Arizona faces higher water rates as federal plan cuts Colorado River deliveries

A federal water-management plan that takes effect on Jan. 1 will trim Arizona’s Colorado River allotment by 27% each year through 2028, with the possibility of deeper cuts afterward. The reduction follows more than two decades of drought that have left the river’s major reservoirs at historic lows.

Phoenix water-resources advisor Max Wilson said the city’s extensive water-portfolio and recent infrastructure projects will keep taps flowing for its 1.7 million residents. > "The cuts that we're talking about today will not threaten water deliveries to homes. There will never be a moment where you go into your house, you turn on your faucet and no water comes out the other side," Wilson said.

The Central Arizona Project, which transports Colorado River water to the Phoenix-Tucson corridor, supplies about 40% of Phoenix’s water. The city is supplementing the loss with the Salt and Verde River systems, which provide roughly 58% of its supply, and with a $300 million “drought pipeline” completed in 2023 that shifts water from the south to the north side of the metro area.

Other utilities are also preparing. EPCOR USA’s associate director of water resources Doug Dunham noted that existing inter-connected pipe networks and a lease of water from the Ak-Chin Indian Community allow its Anthem plant to maintain service despite the cuts. > "This isn’t new headlines to us. Across the Valley, across the state, from Tucson on up, there have been people who've been thinking about this and planning for these kinds of things for a long time," Dunham said.

The infrastructure upgrades required to offset the reduced river flow are costly, and utilities expect the expenses to be passed to consumers. In Gilbert, water bills have roughly doubled since 2024 after the town accelerated well-building projects to replace lost Colorado River water. Water-resources manager Lauren Hixson said the rapid rate hikes have been difficult for residents to accept.

Experts suggest that higher water prices can encourage conservation. Kathryn Sorensen, director of research at the Kyl Center for Water Policy, said price signals have helped Phoenix cut peak summer use by about 40% since the 1980s. > "When people get that bill, they see it and they feel it in their pocketbook. That can be really painful, and the change can be immediate," she said.

The long-term outlook remains uncertain. The federal plan gives the government authority to cut Arizona, California and Nevada allocations by up to 40% starting in 2028, with mandatory reviews every two years after 2036. Water-banking arrangements that store Colorado River water underground are also under negotiation, adding further complexity to municipal planning.

Phoenix is advancing a $359 million water-recycling plant slated to begin operations in early 2029, with additional reuse facilities planned for the early 2030s. Wilson said the projects are essential for future drought resilience and urged the federal government to share in the funding costs.