Multi Stage Optimal Mix in the Interconnection of Drinking Water Sources

The use of integrated aqueduct systems is quite common in the provision of drinking water. In fact, it enables the system to handle crisis in the provision of the service caused, for example, by pollution emergencies or peaks in day demand curves. The Italian Local Water authorities (ATOs) assign a concession contract to a private provider that has the right to produce, operate and manage water utilities for a certain period of time (usually 30 years). The tariffs, set by the ATO according to the Government Decree n. 1/8/1996, can be revised after a period lasting three years. Within each single year some technical and economical data can be considered as fixed, such as the volume of water produced, the operating costs and the tariffs. Therefore the provider's profit can be considered as constant over a single year though it varies on a yearly basis. That's why a deterministic approach can be properly adopted over a three-year period. We formulate and solve an optimal control model in order to determine the optimal abstraction policy for a provider of water services who has invested in the interconnection of two different sources and wants to maximize his profit and to minimize the environmental costs related to water abstraction.