The Central Arizona Project

With the President's signature on September 30, 1968, the Colorado River Basin Project bill became law. The heart of the measure is the $832 million Central Arizona Project (CAP) which will bring approximately 1.2 million acre-feet of water annually from Lake Havasu on the Colorado River to the Phoenix and Tucson areas of Central Arizona. The amount authorized for the entire Colorado River Project was $1.3 billion, the largest single-package Reclamation authorization bill ever approved. Funds will have to be appropriate at a later date.

The CAP has been a key feature of the long-lived controversy over use of Colorado River waters. The Colorado flows 1,300 miles from headwaters in Wyoming and Colorado through some of the most arid portions of the United States to empty finally into the Gulf of California. Following World War 1, concern for potential water shortage in parts of the basin grew to the point that commissioners were appointed by the affected states and the federal government to design an interstate compact governing the use of the river's water. Herbert Hoover, then Secretary of Commerce, chaired the Commission which, in 1922, drafted the Colorado River Compact.

The Compact was finally approved by Congress in 1928 as part of the Boulder Canyon Project Act, although Arizona didn't ratify until 1944. The Compact divided the basin into two major sub-basins. It allocated the then estimated flow of 16 million acre-feet (maf) per year by giving the upper basin 7.5 maf and lower basin 8.5 maf with the upper basin required to provide a ten-year average of 7.5 maf for lower basin use. The Compact did not allocate the lower basin water among the lower basin states. Congress tried, in the Boulder Canyon Project Act, to reach a compromise which would restrict California to 4.4 maf per year out of the first 7.5 maf available plus one-half of the surplus, with Arizona receiving 2.8 maf and Nevada 300,000 af. It was estimated that 1.0 maf would be lost through evaporation in the lower basin, leaving a total of 7.5 maf to be allocated. While these basic figures were not disputed, strong controversy arose on two points: (1) Should Arizona's 2.8 maf include the use the state made of waters from the Gila, a Colorado tributary? (2) How would shortages be allocated should the streamflow fall below 7.5 maf? In the famous Arizona vs California decision (1963), the Supreme Court reaffirmed the above allocation, decided in favor of Arizona on the first point, but failed to rule on the second.

It would be difficult for Arizona to use its total allotment without transporting some of the water to the prosperous and populous Central Valley. Bills were introduced into Congress in 1948 to effect this transfer, and Senate bills were introduced in 1950, 1951, and 1967, but none reached the House floor.

The largest feature of the recently passed authorization is the CAP, which will bring new water to one of the fastest growing areas of the an area now almost completely dependent on groundwater. Large new distribution facilities will be required to handle a surface supply and a sum of $100 million was authorized for this purpose. Projects were also authorized for Colorado, New Mexico, and Utah.

Several unique features were included in the bill. Power needed to pump the water will come from a private steam plant and is being paid for in advance to insure that plant will be built to a scale permitting a low power price. This move was spurred primarily by earlier public rejection of the Marble Canyon and Hualapai power dams on the Colorado, and marks an important precedent for a public agency which has historically been tied to hydroelectric power.

Another feature was the priority given in perpetuity to California for 4.4 maf. Thus, if the Colorado's flow drops below 7.5 maf, the shortage will be absorbed largely by Arizona and its CAP. The 4.4 maf guarantee is, however, 700,000 af short of what California is currently using, so that some reduction in California use is certain to be required before the guarantee comes into effect.

The United States entered into a treaty with Mexico in 1945, guaranteeing them delivery, with some ill-defined exceptions, of 1.5 maf per year. The newly enacted bill makes this delivery a responsibility of the nation as a whole, relieving basin users of an additional possibility of shortage in low-flow years. Just how the "nation as a whole" is supposed to fulfill the treaty is not stated, but it is clear that this provides an impetus for federal transfers of water into the basin. Thus, after many years of litigation and argument the CAP has been authorized on the assumption that it will benefit the state of Arizona. The Bureau of Reclamation claims benefits well in excess of costs. In annual terms, benefits of $75.4 million are claimed for irrigation; $18.6 million for municipal and industrial uses; $5.1 million for power sales; $0.6 million for recreation; $1.6 million for fish and wildlife; $0.8 million for flood control; and $0.3 million for "area development." The overall benefit-cost ratio computed by the Bureau is 2.5 to 1.

Other studies have not been so optimistic about the beneficial impact that CAP will have on the Arizona economy. One analysis of its impact on agriculture argues that, based on common assumptions concerning the prices at which CAP water will be made available, farmers will be forced out of business faster through being required to buy CAP water than they would be if they were to continue to use groundwater. If the water problem is perceived as a physical matter of groundwater overdraft, the solution may be to import surface water from other river basins. If, however, the problem is one of obtaining maximum economic growth for the state, the reallocation of existing supplies to higher value uses appears likely to be the best policy.

Another study has projected through the year 2006 the impact on agriculture of the falling water table in Pinal County, Arizona. According to this projection, total cropped acreage will drop by 50 percent between 1966 and 2006, but the loss of net income to agriculture will be only 14 percent. Feed grains and alfalfa—heavy water-using but low-income crops—will account for most of the phase-out. The implied value of this water is $9 per acre-foot—far below the cost of CAP water which (for physical transfer to irrigation districts only) is estimated to be $35 per acre-foot. The case for CAP is still uncertain. There appear to be enough questions about the economics of the Project to warrant careful scrutiny before final appropriations are made.