The coming months in the Colorado River basin

The Colorado River basin supplies water to over 40 million people and five million acres of farmland across two countries, seven U.S. states, and up to 30 federally recognized Native American Tribes. Since 2000, consumptive uses and losses of the basin’s water have regularly exceeded natural flows, and levels of Lakes Mead and Powell, the largest surface water reservoirs in the U.S., are at historic lows. Consequently, the U.S. government is taking and considering unprecedented steps to reduce water use.

Water conservation required

On June 14, 2022, Bureau of Reclamation Commissioner Camille Touton stated in a Congressional hearing that “between two and four million acre-feet of additional conservation is needed just to protect critical elevations in 2023.” This volume is 16 percent to 33 percent of the Colorado River’s average annual flow since 2000.

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Key voluntary water conservation programs

Voluntary water conservation is largely being funded by the Inflation Reduction Act, which provides $4 billion to pay water users to temporarily use less water, lower long-term demand, and restore ecosystems.

 

Lower Basin System Conservation and Efficiency Program

From October 12 to November 21, 2022, Reclamation accepted proposals for projects that would pay water users to leave water in Lake Mead. Reclamation offered $330 per acre-foot for one-year agreements, $365 per acre-foot for two-year agreements, and $400 per acre-foot for three-year agreements. A second part of this same program accepted water conservation and efficiency project proposals with varied pricing through November 21, 2022. On March 10, 2023, Reclamation announced that it was finalizing $250 million in water conservation deals expected to keep 650,000 acre-feet in Lake Mead in 2023. Specifically, Reclamation has finalized or is working to finalize agreements with the Gila River Indian Community to conserve 125,000 acre-feet for $50 million, California’s Coachella Valley Water District to conserve 30,000 acre-feet for $12 million, and California’s Imperial Irrigation District to conserve 250,000 acre-feet – all in 2023. These agreements would each provide similar opportunities in 2024 and 2025.  A third part of the program is anticipated to launch in early 2023 and would fund “long-term system efficiency improvements that will result in multi-year system conservation.”

 

Upper Basin System Conservation Pilot Program

In December 2022, the Upper Colorado River Commission announced that up to $125 million would be available to pay water users to conserve water and improve water-use efficiency. This effort restarted a prior System Conservation Pilot Program but greatly ramped up its funding. This program previously spent a total of $8.5 million in the Upper Basin from 2015-2018. The Commission accepted new water conservation proposals from December 14, 2022 to March 1, 2023, offering $150 per acre-foot of conserved water, and it received more than 80 applications. Water users, however, could request a higher payment rate.¹

 

California's offer

In October 2022, California offered to voluntarily conserve 400,000 acre-feet annually from 2023-2026, or about nine percent of its Colorado River allocation. This voluntary conservation would be contingent upon unspecified payments to water users from the federal government and a clear federal commitment to contribute to stabilizing California’s Salton Sea. Farmers in California’s Imperial Irrigation District and Yuma, Arizona have sought conservation payments of $1,500 per acre-foot.

 

Salton Sea restoration

From 2023-2026, Reclamation will provide $250 million to help stabilize California’s Salton Sea, complementing $583 million in state funding to date. The Salton Sea is an inland lake that is already shrinking and would shrink further due to reduced irrigation runoff caused by water conservation, exposing the community to toxic dust on the lakebed.

Mandating water-use reductions with revised operating guidelines for Lakes Mead and Powell

On October 28, 2022, Reclamation announced that it was beginning a legal process that could mandate new, uncompensated water cuts by late summer of 2023. Specifically, Reclamation is exploring modifications to the existing operating guidelines for Glen Canyon and Hoover Dams for the 2023 and 2024 operating years. Current guidelines expire at the end of 2026, but given critically low reservoir elevations in Lakes Mead and Powell, Reclamation is seriously considering the implementation of revised guidelines earlier.

 

National Environmental Policy Act process to revise the guidelines

To revise the guidelines, Reclamation is preparing a Supplemental Environmental Impact Statement (SEIS) that considers alternative approaches. Reclamation collected public comments in late 2022 and early 2023 and released a draft SEIS for public review in spring 2023, followed by a 45-day public comment period, with a final SEIS expected in late summer 2023. In November 2022, Reclamation anticipated that the SEIS would evaluate at least three different alternatives:

• A no-action alternative consisting of existing agreements and operations
• A seven-state consensus set of actions that builds on existing agreements and operations²
• Unilateral action by the federal government that relies on Interior’s existing authority³

Read the draft Supplement Environmental Impact Statement

Alternatives submitted by the states

Reclamation asked the states to submit modeling proposals for review in the SEIS, hoping for one modeling proposal agreed to by all seven states. On January 31, 2023, after the Colorado River basin states were unable to reach consensus, states submitted two different alternatives to Reclamation. Six states (except California) submitted one alternative, and California submitted its own proposal. These proposals differ in the aggressiveness of their water cuts and how those cuts are distributed among the states and Mexico.

• Under the six-state modeling alternative, between 1.543 and 1.943 million acre-feet per year in new reductions would be assessed among all Lower Basin contractors. The volume roughly matches that lost each year in the Lower Basin to evaporation and transit losses—an amount not currently assessed to contractors. This approach imposes more water cuts on California, which has senior rights to Colorado River water, and Mexico.
• California’s modeling proposal includes its earlier offer to conserve up to 400,000 acre-feet per year through 2026 as well as new water cuts in Arizona, California, and Nevada if Lake Mead levels decline further. These new water cuts would be grounded in existing rules and agreements. California’s proposal would add 1.0 to 1.95 million acre-feet per year of new water cuts. Overall, California’s proposal cuts water use less aggressively than the six-state alternative.

Potential litigation over mandatory water cuts

If Reclamation makes unilateral water cuts, it will probably be sued by basin states, Native American Tribes, and/or individual water rights holders. For example, water cuts like those in the six-state alternative could trigger litigation where California and major water users like the Imperial Irrigation District seek relief against Reclamation. Meanwhile, heavy cuts to the Central Arizona Project (CAP) could trigger litigation from Arizona and the 11 Native American Tribes that receive water from the CAP. A court would face several key questions:

 

Did Interior exceed its authority?

If Interior unilaterally cuts water deliveries to California, litigation would center on Interior’s authority to do so despite California’s senior legal status. Interior’s role as the Lower Basin’s “water master” gives it broad authority to distribute water by contract and apportion shortage. However, the CAP is legally junior to California’s Colorado River allocation and about two-thirds of California’s Colorado River allocation predates the 1922 Colorado River Compact and thus has a senior status.⁴ Reclamation might justify water cuts for senior users like those in California by determining that some water uses are not “reasonably required for beneficial use.”⁵ Such a determination could be challenged in federal court. Reclamation would be on stronger legal ground cutting deliveries to the CAP given its junior legal status, but this could mean that some Tribes and cities like Phoenix and Tucson could face heavy supply reductions while farmers in California and elsewhere receive continued deliveries. Such cuts would likely trigger litigation from Arizona, individual water rights holders, and Tribes. Among other claims, Tribes could claim that any cuts that impact their water rights violate the U.S. federal trust responsibility to Tribes.

 

Would Reclamation's water cuts be halted during litigation?

The parties suing Reclamation would probably seek to have water cuts halted while litigation plays out (with a preliminary injunction). A court could decide to halt the water cuts during litigation based on harm caused to water users, or a court could decide to keep the water cuts in place during litigation based on public interests served by stabilizing the Colorado River System.⁶

 

Would lawsuits go directly to the U.S. Supreme Court or to federal district court?

If a lawsuit over Colorado River cuts involves two or more states, it would go directly to the U.S. Supreme Court.⁷ Lawsuits between individual water rights holders and Reclamation could start in federal district court.⁸

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Anticipated key dates in the coming months

• Early 2023: Reclamation is expected to launch a program that funds “long-term system efficiency improvements that will result in multi-year system conservation” in the Lower Basin. As noted above, the Inflation Reduction Act allocated $4 billion to Reclamation for this purpose in addition to two purposes (short-term conservation and Salton Sea) already allocated.
• Spring 2023: Reclamation and the Upper Colorado River Commission select additional system conservation and efficiency projects for funding.
• Spring 2023: Draft SEIS released for public review, including 45-day comment period.
• Late Summer 2023: Final SEIS released, potentially identifying new mandatory water cuts.
• August 2023: Reclamation announces shortage designation for calendar year 2024.

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Page last revised: April 14, 2023

Thanks to Buzz Thompson, Felicia Marcus, Martin Doyle, and Zachary Sugg for their comments and review.

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Notes

¹ The System Conservation Pilot Program generally does not protect water savings all the way downstream to Lake Powell or other reservoirs, raising the possibility that other water users may take the conserved water.

² Such a seven-state consensus differs from the modeling alternative submitted by all states but California, which those states labeled a "consensus-based modeling alternative."

³ According to Reclamation, this third alternative “would consider how the Secretary’s authority could complement a consensus-based alternative that may not sufficiently mitigate current and projected risks to the Colorado River system reservoirs.”

⁴ According to the Compact, water rights that predate it, known as “present perfected rights,” “are unimpaired by this compact.” Colorado River Compact art. VIII, 1922. California has over three million acre-feet of these senior rights, with 2.6 million acre-feet owned by the Imperial Irrigation District. Arizona v. California, 547 U.S. 150, 174 (2006). Over one million acre-feet of these senior rights that predate the Compact are in Arizona, with about 780,000 acre-feet of those owned by Native American Tribes. Arizona v. California, 547 U.S. 150, 169 (2006).

⁵ In 2003, Reclamation unilaterally attempted to reduce the Imperial Irrigation District’s water delivery by making such a determination, relying on its regulations at 43 C.F.R. § 417.2 stating that deliveries “will not exceed those reasonably required for beneficial use….” In litigation over such a determination, among other issues, a court could be asked to decide whether Reclamation has authority to adjudicate “beneficial uses” of Colorado River water and whether it applied that authority properly. Due to a settlement agreement in 2003, no federal court issued a final ruling on these issues then. Osias, D. & Hicks, T. (2008), 43 C.F.R. Part 417 Does Not Authorize Federal Agency Adjudication of IID Beneficial Use of Colorado River Water. West-Northwest Journal of Environmental Law & Policy, 14(2), 1499-1582. 

⁶ Federal courts generally consider four factors when evaluating whether or not to issue a preliminary injunction: (1) the moving party’s (i.e., the party requesting the injunction’s) likelihood of success on the merits; (2) the likelihood that the moving party will suffer irreparable harm absent a preliminary injunction; (3) the balance of harms between the moving party and the non-moving party; and (4) the effect of the injunction on the public interest. Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008).

⁷ Also, any lawsuit would go directly to the U.S. Supreme Court if it invokes the Court’s retained and exclusive jurisdiction over adjudication of water from the mainstream of the Colorado River in Arizona v. California. ​The scope of the Court’s Arizona v. California jurisdiction could be elaborated in a different case currently before the Court, Arizona v. Navajo Nation, No. 21-1484. Oral argument was March 20, 2023.

⁸ This occurred in 2003 when California’s Imperial Irrigation District challenged Reclamation’s authority to reduce its water deliveries. Imperial Irrigation Dist. v. United States, No. 03-CV-0069W (JFS) (S.D. Cal. Jan. 10, 2003).