Top Five Issues to Watch in Arizona Water Law

Drought on the Colorado River.  Although the winter snowpack in the Rockies is off to a good start and California has seen heavy rainfall this winter, the drought in the southwest is not over.  One wet season cannot overcome the water deficit in reservoirs along the Colorado River caused by the prolonged drought.  While the intensity of the drought in California has lessened and Arizona has also received substantial winter storms this year, Lake Mead – on which both California and Arizona depend – is still less than half full.

Drought Contingency Plan.  If the elevation level in Lake Mead drops below 1,075 feet, the Bureau of Reclamation would cut deliveries of Colorado River water to Arizona and Nevada under the existing shortage sharing criteria guidelines.  California, Nevada and Arizona are negotiating a plan to address how the states would allocate a shortage on the Colorado River differently than provided for under the existing guidelines.  The states are still negotiating a deal, which has been delayed due to the change in administration.  However, the parties remain hopeful that an agreement can be reached this year.

Regulatory Changes to Water Reuse.  Treated wastewater is used frequently in Arizona to water turf in parks and golf courses.  But under current Arizona regulations, direct potable reuse (adding treated wastewater to the drinking water supply) is prohibited.  However, that may soon change.  The Arizona Department of Environmental Quality has begun revising the rules governing the use of reclaimed water, and based on input from stakeholders and technical advisory groups, the new rules may permit direct potable reuse.  ADEQ plans to issue draft rules in two or three installments in 2017 and 2018.

CAP System Use Agreement.  On February 2, 2017, the Central Arizona Project and the Bureau of Reclamation entered into an agreement to allow the Central Arizona Project (CAP) system to be used to transport non-CAP water.  The agreement will permit non-CAP water to be wheeled within the 336-mile long canal, which will facilitate the recovery and delivery of stored water and help the state meet firming obligations under Indian water right settlements.  As we watch the implementation of the System Use Agreement we should see an increase in creative solutions to meet water demands across the state.

Closure of Navajo Generating Station.  The owners of the Navajo Generating Station (NGS) announced this week that they voted to close the station in 2019.  Read more here.  The four NGS owners include Salt River Project, Arizona Public Service Co., NV Energy and Tucson Electric Power.  The NGS provides power to move water through the CAP canal, 24 hours a day, seven days a week.  The plant’s closure could have an effect on the price of CAP water.  CAP officials recently reported that, in 2016, CAP would have saved approximately $27 in energy costs per acre-foot of water the CAP delivered if it had purchased its power from the open market rather than from NGS.  See AzCentral, “Officials: Arizona water users better off without Navajo Generating Station coal plant,” available here.  Whether the CAP’s change in power supplies will actually decrease the costs of CAP water, or perhaps just offset increases in cost under a drought contingency plan, remains to be seen.