New law means ‘water banking’ set to begin in Nevada and Arizona

The legislation will, for example, allow Arizona or California to store unused Colorado River water in underground aquifers. Users in Nevada would then pay for the cost of the storage. In exchange, users would be entitled to draw additional Colorado River water that would otherwise not be available under the Federal laws governing the river’s allocation.

“Water banking is a concept that makes economic sense and it is an important tool for meeting the water needs of rapidly growing areas like Southern Nevada,” Senator Harry Reid said. Reid has played instrumental role in developing the rule.

“I am extremely pleased that officials from Arizona and Nevada can now sit down at the bargaining table and reach an agreement that will be beneficial for both states and will set a model for private cooperation among lower basin water users,” Reid said. “While it may seem unfair, Nevada will probably never receive a greater share of Colorado River water than it does today. Instead we must look for more solutions like water banking to meet our needs for the 21st century and beyond.

“In the western USA, water remains one of our most precious commodities. This new rule will help create a marketplace where communities can turn for new water sources to meet the demands of growth or economic development,” Reid said.

Arizona, California and Nevada are apportioned a total of 7.5 million acre feet (9.25 Bn cubic metres) of Colorado River water annually under the 1922 Colorado River Compact. The water was further apportioned among these states by the 1928 Boulder Canyon Project Act, which allocated 300,000 acre feet (370M cubic metres) annually to Nevada, 2.8 million acre feet (3.45Bn cubic metres) annually to Arizona, and 4.4 million acre feet (5.43Bn cubic metres) annually to California.

Because demand for Colorado River water in the Lower Basin is exceeding supplies in a normal year, the US Department of the Interior, the states, and other interested parties have been exploring more flexible approaches for voluntarily addressing water supply needs. According to the Department of the Interior, this final rule reflects the most promising of these new approaches.

“This rule represents an historic step toward water management of the Colorado River in the 21st Century,” said Secretary for the Interior Bruce Babbitt. “We now have a framework in place to facilitate the movement of water among the three lower basin states. By developing voluntary arrangements under the authority of this new rule, states that are facing significant water needs, such as Nevada, have an important new tool for assuring adequate water supplies for their futures.”

The new rule does not change the existing laws which govern the Colorado River, nor does it change in any way a state’s individual Colorado River apportionment. The rule also does not address intrastate water storage and distribution, nor does it affect any Colorado River water entitlement holder’s right to use its full entitlement.

In addition, the rule stipulates that the Secretary of the Interior will be responsible for ensuring compliance with the National Environmental Policy Act and the Endangered Species Act.