Phoenix Orders Full Entitlement of CAP Water for Storage and Recovery Agreements

The Central Arizona Water Conservation District (“CAWCD”) has announced that, for the first time in its history, the City of Phoenix ordered its full entitlement of Central Arizona Project (“CAP”) water for 2017. Phoenix currently does not use its full entitlement, but the city has agreements with the City of Tucson and the Metropolitan Domestic Water Improvement District (“Metro Water”) that allow for the unused portion to be stored in aquifers in the Tucson area.

The agreements govern a pilot project in which Phoenix directs unused CAP water to Tucson’s Southern Avra Valley Storage and Recovery Project (“SAVSRP”) and Metro Water’s Avra Valley Recharge Project (“AVRP”), where it is recharged, stored and converted into long-term storage credits (“LTSC”). If there is a shortage that impacts CAP municipal and industrial (“M&I”) users, LTSC will be recovered for use in the Tucson area, and Tucson and Metro Water will have a like volume of their CAP water delivered to Phoenix.

The original agreement with Metro Water, which was executed in 2014, provided for the storage of 150 AF in 2015. An amendment in 2015 provides for storage of 1,500 AF in 2016, and a second amendment in 2016 increased the volume to 3,500 AF per year for 2017 and 2018. Phoenix paid storage fees of $15.91/AF in 2015 and $16.39/AF in 2016 to cover Metro Water’s Operation and Maintenance (“O&M”) costs. In 2017 and 2018, storage fees will include capital charge of $15.04/AF, plus O&M charges of $16.88/AF and $17.39/AF—which brings the total storage fees to $31.92/AF and $32.43/AF.

Under the original agreement with Tucson, which was also executed in 2014, Phoenix stored 850 AF in 2015 and 4,000 AF in 2016. An amendment executed in late 2015, extends the agreement for five years and allows the annual volume stored to be determined by the water department directors. Water storage fees, which cover Tucson’s O&M costs, were set at $16.58/AF in 2015, $17.08/AF in 2016, $17.59/AF in 2017 and $18.12/AF in 2018.

The storage of CAP water to offset future shortages is known as firming. Firming services are provided by the Arizona Water Banking Authority and CAWCD, but projections show that the firming goal for the Tucson Active Management Area (“AMA”) will be short 260,900 AF by 2023. As result, CAP subcontractors in the Tucson AMA are engaging in self-firming. Phoenix’s agreements with Tucson and Metro Water are touted as evidence that inter-AMA firming is also a feasible water management solution.

The innovative and collaborative nature of the agreements has also been lauded.

“This is exactly the kind of innovative and cooperative arrangement that Arizona is known for, and CAP is central to making it work,” said CAWCD General Manager Ted Cooke.

The cities have announced plans to expand the project. While agreements have not been executed, general terms have been presented. Phoenix and potentially other subcontractors in the Phoenix AMA would fund an expansion of SAVSRP allowing Phoenix to store up to 40,000 AF per year. The CAP System Use Agreement, which is in development between U.S. Bureau of Reclamation and CAWCD would facilitate the arrangements between the cities. The CAP System Use Agreement would authorize CAWCD to deliver recovery exchange water, replenishment exchange water and non-project water for firming, on-river firming and interstate agreements and would establish a standard form wheeling agreement for wheeling of non-project water. (For additional information on the CAP System Use Agreement, see “Central Arizona Project Holds Workshop on Firming, Wheeling and Exchanges,” JOW February 2016).


Written by Marta L. Weismann