How Arizona abandoned its plan to reduce its Colorado River water use

I deeply misunderstood central Arizona’s readiness to respond to declining Colorado River supplies. Because I thought Arizona had a plan.

In fact, Arizona did have a plan, a carefully crafted priority system that provided some users with deeply subsidized water in the short run, with the understanding that they would be the first to have supplies curtailed in the long run, as Colorado River water inevitably ran short.

That actually was a pretty good plan – essentially a subsidy from urban to rural water users to provide a resilient cushion on which to land as supplies run short.

When that time came, however, those with the lowest priorities, after taking the subsidies for years, used political power to end-run the plan.

There’s a nice explanation of this in the staff report for the Phoenix City Council’s discussion on tomorrow’s agenda of the Colorado River Drought Contingency Plan:

In addition to the existing priority system on the main-stem of the Colorado River, a separate priority system for Colorado River water exists for users of the CAP. Various cities, Indian communities, mining companies, and private water companies in Maricopa, Pima, and Pinal County, including Phoenix, hold federal contracts in perpetuity for the three highest priority classes of water. In priority from highest to lowest, these are Wellton-Mohawk water, Municipal & Industrial and Indian water as co-equal priority, and Non-Indian Agricultural water. These federal contracts guarantee that delivery of water in the CAP occurs in accordance with the established priority system. All other water delivered through the CAP is in a category called Excess water. Excess water is the water not used by long-term federal contract holders in any given year. Long-term contracts for Excess water are not available, but rather are entered into with the Central Arizona Water Conservation District (CAWCD) on a year-by-year basis. Because the volume and availability of Excess water is based on the orders of higher priority water users in Central Arizona, there is no guarantee that Excess water will be available in any given year. Moreover, this water is subject to the first reductions in deliveries under shortage conditions on the Colorado River. In any given year, Excess water is only available after the water orders of those holding contracts for Wellton-Mohawk, Municipal & Industrial, Indian, and Non-Indian Agricultural water are fulfilled.

For users in Central Arizona, the cost of Colorado River water consists of: (a) a capital charge to repay the federal government for the canal infrastructure; (b) operation, maintenance and replacement (OM&R) costs for the canal works; and (c) the energy costs associated with pumping the Colorado River water uphill from the Colorado River into Central Arizona. At the time of the 2004 Arizona Water Settlement Act, agricultural districts in Maricopa, Pima, and Pinal counties were struggling to maintain their long- term contracts to Non-Indian Agricultural water because they could not afford the full cost of Colorado River water. To solve this problem, the agricultural districts relinquished their higher priority Non-Indian Agricultural contracts to cities and tribes (including Phoenix) in exchange for a right-of-first-refusal to Excess water at a substantially subsidized cost. Agricultural districts do not have a right to Excess water, but rather only a right-of-first-refusal whenever Excess water is available. CAP agricultural districts do not pay capital charges or OM&R, but only pay the energy costs for Excess water when it is available. According to the agreement between the agricultural districts and the CAWCD, this right of first-refusal for Excess water expires in 2030. As a result of this agreement, to date, the agricultural districts have received subsidies through reduced-cost deliveries of Excess water and other concessions valued at nearly $400,000,000. The CAWCD has taxing authority on real property in Maricopa, Pima, and Pinal Counties and uses the taxes raised to pay for the subsidies provided to the agricultural districts.

This seemed like a good plan, until the water began to run short and it actually required the next steps of implementation – using less water.

Under the terms of the DCP, less Colorado River water will be available in Central Arizona and the likely impact is that Excess water will not be available at all because it is lowest in priority and first to be cut. Because the agricultural districts in Central Arizona depend on Excess water, one impact of DCP is the likely elimination of any deliveries of Colorado River water to the agricultural districts. This was an unacceptable result to the Governor’s office and the Board of Directors of CAWCD, so they determined that the loss of water to agricultural districts must be mitigated as a prerequisite to passage of the DCP in the Arizona Legislature.

The Phoenix City Council seems ready to approve their part of the deal tomorrow.

13 Comments

  1. The report is wrong, cities have subcontracts. They do not have federal contracts. A lot of revisionist history in that report too, with quite a slant.

  2. Have to agree with Facts Matter. You didn’t do your homework, John. The Phoenix council brief is so skewed that it barely even resembles the truth. Among the errors:

    – Agricultural districts were not “struggling to maintain” their CAP subcontracts in 2004 because their obligations under those contracts had been waived since 1994.

    – The primary reason for ag relinquishments was to provide water to settle Indian water rights claims. Phoenix got to keep its cheap SRP water while the CAP ag water went to tribes. A great deal for Phoenix that the brief completely fails to mention.

    – And the so-called “subsidies” (selling excess CAP water to ag at reduced rates) had been around since 1994. That program was recommended in 1993 by then-Governor Symington’s CAP Advisory Committee. And by the way, keeping ag a viable part of CAP saved the cities more than $600 million in interest on the CAP repayment obligation–another fact the Phoenix brief just happens to omit.

    If you care about the facts, there is an excellent paper on agriculture and the CAP on the CAP website: http://www.cap-az.com/documents/departments/finance/Agriculture_2016-10.pdf

    You’ve been told all this before, John, but apparently you prefer to ignore the facts. http://www.inkstain.net/fleck/2018/06/for-central-arizona-farmers-coming-to-terms-with-the-reality-that-a-colorado-river-allocation-is-not-an-entitlement/#comments

  3. Wonder if either Concerned Citizen or Facts Matter is a Pinal farmer, esp. of cotton. That’s not to say Phoenix is blameless either.

    The big issue is that most of Arizona in general is not blameless. And a bunch of people still need to read Ed Abbey.

  4. Not even close. And I loved The Monkey Wrench Gang.

    Of course Arizona is not blameless. Neither are any of the other Basin states. But the question isn’t who’s to blame for the state of the river today; the question is who’s willing to make changes—i.e. reduce their use—to fix things. And Arizona seems to be the only state making significant cuts.

  5. CC – Re Arizona “the only state making significant cuts,” it is perhaps worth noting that in 2017, the most recent year for which we have complete data, the states of the Lower Basin used the following percentages of compact and BCPA/AZ v. CA allocations:

    Nevada: 81 percent
    Arizona: 90 percent
    California: 91 percent

    In the Upper Basin in 2017, per the latest Consumptive Uses and Losses report, each state’s use as a percentage of compact allocation:

    Colorado: 57 percent
    Utah: 55 percent
    Wyoming: 42 percent
    New Mexico: 49 percent

    In other words, pretty much everyone’s contributing here. It only seems painful to Arizona because y’all have been in denial for so long in your attempts to continue to try to squeeze a full allocation every year out of a river that y’all knew all along doesn’t have the water to meet it.

  6. Concerned, thanks.

    That said, per Fleck .. there IS denialism, and other states have made plenty of voluntary cuts. I know Arizona’s full history, per previous comments here, like its long-ago sending the Guard to the river border with California and other things.

    THAT said, per Fleck … why he has expected Arizona to act differently than past history would indicate is a puzzler. But, I’m a skeptical realist.

  7. SG –

    I did, in fact, expect Arizona to act as it has in the past, by which I mean that I expected Arizona to continue carrying out its plan to manage increasing water scarcity by reducing unsustainable agricultural water use in central Arizona.

    This expectation was based on trends in the state’s historical water use, and the policies that drove them.

    Since 1980, the state’s agricultural water use has declined from 8 million acre feet to 5 million acre feet. That has been more than enough to meet growing municipal needs while still decreasing overall water use by 26 percent, even as population has more than doubled. This shift has enabled a 45 percent reduction in groundwater pumping since its peak in the mid-1970s. (data: USGS Water Use in the United States)

    The GMA and the CAP priority system, as modified in the 2004 AWSA, have been the policy tools to continue carrying out that plan. While rarely labeled as such, this has been the most stunningly successful example of ag-to-urban water transfers in the West.

    I expected Arizona to continue doing this.

  8. John, my comment about Arizona seemingly being the only state making significant cuts was referring to what happens under DCP.

    Looking at the percentage of apportionment each state is using today is not particularly relevant. That figure will always be lower for Upper Basin states because there is not enough water physically available to support 7.5 MAF of use in the Upper Basin. Reclamation’s 2007 hydrologic determination (https://www.usbr.gov/uc/envdocs/eis/navgallup/FEIS/vol1/attach-N.pdf) concluded that Upper Basin annual depletions are effectively limited to 5.76 MAF. Upper Basin uses in 2017 (4.7 MAF) were essentially the same as at the start of the current drought in 2000 (4.6 MAF). (By comparison, Arizona’s 2017 uses were nearly 300 KAF less than in 2000, and California’s were nearly 1 MAF less; but again, that misses the point.)

    My comment referred to what will happen under DCP. I am not aware of any mandatory reduction of existing Upper Basin uses under the Upper Basin DCP. Arizona, on the other hand, will have to immediately reduce its existing uses by 512,000 AF once the Secretary declares a Tier 1 shortage, possibly as early as next year.

    Nevada has done a good job in reducing its consumptive use from 322,000 AF in 2000 to 243,000 in 2017. As a result, even at its maximum DCP reduction of 30,000 AF, Nevada will not need to curtail any existing uses.

    And California will not be required to reduce its use unless and until Mead falls below elevation 1045. Even then, the expectation is that California will use ICS credits to make its DCP “contribution,” so actual uses need not be reduced at all.

  9. CC –

    Fair enough.

    I think there’s another way of looking at this.

    The states of the Upper Basin long ago realized that they could not rely on unrealistic expectations about how much water the Colorado River could supply, and have scaled back their expectations accordingly.

    Nevada realized that it did not need a full 300,000 acre feet of water and scaled back its expectations and water use performance.

    California, after coming to rely on an unreliable flow of surplus water from the Colorado River, went through the difficult exercise of scaling back its water use in 2003.

    That leaves Arizona, which has been less realistic about the reality that it also had come to rely on a surplus the river could not realistically supply.

    I still think it’s accurate to say that everyone is contributing here.

  10. Oh, per the story above, the Edmund G. Brown Jr. Peripheral Delta Tunnel (singular only now) could get hauled back into play. Stand by for NEWS!

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