This paper uses parametric methods to construct 5 year, 10 year, and greater than 15 year drought scenarios to calculate potential source water reduction for the Albuquerque Bernalillo County Water Utility Authoritys (Authority) service area. The drought scenarios are drawn from literature of the Southwestern region's historical precipitation patterns, the tree-ring record (TRR), and Global Climate Models (GCM). The cumulative surface water losses attributed to prolonged drought conditions are between 20,000 and 25,000 Acre-Feet per year. Converting the contracted supply, that would be unavailable for sale by the Authority, based on the commodity charge, represents a considerable financial loss, with an estimated annual revenue reduction of approximately $14 million. The estimated cumulative cost, unrealized income, for the Authority of a 15 year drought is over $110 million. Asset Management tools, in particular Nessi-curves, were used to graphically display the financial cost to replace aging water pipe system wide. Integrating an in-house GIS Produced Pipeline Analysis Rehabilitation Model and stacking the Nessi-curves, for the period 2005-2020, the amount needed to replace the aging pipe is around $1 billion. Current capital programs would meet about 25% of this forecasted need. The risk exposure to a prolonged drought and the potential unmet requirements to replace critical aging pipe infrastructure over the next 15 to 20 years is around $1 billion. Management options to address such a considerable revenue shortfall due to drought and infrastructure are limited. Continued Asset Management is recommended to prioritize project replacement work and may extend the life of the pipe asset base. This has the possibility to lessen the infrastructure cost of ownership by as much as 30%. However, it is recommended to increase monthly average rates by around $6, and place the funds in a reserve, sinking fund. This fund is estimated to grow to over $110 million in 15 years in order to provide protection against a severe or prolonged drought.
Droughts--Economic aspects--New Mexico--Albuquerque Metropolitan Area., Municipal water supply--New Mexico--Albuquerque Metropolitan Area--Econometric models., Water consumption--New Mexico--Albuquerque Metropolitan Area--Econometric models., Drought forecasting--New Mexico--Albuquerque Metropolitan Area.
Martinez, Louis. "Utility response to drought : business of water management practices and function in view of decreased consumption." (2010). https://digitalrepository.unm.edu/wr_sp/90