State Water Resources Research Institute Program

Project ID: 2007OK78B
Title: Decision Support Model for Optimal Water Pricing Protocol for Oklahoma Water Planning: Lake Tennkiller Case Study
Project Type: Research
Start Date: 3/01/2007
End Date: 2/28/2008
Congressional District: 3
Focus Categories: Economics, Surface Water, Water Use
Keywords: Water Pricing, Non-Market Valuation, Water Allocation
Principal Investigators: Boyer, Tracy (Oklahoma State University); Sanders, Larry; Stoecker, Arthur (Oklahoma State University)
Federal Funds: $ 25,000
Non-Federal Matching Funds: $ 50,000
Abstract: Water supply planning can be designed to meet a set of projected demands if sufficient water is available. However it is usually necessary to allocate limited supplies among competing uses, a source of imminent concern due to increased urban and industrial growth and fluctuating climate conditions. In Oklahoma, the issue of allocating water rights has received greater attention given drought conditions and conflicts over water rights. The Lake Tenkiller Area is one of the areas in Oklahoma with demands for water that may exceed supply in the near future. According to the USACE (2001) there are 27 water systems and water districts in the Tenkiller area, including several rural water districts, the cities of Sallisaw and Tahlequah, and several towns. Current water rights of 9,096 acre feet held by these participating systems are insufficient to meet the year 2050 demand.

The objective is to develop a water pricing model that can be used in various locations in Oklahoma in support of the state water planning process. The model would develop methods to estimate both monetary and opportunity costs of a representative surface water system under conditions of competing water uses and variable water supplies that could be later modified to include related groundwater supplies. We propose to use Tenkiller Ferry Lake (commonly known as Lake Tenkiller) and the upper and lower Illinois Rivers in Eastern Oklahoma as a representative water system for development and testing of an optimal water pricing protocol that (1) internalizes monetary and opportunity costs of water storage, treatment, and delivery systems; and (2) encourages a sustainable supply of water over 50 years through water conservation, while (3) not discouraging economic growth.

Demand and supply will be combined in a mathematical programming model to simulate the representative river-reservoir system. Existing data on monthly quantities and quality of water, probable climate variability, existing and future demands, and non-market values for water will be used to estimate the model. Because detailed data on total recreational and non-market benefits do not exist, a statewide valuation model for water-related recreation will be conducted that will inform this model and future modeling efforts. The optimization model will be used to determine water pricing, water allocations, and capital improvements based on current 50 year population projections under different possible policy scenarios. The model and results will be used to create a simulation game that would become an education tool for extension and outreach among the various stakeholders of major water resources in Oklahoma.

Progress/Completion Report, PDF

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