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the "final design", procedures must account for all factors affecting the project design, including fluctuations of inflows and release by season, release restriction during periods of low storage, evaporation losses, minimum pool requirements and supply failure probability.

Uncertainty is a major element of concern in the design process. It not only affects flow records, where temporal and spatial variability is significant, but also the generation of demand forecasts.

2.3 – Allocation of Water Releases

Linked to storage is the optimal allocation of water releases. Heightened competition for withdrawals, increasing in-stream flow regulations, compelling groundwater quality issues, along with environmental concerns, lead to the formulation of permitting programs and the establishment of regulatory agencies aimed at coordinating and controlling water resource allocations. The first task in this process is to determine and explicitly formulate the overall goal of the permitting systems and to establish permitting rules that reflect those objectives, such as: maintenance of in-stream flows, economic development, water rights and protection of surface and groundwater bodies.

A great variety of mathematical techniques has been proposed to solve problems of optimal allocation of water withdrawals. Eheart and Lyon (1983) identified and compared alternative designs of marketable water permitting systems. Their work examined the trade-offs among multiple objectives including economic efficiency, equity, ease of implementation and administration, along with environmental concerns. Tisdell and Harrison (1992) proposed a water market procedure using game theory.

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