Globally, urban water managers are increasingly challenged by growing water demands and a changing climate (AghaKouchak et al., 2021;Wasley et al., 2020). In the United States (US), drinking water systems require over $400 billion of capital investment by 2029 to maintain aging infrastructure and manage growing demands (ASCE, 2021
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.
Key Takeaways
Capacity‐sharing agreements can help water utilities make use of spare capacity while long‐run demands catch up with projections by allocating project capacity and splitting infrastructure costs between multiple utilities.
Utility size, projected growth, and regional context all can influence the most effective choice of capacity‐sharing agreement.
Analysis of cooperative agreements can inform utility managers on how to effectively design and implement agreements of their own.
Climate and land cover change strongly shape water resources management, but understanding their joint impacts is extremely challenging. Consequently, there is limited research of their integrated effects on water supply systems, and even fewer studies that rigorously account for infrastructure investment and management interventions. We utilize ecohydrologic modeling to generate watershed outflows under scenarios of climate and land cover change, which in turn drive modeled water utility-level decision making for the Research Triangle region of North Carolina. In the Triangle region, land cover and climate change are both likely to increase water supply availability (reservoir inflows) individually and in tandem. However, improvements from water supply increases are not uniform across management system performance indicators of reliability, conservation implementation frequency (i.e., water use restrictions), and infrastructure investment. Utility decisions influence the impact of hydrologic change through both short-term (e.g., use restrictions and water transfers) and longer-term infrastructure investment actions, in some cases offsetting the beneficial effects of additional water supply. Timing and sequencing of infrastructure development are strongly sensitive to climate and land use change as captured by their impacts on utility performance outcomes. This work underscores the need to consider adaptive management system responses and decision-relevant performance measures when determining the impacts of hydrologic change on water availability. Key Points: • Utility-scale decision making influences the impact of climate and land use change on both short-and long-term outcomes • Timing and sequencing of infrastructure development is highly sensitive to hydrologic change as captured by utility performance indicators • Impacts of hydrologic change are not uniform across performance indicators, utilities, or time, owing to management actions Supporting Information: • Supporting Information S1 Vose, J. M., Coulston, J. W., et al. (2020). Accounting for adaptive water supply management when quantifying climate and land cover change vulnerability. Water Resources Research, 56, e2019WR025614. https://
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