Water Authority Saves Money and Water in Three-Party Water Deal

December 01, 2023

Funded by the federal government, landmark water exchange will raise Lake Mead

The San Diego County Water Authority today announced a landmark water exchange designed to boost water levels in Lake Mead, combat upward pressure on wholesale water rates, and create a new template for water management in the arid West. 

The one-year agreement is supported by the U.S. Bureau of Reclamation and executed in coordination with the Imperial Irrigation District and the Metropolitan Water District of Southern California. It builds on the 2003 Quantification Settlement Agreement, which turned 20 years old in October, and highlights how water agencies can work together under existing laws and agreements to adapt to the changing climate. Funds to facilitate the deal are from the federal 2022 Inflation Reduction Act.

“This is a great example of what happens when we collaborate and work together. Cooperation by all three water agencies and the Bureau of Reclamation produced a creative solution that helps sustain the Colorado River.” said Water Authority Chair Mel Katz. “Today’s announcement is an innovative win-win-win solution that helps us all meet the incredible challenges we face.”

The agreement meets several goals by helping California meet conservation obligations under the Bureau of Reclamation’s Lower Colorado River Basin conservation program, supporting financial viability for participating agencies, and reducing the chances for more shortages on the Colorado. The river system has suffered drought-induced decline for more than 20 years.

For the Water Authority, the arrangement is expected to save a projected $15 million to $20 million (depending on hydrological variables), which will help offset significant upward pressure on rates due to inflation and other factors. 

Over the past several months, the Water Authority, MWD and IID have been working on ways to make the most of unusual circumstances in which the State Water Project is delivering full supplies to MWD due to a historically wet year. That has refilled reservoirs while reducing demand for Colorado River water. The MWD Board of Directors approved the agreement in November, and the IID Board followed suit on Dec. 1. 

“This transfer is an example of how Southern California water agencies are leading with creative water management,” said Water Authority General Manager Dan Denham. “This agreement is based on decades of working together through the QSA, and it makes good on our collective commitment to the river. While this is a one-year arrangement, it will open the door for additional talks between partnering agencies in 2024.”

The exchange works like this: The Water Authority will leave 50,000 acre-feet of conserved QSA water in the river, helping to raise the level of Lake Mead, which has fallen perilously low in recent years. The volume is equivalent to the amount of water used in a year by approximately 150,000 single-family homes. It’s also equivalent to about three months of San Diego County’s deliveries under the QSA, which created the largest water conservation-and-transfer agreement in U.S. history. The Bureau of Reclamation will cover the cost of the Water Authority’s QSA supplies left in the river. The Water Authority agreed to buy 50,000 acre-feet from MWD to meet current and future demands. The Water Authority’s financial savings result from the cost differential between the MWD supply rate and the rate for IID’s conserved water through the QSA.

  • The San Diego County Water Authority sustains a $268 billion regional economy and the quality of life for 3.3 million residents through a multi-decade water supply diversification plan, major infrastructure investments and forward-thinking policies that promote fiscal and environmental responsibility. A public agency created in 1944, the Water Authority delivers wholesale water supplies to 23 retail water providers, including cities, special districts and a military base.

    Media Contact Information

    Grace Sevilla

    Phone: (619) 855-5135

    Email: GSevilla@sdcwa.org