The Colorado River, a critical water source for approximately 40 million people, faces mounting challenges due to a prolonged drought. In response, officials are considering measures to alleviate the strain, including the possibility of compensating some communities to relinquish their water rights.

The U.S. Bureau of Reclamation is currently in discussions with the city of Phoenix, Arizona, to strike such a deal. Under the proposed agreement, Phoenix would give up a portion of its Colorado River water allocation in exchange for up to $300 million in federal funding. These funds would be allocated toward the construction of an advanced water purification plant.

The planned facility would recycle wastewater, treating it to meet drinking water standards. Once operational, the plant is expected to produce up to 7,500 acre-feet of water annually, equivalent to approximately 3,750 Olympic-sized swimming pools.

The director of Phoenix Water Services, Troy Hayes, described the project as essential for improving drought resilience while reducing costs. Other officials emphasized that the purification plant would help lower Phoenix’s dependence on the Colorado River, a key goal as water shortages persist.

This development follows a recent meeting in Las Vegas, where representatives from states relying on the Colorado River gathered to discuss the ongoing drought and the impending expiration of current water-sharing agreements in August 2026.

Negotiations over a new framework have stalled, with the Upper Basin states, Colorado, Utah, New Mexico and Wyoming, asserting that Lower Basin states, Arizona, California and Nevada, must further reduce water usage.

In contrast, Lower Basin representatives argue they have already made substantial conservation efforts and believe reductions should be applied system-wide.

As the deadline approaches, talks between Colorado River Basin states continue.

Meanwhile, Phoenix’s advanced water purification plant is expected to move forward if the agreement regarding its water rights is finalized. Officials projected that crews will complete construction by 2030.