Management of the Colorado River: Water Allocations, Drought, and the Federal Role

The Colorado River Basin covers more than 246,000 square miles in seven U.S. states (Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, and California) and Mexico. Pursuant to federal law, the Bureau of Reclamation (Reclamation, part of the Department of the Interior) manages much of the basin’s water supplies. Colorado River water is used primarily for agricultural irrigation and municipal and industrial (M&I) purposes; it is also important for tribal uses, hydropower production, fish and wildlife, and recreational uses. Since the onset of dry conditions in the early 2000s, storage levels at the basin’s federal reservoirs have fallen. Pursuant to existing authorities, the Secretary of the Interior, through Reclamation, is currently leading a process analyzing potential “long-term” (post-2026) operational changes to the Colorado River system. River Management A collection of compacts, treaties, statutes, and other authorities govern Colorado River allocations and apportionments. The foundational management document, the Colorado River Compact of 1922, established a framework to apportion water supplies between the river’s Upper and Lower Basins, divided at Lee Ferry, AZ. The compact allocated 7.5 million acre-feet (MAF) annually to each basin, and a 1944 treaty made an additional 1.5 MAF in annual flows available to Mexico. A Supreme Court case and related decrees inform the Secretary of the Interior’s management of the delivery of all water below Hoover Dam. Consumptive use plus other water losses (e.g., evaporation) on the Colorado River typically exceed the basin’s flows. This imbalance, coupled with a long-term drought dating to 2000, has stressed basin water supplies. Reclamation closely tracks the status of two large reservoirs—Lake Powell in the Upper Basin and Lake Mead in the Lower Basin—as indicators of basin storage conditions. Since the onset of dry conditions in the early 2000s, storage levels at these reservoirs have fallen. To alleviate these trends, water releases from both lakes have been tied to specific water storage levels. Since 2020, Reclamation has reduced water deliveries in Arizona and Nevada and reduced its deliveries to Mexico based on falling Lake Mead storage levels. In the Upper Basin, Lake Powell’s storage also has continued to drop; some worry this could jeopardize hydropower generation at Glen Canyon Dam. Efforts to Address Drought The federal government has led multiple efforts to improve the basin’s water supply outlook, resulting in collaborative agreements in 2003, 2007, 2019, and 2023 that reduced water use and increased operational flexibilities, among other things. In the most recent agreement, the three Lower Basin states agreed to “near-term” (i.e., 2023-2026) conservation of 3.0 MAF, with 2.3 MAF of these reductions compensated using federal funds from P.L. 117-169, commonly referred to as the Inflation Reduction Act. Despite these efforts, storage levels throughout the basin have continued to fall, and pose widespread concerns among observers and stakeholders. With previous agreements set to expire at the end of 2026, Reclamation is currently leading an effort to study and implement post-2026 operations that account for the realities of the basin’s hydrology. To date, Upper and Lower Basin state leaders have been unable to agree on a preferred set of actions to guide these operations. In January 2026, Reclamation published a Draft Environmental Impact Statement (DEIS) with four potential action alternatives for post-2026 operations, but has yet to identify a preference among these options. Three of the four DEIS alternatives appear to require action by Congress for implementation. Reclamation plans to finalize a post-2026 operational plan by October 1, 2026. Congressional Role Congress funds and oversees management of the basin’s federal water and hydropower facilities. It has approved legislation affecting Colorado River water allocations (e.g., Indian water rights settlements) and authorizing water shortage plans and mitigation funding. In considering post-2026 basin operations, Congress may weigh whether or not to act on secretarial requests for new or modified authorities, or whether to issue other authorities and/or directives for river management. If the Secretary recommends an operations option that relies on congressional enactment of new or modified authorities and Congress does not act, the Secretary may be forced to limit post-2026 activities to those available under existing authorities and funding.