Alternative Water‐District Organization: Screening‐Level Analysis

Abstract

Several water‐district organization alternatives are investigated using data and demand functions from a municipal water district in Northern California. A mathematical program finds optimal seasonal allocations and water prices for the district's sales to several water users. The net economic benefits produced by the current water‐district organization are compared with the net benefits produced by alternative “mutual stock” organizations. Dual variables and sensitivity analysis indicate aspects of optimal district organization and the economic potential of water trade under different hydrologic regimes. For conditions where water availability varies greatly between years, results indicate that optimized fixed shares of the mutual stock might improve the net economic product of the district, but not necessarily by large amounts.