Integrated Financial and Water Supply Management: Seasonal Source Allocation Decision Support Tool
Last Modified: May 26, 2015
- John Clayton, Luke Wang - Hazen and Sawyer
- Tirusew Asefa - Tampa Bay Water
- Upmanu Lall - Columbia University
Tampa Bay Water is obligated to meet the water demands posed by its constituents using a mix of regulated surface water and groundwater water sources, each of which has a different unit cost of operation, capacity and response time. Each year, Tampa Bay Water establishes an annual operational budget based on estimates of the amount of water needed from each source and the associated costs. The budget is proposed and adopted in the March-May time frame for an operational period that runs from the following October-September.
Key factors in setting and adhering to the budget include accurate forecasting of surface water availability, regional demand, and need for other sources (groundwater and desalination) when surface water is limited. Tampa Bay Water experiences high seasonal variability in demand and surface water supply with considerable additional uncertainty around those seasonal norms both temporally and spatially. Consequently, expenses can potentially increase well beyond or decrease well below those budgeted. Budget surpluses and deficits may be handled by deposits to or withdrawals from a rate stabilization fund and/or a utility fund, and deficits may be handled by in-year rate increase to Member Governments to meet the deficit, though both deficit options are undesirable and sought to be avoided.
To assist in operational budgeting and in-year adaptation, Tampa Bay Water has recently developed a probabilistic forecast-based decision support tool which determines monthly source allocations to minimize anticipated costs while averting financial and regulatory risks over the upcoming year. This tool accounts for uncertainty in future supply and demand by accepting probabilistic forecasts for both as inputs. The tool then determines an allocation that minimizes expected costs across all probabilistic scenarios within constraints on infrastructure and operational capacities, reliance on regulated groundwater sources, and financial risk (i.e. probability/magnitude of exercising the fund or need of interim rate increases). In addition, this tool allows Tampa Bay Water to track their budget performance during the year and make allocation adjustments to follow the budget if actual supply availability, operations, and associated costs stray from expectations.
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