Saturday, December 04, 2004
Copyright © Las Vegas Review-Journal

COLORADO RIVER: Transfer of water approved

$330 million deal to give Nevada reserve from Arizona's allotment

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Arizona's largest water supplier has approved a plan that would transfer 1.25 million acre-feet of the state's Colorado River water to Nevada, a reserve large enough to supply Southern Nevada for four years.

In exchange, Arizona would get $330 million and Nevada's support as it seeks to change a decades-old agreement that forces Arizona to absorb the largest share of any shortage on the Colorado River.

The deal, approved Thursday by the Central Arizona Project board, essentially turns a 3-year-old promise to Nevada into a guarantee.

Under a 2001 water-banking agreement, Arizona pledged its "best efforts" to set aside up to 1.25 million acre-feet of water for Nevada during the next two decades. The amended deal approved by the CAP board would ensure that the full 1.25 acre-feet is made available to shore up Southern Nevada's water supply.

The deal still requires approval from the Arizona Water Banking Authority. That is scheduled for Thursday.

If approved, the agreement will come before the Southern Nevada Water Authority board for approval on Dec. 16.

"It's a guaranteed water supply," said Kay Brothers, deputy general manager for the Southern Nevada Water Authority. "It's essentially another 40,000 acre-feet a year we could use if we need to."

To make a withdrawal from its bank in Arizona, the Southern Nevada Water Authority would take water from Lake Mead that normally would be released downstream for delivery to Arizona.

The amended banking agreement allows Nevada to withdraw up to 20,000 acre-feet a year in 2007 and 2008, up to 30,000 acre-feet a year in 2009 and 2010, and up to 40,000 acre-feet each year after that until the bank is empty.

There are 325,851 gallons in an acre-foot. According to water authority figures, the average Las Vegas household consumes about 230,000 gallons of water each year, less than three-quarters of an acre-foot.

Nevada also would be allowed to use its Arizona account to cover any shortages should the drought prompt the U.S. Bureau of Reclamation to temporarily reduce the state's annual share of the Colorado River.

"In essence, it buffers us against shortage," Brothers said.

A so-called "shortage condition" on the river also would reduce Arizona's share. Nevada has agreed to cut its withdrawals from the bank to keep such a shortage from impacting Arizona cities.

"To have this sort of shared-shortage agreement across state lines is historic," water authority general manager Pat Mulroy said. "This has never happened before."

The deal calls for the water authority to make an initial payment of $100 million to Arizona in 2005. The rest of the $330 million would be paid in annual, $23 million installments starting in 2009.

Under the original agreement from 2001, the water authority has accumulated 110,000 acre-feet of credits in Arizona's groundwater bank. Another 10,000 acre-feet is expected to go into the bank by the end of the year.

Nevada has yet to tap the reserve, and Brothers doesn't expect that to happen anytime soon.

Despite its growing population, Southern Nevada has reduced its water use in each of the last two years.

The state's annual share of the Colorado River is 300,000 acre-feet. Southern Nevada consumed about 272,000 acre-feet of water in 2003 and remains on pace to use even less this year.

"Our conservation efforts have been great," she said. "We might not need to take any (banked) water in 2007."

If the amended deal is approved, Nevada would have until 2060 to withdraw the full 1.25 million acre-feet from the bank.

The water authority's $330 million payment to Arizona is expected to come from bond revenue, federal grant money, connection charges paid by new customers, and from a fund set aside for capital improvements and major construction.

"We do not anticipate it impacting water rates," water authority spokesman Vince Alberta said.

Nevada currently pays the federal government about 50 cents per acre-foot for the water it gets from Lake Mead.

Southern Nevada's payment to Arizona is $330 million for 1.25 million acre-feet of water, minus the 120,000 acre-feet already banked. That translates to about $292 per acre-foot.

"Therein lies why everyone loves their traditional Colorado River allocation. It's a very, very cheap resource," Alberta said.

But CAP board member Grady Gammage insists the water deal would provide Arizona with a lot more than just money.

"The reason to do this is because it's good water management," Gammage said. "This is a giant game of diplomacy; and when you can gain an ally without hurting yourself, you should do it."

Arizona will need all the allies it can get if it hopes to reverse a decades-old rule of the river that gives junior rights status to CAP's network of canals, which delivers water 350 miles from the Colorado to Phoenix, Tucson and farmland in between.

The rule states that if a shortage is declared on the river, California is allowed to take its full allocation of 4.4 million acre-feet before CAP can take any of its share. With Nevada's help, Arizona water officials want to change the rule so all river users share shortages equally.

"California needs to come to the table," Mulroy said. "As I told the board in Arizona (Thursday), you can't fix 100 percent of a shortage with 50 percent of the supply."