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102 Part I California Water Table 2.5 Water-related energy use in California,2001 Electricity Natural gas Gigawatt Share of state Million Share of state hours total(%) therms total(%) End uses 14.1 31.2 Urban 27,887 11.1 4,220 31.1 Residential 13,526 5.4 2,055 15.1 Commercial 8,341 3.3 250 1.8 Industrial 6,017 2.4 1,914 14.1 Agricultural 7,372 2.9 18 0.1 Water supply and treatment 4.3 0.1 Urban 7,554 3.0 19 0.1 Agricultural 3,188 1.3 0 0 Wastewater treatment 2,012 0.8 27 0.2 Total water-related energy use 48,012 19.2 4,284 31.6 Total California energy use 250,494 100.0 13,571 100.0 SOURCE:California Energy Commission(2005). NOTE:Statistics on natural gas use refer to the portion of natural gas that is not used as an input in electricity production. uses mainly include operating pumps for groundwater and irrigation systems. Infrastructure-related energy("supply and treatment"in Table 2.5)is primarily for pumping supplies through conveyance channels and(in the urban sector) to move water in and out of treatment plants and distribution networks. The high energy content of some end uses means that energy costs drive the eco- nomics of some water conservation activities(especially for hot water).As with some energy efficiency measures,water use efficiency investments that reduce hot water use can save customers money within a short time.27 Energy costs also affect the economics of design and operating decisions by water utilities. The high energy requirements of seawater desalination makes this technology particularly vulnerable to rising energy prices(Semiat 2008). Water also is a major source of energy.California relies on hydropower for between 15 and 30 percent of its annual electricity generation, depending on annual runoff and droughts(Madani and Lund 2010).28 The flexibility of hydro- 27. On water,see Gleick et al.(2003).On energy,see McKinsey&Company(2007). 28. Statewide hydropower revenues exceed$2 billion per year(authors'calculations,assuming 34,000 gigawatt hours x$0.05 per kilowatt hour=$1.7 billion per year at average wholesale prices,plus the ancillary services of hydropower, such as maintaining reserve capacity and regulating voltage on the grid).