Phoenix expects to enter the second stage of its drought plan in January 2027, a step that would ask customers to conserve and add a temporary surcharge for the city’s highest water users as Colorado River deliveries decline.
The plan was presented during a Nov. 10 City Council policy session. The item was for information and discussion, so the briefing did not itself declare a Stage 2 Water Warning or put the surcharge into effect. Phoenix says water service will remain reliable while it uses backup supplies and develops additional sources.
The decision matters beyond Phoenix because the same federal reductions are forcing West Valley cities to define how they will replace part of their Central Arizona Project supply. Phoenix’s proposal adds a demand-reduction and pricing response to the stored-water agreements, wells and other backup measures being assembled across the region.
How the proposed surcharge would work
Under the city staff report, the temporary charge would be $2.10 for each unit of water used above a monthly threshold. One unit equals 748 gallons.
- Residential customers: more than 20 units, or 14,960 gallons, in a month
- Commercial customers: more than 300 units, or 224,400 gallons
- Industrial customers: more than 15,000 units, or 11.22 million gallons
Only consumption above the threshold would be assessed the surcharge. Phoenix estimates it would affect about 16% of residential bills, 7% of commercial bills and 1% of industrial bills based on current use. Preliminary modeling projects about $40 million in revenue for conservation programs and additional water supplies.
The Stage 2 plan also calls for residents and businesses to reduce water use voluntarily by 5%. City departments would target a 10% reduction. Phoenix proposes doubling its grass-removal incentive from $2 to $4 per square foot, raising the smart-irrigation-controller incentive from $75 to $150 and creating a $100 annual leak-repair incentive.
Supply cuts drive the January target
Phoenix says about 40% of its drinking water now comes from the Colorado River and that its deliveries could decline by approximately 30%. The city plans to rely on stored water, groundwater-recovery infrastructure, regional partnerships and other renewable backup supplies while advancing longer-term projects including Pure Water Phoenix and the proposed Bartlett Dam expansion.
The federal operating decision requires Arizona, California and Nevada to reduce Lower Basin deliveries by 1.25 million acre-feet in both 2027 and 2028. If the states implement their proposed sharing agreement, Arizona’s portion would be 760,000 acre-feet a year. The federal rules also call for at least 700,000 acre-feet of additional voluntary conservation and storage over the two years.
Phoenix has operated under Stage 1, called a Water Alert, since June 2022. Stage 2 is a Water Warning used when normal supplies are insufficient and the city needs additional resources or demand reductions. The city has not announced household service interruptions or mandatory residential watering limits as part of the January plan.
How West Valley responses compare
West Valley cities are responding to the same regional cut with different supply portfolios and customer rules. Goodyear approved a Nov. 10 agreement that gives it a direct-recovery route for stored-water credits as staff projects a 1,504-acre-foot reduction to the city’s 2027 CAP supply. West Valley Post’s Goodyear report explains that the agreement creates a backup mechanism rather than a new supply or a household service cut.
Avondale staff previously projected a 758-acre-foot annual reduction and outlined independent and direct recovery options through an Arizona Water Banking Authority agreement. The Avondale analysis also places that contingency within the city’s broader water and wastewater capital plan.
Glendale, meanwhile, has pointed to long-term storage credits, a diversified supply and planned well projects. West Valley Post’s Glendale overview tracks those measures and the milestones that would determine when stored water is recovered.
The next decisive Phoenix milestone is a formal Stage 2 declaration. Until that occurs, the conservation targets, expanded incentives and high-use surcharge remain planned measures rather than active customer requirements.
Featured image: AI-generated editorial illustration by West Valley Post. It does not depict a specific reservoir, water facility or engineering plan.
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