On May 22, the Department of the Interior (DOI) announced a consensus agreement to conserve water in the Colorado River System. Arizona, California, and Nevada have agreed to take less water from the drought-strained Colorado River, a breakthrough agreement that, for now, keeps the river from falling so low that it would jeopardize water supplies for major western cities like Phoenix and Los Angeles as well as for some of America’s most productive farmland.

The agreement calls for the federal government to pay about $1.2 billion to irrigation districts, cities, and Native American tribes in the three states if they voluntarily use about 2.3 million acre-feet less water than they would otherwise be entitled. The Interior Department said it would use the Inflation Reduction Act to pay farmers and other users for saving water. The states have also agreed to make additional cuts beyond the ones tied to the federal payments to generate the total reductions needed to prevent the collapse of the river. Taken together, those reductions would amount to about 13% of the total water use in the lower Colorado Basin — among the most aggressive ever experienced in the region, and likely to require significant water restrictions for residential and agriculture uses.

“I commend our partners in the seven Basin states who have demonstrated leadership and unity of purpose in developing this consensus-based approach to achieve the substantial water conservation necessary to sustain the Colorado River System through 2026,” said DOI Deputy Secretary Tommy Beaudreau. “Reclamation’s SEIS process succeeded in facilitating this agreement, and we will carry forward the consensus proposal by analyzing it under the SEIS.”

The Colorado River supplies drinking water to 40 million Americans in seven states (AZ, CA, CO, NV, NM, UT, and WY) as well as part of Mexico and irrigates 5.5 million acres of farmland. The electricity generated by dams on the river’s two main reservoirs (Lake Mead and Lake Powell) powers millions of homes and businesses.

The agreement runs only through the end of 2026 and still needs to be formally adopted by the federal government, and on June 15 the Bureau of Reclamation initiated that process with a notice of intent posted in the Federal Register. At that point, all seven states that rely on the river could face a deeper reckoning, as its decline is likely to continue. However, this winter’s heavy snows are driving up water levels across the West, including in Lake Powell, where the reservoir is rising almost a foot a day. Experts say that unexpected bounty has given regulators and water users breathing room but caution it’s not a solution. In most years, farms, cities, and tribes use around 13 million acre-feet of the Colorado River’s water, which is significantly more than the 11 million acre-feet of rain and snow that feeds into the river system in an average year.