Water Demand Forecast Approach

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1 CHAPTER REGIONAL WATER SUPPLY OUTLOOK Water Demand Forecast Approach 6.1 Introduction Long-range water demand forecasting is a fundamental tool that water utilities use to assure that they can meet their customer s future water needs. Water demands are impacted by weather conditions, demographic and economic conditions, and water use efficiency technology and behaviors among customers. Although future conditions cannot be known with certainty, reasonable estimates of a range of future conditions allow useful estimates of future water demands. One goal of the 2009 Regional Municipal Water Supply Outlook (2009 Outlook), is to provide a water demand forecast for regional municipal water needs based upon the best available information. This chapter describes the approach and data used to develop the Municipal Water Demand Forecast Model (Demand Model) for the planning area. The following are basic requirements of the water demand forecast set forth by the Water Supply Forum (Forum). The water demand forecast should: Estimate future water demand for a period of 50 years Include seasonal variations in water use Provide a regional forecast, rather than a utility specific forecast Include the effects of weather and climate change Assess the future needs of municipal water suppliers and other domestic water users, but not agricultural water use, industrial water use, or irrigation water uses not provided by municipal water suppliers OUTLOOK

2 6.2 Regional vs. Utility Forecasts The Forum s Demand Model prepared for the 2009 Outlook is a regional planning tool. Regional and utility-level forecasting differ both in methodology and purpose. Regional water demand forecasting uses a consistent methodology across all utilities within the region, whereas individual utilities may use different forecasting methodologies. Thus, one outcome of the regional forecast is consistency in the forecasting methodology, as well as in the data used to construct the forecast. The result is a demand forecast that eliminates conservative factors that each individual utility may feel is necessary to deal with local uncertainties. As a result, a regional demand forecast generally will predict less demand than would result from adding the demands projected by individual utilities within the region. A regional water demand forecast may rely on regional data or assumptions, while a utility-specific forecast can incorporate more specific information. For example, while both a regional forecast and utility level forecast may begin with regionally provided growth data, the utility forecast might be adjusted to include specifically identified development projects within the utility s local service area. The regional demand forecast provides an overview of the region s future water demands. In contrast, utility-specific water demand forecasts are often prepared as part of water system plans required by Washington State regulations. Water demand forecasts prepared for individual utilities may have several purposes, including capital project scheduling and budget planning. Utility level planning may require more detailed and precise forecasting methodologies. Figure 6-1 summarizes the differences between regional and utility-specific water demand forecasts OUTLOOK OUTLOOK

3 Figure 6-1 Differences between Regional and Utility-Specific Water Demand Forecasts 6.3 Demand Computations Demands were computed for each of the counties (Snohomish, King, and Pierce) in the planning area. The county totals included both the areas served by the water utilities (500 or more connections) in the county and the domestic needs of households not served by the 500-connection or larger water systems. Also, in response to suggestions by the Water Demand Forecast Advisory Committee an additional 17 demand forecasting sub-regions were identified (listed in Table 6-1). Although smaller public water systems, community water systems or individual wells are supplying water to areas that are not served by water systems with 500-connections or larger in each county, the demand forecast includes a computation of the demand, regardless of the water source OUTLOOK

4 Table 6-1 Demand Sub-Regions It is important to note that the geographic areas represented by the regions and sub-regions overlap in many cases. That is, the individual sub-regions are not mutually exclusive of one another. Therefore, the demographic data for all of the sub-regions, as well as the corresponding water demand forecasts by sub-region, cannot be summed to a county or regional total. Only the utility- and self-supplied sub-regions can be added to make a county total. The regional total is the sum of the three county utility- and self-supplied sub-regions. 6.4 Approach and Data Sources The basic approach used in the 2009 Outlook demand forecast is to calculate water use factors based on reported consumption and demographic data and then apply these factors to forecasts of future households and employment. Water use factors were computed for reporting utilities for single-family households, multi-family households, and OUTLOOK

5 per employee (for non-residential users). The water use factor is then multiplied by demographic unit to compute a basic future demand. For example, a water use factor measured as gallons per single family household per day multiplied by the number of single-family households in a given year results in a water demand estimate for single-family households for that year. Thus, we see that demographic information such as number of households, and employment can drive the water use forecast based from the water use factor. The demographic projections are a reflection of growth trends and economic conditions of the study area. Details of the water use factors used in the Demand Model are shown in Appendix I, Section 2. A detailed discussion of the computations included in the Demand Model is provided in Appendix L. Figure 6-2 provides definitions for the key terms used in the following paragraphs to describe the elements of a water demand forecast and factors that are used to develop and adjust the data. Figure 6-2 Terms for Water Demand Forecasts OUTLOOK

6 Historical water use can be used to estimate the water use factor for a water demand forecast. When recent historical water use is the basis for developing water use factors, it includes the effects of water conservation programs that have been implemented as well as changes in community values that impact how customers use water. There are, however, a number of factors that can influence or change the water use factor over time. Some of the factors that affect water use factors, or the rate of water use, include weather, income (affluence), water rates and charges, the amount of irrigation area or lawn space around homes and businesses, and improvements in water use efficiency (e.g., water conservation). In preparing the Forum s Demand Model, various sources were researched for data on water use, demographics, socioeconomic variables, and weather variables. Some of the data were utility-level and other regional. Questions of uncertainty about the water demand forecast were addressed by providing the ability to develop alternative forecasts. That is, a change was made in one of the underlying assumptions (factors) to see what impact it had on the forecast. Uncertainties such as low- and high-growth demographics and changes in weather conditions such as hot and dry, or cool and wet, conditions were included as factors that could be changed to develop alternative forecasts. Water Use Water use data were collected at the utility-level through a survey of King, Pierce, and Snohomish County water purveyors with 500 or more connections. Purveyors were asked to provide available data and information on water demand, water supplies, curtailment events, and conservation dating back to The survey completion rate was 70 percent, representing over 95 percent of the region s total connections. Survey data were used to compute utility-level water use factors and analyze historical water use patterns in the region (See Appendix C for a copy of the utility survey form and Appendix D for a discussion of survey responses related to water demand). Demographics Demographic data were provided by the Puget Sound Regional Council (PSRC), the designated regional economic and transportation planning agency. PSRC data includes projections of population, single- and multifamily households, and employment through The Consultant applied linear extrapolation to extend the demographic projections to 2060 (see Figure 6-3). A computer geographic information system (GIS) was used to transform the data from Traffic Analysis Zones (TAZ) to purveyor service area boundaries. Once transformed, the utility-level data were OUTLOOK

7 aggregated into the sub-regions. Regional projections of population, housing (single- and multi-family), and employment are shown in Figures 6-4, 6-5, 6-6, and 6-7, respectively. Figure 6-3 Regional Projections of Population Source: Puget Sound Regional Council (PSRC) Figure 6-4 Regional Projections of Single-Family Households Source: Puget Sound Regional Council (PSRC) OUTLOOK

8 Figure 6-5 Regional Projections of Multi-Family Households Source: Puget Sound Regional Council (PSRC) Figure 6-6 Regional Projections of Employment Source: Puget Sound Regional Council (PSRC) Both high- and low-alternative growth projections were developed to explore uncertainty in the demand forecast. These projections increased or decreased housing units, population, and employment according to the OUTLOOK

9 multipliers shown in Table 6-2. The multipliers were developed using data from the PSRC and analysis by the Consultant. These multipliers were used for simulating alternative demographic growth projections in the Demand Model. The Demand Model allows selection of alternative growth assumptions and thus computes estimates of future water demands under the alternative demographic conditions. The projected future population, housing and employment under the low-growth and high-growth conditions are included in Appendix F. Table 6-2 Demographic Scenario Increase/Decrease from Expected Socioeconomics Socioeconomic variables in the model include future growth in real household income and future growth in the real price of water. Real growth in income and price is the amount that income and price change in relation to the value of the dollar. As an example, if there is inflation at 10 percent and the average level of income increases 10 percent in the same period then there would be no increase in real income. However, if inflation is 10 percent, and the price of water increases 14 percent, then real price of water would have increased by 4 percent. Historic and projected growth rates for both variables were obtained from several sources, including the Washington Office of Financial Management, Seattle Public Utilities, the PSRC, and the U.S. Department of Energy. With consideration to all gathered data, the Forum assumed growth rates for real income at 0.5 percent and real price of water at 1.0 percent per year through However, the Forum s Demand Model allows users to explore the sensitivity of the water demand forecast to changes in income and price by allowing users to change growth rates for real income and real price of water within reasonable ranges OUTLOOK

10 Weather Monthly average maximum daily temperature and monthly total precipitation weather data were collected from five geographically dispersed weather stations within the region (see Figure 6-8). Historical weather data were obtained from NOAA weather records. Historical averages are used to estimate future water demand under baseline conditions. That is, the monthly average maximum daily temperature and monthly total precipitation in future years is assumed to be the same as historical average weather for the baseline condition. The historical average conditions, as well as alternative weather conditions, are discussed in Appendix G. The Consultant reviewed historic temperature and precipitation data and suggested some parameters for use in representing hot dry conditions and cool-wet conditions. The years that had the hottest summer temperatures and drier than average summer precipitation had temperatures about 4 percent hotter than average summer temperatures and precipitation 38 percent less than average. The years with the coolest summer temperatures and wetter than average summer precipitation had temperatures about 5 percent cooler than average summer temperatures and precipitation 29 percent more than average. These percentages were selected to be included in the Demand Model for creating hot-dry and coolwet alternative weather conditions. In addition, the Demand Model includes the ability to estimate future water demands under specific sets of alternative conditions prepared by the Climate Change Technical Committee. That is, specific values of future monthly maximum temperature and monthly precipitation can be input to determine the impact on future water demand. The climate change data are discussed in more detail in Section 3 of this report OUTLOOK

11 Figure 6-7 Data from Five Geographically Dispersed Weather Stations Source: Natural Resource Conservation Service PRISM Climate Mapping Data Demand Model Features The Forum s Water Demand Model was created as an Excel spreadsheet model that provides the following features: Ability to include water use factors unique to each major sector of water demand (i.e., single-family, multi-family, and nonresidential) Use of demand drivers (e.g., projections of single- and multifamily households and employment) that are readily available and can be used to estimated future water demands for each major sector OUTLOOK

12 Ability to incorporate changes in water demand over time due to price, income, weather, conservation, and other factors Ability to conduct sensitivity analysis and present alternate forecasts of water demand Ability to add other adjustment factors (with additional programming) should they become available in the future. These might include local elasticities, housing density, or similar factors Inclusion of computations of demand resulting from identified climate change scenarios Future water demands are computed within the Demand Model for: Singlefamily, Multi-family, Nonresidential, and Large Users, which are then added to provide a regional or sub-regional demand for each of these sectors. The number of occupied single-family houses served by utilities is the driver for the single-family sector. The number of multi-family housing units is the driver for the multi-family sector. The nonresidential sector is driven by employment. The water use factors are calculated as the water use per housing unit and per employee. The water use factors are affected by temperature, rainfall, income growth, the price of water, and changes in employment mix. Thus, the water use factors change over time and under different selected forecast conditions. The water use factors are multiplied by the demographics of the sector for each region or sub-region. Large User sector water use is held constant as a volume of water and thus has no driver. In addition to sector water use, non-revenue water which is the difference between water produced and water sold as identified by billed sales. Non revenue water is computed for each region or sub-region and includes authorized metered water usage that is not billed, unauthorized water use, billing errors, metering errors, line breaks, and system losses. In the Demand Model, non-revenue water volume is computed for each forecast year as a percentage of the total demand of the other demand elements. Conservation savings are also integrated into the forecasting model through a percent reduction. A detailed discussion of conservation is provided in Chapter 4 of this report. The Forum s Water Demand Model has an easy-to-use interface and readyto-print report formats and charts. The reports and charts change OUTLOOK

13 dynamically to reflect alternative projections of demographic growth, price and income growth, alternative model elasticities, and alternative weather conditions. A detailed description of the Demand Model, its computations and its data is provided in Appendix L. A flow sheet describing the sequence of computations is also provided OUTLOOK

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