Drought and Water Demand Continues in Spite of COVID-19 Pandemic

The demands on government and private water providers to address the declining availability of water resources in the southwest did not get a reprieve, unfortunately, when the COVID-19 virus emerged in February.

Last August, I wrote that even though the snowpack that feeds the Colorado River was 145% of normal for 2018-2019, it was not enough to prevent a “Tier 0” shortage declaration on the Colorado River based on predictive modeling completed by the U.S. Bureau of Reclamation (“BOR”) (notwithstanding the fact that the observed water level at Lake Mead was above 1,090 feet on January 1, 2020).

Today, the outlook on the Colorado River system is arguably worse, despite that Lake Mead was approximately 8 feet higher at the end of March than it was in March last year.  Snowpack in the Colorado River’s Upper Basin is significantly less this year, which bodes poorly for reservoir levels in 2020-2021.  The snowpack slipped to 95.68% of average as of April 20, 2020 at 15.138 SWE (inches of water in a volume of snow, measured by weight) after trending relatively close to the seven-year average for most of the winter.  Snowpack reached a high of 21.273 SWE last year by comparison.  BOR’s most recent projection for the water level at the end of December 2020 is 1,084.69 feet, which would result in another year in a Tier 0 shortage if the projection remains under 1,090 feet until August when BOR sets the operational tier levels on Lakes Mead and Powell.

One bright spot for Arizona, and the greater Phoenix area in particular, is that the reservoirs are full in the Salt and Verde River systems managed by the Salt River Project (“SRP”).  The reservoirs were only 79% full at this time last year.  Today, they are at 98%.  Charlie Ester, SRP’s surface water resources manager told azcentral.com, “Frankly, it’s nothing but bad news on the Colorado over the last few years.  So here’s a little piece of good news for water.  And we’ve been in this drought for so, so long that having full reservoirs is reason to celebrate.”

Nevertheless, the overall trend for water supplies is heading downward.  In January, my Snell & Wilmer colleague Bill Staudenmaier wrote about the groundwater deficit in Pinal County and efforts of the Pinal Groundwater Task Force to find solutions that will allow growth to continue in the corridor between Phoenix and Tucson.  In February, I wrote about the process undertaken by the Arizona Department of Water Resources to adopt more stringent groundwater conservation requirements in the State’s Active Management Areas, and a process spearheaded by Governor Ducey’s office to examine ideas and opportunities to develop new water supplies and enhance existing water supplies for all of Arizona through his Water Augmentation, Innovation and Conservation Council.  These proactive efforts may be commendable, but water supply solutions will likely require substantial capital investment.

With a $1.1 billion budget deficit projection for the State of Arizona as a result of the COVID-19 pandemic, the prospect of finding revenues to fund water development and infrastructure projects may seem daunting, but there are options available.  Arizona’s Water Infrastructure and Finance Authority (“WIFA”) provides low-interest loans and grants to fund water infrastructure projects for both publicly and privately held drinking water systems.  For the agricultural industry, there are a number of potential sources of funding for water conservation projects through the Natural Resource Conservation Service.  The State of Arizona’s Water Protection Fund (“WPF”) is another potential source of funding for rural water conservation projects.  According to Ruben Turan, the WPF Executive Director, a formal decision on implementing the next grant cycle is anticipated to be made at the next meeting of the WFP Commission, currently scheduled for June 16, 2020.  Anyone interested in seeking grants or loans for water projects should monitor those websites linked in this paragraph and stay tuned for future updates.