municipal water

I have the opportunity to bid a decent project here utilizing water-air heat pumps, Mcquay is specified and there are 3 4ton units. The whole thing is pretty straight forward except the loop side: There are two taps onto a main city water line (3") , one is brought in and is pumped up to overtake the pressure and go through a double wall plate heat exchanger and back out into the main line. The other side of the heat exchanger is where the source loop for the heat pumps connects. This seems pretty counter productive to me, but to what extent? Any ideas? I was thinking atleast 30% less efficient than a normal closed earth loop due to the energy lost on the extra pumps as well as the heat exchanger. The material costs for the heat exchanger alone are more than the cost of the three HP's. I also think the idea is a little shady because of the heat loss/gain of the city water, the next guy down the line will have to heat his water that much more. I realize the other end of the stick is he will have to heat it less in the summer, but this climate is a heating dominant one. Just odd to me to be allowed this sort of thing, if you get a whole block of people doing this, the city water mains will be a mess.

Thanks for any thoughts on this one!

Nobody? I thought someone would jump all over this due to the use of the city water and the risks imposed by re-injecting water back into the municipal system. I have found that there are a few other buildings and residences that use ground source this way in this community. One had so many issues it actually froze the water main where the return line connected back into it.
Anyone else know of another municipality allowing this?

There is a school in Comanche OK that I beleive had this type of arrangement.

Do really don't think so, that is why the plumbing code requires a backflow preventer so that water doing to a property doesn't run backwards to the city supply.

There are many of these systems out there. You are right in that it will be less efficient, but if the municipal water is free to use the upfront costs will obviously be reduced. In my thinking the plate exchanger is a way that the municipal water never comes into contact with anything presumably other than the plate exchanger. A closed / open loop hybrid if you will.

well drillers and loopers are profesionals
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Eric