Arizona's In-State Surface Water Resources: Appropriable Water Fosters Economic Development
May 16, 2023
By John D. Burnside, Fred Breedlove, John Habib, and L. William Staudenmaier
This article is Part 3 of a series providing information about the resilience of Arizona’s water supplies during a time in which the news is dominated by stories about drought and scarcity. As we noted in Part 1, Arizona has a very diverse water portfolio to draw on, including Colorado River water, in-state surface water, groundwater, recycled water, and large quantities of water stored in underground aquifers. Part 2 addressed law and policy surrounding the availability of groundwater as a partial solution to many of the water supply challenges that Arizona’s communities face. This article turns our attention to another important component of Arizona’s water supply that has been widely utilized to support the economic growth of the state — in-state surface water.
The Nature of In-State Surface Water
In-state surface water includes water from lakes, rivers and streams that flow within the state’s boundaries. This resource is considered renewable because it regenerates with the rain and snow that fall seasonally within the watersheds of Arizona’s rivers and streams. As is typical in a semiarid climate, natural flow of this system is seasonal, with greatest flows expected during the late summer monsoon and spring runoff season and the lowest flows in mid-summer. Moreover, lengthy drought cycles interspersed with periods of relatively abundant precipitation are common in Arizona. To manage the highly variable flow of surface water, storage reservoirs and delivery systems have been constructed throughout the state. Most notable are the major reservoir storage systems on the Salt, Verde, Gila and Agua Fria Rivers.
According to the Arizona Department of Water Resources, in-state surface water makes up 18% of Arizona’s water supply. Availability of in-state surface water is highly dependent on location. For example, the City of Flagstaff relies on the flow of Walnut Creek, impounded in Upper Lake Mary, for a substantial portion of its municipal water supply. At the other end of the spectrum, agricultural operations in the upper Gila River valley utilize flow diverted from the Gila River. The Salt River Project (SRP), which impounds and transports water from the Salt and Verde River watersheds to the Phoenix metro area, supports a very significant use of in-state surface water, as discussed further below. However, unlike the Phoenix metro area, Tucson has no appreciable source of in-state surface water and must rely entirely on other sources for its municipal supply.
In-state surface water is distinct from Colorado River water. Flow from the Colorado River, while also a major source of surface water for Arizona, is an interstate resource managed by the federal government for the benefit of multiple states under a framework of federal law. Importantly, in-state surface water, while affected by drought, is not subject to the current reductions in supply mandated by the U.S. Secretary of the Interior’s shortage declaration. In-state surface water is also not impacted by the U.S. Bureau of Reclamation’s recently released Near-term Colorado River Operations Draft Supplemental Environmental Impact Statement (SEIS), which evaluates future cuts in Colorado River deliveries to avoid potentially dire consequences if the status quo is maintained while reservoir volumes continue to shrink. The plight of the Colorado River resource will be addressed in the next article in this series.
Doctrine of Prior Appropriation
In-state surface water is subject to a highly restrictive legal doctrine that limits who may use the water where, and for what purpose. This doctrine, known as prior appropriation, imposes the principle of “first in time, first in right” on the use of surface water. Thus, under Arizona law, the first person to divert and beneficially use water from a source of surface water acquires the senior right to use water from that source — assuming certain legal formalities are satisfied to perfect the water right. A use established later — i.e., a junior right — that interferes with a senior right must yield, providing a significant advantage to the senior “prior appropriator” in times of shortage. See Clough v. Wing, 2 Ariz. 371, 377-79, 382-83 (1888). Moreover, water rights grounded in prior appropriation are appurtenant to land and usually must be used at the same place, for the same purpose, and in the same amount as the original beneficial use supporting the right. An Arizona statute authorizes severance and transfer of surface water rights, but requires the right holder to meet certain standards through an administrative process that can be difficult and expensive to complete. See A.R.S. § 45-172. As explained below, the doctrine of prior appropriation places significant constraints on the usage of in-state surface water.
Shifting Use of Surface Water in Metro Phoenix: Agriculture to Urbanization
From pre-statehood times through much of the 20th century, Arizona’s economy was dominated by agriculture. Given the limited availability of surface water in this arid state, it is perhaps not surprising that much of the state’s surface water was appropriated for agriculture during the late 19th and early 20th centuries. To this day, agriculture — which accounts for about 72% of water used in Arizona — remains an extremely important consumer of surface water. However, particularly in the Phoenix metro area, the in-state surface water historically appropriated for agriculture became a key driver of urbanization, ultimately supplying municipal water to hundreds of thousands of homes and businesses in ten developing cities and towns.
SRP is the organization behind the historic shift from agricultural use of in-state surface water to municipal use in the Phoenix metro area. SRP, consisting of the Salt River Valley Water Users Association and the Salt River Project Agricultural Improvement and Power District, conveys surface water from the Verde River and Salt River watersheds located to the north and east of Phoenix. SRP operates a federal reclamation project composed of seven dams and lakes, of which Roosevelt is the largest, and uses a system of canals to deliver water to users in the Phoenix area.
SRP was originally organized by Phoenix-area farmers seeking to increase the reliability of water deliveries to service their water rights derived from appropriation of the flow of the Salt and Verde Rivers. During the second half of the 20th Century, as municipal development began to overtake historically irrigated land, SRP shifted its focus from delivery of water to farms for agriculture to water treatment plants for the municipalities that serve urban water uses on the land formerly occupied by agriculture. Today, the historically agricultural land served by SRP is about 90% urbanized. Within that framework, SRP delivers municipal water for an area of approximately 248,200 acres within the cities of Phoenix, Avondale, Glendale, Mesa, Tempe, Chandler, Peoria, Scottsdale, Tolleson, and the town of Gilbert.
The SRP system is quite resilient, owing to the size of its reservoir system and the diversity of its available sources. Even in the driest years, SRP has generally been able to satisfy its water deliveries with surface water, supplemented as needed with groundwater and in wetter years, such as we experienced this past winter, the system can hold large enough quantities to satisfy several years of water deliveries. In fact, this winter resulted in so much snow and rainfall in the Salt and Verde River watersheds that, as we noted in Part 1, SRP has been releasing water from its reservoirs since early March to ensure there will be enough capacity to hold expected runoff from the melting of unusually deep snowpack. In total, SRP has released nearly 700,000 acre-feet of water from its system over the past three months. While much of this water has not been consumptively used, its presence in the normally dry lower Salt River will result in substantial recharge of aquifers in the Phoenix area.
Use of In-State Surface Water Is Limited to Locations of Historical Use
Although SRP provides a resilient supply of in-state surface water for the land SRP serves, the use of the water is governed by the doctrine of prior appropriation, discussed above. Thus, even in the modern era of urbanization, SRP may only deliver water for use on lands, typically located near the Salt River, that are entitled to receive water from the Salt and Verde River system because they have appropriative water rights grounded on historical agricultural use. The former agricultural land served by SRP water in the Phoenix area — while substantial — represents only a small fraction of the region’s total urbanized area. As a result, the amount of SRP water available to a particular municipality varies greatly depending on the extent of this land, generally known as “on-project land,” within their municipal service area. For example, Tempe, located south of the Salt River in an area historically dominated by agriculture, receives about 80% of its municipal supply from SRP. By contrast, Scottsdale, with only the southernmost portion of its land “on-project”, receives less than 20% of its supply from SRP. Phoenix receives about 50% of its water supply from SRP.
Other sources of water relied upon by Phoenix-area cities that are entirely or significantly “off-project” include groundwater, Colorado River water, and treated wastewater (currently, for non-potable use only). Municipalities that receive little or no SRP water must rely heavily on these alternative sources. Scottsdale, for example, with its small proportion of on-project land, relies on Colorado River water for about 70% of its water supply. As another example, Goodyear has historically relied entirely on groundwater, but has recently constructed facilities to begin using its allocation of Colorado River water. While areas outside of SRP’s service area generally cannot benefit directly from SRP water, it bears noting that the availability of this resilient, renewable water supply to a substantial portion of the Phoenix area — which also happens to be among the most densely utilized land — effectively allows for greater utilization of alternative supplies by the municipalities that need them.
This article summarizes the principal mechanisms by which in-state surface water has supported economic development in Arizona and how it remains an important component of Arizona’s water supply. The resource is renewable and resilient, thanks in large part to the dams, reservoirs, and delivery systems that store available water for transport over large distances. However, the doctrine of prior appropriation limits use of surface water to certain locations and users that can derive water rights from historical, primarily agricultural uses.
We have only scratched the surface of this immense topic. Other considerations in the utilization of in-state surface water include the reservation under federal law of water rights to Indian lands and other federal reservations, the opportunity for instream flow rights to preserve riparian habitat, the extension of surface water appropriation doctrine to certain categories of underground water (i.e., “subflow”), and the massive general stream adjudication proceedings that will, at some point in the future, produce a comprehensive judicial decree of appropriative water rights. These considerations, while important, are beyond the scope of our series. Our next article in the series will turn to “The Law of the Colorado River,” where we will address the priority system, the causes and impacts of shortage, and consider what the future might have in store.
©2023 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.
The material in this newsletter may not be reproduced, distributed, transmitted, cached or otherwise used, except with the written permission of Snell & Wilmer.