The AWBA provides a mechanism to assist other Lower Basin States through interstate water banking. By storing water and accruing long term storage credits (LTSCs) for other Lower Basin states, the Water Bank can secure future supplies on their behalf. When these supplies are needed, the credits will be recovered (pumped) and delivered to an Arizona water user in place of Central Arizona Project (CAP) water. This "frees up" an equal portion of Arizona's Colorado River entitlement that will be diverted by the storing partner.
When Arizona established the interstate banking program, it was based on a set of guiding principles.
- Arizona could use its excess CAP supplies for interstate banking purposes, as long as it did not impact Arizona uses.
- Interstate banking was only intended to serve as an interim supply.
- The interstate party had to show that they were working on other water projects and provide status updates. The interstate storing party had to pay the full cost for storage and the costs to pump or recover the stored water in the future.
In 1999, the Secretary adopted the off-stream storage rule (43 CFR Part 414) that established a procedural framework for carrying out interstate water banking. The State of Arizona, acting through the director of ADWR, determined that the off-stream storage rule is consistent with Arizona’s statutory framework for interstate banking and consistent with Arizona water policy.
Interstate banking requires a number of interrelated agreements:
- Interstate Banking Agreement - An agreement between the AWBA and the storing party which specifies the interstate banking relationship among the parties.
- Storage and Interstate Release Agreement - An agreement between the Interstate Parties and the Secretary of Interior which establishes the contractual framework necessary for facilitating off-stream storage (43 CFR Part 414) and the future use of that stored water through the development and release of intentionally created unused apportionment (ICUA).
- Development of ICUA Agreement - An agreement which is linked to the SIRA and essentially refines the provisions in the SIRA. The agreement between the AWBA and CAWCD for the Development of ICUA addresses the recovery aspects for creating ICUA. The AWBA stores water and is the entity that certifies the development of ICUA. However, the AWBA is not authorized to recover the water it has stored in order to create ICUA. CAWCD is the AWBA’s recover partner for the purpose of recovering water to create ICUA.
- Recovery Agreement - An agreement that is linked to the Storage and Interstate Release Agreement (SIRA) and defines the recovery agreement between the interstate parties and CAWCD to address recovery schedules, quantities, payments etc.
SOUTHERN NEVADA WATER AUTHORITY (SNWA)
In 2001, the AWBA entered into an interstate banking agreement with the State of Nevada, specifically the Southern Nevada Water Authority (SNWA) in conjunction with the Colorado River Commission of Nevada (CRCN). At the time, Nevada was approaching full use of its entitlement and needed to find additional water resources to meet its future demands. Through interstate banking, the AWBA was able to provide Nevada with a bridge until additional resources could be established. Through 2019, the AWBA has accrued over 600,000 acre-feet of credits on behalf of SNWA. Some of this water also included storage of Nevada's unused Colorado River entitlement. When SNWA requests ICUA, recovered water will be delivered to an Arizona user and water that would have otherwise been delivered through the CAP system will remain on the river to be diverted by SNWA. In 2010, the AWBA, CAWCD, SNWA and CRCN entered into a Recovery Agreement that describes the methods that can be used for recovery and development of ICUA.
SUMMARY OF AMENDED AGREEMENTS
Third Amended and Restated Agreement (2013) – The 2013 Agreement is the agreement currently in effect between the AWBA, SNWA, and CRCN. Pursuant to the 2013 Agreement, the AWBA may store either unused Arizona apportionment or unused Nevada apportionment within Arizona for the benefit of Nevada.
The history of agreements and amendments between the AWBA, SNWA, and CRCN are described below:
- Agreement for Interstate Water Banking (2001) – The original agreement allowed for interstate banking using excess CAP water or Nevada’s unused apportionment. The goal was to accrue 1,200,000 acre-feet of credits, the amount SNWA anticipated it would need to meet future demands. Payments for water storage costs occurred at the time of storage.
- First Amended Agreement (2005) – Arizona commits to accrue 1,200,000 acre-feet of interstate credits. Nevada agrees to pay the water storage costs and provides $100 million to Arizona intended as “insurance” in the event the AWBA needed to acquire other sources of water in order to meet this obligation to Nevada.
- Second Amended Agreement (2009) – The second amended agreement modified certain provisions of the agreement, including performance dates, annual quantities of ICUA developed and administration fees.
- Third Amended and Restated Agreement (2013) – The AWBA’s obligation to accrue 1,200,000 acre-feet of credits is removed. All the monies paid by SNWA to date are considered payment in full for the credits that have been accrued. Any future storage is paid at the time of storage.