Colorado River deals pays Arizona, California, and Nevada $1.2 billion to use less water

On May 22, the Biden Administration and the states along the Colorado River announced that they had reached an agreement to conserve an unprecedented amount of the river’s water supply. The Lower Basin states of Arizona, California, and Nevada have agreed to save an additional 3 million acre-feet of Colorado River Water in the Lower Basin by the end of 2026, or about 13 percent of these states’ total allocation of water from the river.

In return, the federal government will compensate the three states for three-quarters of the water savings, or about $1.2 billion. The money will come from the 2022 Inflation Reduction Actf and is intended to pay Native American tribes, farmers, cities, and others who will voluntarily forgo their supplies.

The Colorado River is a critical water supply in the Western United States and 20 years of severe drought, population growth, and climate change have strained its supply. The three states in the river’s Lower Basin all agreed to take less water from the river for now, in an effort to keep the water levels from falling so low that it jeopardizes the water supply to major cities like Los Angeles and Phoenix, as well as some of the most productive farmland in the country.

The agreement follows almost a year of negotiations and numerous missed deadlines. The plan intended to protect both Lake Powell and Lake Mead—two of the largest reservoirs in the US. Recent droughts have reduced the Colorado River’s natural water flow by roughly 20 percent. In summer 2022, the water levels in both reservoirs fell so low that officials worried that the hydroelectric turbines they powered might stop working.

In June 2022, the federal government told the seven states that rely on the river—including Colorado, Utah, New Mexico, and Wyoming—that they must find a way to reduce their water use by two to four million acre-feet of water per year. An agreement was not reached among the states, and the federal government considered unilaterally imposing water cuts on those states last summer.

The states had until May 30 to take a position on future unilateral reductions, but a deal was being negotiated behind closed doors to reach a deal and avoid imposing cuts that would likely face legal challenges and delaying any serious action, according to The New York Times.

“There are 40 million people, seven states, and 30 Tribal Nations who rely on the Colorado River Basin for basic services such as drinking water and electricity. Today’s announcement is a testament to the Biden-Harris administration’s commitment to working with states, Tribes and communities throughout the West to find consensus solutions in the face of climate change and sustained drought,” Secretary of the Interior Deb Haaland said in a statement. “In particular I want to thank Deputy Secretary Tommy Beaudreau and Reclamation Commissioner Camille Calimlim Touton, who have led the discussions with Basin state commissioners, Tribes, irrigators, local communities, and valued stakeholders to reach this critical moment.”

The agreement runs through the end of 2026 and still needs to be formally adopted by the federal government. By 2026, all seven states that rely on the Colorado River may face a deeper water reckoning and the river’s decline is likely to continue.

According to The Washington Post, Arizona’s commissioner to the Colorado River Tom Buschatzke emphasized that the deal is not the final outcome, and the parties have also agreed to a new proposal that will be analyzed by the Interior Department.

“It is important to note that this is not an agreement — this is an agreement to submit a proposal and an agreement to the terms of that proposal to be analyzed by the federal government,” Buschatzke told reporters. “That is a really critical point for everyone to understand.”

The heavy snow and rain that fell in the West during the winter helped ease the crisis and gave the negotiators some breathing room, but this winter was “extraordinary” and was not a solution.
“This wet winter definitely is great news for the Colorado River because of the snowpack. That snow runoff from the mountains will drain into the Colorado River and increase the stream flow,” Utah State University climate scientist Wei Zhang told PopSci in March. “But that cannot solve the water problem in the Colorado River—that demand is still much larger than the supply.”