Abstract |
As part of a sequence of studies utilizing optimization and simulation techniques to analyze a variety of metropolitan water resource problems, the study was concerned with the long term effects of presently used and alternatively proposed water pricing policies. A discrete deterministic dynamic programming model was structured and solved to determine the optimal water supply capacity expansion paths for a hypothetical and actual metropolitan community. Demand curves, population sizes and growth rates for various economic sectors of the community were specified, as well as short run production and capital construction costs. The objective of dynamic programming model was the maximization of future discounted consumers' surpluses plus producer's revenues net of the long run cost of supply. State variables were the MGD of system capacity and state variables were the years that the feasible capacity increases. The model was structured so that social preferences or weights could be attached to the benefit or loss functions of any economic sector, to check their effect on overall results. Several policies, including flat rates, constant rate, decreasing or increasing block rates and summer differential rates were tested. The sensitivity of varying discount rates, growth rates and patterns, capacity increment size and timing, and planning horizons was examined. (WRSIC abstract) |