Water resources planning using integrated systems of marketable water rights and reservoir design and operation

Abstract

The needs and the approaches for developing (1) efficient methods for the allocation of water resources and (2) efficient planning tools for the design and operation of storage facilities and other water supply enhancement techniques, are often interrelated, and should be addressed in a coordinated fashion. Recent studies have shown that the marketable water permits system holds some attractive features as a vehicle for allocating water supplies. In this study, management techniques to integrate marketable water rights systems with systems for the design and operation of a single reservoir are developed. Three kinds of rights may be found in such integrated systems. They are natural flowing water rights, release rights, and storage rights, which are contingent on possession of permits. Auctions of these rights or other market transactions may be helpful to the design and operation of the reservoir by providing useful information about the users' demand and benefit functions. In order to assess the efficiency of these policies, their operations are simulated using economic data based on corn irrigation. These programs are then compared to some other methods of water allocation and reservoir operation. Results of the study show that high efficiency may be attained by these integrated systems. As in many other water resources and reservoir management systems, the efficiencies attained are, in part, dependent on how well the future is predicted. A highly sophisticated storage management policy is likely to generate higher efficiency than simple ones, but only if the release decisions are carefully determined. Restrictions on spot trading would also prevent some of the efficiency from being captured. When the integrated system is operated and managed by a profit-seeking private enterprise, some degree of supervision from the authority may be required to prevent the problem of supply curtailment (i.e., undersizing of the reservoir), caused by a potentially larger profit at a smaller reservoir size.U.S. Geological SurveyU.S. Department of the InteriorOpe