Arizona water officials developed a plan this week to address mandatory Colorado River water cutbacks set to begin January 1, 2027. The plan responds to federal operating rules requiring Arizona to reduce its water use by 760,000 acre-feet annually in 2027 and 2028, representing about 27% of the state’s Central Arizona Project supply, officials said.
The new federal operating guidelines, signed by the U.S. Department of the Interior on August 21, 2026, and effective October 1, 2026, require Arizona, California, and Nevada to reduce their combined Colorado River water use by 1.25 million acre-feet annually during 2027 and 2028, according to federal records.
Arizona is expected to absorb the largest share of these initial cuts, with a mandatory reduction of 760,000 acre-feet per year, which represents about 27% of the state’s Central Arizona Project (CAP) supply, officials from the Arizona Department of Water Resources said.
Arizona’s normal Colorado River allocation is approximately 2.8 million acre-feet, but much of its CAP water has a lower legal priority compared to California’s and Nevada’s supplies, resulting in a larger proportional reduction for the state, according to water officials. The 760,000-acre-foot figure assumes that the Lower Basin states implement their proposed agreement for sharing the federal reductions, sources confirmed. The reductions are scheduled to begin January 1, 2027, rather than during the remainder of 2026, Arizona Department of Water Resources Director Tom Buschatzke said.
Buschatzke described the reductions set for 2027 and 2028 as providing “substantial stability” while longer-term negotiations continue. However, he warned that Arizona does not accept a framework that would give the federal government broad discretion to impose potentially larger cuts every two years. In an August 2026 letter, Buschatzke rejected extending the largest potential reductions—up to 3 million acre-feet per year or about 40% of the Lower Basin states’ combined allocations—beyond the initial two-year period. Governor Katie Hobbs also noted that without a Lower Basin agreement, Arizona could face cuts of up to 77% of its CAP supply in 2027 and 2028, according to her public statements.
Arizona, California, and Nevada have proposed a three-state conservation agreement that includes mandatory reductions totaling at least 1.25 million acre-feet per year during 2027 and 2028, as well as pursuing at least 700,000 acre-feet of additional voluntary conservation over the next two years, officials said. The voluntary conservation efforts are intended to preserve additional water in Lake Mead, the principal reservoir serving the Lower Basin. Federal payments may be used as incentives for some voluntary conservation projects, sources confirmed.
To help manage the reductions, Arizona cities may be allowed to draw on a state water savings account, which could provide up to 12,308 acre-feet in 2026 and up to 56,179 acre-feet in 2027, according to reporting on the proposed response. This account is being considered as a limited buffer to help municipalities manage short-term supply disruptions while longer-term agreements are negotiated, not as a replacement for conservation, officials said.
The Central Arizona Project is expected to bear much of Arizona’s reduction because its Colorado River water has a lower legal priority, according to coverage of the federal plan. The 760,000-acre-foot reduction is approximately 30% of the state’s overall Colorado River allocation and about 27% of the state’s total CAP supply, according to the Arizona Department of Water Resources. While municipal water systems are not expected to lose all Colorado River deliveries under the plan, the cuts are anticipated to increase pressure on water providers, conservation programs, and customer rates, with some reports indicating that water bills in Arizona could rise.
As of October 2, 2026, Arizona, California, and Nevada were still negotiating how to distribute the reductions among themselves. Arizona’s top Colorado River negotiator described the discussions as progressing with optimism but noted that the final allocation formula was not yet complete. The federal framework for Colorado River operations extends through 2036, and the states must develop a longer-term arrangement for water management after the initial two-year mandatory reductions end in 2028, officials said.
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