Water scarcity is a growing problem around the world, and regions such as California are working to develop diversified, interconnected, flexible, and resilient water supply portfolios. To meet these goals, water utilities, irrigation districts, and other organizations will need to cooperate across scales to finance, build, and operate shared water supply infrastructure. However, planning studies to date have generally focused on partnership‐level outcomes (i.e., highly aggregated cost‐benefit analyses), while ignoring the heterogeneity of benefits, costs, and risks across the individual partners. This study contributes an exploratory modeling analysis that tests thousands of alternative infrastructure partnerships in the Central Valley of California, using a daily scale simulation model (CALFEWS) to evaluate the effects of new infrastructure on individual water providers. The viability of conveyance and groundwater banking investments are as strongly shaped by partnership design choices (i.e., which water providers are participating, and how is the project's debt distributed?) as by extreme hydrologic conditions (i.e., floods and droughts). Importantly, most of the analyzed partnerships yield highly unequal distributions of water supply and financial risks across the partners, so that only 8% of the partnerships explored are capable of providing water to each partner for under $200/ML. Partnership viability is especially rare in the absence of groundwater banking facilities (1%), or under dry hydrologic conditions (1%), even under explicitly optimistic assumptions regarding climate change. Given these results, we outline several major policy implications for institutionally complex regions such as California, which are currently investing heavily in cooperative approaches to resilient water portfolio design.
Urban water utilities, facing rising demands and limited supply expansion options, increasingly partner with neighboring utilities to develop and operate shared infrastructure. Inter‐utility agreements can reduce costs via economies of scale and help limit environmental impacts, as substitutes for independent investments in large capital projects. However, unexpected shifts in demand growth or water availability, deviating from projections underpinning cooperative agreements, can introduce both supply and financial risk to utility partners. Risks may also be compounded by asymmetric growth in demand across partners or inflexibility of the agreement structure itself to adapt to changing conditions of supply and demand. This work explores the viability of both fixed and adjustable capacity inter‐utility cooperative agreements to mitigate regional water supply and financial risk for utilities that vary in size, growth expectations, and independent infrastructure expansion options. Agreements formalized for a shared regional water treatment plant are found to significantly improve regional supply reliability and financial outcomes, despite highly correlated weather and climate across neighboring supply systems (e.g., concurrent drought events). Regional improvements in performance, however, mask tradeoffs among individual agreement partners. Adjustable treatment capacity allocations add flexibility to inter‐utility agreements but can compound financial risk to each utility as a function of the decision‐making of the other partners. Often the sensitivity to partners' decision‐making under an adjustable agreement degrades financial performance, relative to agreements with fixed capacities allocated to each partner. Our results demonstrate the significant benefits cooperative agreements offer, providing a template to aid decision‐makers in the development of water supply partnerships.
more » « less- NSF-PAR ID:
- 10443332
- Publisher / Repository:
- DOI PREFIX: 10.1029
- Date Published:
- Journal Name:
- Water Resources Research
- Volume:
- 58
- Issue:
- 3
- ISSN:
- 0043-1397
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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