Instead of creating water supply systems that fully insulate mankind from c
limate-imposed water deficiencies, it is possible that fur municipal water
systems a nonzero probability of water supply shortfall is efficient. Perfe
ct water supply reliability, meaning no chance of future shortfall, is not
optimal when water development costs are high. Designing an efficient strat
egy requires an assessment of consumer preferences pertaining to the reliab
ility of water supply. Contingent valuations of both current and future sho
rtfalls are reported. The consistency of these measures is gauged using an
expected utility model.