CAGRD’s growing constraints are a harsh reality check that needs to be addressed

As water legislation continues to be discussed at the State Capitol, more attention is being raised about the Central Arizona Groundwater Replenishment District (CAGRD) and its role in Arizona’s water management. This increased focus stems from legislation that would place more responsibility on the CAGRD, which would jeopardize CAGRD’s ability to fulfill its existing obligations. If CAGRD fails, it would raise doubts about Arizona’s ability to effectively manage its water, thereby threatening the state's economy. Ultimately, for CAGRD and other water challenges, such as the uncertainty surrounding the Colorado River and stressed aquifers, the answer is not to weaken our water policies, but to develop and invest in new water supplies and continue to expand our conservation practices.

CAGRD is connected to the Assured Water Supply Program, which requires that, before development can occur in Central Arizona’s metropolitan regions, the water provider must demonstrate that it has sufficient water for at least 100 years. The key qualification is that the water provider – whether a city, town, or private water company – must show that it has, and will continue to use, a renewable supply such as water from the Colorado River or Salt River, and not rely solely on groundwater. 

However, when the Assured Water Supply Program was being drafted in the early 1990s, many landowners wanted to develop their lands but lacked access to renewable water supplies because they were outside of water provider service areas with a 100-year supply. They insisted that the State come up with an alternative method that would allow them to develop their lands and meet the proposed Assured Water Supply requirements. Thus, the CAGRD was created in 1993. 

So, how does the CAGRD work?  

• To develop land that is not served by a water provider with a 100-year Designation of Assured Water Supply, you must show that you have 100 years of actual groundwater supply underneath your land. In general, the groundwater that is used must be replenished or replaced with another water supply by the CAGRD, not by the developer or water provider. 
• To develop your land, you pay what some may call a nominal enrollment and activation fee to qualify your land to be a member of the CAGRD.  
• After development, the future homeowner pays the CAGRD a fee, in perpetuity, through their property tax to replenish the groundwater that was pumped. 
• The CAGRD has three years to find renewable water supplies and then replenish (replace) the groundwater pumped. The replenishment can occur anywhere in the Active Management Area (AMA), not just where the groundwater was actually pumped.  

CAGRD’s success hinges upon whether it has sufficient water supplies to replenish the groundwater pumped by its members. When it was created, CAGRD was expected to use excess Colorado River water that was available to the Central Arizona Project (CAP). However, as the word “excess” implies, it is not a permanent supply. As more CAP users fully used their allocations and the Colorado River began producing less water, the volume of “excess” CAP water dwindled to the point where there is none today. In response, CAGRD has acquired Long-Term Storage Credits, water that has been stored in the aquifer, that can be retired by not recovering it but leaving it in the ground to meet its replenishment obligation.   

After 30 years, CAGRD’s new Plan of Operation is revealing the limitations of its original structure. CAGRD currently has an annual obligation to replace or replenish 33,893 acre-feet of excess groundwater pumped. That obligation is projected to be 53,200 acre-feet by 2030, yet CAGRD’s annual water supply portfolio is 38,495 acre-feet. While CAGRD has identified potentially available water supplies over the coming decades, it doesn’t take a mathematician to see that there’s a very narrow margin between supply and demand. 

CAGRD’s growing constraints are a harsh reality check for lawmakers, developers, and homebuilders who have lobbied for ways to resume building subdivisions in the far reaches of this Valley, where groundwater is the only available supply. The State halted this development in June 2023 when the Arizona Department of Water Resources (ADWR) released a groundwater model  for the metropolitan Phoenix region, projecting that demands over the next 100 years would exceed aquifer supplies.  

Lawmakers and stakeholders have sought various methods to circumvent ADWR’s groundwater model to restart this type of subdivision development. Unfortunately, everything considered—from legislation overriding the model’s projections of unmet demand to two lawsuits  challenging ADWR’s ability to manage the Phoenix area’s groundwater and implement the rules for an Alternative 100-year assured water supply designation—would require placing additional responsibilities on CAGRD. Similarly, the current effort to draft a program to incentivize the retirement of irrigated agricultural land for urban development (Ag-to-Urban) could overextend the CAGRD if the program does not have reasonable and measured guardrails.  

Preventing CAGRD from collapsing under the weight of its obligations, which would stop even more development and hurt our economy, demands finding ways to strengthen its ability to meet current and any additional replenishment obligations. The only way to overcome this challenge is if CAGRD has the necessary water supplies to replace the groundwater pumped in those areas that depend on CAGRD’s replenishment. Therefore, we need to have tough conversations about how to keep CAGRD solvent, including how it will acquire the necessary water supplies to fulfill its responsibilities.  

That is the challenge of this moment – how to accept and address the water management obstacles that necessitate difficult choices. CAGRD’s constraints are interconnected with the limitations we are facing regarding the Colorado River, which is producing less water, and we don’t know how the federal government will decide to operate the River after 2026. CAGRD’s limitations are also directly interconnected with the constraints of an aquifer that, if further stressed by additional development that solely relies on groundwater, will put at risk current commitments to existing residents.    

Each of these limitations means making tough decisions about the inescapable connection between water security and the way and where we develop. These challenges require us to safeguard our current resources and invest in new supplies to ensure our communities continue to thrive. Such investments will be expensive but will ensure our long-term prosperity. All stakeholders – the Governor, the Legislature, ADWR, CAWCD, Salt River Project, Water Infrastructure Finance Authority, private water companies, businesses, developers, homebuilders, and municipalities – need to put together a coordinated effort to develop and invest in resources to ensure water security for everyone now and into the future.  

For additional information about the limitations of the Central Arizona Groundwater Replenishment District, check out ASU’s Kyl Center for Water Policy’s report entitled More Elusive Than Ever: Arizona’s Assured Water Supply Protections Under Colorado River Shortages and Groundwater Scarcity .