A long‐range capacity expansion planning model is formulated that provides a projection of future water supply availabilities based on economic efficiency. The planning model provides a least‐cost schedule of development projects that also maximizes the net benefits of the outputs of those projects to a regional economy. A dynamic programing algorithm is used to schedule the projects, and a Leontief input‐output linear program is used to model the response to project supplies. Multilevel theory is used to provide a dynamic coordination scheme that seeks the best joint solution of the scheduling problem and the input‐output linear program. A regional planning example is provided.

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