Modeling Integrated Water-User Decisions with Intermittent Supplies

We present an economic-engineering method to estimate urban water use demands with intermittent water supplies. A two-stage, probabilistic optimization formulation includes a wide variety of water supply enhancement and conservation actions that individual households can adopt to meet multiple water quality uses with uncertain water availability. We embed the optimization in Monte-Carlo simulations to show aggregate effects at a utility (citywide) scale for a population of user conditions and decisions. Parametric analysis provides derivations of supply curves to subsidize conservation, demand responses to alternative pricing, and customer willingness-to-pay to avoid shortages. Results show a good empirical fit for the average and distribution of billed residential water use in Amman, Jordan. Additional outputs give likely market penetration rates for household conservation actions, associated water savings, and subsidies required to entice further adoption. We discuss new insights to size, target, market, and finance conservation programs and interpret a demand curve with block pricing.