The Impact of Water Utility Rates on Chiller Selection

Historically, the operation of a water-cooled chiller plant would deliver lower utility costs than a similar air-cooled chiller plant. A water-cooled chiller’s superior efficiency in kW/ton more than made up for the energy consumed by condenser water pumps and cooling tower fans. However, over the past decade air-cooled and water-cooled chillers have experienced dramatic improvements in energy efficiency. At the same time electricity, water, and wastewater charges have experienced year-over-year increases.

Do water-cooled chiller plants still deliver lower utility bills? Today, many chiller plant energy analyses carefully account for energy costs, and even energy escalation rates – a factor that projects how fuel costs will increase over time, while ignoring water and wastewater costs associated with cooling towers. While highly effective at transferring heat, cooling towers consume millions of gallons of water each year through the process of evaporation, drift, and blowdown. With the rising cost of water and wastewater, this omission can result in an incomplete picture for the building owner. In September 2017, the U.S. Department of Energy’s (DOE’s) Pacific Northwest National Laboratory (PNNL) produced a report on water and wastewater price escalation across the United States. Their findings showed that while energy prices tend to be driven by commodities; water and wastewater are driven by infrastructure projects leading to large variances in prices escalations across various service providers.[1] They found on average annual escalation rates for water range from 0.6% in the West-Mountain region to 8.6% in the Northeast. Average annual wastewater escalation rates range from 1.3 to 5.1 percent. In comparison, the DOE’s Energy Information Administration (EIA) energy escalation calculator[2] predicts average annual escalation rates from 0.35% in the Midwest to 1.78% in Northeast US.

With this degree of variability, a careful analysis of site-specific utility costs coupled with a detailed energy model is invaluable to an owner who is weighing chiller plant options.

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