INCORPORATING PUBLIC PREFERENCES IN PLANNING URBAN WATER-SUPPLY RELIABILITY

This study has two objectives: (1) to compare the attitudes of the water-using public, water officials, and elected officials toward the risk of water supply shortage; and (2) to develop a methodology for incorporating water users' valuation of reliability in system design. Using contingent valuation techniques, we have measured the benefits and costs of different reliability levels in terms of water users' willingness to pay (WTP) for increases in reliability and in terms of their willingness to accept (WTA) compensation in the form of lower water bills for lower levels of reliability. Three cities in northern Colorado with diverse baseline levels of water supply reliability (Aurora, Boulder, and Longmont) are the study sites. Contrary to our hypothesis that water managers are unjustifiably risk averse, we find that water managers' preferences are consistent with customer WTP (WTA) values associated with the risk of water shortages and the system costs associated with reliability. Water managers in Boulder (high reliability) were willing to consider reductions in the level of system reliability while water managers in Aurora and Longmont (low reliability) favored the status quo or increased reliability. While these attitudes were sometimes contrary to a majority of customers' expressed interests in change, they were shown to be justified by comparison of supply system costs (savings) with aggregate WTP for additional reliability (WTA for less reliability).