December 2012, Issue 66: Editors’ Notes

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Another water supply is shaking loose in Arizona, offering new and interesting opportunities.

In our last editorial, we presented news of the Gila River Indian Community’s plans to begin selling long-term storage credits and to lease 30,000 AF of its CAP water for 100 years — a development that opens doors to the future use of CAP water anywhere in the state. Another emerging water supply is CAP “Non-Indian Agriculture” water. ADWR, in cooperation with the CAP and Reclamation, has begun the process to permanently allocate 75,782 AF of this NIA water to interested parties in accordance with the terms of the Arizona Water Settlement Act and other legal agreements. Of the initial pool, 12,000 AF are reserved for industrial users and about 12,000 AF are reserved for water providers in certain Pinal County irrigation districts that have right of first refusal; the remaining 52,000 AF are available to other water providers, including the CAGRD.

According to the agencies’ proposal, applicants must demonstrate their ability to pay for and use the NIA water by 2020 to be eligible for this supply, establishing a hierarchy that may not please all parties. The proposal also calls for all eligible applicants to receive a share. CAP’s preliminary price estimate for the water is $2,288/AF. This is a one-time acquisition cost; as with all CAP contracts, annual cost-of-delivery charges will also apply. Additionally, all proposed contracts must comply with NEPA and be authorized by the Secretary of Interior. ADWR is currently reviewing public comments and expects to release the final policy by year-end.

Unlike the GRIC supplies, NIA water has a lower priority on the CAP system than the M&I and Indian contracts. In fact, ADWR estimates that the annual NIA allocation could be reduced by anywhere from 6,000 to 60,000 AF — and it’s possible this supply may not even be available in some years, depending on basin hydrology and usage by on-river contractors. However, despite its lower reliability, there is still a great deal of interest in this water supply. Because of the robust system of recharge and recovery that has been developed in Arizona over the past two decades, NIA water can be used directly or stored underground to round out a municipality’s water portfolio.

Like GRIC water, this new NIA supply is actually a reallocation that is already being sold as excess water by CAP via year-to-year contracts. By moving more CAP water into permanent contracts or long-term leases, competition may begin to increase for other water supplies in Arizona.

Juliet M. McKenna, MS, PG | Michele Robertson, PG