This paper describes a reservoir simulation model for predicting the risk of meeting any target demand based on any amount of water in storage at any time of the year; it was developed for Durham, North Carolina. For example, if Durham found that in the 4th week of August the working volume of its reservoirs was depleted by 80%, the model would predict the probability of meeting its demand from then until the reservoirs refilled the following spring. The risk that target demand cannot be met is used as a criterion for drought management decisions. If the risk is unacceptable, alternative conservation policies can beexplored with the model to determine an appropriate solution. In NC, high demands and droughts occur in the summer; however, results show that a delay in conservation (rationing) until autumn usually does not adversely affect the risk of meeting demand. Moreover, a stringent policy of rationing for a short period can have the same or greater payoff in reducing risk as a less stringent policy for a longer period. Includes 5 references, tables, figures.