American Council of Engineering Companies Jennifer Brown CAWCD Board of Directors February 26, 2019 Welcome Introduce self

Central Arizona Project 336-mile aqueduct stretches from Lake Havasu to Tucson 14 pumping plants lift water nearly 3,000 feet 10 siphons, 3 tunnels Lake Pleasant/New Waddell Dam & Pump Generating Station Delivers more than 500 billion gallons of water annually Delivery began in 1985 in Maricopa County Construction complete in 1993 336-mile aqueduct stretches from Lake Havasu to Tucson 14 pumping plants lift water nearly 3,000 feet 10 siphons, 3 tunnels Lake Pleasant/New Waddell Dam & Pump Generating Station Annually delivers more than 500 billion gallons (1.6 million acre-feet) of water Delivery of Colorado River water began in 1985 in Maricopa County Construction complete in 1993 Watch CAP 101

CAP Service Area 3 counties 23,790 square miles < 8” annual rainfall 5 million people (approx. 80% of Arizona’s population) 350,000 acres of irrigated agriculture 11 Native American tribes

Who Gets CAP Water? Municipal & Industrial 33% Agriculture 26% Native American Communities 35% Recharge 6%

CAP and the Economy ASU’s W.P. Carey School of Business conducted a study to quantify the economic impact of the Colorado River water supply delivered by CAP. It has generated: Nearly $2 trillion of Arizona’s gross state product $100 billion per year in economic benefit which is ~1/3 of Arizona’s gross state product More than 1.6 million job-years in 2010 (ASU, 2014) CAP commissioned a study conducted by ASU’s W.P. Carey School of Business to quantify the economic impact of the Colorado River water supply on central and southern Arizona. We intuitively knew this number would be large, but the results even surprised some of us. To date, deliveries of Colorado River water through the CAP have generated nearly $2 trillion or Arizona’s gross state product. Deliveries of Colorado River water through the CAP generates $100 billion per year in economic benefit to the state. This equates to approximately 1/3 of Arizona’s gross state product. The water supply also fuels more than 1.6 million job years.

CAGRD’s Relationship to CAP CAGRD is not a separate entity CAGRD is a special function of CAP funded solely by its members CAGRD and CAP both serve the same three-county service area – Maricopa, Pima and Pinal CAGRD members pay CAP’s 10-cent and 4-cent property taxes and all costs of CAGRD membership CAGRD members are a subset of CAP’s constituents CAGRD is a department within CAP CAGRD serves the same three county service area as CAP CAGRD members are a subset of CAP’s constituents

CAGRD’s Role in Water Management Arizona requires new development in major metropolitan areas to have a 100-year assured water supply Entities that lack access to renewable water supplies, but have access to groundwater, may join CAGRD CAGRD membership makes groundwater use consistent with Arizona water management goals CAGRD members pay CAGRD to replenish the groundwater they use Arizona requires all new development in the major metropolitan areas to have a 100-year assured water supply Entities that lack access to renewable water supplies, but have reliable access to groundwater, may join CAGRD CAGRD does not allow “mining” of groundwater; CAGRD allows use of groundwater to be consistent with the AMA management goal by replenishing the aquifer after pumping occurs. CAGRD members pay CAGRD to replenish the groundwater they use

Colorado River Basin Upper Basin States: Colorado, New Mexico, Utah, and Wyoming Lower Basin States: Arizona, California, and Nevada 7.5 million acre-feet (MAF) annual allocation of Colorado River water for the Upper Basin, 7.5 MAF for the Lower Basin and 1.5 MAF for Mexico Lower Basin allocations: - AZ (2.8 MAF) - CA (4.4 MAF) - NV (0.3 MAF) The Colorado River Basin is divided into the Upper and the Lower Basins. Each basin was allocated 7.5 million acre feet to divide among the states. Arizona has an allocation of 2.8 MAF, and within that CAP holds an entitlement to more than half of Arizona’s supply. The Colorado River supplies about 40% of the state’s overall supply of water.

Lower Basin Water Allocation Lower Basin (AZ, CA, NV + Mex.) 9.6 MAF Lake Mead evaporation losses 0.6 MAF Average Inflow 9.0 MAF Structural Deficit 1.2 MAF Given basic apportionments in the Lower Basin, the allotment in Mexico, and an 8.23 MAF from Lake Powell, Lake Mead declines about 12 feet each year. The lower basin allocates 9.0 MAF to Arizona, California, Nevada and Mexico and about 600,000 AF is lost through evaporation on the river, riparian, etc…which means the lower basin utilizes 9.6 MAF. The primary reason for the structural deficit is that we are taking more out of the reservoir than is flowing in during normal years. When the states originally divvied up the water supply, they didn’t account for evaporation or system losses. That deficit is significant, and draws down the water elevation in Lake Mead by approx. 12 feet a year, even in “normal” water year.

Impacts of the Structural Deficit Results in a decline of 12+ feet in Lake Mead every year when releases from Lake Powell are “normal” (8.23 million acre-feet, MAF) Results in a decline of 4 feet in Lake Mead every year when releases from Lake Powell are “balancing” (9.0 MAF) Drives Lower Basin to shortage CAP forced to bear obligations of others Evaporation and other system losses Lower Basin’s half of Mexican Treaty obligation The primary reason for Lake Mead’s decline is not the ongoing drought, but rather the “structural deficit” that exists in the Lower Basin. No Lower Basin state is exceeding its apportionment. An 8.23 MAF annual release from Lake Powell is nominally sufficient to cover the 7.5 MAF apportioned to the Lower Basin states as well as one-half of the 1.5 MAF Mexican Treaty obligation. But losses due to evaporation in Lake Mead and evapotranspiration downstream of Glen Canyon Dam exceed average gains from side inflows. And the Lower Basin must also provide its half of the Mexican Treaty obligation. The net result is that the Lower Basin operates at a deficit of about 1.2 MAF per year, which causes a drop of about 12 feet annually in Lake Mead when 8.23 MAF is released from Lake Powell.

Colorado River Shortage Shortage is a reduction of Colorado River water to users and is declared by the Secretary of the Department of Interior based on the water elevation of Lake Mead. Shortage is declared in August based on projected January lake levels and take force in January for the new year. Lake Mead elevations have been declining steadily in the past 15 years. What’s causing the decline in Lake Mead? Extended drought Overallocation of the system or “structural deficit” An agreement referred to as the Shortage Sharing Guidelines was signed in 2007 and set forth how shortage would be declared in the Lower Basin and lake elevations for reductions. A shortage on the Colorado River system would be declared by the Secretary of the Department of Interior based on the water elevation of Lake Mead. Shortage is declared in August based on projected January 1 lake levels, and take force in January for the new year. Lake Mead elevations have been declining steadily in the past 15 years due to overallocation, what we call the structural deficit…which hasn’t been as obvious in recent years because of the way we have been managing the lake.

Lake Mead Decline 1075’ 1050’ 1025’ 1000 895’ Arizona takes 320 KAF shortage Arizona takes 400 KAF shortage reduction Reductions in hydropower generation Arizona takes 480 KAF shortage reduction Uncertainty about what actions Secretary will take to protect Lake Mead Potential loss of hydropower generation and instability in the electrical grid Active storage in Mead is less than CA’s allocation (~4.3 MAF) “Run of River” operations – insufficient storage to meet deliveries to AZ, CA, NV and MX Dead pool; only 2 MAF in storage As the lake level falls, Arizona takes larger reductions and the uncertainty increases about what action might be taken to protect the river, including the loss of hydropower generation which will result in instability in the electrical grid.

Colorado River Water Supply Report As of January 28, 2029 there is a total of 24.75 million acre-feet of water stored in the Colorado River system.

CAP 101

Recent Adaptation Strategies Storage and Recovery 3.4 MAF underground storage in partnership with AWBA Augmentation Weather modification projects in the Upper Basin Local and binational desalination Lower Basin Pilot Drought Response Actions MOU Interstate plan to leave 740 KAF in Mead through 2017 CAP’s share is 345 KAF – completed in 2016 Innovative Conservation (“Pilot System Conservation”) Interstate funding to conserve >75 KAF in the River Conservation research grant program Lower Basin Drought Contingency Plan (“DCP”) Legislation supporting LBDCP recently signed by Governor Ducey CAP has been collaborating to find solutions and protect our future water supplies. Those include: Storing water underground in partnership with the Arizona Water Banking Authority Participating in weather modification projects Collaborating to leave water in Lake Mead (this is what has kept us out of shortage in 2016 and 2017) Partnering with others to support innovative conservation programs Developing the Lower Basin Drought Contingency Plan

Drought Contingency Plan DCP is a set of agreements designed to protect the Colorado River system through voluntary reductions and increased conservation. The risks of Lake Mead falling below critically low reservoir elevations tripled in the past decade, increasing the risks of large scale reductions to Arizona’s Colorado River supply and threatening the health of the river for all users. What is the Drought Contingency Plan (DCP)? DCP is a set of agreements designed to protect the Colorado River system through voluntary reductions and increased conservation. The agreements were developed through a collaborative process among the federal government, states, water users and Mexico. There is an Upper Basin DCP involving Colorado, New Mexico, Utah and Wyoming, a Lower Basin DCP involving Arizona, California and Nevada, and a companion agreement which connects the two programs, as well as linkage to Mexico through a US-Mexico agreement.   Why was DCP necessary? The risks of Lake Mead falling below critically low reservoir elevations tripled in the past decade, increasing the risks of large scale reductions to Arizona’s Colorado River supply and threatening the health of the river for all users. Previous agreements and guidelines designed to protect the system against such dry times may not be sufficient to address the current risks to the system. Projections by the U.S. Bureau of Reclamation show that DCP would reduce the risks of Lake Mead falling below critical elevations. DCP provides Arizona with greater certainty for reliable and secure water supplies now and in the future.

Drought Contingency Plan Why Implement DCP? Arizona has junior priority on the Colorado River, which means its supply is cut first, and the most, during times of shortage. How did we do it? Collaborative process led by ADWR and CAP When does DCP start? DCP is expected to be signed by the states, key water users, and federal government in 2019 Why did Arizona participate in DCP? Arguably Arizona had the most to lose because of its junior priority on the Colorado River, which means its supply is cut first, and the most, during times of shortage. There was also uncertainty about what would happen if Lake Mead dipped to the very lowest levels. Arizona participated in DCP in order to reduce this risk by sharing reductions with other states and Mexico. How did we do it? In 2018, the Arizona Department of Water Resources (ADWR) and Central Arizona Project jointly led nearly 40 parties through months of public and small group meetings. During this process, new arrangements, which form a package called the Arizona Implementation Plan, were negotiated to among the parties. The package of agreements shares the burden of impacts from Colorado River reductions and the benefits of increased reliability among Arizona water users and stakeholders. These agreements are still being developed and are expected to be completed in 2019.   When does DCP start? DCP is expected to be signed by the states, key water users, and federal government in 2019. Potential reductions to Arizona’s Colorado River supply under DCP will likely begin in 2020. The DCP agreement lasts through 2026. It is anticipated that new rules will be negotiated and put in to effect after 2026.

Drought Contingency Plan Will DCP prevent a shortage? No. You should know: A Colorado River water shortage does not mean that Arizona is in a water crisis. Arizona leads the nation with rigorous water conservation and sustainability laws that protect Arizona water users. The DCP guides new ways for how Arizona cities, agricultural users, industries, tribes and others will share Colorado River water supplies during shortages. Will DCP prevent a shortage? DCP will not prevent a Colorado River shortage, but thanks to Arizona’s innovative water management programs, conservation, and collaborative long-term planning, Arizona has enjoyed reliable water supplies. With DCP and Arizona’s water management framework, we are prepared to handle the effects of drought and impending potential Colorado River shortage. You Should Know A Colorado River water shortage does not mean that Arizona is in a water crisis. Arizona leads the nation with rigorous water conservation and sustainability laws that protect Arizona water users. The DCP guides new ways for how Arizona cities, agricultural users, industries, tribes and others will share Colorado River water supplies during shortages.   What does DCP mean to me? Residents of Arizona can now be assured that future water supplies are more reliable and secure. The economies supporting the state can continue thriving based on this secure water supply.

Arizona Implementation Plan Package of agreements to helps those impacted by shortage. Roughly 40 percent of the water we use in AZ comes from the Colorado River. AZDCP impacts Arizona’s junior Colorado River priority holders, mainly CAP water users. The most significant impacts will be felt by CAP Agricultural users and CAP Cities and Tribes holding junior priority CAP water. AZDCP balances water impacts and benefits and spells out ways Arizona will conserve. Arizona Implementation Plan The Arizona Implementation Plan for DCP (AZDCP) helps those impacted by reductions in Colorado River supplies as the state transitions to an even drier future. Across Arizona, roughly 40 percent of the water we use comes from the Colorado River. AZDCP impacts Arizona’s junior Colorado River priority holders, mainly CAP water users. The most significant impacts will be felt by CAP Agricultural users as well as the CAP Cities and Tribes holding junior priority CAP water. A 40-member steering committee, representing diverse interests from across Arizona, carefully crafted AZDCP. Water managers, agriculture, cities, industry, nonprofits, tribal communities, and legislative leaders were all at the table. The resulting AZDCP balances water impacts and benefits from DCP and spells out ways Arizona will contribute to conserving more water in Lake Mead. Key components of the plan include: Water to mitigate impacts to CAP users Water conserved to benefit the Colorado River New conservation infrastructure to stretch existing supplies

CentralArizonaProject.com ~ CAGRD.com KNOW YOUR WATER Questions? CentralArizonaProject.com ~ CAGRD.com