As drought worsens, will Arizonans see higher water bills?

The KJZZ series "Every Last Drop" tackles big questions about Arizona's water future — including what Arizonans can do to make a difference.

Published: July 15, 2022

​​According to the city, water rates in Phoenix have three main components: the monthly fixed service charge, volume (usage) charges and environmental charges. KJZZ

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The Colorado River is facing a catastrophic drought. But will a shrinking water supply mean higher utility bills for Arizonans? 

The short answer is, yes. Arizonans are likely to see their water bills increase in coming years. But water experts say the long answer is a lot more complicated.

“What the actual impact will be will really vary community to community," said Kathryn Sorensen, director of research at the Kyl Center for Water Policy at Arizona State University and former director for Phoenix and Mesa’s water departments.

Sorensen said the Colorado River is facing severe shortages, but not everyone in Arizona is relying on Colorado River water to the same degree.

Consider the city of Tempe, for example. Most of its water comes from the Salt River and only about 7% of the city's supply comes from the Colorado River.

“Even a really big increase in the cost of Colorado River water isn’t going to affect the city of Tempe very much," Sorensen said. 

But just up the road, Scottsdale relies on the Colorado River for 70% of its water, so increases would have a much bigger impact.

But Sorensen said for cities that are more dependent on the Colorado River, shortages still might not directly translate to higher prices.

“The cost that you pay on your water utility bill has much more to do with the age and condition of the infrastructure necessary to provide the water than it does to the water supplies themselves that are being delivered," Sorensen said. 

Phoenix actually has some of the cheapest water in the country. A 2021 study from Black & Veatch, a company that specializes in infrastructure engineering, showed Phoenix's water bills, on average, were even cheaper than bills in regions of the country with ample water supplies, such as the Great Lakes region or the Pacific Northwest.

Sorensen said that comes down to the fact that Valley cities — and all of their pipes — are a little newer than those in many other parts of the country.

“It’s just that in relative terms, we’re slightly better off," Sorensen said. 

But that brings us back to the Colorado River.

A major component of Arizona's water infrastructure is the Central Arizona Project, the massive canal system that pumps Colorado River water across the state to Phoenix and Tucson.

The Arizona Canal, part of the Salt River Project system. Ron Dungan/KJZZ

CAP is a wholesaler that delivers water to your local utility provider. And Chris Hall, CAP assistant general manager for finance, said CAP doesn’t really charge for the water. 

“We only charge our customers for the cost to move the water and operate the Central Arizona Project," Hall said. 

But those operational costs are going up. Just like any other industry, CAP is feeling the pinch of inflation. For one thing, it takes a lot of energy to pump water across the state, and those electrical bills are getting more expensive.

“On top of that, as we move deeper and deeper into shortage, there is a compounding effect, where we’re dividing those higher costs across fewer acre-feet of water," Hall said. 

So Colorado River water delivery prices are rising. Rates are planned through 2028 and CAP is projecting about a 40% increase in costs for its municipal customers.

And even cities with diversified water supplies could feel an impact.

The city of Phoenix relies on the CAP for about 40% of its water. With shortages looming, Phoenix water managers want to shift away from Colorado River water to use more of the city’s other supplies from the Salt River or groundwater reserves.

The Salt River flows through the Tres Rios Wetlands in Phoenix. Katherine Davis-Young/KJZZ

But Troy Hayes, Phoenix water director, said that’s not a simple process.

“We didn’t have the water infrastructure in place to be able to move all of the water resources that we did have to the places of our city that maybe need it," Hayes said. 

So your water bill may have more to do with infrastructure than water scarcity. But in Phoenix’s case, the drought actually created new infrastructure challenges.

The city is spending $300 million on new pipelines to get Salt River water and groundwater to parts of the city that currently rely on Colorado River water. That construction is set to be done at the end of this year.

But these expenses didn’t come as a surprise. Phoenix customers have actually had the cost of the drought pipeline projects built into their bills since 2019.

“So we’re hoping it will be a minimal impact to our customers for years to come," Hayes said. 

CAP has also planned ahead. Hall said back in 2012, CAP started collecting a few extra dollars per acre-foot of water as an insurance policy against the higher costs it’s now facing.

“That was to create a little bit softer landing if we did have a shortage situation that could potentially cause a rate spike," Hall said. 

Those funds will keep CAP’s rates lower through 2023.

“Once those reserves are exhausted, they’re gone. There is no current plan to replenish them, but that is something that we can look at as we go forward,” Hall said. 

Sorensen said she thinks Arizona’s water managers have generally done a good job preparing for worst-case scenarios.

“I like to remind people — we know it’s a desert, right?" Sorensen said. 

So while prices are going to rise, they may not skyrocket. And Sorensen points out, those higher costs could actually help incentivize individual users to conserve.

“Conservation is obviously super important, and increasing water rates has a very direct effect on how people consume their water," Sorensen said. 

Water affordability is a critical issue, Sorensen said. Water managers in the years ahead will have to balance that with the reality of a drought that is not going away.

Explore all the stories in KJZZ's 'Every Last Drop' series

Arizona's water supply is shrinking, but its population is growing. Is it sustainable?
Groundwater is critical to rural Arizona — but there's a struggle to regulate it
Is drought in Arizona and the Southwest the new normal?
To better understand Arizona's water supply, we retrace its origins
How much can at-home conservation impact Arizona's water shortage?
How Scottsdale's drought plan has reduced the city's water footprint
Gray water’s untapped potential is clouded by complexity
As drought worsens, will Arizonans see higher water bills?