CAGRD's Authority to Hold Water Rights

The CAGRD's authority to obtain water supplies is broad. According to existing state law, CAGRD may:

• Acquire, transport, hold, exchange, own, lease, store or replenish water, except groundwater withdrawn from an active management area, subject to the provisions of title 45, for the benefit of member lands and member service areas, and
• Acquire, hold, exchange, own, lease, retire or dispose of water rights for the benefit of member lands and member service areas. (ARS § 48-3772.B.)

Further, the statutes anticipate that someday the CAGRD may hold an allocation of CAP water. In describing the requirements for the Plan of Operation, ARS § 45-576.02.D. states:

The information required by subsection C, paragraphs 2 and 6 of this section need not be included in a conservation district's plan if the conservation district demonstrates to the director that it has obtained an allocation of central Arizona project water in an amount that equals or exceeds the projected groundwater replenishment obligation for the twenty calendar years following the submission of the plan.

Excess CAP Water

The current CAGRD Plan of Operation, which was approved by the Director of the Arizona Department of Water Resources (ADWR) in 1995, indicates that there will be sufficient excess CAP water available to meet all CAGRD replenishment obligations through the year 2014. Excess CAP water is defined as water from the Central Arizona Project that is available for delivery, but not ordered by CAP contract and subcontract holders.

Long-Term Storage Credits Earned with State Demonstration Funds

CAGRD holds rights to 287 AF of long-term storage credits in the Phoenix Active Management Area (AMA). These credits were earned in 1994-96 at the Granite Reef Underground Storage Project (GRUSP) using State Water Storage (State Demonstration) funds. Although more than 143,000 AF were stored using these funds, the Director of ADWR determined that only 0.2% of the accrued credits should be given to the CAGRD. The remaining 99.8% (143,046 AF) was made available for use only by non-CAGRD municipal and industrial users.

CAWCD's Long-Term Storage Credits Dedicated to CAGRD

During the period 1992-1996, CAWCD earned credits through storage at groundwater savings facilities (in-lieu recharge projects). CAWCD currently holds 646,998 AF of long-term storage credits (of this total, 195,796 AF are in the Phoenix AMA, 449,397 AF are in the Pinal AMA, and 1,805 AF are in the Tucson AMA). CAWCD's purpose for storing this water was to improve CAP system reliability by developing a water supply that could be delivered to subcontractors during times of shortage or canal outages. The establishment of the Arizona Water Bank (Bank) eliminated the need for CAWCD to maintain these credits for system reliability. The Bank is storing excess CAP water for reliability purposes using State Water Storage funds.

A.R.S. §48-3713 B.11. authorizes CAWCD to assign its long-term storage credits to the CAGRD account, so long as CAWCD receives "fair value" for the credits. Because the credits were no longer needed for their original purpose, at their July 1, 1999, meeting, the CAWCD Board of Directors adopted a policy under which all long-term storage credits currently held by CAWCD in the Phoenix and Tucson AMAs, and up to 100,000 AF of the credits currently held in the Pinal AMA, are dedicated for exclusive use by the CAGRD. As the CAGRD needs the credits to offset replenishment obligations in the future, CAWCD will transfer the credits to the CAGRD and CAWCD will be paid no less than the CAP M&I water price per acre-foot, including capital.

CAP Subcontract

The CAGRD is in the process of trying to secure its own subcontract for M&I priority CAP water through transfers from water providers that currently hold a CAP subcontract. One reason that the water providers are willing to transfer their CAP subcontracts is that the lands within their service areas are being issued Certificates of Assured Water Supply by ADWR based on the land's enrollment as Member Lands of the CAGRD. Because CAGRD is taking on a water supply commitment to replenish for these lands, the CAGRD is a logical recipient of the transferred CAP subcontracts.

CAGRD is also interested in obtaining a subcontract right to non-Indian agricultural (NIA) priority CAP water in addition to the M&I priority subcontracts discussed above. Such NIA priority subcontract supplies may become available in the next few years as a result of ongoing Indian water rights settlement negotiations. It appears that a total annual NIA entitlement of about 96,000 acre-feet may become available. It is likely that this supply would only be available during non-shortage years on the Colorado River (i.e., only about 70% of the time after year 2050). It should be noted that CAGRD will likely be competing with numerous other entities for this supply and will probably not receive all of it.

Advance Replenishment by CAGRD

A.R.S §48-3772.E. authorizes the CAGRD to perform advance replenishment to accrue long-term storage credits for future needs. CAGRD currently holds 956 AF of credits in the Phoenix AMA and 1,231 AF of credits in the Tucson AMA under this program.

Other Potential Water Supplies

Other water supplies will require significant up-front funding and commitments. These sources should be evaluated after the final reallocation of all CAP supplies is complete and other, less expensive options have been exhausted. The following lists some of the other methods that may be used to obtain long-term water supplies.

• Long-term leases of Indian water; 
• Agreements to use reclaimed effluent; 
• Imported groundwater; 
• Land fallowing agreements.