to some of the unique issues associated with renewable energy vis-à-vis water supply, some states are considering standards or regulations relating specifically to water use in connection with renewable development. Some regulations and standards are aimed to lift obstacles where water use is in fact small,⁸ others to impose restrictions to encourage or discourage certain kinds of projects.⁹ The federal government has not been silent on the issue, and is actively addressing renewable energy development while considering water use and alternative technologies.¹⁰ A combination of political, economic and technological choices will influence the mandates at both the state and federal level for renewable energy development and the need for water to support such generation projects.

III. STATE REGULATION AND POLICIES RELATING TO WATER USE FOR RENEWABLE ENERGY PROJECTS

States struggling with the allocation of scarce water resources for energy development, including renewable projects, are addressing water issues and considering the siting of renewable energy projects both generally and specifically, primarily with regard to geothermal and solar resources. The developing policies and regulations across the West demonstrate efforts to harmonize competing demands for increasingly scarce water supplies with increasing demands for more renewable energy generation.

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A. Overview of State Water Resource Regulation

State law generally governs the allocation and use of water in the West.¹¹ Accordingly, the specific laws and regulations relating to acquisition of water supply and use of water for a renewable energy project will vary from state to state depending on the particular law of a state. However, there are significant similarities and overlap in how western states approach the regulation of water.

Generally, water in the West is governed by the law of prior appropriation.¹² Three states, Oklahoma, Nebraska and California retain various vestiges of riparianism and are considered dual doctrine states.¹³ The law of prior appropriation is generally driven by two concepts that arose as a result of scarcity: beneficial use and "first in time, first in right." In most states "beneficial use" is not specifically defined and is generally recognized as any consumptive use of water which is not wasteful. The first in time, first in right principle determines the assignment of a priority date to the use of water in times of scarcity based on the date of the initiation of the right. Under the prior appropriation doctrine, water can be developed through an appropriation and application to beneficial use. Once established, the developed water right can be moved or transferred from the land to which it is appurtenant to another place, purpose of use or point of diversion subject to considerations of effects on other users.¹⁴ In both the initial appropriation of water and the movement of water to another place or purpose of use after establishment of a water right, most states consider whether the proposed change is in the "public interest" or in the public welfare of the state.¹⁵ Because beneficial use is the basis and the measure of the right to water under the prior appropriation doctrine a water right, even once established can be lost for non-use.¹⁶

Some western states govern surface water and groundwater conjunctively, and apply similar rules of appropriation and use to both resources.¹⁷ Other states have a bifurcated approach to the regulation of surface and groundwater and regulate surface water according to strict prior appropriation but regulate groundwater under a variety of different paradigms depending on the state. For example, in California, there is no comprehensive state groundwater

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code and groundwater regulation is primarily governed by local water districts.¹⁸ Regulation of groundwater in Arizona is based on a complex set of considerations including whether the proposed withdrawal is from an Active Management Area ("AMA")¹⁹ or an irrigation non-expansion area ("INA")²⁰ and whether the well proposed for withdrawal has a pumping capacity of not more than 35 gallons per minute.²¹ In Oklahoma groundwater is owned by the overlying landowner but a permit is required from the Oklahoma Water Resources Board to develop the groundwater.²² Texas generally follows the rule of capture but local groundwater districts can limit withdrawal.²³

The riparian doctrine is governed by its relation to ownership of riparian lands and is generally governed by a reasonable use requirement.²⁴ Riparian rights are not subject to forfeiture for non-use, and in times of shortages rights to water are shared and not allocated based on priority of use. To the extent riparian rights remain recognized in Nebraska, Oklahoma and California, they are considered superior to rights secured under the prior appropriation doctrine in times of shortage. In Nebraska, the legislature amended the water code in 1889 to mandate that prior appropriation would fully apply going forward but recognized all riparian rights developed prior to that time.²⁵ In...