Phoenix Gives Up Water Rights For $60 Million In Federal Funding

Phoenix Gives Up Water Rights For $60 Million In Federal Funding

By Corinne Murdock |

On Wednesday, the city of Phoenix gave up its water rights for $60 million in federal funding that may be used for infrastructure. The city cited the historic drought as necessary for its forfeiture.

The trade is a deal offered by the Biden administration to those with Colorado River rights: voluntarily forfeit their water allotment, and in return receive millions of taxpayer dollars. It’s a deal that Tucson also took up last week. 

Phoenix forfeited 150,000 acre-feet of its water in Lake Mead over the next three years, in exchange for $400 per acre-foot. 

The Biden administration financed the arrangement through the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) enacted last year and in 2021, respectively. A combined $15.4 billion from the IRA and BIL were designated for combating drought. 

The federal payments for water allocation forfeitures is part of the newly-established Lower Colorado Basin System Conservation and Efficiency Program (LC Conservation Program). 

Additional options for cities and states include shorter agreements of water forfeitures for less funding: one year for $330 an acre-foot, or two years for $365 an acre-foot. 

Mayor Kate Gallego characterized the trade as one of their moves chalking up a big win for sustainability, alongside an Active Transportation Plan to prioritize transit alternatives such as bicycles, fully electric or liquified natural gas-based buses, and an increase in trees planted.

Gallego shared that the city would apply for another federal grant to expand the number of electric vehicle chargers throughout the city.

Phoenix and Tucson follow in the tracks of Gov. Katie Hobbs, who joined California Gov. Gavin Newsom and Nevada Gov. Joe Lombardo to collectively forfeit three million acre-feet of water rights over the next three years. That plan, the Lower Basin Plan, equates to $1.2 billion in federal funding altogether.

The LC Conservation Program by the Department of the Interior (DOI) has three stages altogether, or “components.” The tradeoff of acre-feet for federal infrastructure funding makes up the first component. 

At present, the second component effectively offers a blank check to entities with effective proposals for water conservation and efficiency projects. The application window closed in November. 

Similarly, the third component requests proposals for long-term conservation. Proposals for this program component are currently open according to the DOI website.

Senior White House and DOI officials traveled to Arizona and the rest of the lower basin states in April to arrange deals for water conservation efforts.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to