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1 Dandy, G. C.; McBean, E. A.; Hutchinson, B. G.. 1984. A model for constrained optimum water pricing and capacity expansion. Water Resources Research, 20(5):511-520.
(Location: IWMI-HQ Call no: P 1412 Record No: H0879)
Previous studies of optimum water pricing and capacity expansion have ignored the political administrative factors which limit the range of feasible decisions. A general model is presented for identifying the water price horizon so as to maximize the present value of net benefits. Constraints on the range of water price, the rate of price change, and financial cost recovery are included in the model. The model is applied to a hypothetical case study of an urban water supply system. The results indicate that optimum water pricing and capacity expansion policies are likely to achieve some increase in economic benefits when compared with average cost pricing. Administrative and political constraints tend to reduce these benefits but result in more acceptable pricing policies.
2 Dandy, G. C.; McBean, E. A.; Hutchinson, B. G.. 1985. Pricing and expansion of a water supply system. Journal of Water Resources Planning and Management, 3(1):24-42.
(Location: IWMI-HQ Call no: P 1413 Record No: H0898)
A general model for constrained optimum water pricing and capacity expansion is applied to the twin cities of Kitchener-Waterloo (KW), Ontario. The model identifies the water price and water supply capacity, which maximizes the present value of net economic benefits over a planning horizon. Constraints on the rate of price change and financial cost recovery are included. Results for KW indicate that significant economic benefits can be achieved by jointly optimizing decisions about water pricing and capacity expansion. It is also shown that optimum policies are compatible with the goal of financial cost recovery on the part of the supply authority. The benefits of optimum pricing and capacity expansion are likely to be greatest in water supply systems which exhibit economics of scale or in the cities where the rate of population growth is small.
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