Madison Mills, Research Fellow
Brigit Rollins, Staff Attorney
The Colorado River is one of the most vital waterways in the western United States. The Colorado River Basin spreads across seven states, irrigates approximately 5.5 million acres of farmland, and supplies water to over 40 million people. Administration of this large and vital waterway is governed by a collection of compacts, treaties, court decisions, federal statutes, regulations, and agreements known as the Law of the River. Currently, annual allocations of Colorado River water are made pursuant to guidelines established by the Bureau of Reclamation (“Reclamation”) in 2007. However, those guidelines are set to expire in 2026 and it remains unclear what is next for the Law of the River and those that depend on it.
Background
The Colorado River Compact of 1922 (“the Compact”) is often viewed as the foundation of the Law of the River. The Compact established a framework for dividing and apportioning the River’s water between what are known as the Upper Basin States and the Lower Basin States. Upper Basin States include Colorado, New Mexico, Utah, and Wyoming. Lower Basin States include Arizona, California, and Nevada. Under the Compact, each Basin is annually allocated 7.5 million acre-feet (MAF) of water from the Colorado River. The Compact also allowed the Lower Basin the opportunity to use up to an additional 1 MAF per year. Although each Basin is annually allocated 7.5 MAF each year, low flows in recent decades have made it difficult to supply amount of water. In 2007, Reclamation adopted guidelines to reduce water releases according to availability.
Reclamation is an agency within the U.S. Department of the Interior and oversees the operation of major river infrastructure, including Hoover Dam, Glen Canyon Dam, and the associated reservoirs, Lake Mead and Lake Powell. These reservoirs are central to managing water supply, storage, and distribution across the River with Hoover Dam and Lake Mead providing water storage for the Lower Basin and Glen Canyon Dam and Lake Powell providing storage for the Upper Basin. Because Reclamation operates these facilities, it plays an important role in managing the Colorado River.
Current Status of the River
Although the allocations established under the Colorado River Compact remain in effect, conditions in the River have evolved since 1922. Droughts and variations in hydrology have affected reservoir levels, and water demand has changed across the region. In recent years, the River has experienced declining inflows and record-low reservoir levels. Prolonged drought and rising temperatures have reduced runoff throughout the Western U.S., leaving Lake Mead and Lake Powell well below their historical average water levels. The River now produces only about 12.4 MAF per year on average, far less than the 16.5 MAF available in 1922 when the allocations were originally determined.
Currently, management of the River is governed by the 2007 Colorado River Interim Guidelines for Lower Basin Shortages and Coordinated Operations for Lake Powell and Lake Mead (“the 2007 Guidelines” or “Guidelines”). The Guidelines were developed by Reclamation in response to decreasing flows and prolonged drought throughout the Colorado River Basin. Through the Guidelines, Reclamation established a framework for managing water shortages and coordinating operations between the two main reservoirs. The Guidelines use specific elevation thresholds at Lake Mead to determine when water deliveries to the Lower Basin States must be reduced, starting when the reservoir falls below 1,075 feet. They also provide a system for coordinating releases from Lake Powell to help maintain Lake Mead’s elevation while protecting hydropower generation and overall water supply reliability.
As worsening drought and declining reservoir storage continue throughout the region, several modifications and supplemental agreements have been implemented since 2007. In May 2019, the seven Basin States agreed on the Drought Contingency Plan (“DCP”) to supplement the Guidelines and reduce the risk of the low reservoir levels. The DCP set conservation and operational measures for both the Upper and Lower Basins, including water-use reductions and coordinated releases from Lake Powell and Lake Mead to maintain minimum levels. In May 2023, the Department of the Interior and the Basin States agreed on a consensus-based proposal in which the three Lower Basin States committed to conserving a total of 3 MAF of water before 2026. The federal government will provide compensation for 2.3 MAF of water conserved by those Lower Basin States.
As of February 2025, approximately 52% of the Colorado River’s water is used to irrigate agricultural land, and agriculture accounts for about 80% of total consumptive use in the River. While agriculture remains the largest consumer, municipal and industrial demand has grown steadily, particularly in urban areas such as Las Vegas, Phoenix, and Los Angeles. To help address the supply-demand imbalance, Reclamation has implemented incentive programs that provide financial compensation to farmers who voluntarily reduce their water usage.
As reservoir levels continue to decline, Basin States, Tribes, and federal agencies are exploring strategies to address the supply-demand imbalance and support the long-term sustainability of the Colorado River.
The Colorado River Post-2026
The 2007 Guidelines are set to expire by the end of this year, leaving open the question of what the Colorado River will look like post-2026. As of January, the Upper and Lower Basin States have been unable to reach an agreement on how to manage the River after the Guidelines expire.
Following negotiations, the Upper and Lower Basin States submitted separate proposals to Reclamation in March 2024 outlining their preferred approaches for managing the River post-2026. The Lower Basin States proposed that overall water storage across the Basin, rather than Lake Mead alone, should be used to determine when water-use reductions would occur. Under this approach, both the Upper and Lower Basins would share conservation responsibilities when total storage falls below certain thresholds, with an average reduction of about 1.5 MAF under most conditions.
On the other hand, the Upper Basin States proposed a system that ties water-use reductions to the combined storage levels of Lake Mead and Lake Powell. Their plan would link the amount of water released from Lake Powell directly to that reservoir’s conditions, meaning smaller releases would occur during periods of low storage even if that results in less water reaching the Lower Basin than what the Compact originally required.
Reclamation has expressed that it will step in if the Basin States cannot reach an agreement and will unilaterally propose terms. Reclamation began the process of analyzing options for post-2026 operations in 2023 by initiating a National Environmental Policy Act (“NEPA”) process to consider the possible impacts of changing water management on the Colorado River. NEPA is a federal statute that requires agencies to consider the impacts of the actions they intend to take. Under NEPA, agencies draft detailed reports which are required to examine not only the agency’s intended action, but alternatives to the agency’s action and the impacts of those alternatives. While a complete draft of Reclamation’s NEPA report is not expected to be published until early 2026, in November 2024, Reclamation published a report on the possible options for post-2026 management that the agency will be considering in its NEPA document. The report, titled Alternatives Report: Post-2026 Operational Guidelines and Strategies for Lake Powell and Lake Mead, Reclamation summarizes the following alternatives to post-2026 management: the No Action Alternative; the Federal Authorities Alternative; the Federal Authorities Hybrid Alternative; the Cooperative Conservation Alternative; and the Basin Hybrid Alternative. These alternatives were developed with input from the Basin States, Basin Tribes, conservation organizations, federal agencies, and stakeholders.
The No Action Alternative is included as a requirement of NEPA which provides that agencies must contemplate the impacts of not acting at all when considering carrying out an agency action. Under Reclamation’s No Action Alternative, Colorado River management would likely revert to the management scheme that was in place prior to 2007. According to Reclamation, under the No Action Alternative, annual shortages would be based on the level of Lake Mead on January 1 and there would be no mechanisms to proactively store water in either Lake Powell or Lake Mead.
The Federal Authorities Alternative is designed to protect critical infrastructure within the Department of the Interior’s existing statutory authorities, without relying on new agreements among stakeholders or voluntary reductions from water users. Instead, under this approach, Reclamation would rely on statutory law passed by Congress to protect the Colorado River system. Shortages would be determined based on levels in both Lakes Powell and Mead taken on October 1, the start of the water year, and would be distributed across the Basin according to priority. There would be no mechanisms for proactively conserving water in either Lake Powell or Lake Mead under this approach because such agreements are outside of Reclamation’s congressionally granted authority.
The Federal Authorities Hybrid Alternative incorporates proposals from Tribes, federal agencies, and other stakeholders to both protect infrastructure and optimize storage between Lake Powell and Lake Mead, enhancing the system’s ability to meet Basin needs. Under this approach, annual shortages would be determined based on the amount of water in both Lake Powell and Lake Mead on October 1. Shortages would be distributed proportionally across the Basin and could be offset by deliveries of previously conserved water. This alternative considers options for water users to store their water, including through the establishment of a Colorado River protection Pool which would serve as a federal supply of water that could be used to mitigate Basin-wide reductions.
The Cooperative Conservation Alternative, informed by conservation organizations, emphasizes stabilizing system storage, integrating environmental stewardship and mitigation strategies, supporting cooperation among the Basin states, incentivizing water conservation, and allowing flexible water management. It proposes stewardship targets and mitigation goals intended to priority ecosystems throughout the Basin. Shortages would be based on water levels in both Lakes Powell and Mead on October 1 and shortages could be offset by delivering previously conserved water. This alternative contemplates the establishment of a Conservation Reserve poll which would store water conserved by any water user in the Basin and be distributed “strategically” across Lake Powell and Lake Mead to protect both resources and infrastructure.
Finally, the Basin Hybrid Alternative combines elements of proposals from Upper and Lower Basin States and Basin Tribes, aiming to facilitate coordinated operations and foster broader agreement across the Basin. Under this approach, shortages would be based on total system storage as of October 1 and would allow for shortages to be offset by previously conserved water. Unlike the other alternatives, the Basin Hybrid Alternative considers two different approaches for shortage distribution. Shortages could be based either on priority or distributed proportionally among the Basin states. This alternative also contemplates establishing separate water conservation and storage pools for water users in both the Upper and Lower Basins. Water stored in the Upper Basin pool could be used in water transactions between Upper Basin users while water stored in the Lower Basin pool could be used by Lower Basin users.
Each alternative varies in how it addresses shortage guidelines, coordinated reservoir operations, and the storage and delivery of conserved water, providing a range of options for managing the Colorado River post-2026. Reclamation has declined to identify its preferred alternative for post-2026 Colorado River operations.
Conclusion
The current Colorado River operations do not account for modern drought and demand conditions. The Compact overestimated the available water that the Colorado River would produce about a century later. While the status of post-2026 operations has not yet been determined, significant changes are expected, and Reclamation will play a central role in shaping the Colorado River’s future management. Although the 2024 report provides some insight into the alternatives that Reclamation is exploring, the agency has indicated that it will not identify its preferred approach, providing room for the Basin states to continue to negotiate on what comes next for the Law of the River.
To read the 1922 Compact, click here.
For further resources from Reclamation, click here.
To learn more about the Law of the River, click here to view CRS report “Management of the Colorado River: Water Allocations, Drought, and the Federal Role.”
For more resources on water law from NALC, click here.