Arizona Faces a 760,000-Acre-Foot Colorado River Water Cut. Where Will the State Find New Supply?

Arizona must turn local water resources into dependable supply on a much tighter timeline

On August 21, 2026, the Department of the Interior finalized guidelines that reduce Lower Basin Colorado River deliveries by 1.25 million acre-feet annually in 2027 and 2028. Under the Lower Basin states’ proposed sharing agreement, Arizona would account for 760,000 acre-feet of that annual reduction, compared with 440,000 for California and 50,000 for Nevada. The finalized operating guidelines apply to 2027 and 2028, while the broader decision framework covers operating years through 2036 and allows subsequent guidelines to be developed for later years.

The decision follows years of negotiation among the seven Colorado River Compact states over how to share a shrinking supply. Population growth, long-term aridification, declining river flows, and significant losses at Lake Mead and Lake Powell have intensified the dispute, requiring federal reservoir managers to establish operating rules while the states negotiate a longer-term agreement.

Arizona has known for years that reductions in Colorado River deliveries were coming, but a federal timeline now makes it a more urgent procurement issue. Water providers must plan carefully because reuse, brackish groundwater treatment, recharge, and groundwater development follow different paths for permitting, financing, construction, and operation. With those timelines in mind, Arizona can determine which combination of these strategies best fits the needs of its diverse communities.

A Major Colorado River Reduction Changes the Project Schedule

Long-range supply planning just became a project-readiness test for providers, who will have to quickly translate potential sources into dependable supply with studies, permitting, treatment asset design, construction, conveyance, and financing.

Four practical questions can help assess project priority:

• How much dependable water can the project provide?
• What facilities and permits will it require?
• What will it cost across its lifecycle?
• When can the first gallon become available?

Reuse Can Extend Supplies Arizona Already Controls

In water-scarce regions, discarding water after a single use makes little sense when it can be treated cost-effectively for reuse. Using potable water for applications such as irrigation, toilet flushing, fleet washing, and certain industrial processes can also place unnecessary demand on drinking water supplies. Expanding reuse can make more treated effluent available for nonpotable applications.

Arizona offers an established regulatory framework for reclaimed water, classifying it by quality and intended use, with permitted applications that include nonpotable and industrial reuse. It also offers a clear path to potable reuse with advanced purification, monitoring, and distribution.

Project development begins with a dependable wastewater flow. Providers can plan treatment upgrades required for the target use, apply for permits, and connect the finished water with users through storage, pumping, and conveyance infrastructure. Existing treatment plants and reclaimed-water networks might create some of the h3est near-term opportunities, particularly where they already serve customers.

Industrial facilities can substitute appropriately treated reclaimed water for potable supplies in certain processes, cooling systems, or other nonpotable applications. The h3est reuse project candidates combine steady wastewater flows, treatment infrastructure suitable for upgrade, and nearby demand.

Brackish Groundwater Can Create Supply

Arizona has significant brackish groundwater resources that could be developed as water supplies, including four areas selected for deeper hydrogeologic evaluation. The statewide inventory offers communities an important starting point for investigating these resources.

Providers can evaluate an aquifer by:

• Confirming sustainable yield
• Determining the depth and thickness of the brackish zone, which can affect well construction and pumping costs
• Analyzing the chemistry
• Determining the appropriate treatment train
• Permitting the wells and facilities
• Establishing a concentrate-management strategy

Groundwater desalination produces a brine residual, while source chemistry and hydrogeology shape treatment design, recovery, and disposal options.

Proximity could make brackish groundwater particularly valuable to inland communities that would otherwise need long and costly conveyances. h3 projects coordinate source development, treatment, residuals management, infrastructure, financing, and long-term operations as a unified supply strategy.

Recharge and Groundwater Fill Different Roles

Recharge stores available water underground, supports aquifer management, and improves long-term reliability. Arizona’s permitting framework requires rights to the source water, access to a permitted storage facility, and appropriate recovery arrangements. Its role in the portfolio depends on capturing water when it becomes available and preserving it for periods of greater need.

Groundwater pumping accesses water already stored underground and can help some communities manage near-term shortages but, unchecked, it can also become one of the greatest threats to aquifers. Excessive pumping can deplete groundwater supplies and cause land subsidence, which can permanently reduce an aquifer’s storage capacity. Local aquifer conditions and Arizona’s groundwater-management framework determine how much pumping a location can sustain, with eight Active Management Areas imposing requirements.

Arizona Needs Projects That Can Deliver Water in Time

Arizona providers can compare projects by dependable yield, required infrastructure, permitting path, lifecycle cost, and first-water date. Delivery and financing decisions can influence project readiness as much as source selection. Decentralized treatment can locate capacity closer to demand, while phased infrastructure can align investment with available water and projected growth. Service-based models can integrate design, financing, construction, operations, maintenance, and compliance support.

As Arizona looks beyond traditional supplies, mature treatment technology and experienced partners can help turn more challenging resources into dependable, resilient water supplies. Seven Seas Water Group develops reuse infrastructure and offers Water-as-a-Service® (WaaS®) structures and leasing to line up treatment capacity, capital, and operating responsibility with project requirements. Schedule a consultation with Seven Seas to turn potential local resources into realized supply.

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