(June 9, 2026) -- Water agencies from Arizona, California, and Nevada have signed a new agreement to explore interstate water exchanges across the Colorado River Basin, a step leaders say could help support desalination, water recycling, and other new supply projects without changing existing water rights.
The June 3, 2026, Memorandum of Understanding does not create a new water-sharing agreement. Instead, it establishes a framework for discussions among the Bureau of Reclamation and six major water agencies about how the Lower Basin states might work together on future projects that increase available water supplies.
The agreement was signed at the Claude “Bud” Lewis Carlsbad Desalination Plant in California. Participants include the Bureau of Reclamation, San Diego County Water Authority, Metropolitan Water District of Southern California, Southern Nevada Water Authority, Arizona Department of Water Resources, Central Arizona Project, and Salt River Project.
The effort comes as the Colorado River remains under significant pressure from long-term drought, low reservoir levels, poor snowpack, and record heat. Storage in the Colorado River system is currently about 36 percent of total capacity, according to the participating agencies. The river supplies water to more than 43 million people across the Southwest, making long-term reliability a growing concern for communities, agriculture, industry, and hydropower generation.
Under the concept being explored, agencies across different states could jointly support projects such as desalination, recycled water, and other new water supply initiatives. In return, participating agencies could receive water benefits through exchange arrangements that leverage existing infrastructure and operational flexibility.
For example, a project in one state could potentially create a supply benefit that is exchanged or credited in another location, allowing agencies to stretch limited supplies without building entirely new delivery systems. Any future exchange would have to be negotiated separately, and the MOU makes clear that existing water rights would not be changed, reallocated or impaired. Agencies also would not be obligated to participate in any specific future project.
Water leaders described the agreement as an early but important step toward more flexible regional cooperation.
Dan Denham, general manager of the San Diego County Water Authority, said future strategies will require partnerships that cross state lines.
“Next-generation strategies in the face of climate volatility must include interstate partnerships that deliver water where it’s needed most,” Denham said. “New ideas are challenging to implement, but it’s in everyone’s best interest to make this work.”
Shivaji Deshmukh, general manager of the Metropolitan Water District of Southern California, said many agencies are already developing projects to reduce reliance on the Colorado River, but large-scale water projects often require substantial investment.
“The MOU signed today demonstrates our commitment to discussing how to develop flexible partnerships across borders to pool funding, advance projects, and allow water to be shared when and where it is needed most,” Deshmukh said.
Southern Nevada Water Authority General Manager John Entsminger said regional partnerships will be essential as river conditions become more difficult.
“This agreement allows us to explore forward-thinking, strategic investments that will strengthen water resilience in Southern Nevada and across the Lower Basin,” Entsminger said.
Arizona Department of Water Resources Director Tom Buschatzke said the agreement reflects the kind of innovation Arizona and its Lower Basin partners believe will be needed to stabilize the river system over time.
“It represents the kind of innovation that Arizona and its Lower Basin partners believe is needed from all the Colorado River states to help stabilize the system in the long term,” Buschatzke said.
Central Arizona Project General Manager Brenda Burman emphasized cooperation among basin partners.
“When you have good partners, you can find collaborative opportunities that benefit all,” Burman said.
Leslie Meyers, associate general manager and chief water resources executive for Salt River Project, said the agreement demonstrates a commitment by the Lower Basin states to evaluate new ways to supplement water supplies amid ongoing shortages.
For Arizona, the discussions are especially important. The state relies heavily on Colorado River deliveries through the Central Arizona Project, which serves municipal, tribal, agricultural, and industrial users across central and southern Arizona. Shortages on the river have already reduced Arizona’s supply, and future operating rules for the Colorado River remain a major issue for the basin.
The new MOU is not a final agreement, and it does not identify specific projects. Rather, it begins a process for water managers to determine whether a practical interstate exchange framework can be developed. Desalination, water recycling, groundwater replenishment, and other supply-augmentation projects could all be part of future discussions.
As drought, shrinking reservoirs, and increasing demand continue to challenge the Colorado River Basin, the participating agencies say the goal is to evaluate new tools that could improve long-term water management while staying within existing water rights and infrastructure systems.
The agreement marks a shift toward more regional problem-solving at a time when individual states and water agencies are increasingly recognizing that local supply strategies may not be enough. In a river system shared by seven states, Mexico, tribal nations, farms, cities, and industries, the next generation of water management may depend less on drawing new lines and more on finding workable exchanges across the lines that already exist.