Equilibrium Approach to Integrating Regional Surface Water Treatment and Limited Groundwater Pumping Capacity

The inexpensive nature of groundwater, combined with population growth, has resulted in many aquifers being pumped at unsustainable levels. Consequently, regulators in many states have acted to limit water withdrawals from affected formations. Communities subject to such restrictions must seek alternatives and will often choose to develop surface waters, a process involving substantial expenditures on treatment and conveyance infrastructure, costs that will be particularly burdensome for smaller communities. Regional treatment plants can take advantage of the economies of scale inherent in these facilities and will lower treatment costs, but these savings must be weighed against increased conveyance costs associated with a larger distribution area. Regional strategies must also consider how to integrate the development of surface water with use of the remaining groundwater pumping capacity. This work describes an equilibrium approach that balances the two antagonistic forces affecting surface water development, while simultaneously considering the efficient allocation of post-reduction groundwater capacity through tradable pumping permits. Unlike earlier regionalization work, this approach has each individual community select its least cost supply alternative, rather than the alternative that results in the lowest aggregate regional cost. The model is applied to a 15-county region of North Carolina facing substantial groundwater pumping restrictions. Results indicate that the inclusion of regional surface water systems and tradable groundwater permits can reduce the estimated cost of meeting the new restrictions in the region by as much as 35% in present value cost terms.