Purpose

The purpose of this document is to develop a path forward to advance the needs assessment and offtake agreement processes. This document will be used as a basis for internal discussions and then be modified as needed to facilitate briefings with the LTWAF Committee and the WIFA board.

Background and Process

WIFA’s Long-Term Water Augmentation Fund (LTWAF) was created in anticipation of significant demand for additional sustainable water resources in Arizona. Some, but not necessarily all, of that additional demand may be met by WIFA-funded projects. To invest our resources in a responsible and effective way, WIFA is creating a competitive process to develop the best project(s) to augment water through in-state and out-of-state projects. 

Recognizing that it is unrealistic to assume that every supply-demand gap statewide for all sectors can or should be closed with water augmentation projects, WIFA first sought to determine the extent of potential demand for augmented water. In 2023, WIFA and its consultants reviewed existing supply and demand projections (a “top-down” approach) and held conversations with a wide array of water providers (a “bottom-up” approach) to determine an appropriate scale for an imported water project or projects.

WIFA identified an interest for between 100,000 and 500,000 acre feet per year of augmented water over a 5-15 year timeframe. This does not represent Arizona’s overall water needs, but rather, the portion of those water needs that utilities and water users believe could be effectively met through relatively expensive imported water sources. Water users continue to pursue their own strategies including acquiring additional in-state surface and groundwater supplies, pursuing advanced water recycling projects, and increasing mandatory water efficiency measures.

While this range reflects a high level of price elasticity, it also affirms that reliable new supplies will play an important role for a large number of water users across all sectors. It is WIFA’s intent to identify the project(s) that best address the technical, financial, environmental, regulatory, legal, and political challenges associated with such projects by conducting a rigorous competitive process. 

Moreover, WIFA recognizes that augmentation projects previously considered have been expensive and complex. Although Arizona statutes focus WIFA’s efforts on importing water from out of state, they do provide for significant WIFA funds to be used on in-state projects as well. This flexibility allows WIFA to pursue a portfolio of projects in a range of locations if such a portfolio meets identified needs better than one single project.

The feedback gained from WIFA’s Water Needs Assessment will be incorporated into the evaluation criteria used during the procurement process for long-term water augmentation projects and will help ensure the future needs of Arizona water users are met.

Key Takeaways

  • 100kAF to 500kAF annual near-term (5-15 years) annual augmentation demand, with high price/demand elasticity
  • Economics, rather than project type or water source, is a primary driver
  • Additional water supply is currently needed, but, in the case of groundwater management, additional near-term use should not compromise the security of supplies in the long term
  • Support for WIFA’s LTWAF mission is strong among the water supply community

Other Takeaways

  • Prior confidence in medium-term (30-50 year) supply is being compromised by concerns over reliability, resiliency and sustainability of current and near-term supplies
  • Future demand projections are highly dependent on growth rates and per capita demand projections
  • Regional, Basin, and Statewide planning documents are mostly dated now. ADWR has new demand projections in preparation that are expected to be completed in coming years.
  • Demand projections are highly dependent on dated information on:
    • Municipal per-capita demand efficiencies
    • Agricultural use and efficiencies

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The Water Infrastructure Finance Authority of Arizona (WIFA) is an independent state authority authorized to finance the construction, rehabilitation, acquisition, and improvement of water infrastructure throughout Arizona.

How is WIFA governed? 

WIFA is governed by 18 board members. The board is broken down further into two categories:

  • Nine voting members appointed by the governor and legislative leadership.
  • Nine nonvoting ex-officio members representing legislative leadership and relevant agency heads.

What is the purpose of WIFA?

WIFA was established more than 30 years ago to help meet Arizona’s existing and future water needs by facilitating and funding water infrastructure, conservation, reuse, and augmentation projects. WIFA’s Mission is: “To ensure the sustainability of Arizona’s present and future water supply through financial investments in effective augmentation, conservation, reuse, and water quality actions.”

To accomplish this, WIFA is working strategically to invest in Arizona’s water in multiple ways:

  • Augmentation:
    • Work collaboratively with water purchasers and suppliers to develop targets for new/additional water supply for the state.
    • Create and facilitate a competitive process to develop the best project(s) to reach those targets utilizing in-state and out-of-state projects.
  • Conservation: continue and expand the Water Conservation Grant Fund Program to install long-term water-saving projects throughout the state.
  • Reliability: fund priority projects that address public health impacts due to water reliability and water quality in communities without capacity to address them.

Does WIFA offer other funding programs besides the LTWAF?

Yes! WIFA has several funding options to support water supply, conservation, and infrastructure programs in Arizona.

What does "water augmentation" mean?

Water augmentation is the process of identifying and securing water supplies. 

  • Augmentation projects are intended to create new water supplies, and not affect existing water agreements nor ongoing water negotiations, especially those related to the Colorado River, the Central Arizona Project (CAP), and the state’s other groundwater and surface water resources.  For example, the State of Arizona’s interest in future Colorado River supplies is managed by the Arizona Department of Water Resources.  Any proposals received by WIFA about the LTWAF program that affect programs managed by others will be coordinated with the responsible agencies.
  • Augmentation projects will most likely require significant infrastructure investments.
  • Augmentation projects will support resiliency for the state’s long-term economic and social development.
    • Investing in water augmentation helps communities adapt to climate impacts including drought, wildfires, and flooding.
    • Water augmentation can strengthen economies, revitalize communities, nurture healthy ecosystems address cultural, and equity needs and concerns, and support employment.
    • Water augmentation supports resource conservation and supply reliability.

Why is augmentation an important strategy for Arizona?

Water security is a key to sustaining life, especially in the Sonoran Desert. Water augmentation projects will benefit Arizona’s current and future communities, the economy, and the environment.

  • The LTWAF is part of a commitment to managing water projects that can prepare Arizona’s communities for a changing climate, create jobs, and sustain the economy.
  • The LTWAF allows for the investment in water infrastructure that can ensure that the water supply communities depend on will be safer, more reliable, and more accessible.

Reliability/Resiliency

  • A changing climate can dramatically affect the water cycle and impact the availability and security of Arizona’s water supplies. The LTWAF can support water projects that will ultimately protect the health and safety of our communities.

Equity

  • Water augmentation projects can expand opportunities by creating jobs, building transferable skills, and diversifying the water workforce.
  • The LTWAF provides current and future generations the opportunity to build more equitable and resilient water systems.

Economy

  • Water augmentation projects can expand opportunities by creating jobs, building transferable skills, and diversifying the water workforce.
  • Water augmentation, and ultimately the increase in the state’s water supply will help create a more sustainable and resilient future for Arizona’s communities.

How much water does Arizona need?

In 2023, WIFA and its consultants reviewed existing supply and demand projections (a “top-down” approach) and held conversations with a wide array of water providers (a “bottom-up” approach) to determine an appropriate scale for an imported water project or projects. Through this needs assessment, WIFA identified an interest for between 100,000 and 500,000 acre feet per year of augmented water over a 5-15 year timeframe. This does not represent Arizona’s overall water needs, but rather, the portion of those water needs that utilities and water users believe could be effectively met through relatively expensive augmented water. View the complete Needs Assessment to learn more about our findings and how they will shape WIFA's approach to water augmentation projects.