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required to be left in storage to benefit the overall water supply. Credits to use the water in storage would be reduced by annual evaporation losses, and each state would have an annual limit on the amount of credits that could be created during any year. No credits would be used during a Colorado River shortage and flood control releases would reduce — and perhaps end — the credits. For each of the three states, the program has the potential to substan- tially increase storage capabilities and water supplies; maximum cumulative amounts of credits that would be available at any one time are: 1.5 million acre -feet for California, 300,000 acre -feet for Nevada and 300,000 acre -feet for Arizona. The additional storage, according to those involved in the negotiations, in effect creates an additional "reservoir." The development of such an accounting system is viewed as especially important for the Southern Nevada Water Authority (SNWA) because Nevada's annual 300,000 acre- feet allocation will not be able to keep pace with the extraordinary growth of the city of Las Vegas and the nearby communities of Henderson and North Las Vegas. Under the states' proposal, Norton would develop procedures to allow "non- Colorado River system water in a Lower Division state to be introduced into, conveyed through, and diverted from system reservoirs, or otherwise through the Colorado River System." Thus any water generated by SNWA's plans to develop rural groundwater supplies could be conveyed to the Colorado River mainstream and subsequently diverted by SNWA in addition to its basic apportionment. Recycled water could be conveyed in a similar manner. In addition to this unprecedented proposed action, "contractors in Arizona, California and Nevada also would be able to secure additional water supply by funding the develop- ment of a non - Colorado River System water supply in one Lower Division state for use in another state by exchange." Similar agreements could be established for the development and exchange of non - system water from the Republic of Mexico. Through this mechanism, the SNWA could fund construction of desalination plants and exchange, with another contractor, that new source of non - system water with a similar amount of Colorado River water. The Future The release of the "Seven Basin States' Preliminary Proposal Regarding Colorado River Interim Operations" is the first step in a long process to develop a final plan. As Reclamation continues to prepare its draft EIS, the states intend to finalize their proposed agreement. Also, the states are planning to move forward with an extensive package of "water- supply related actions that include implemen- tation of a demonstration program for extraordinary conservation in 2006, system efficiency projects, preparation of an action plan for system augmenta- tion through weather modification ... development of forbearance agree- ments among the Lower [Basin] states and the initiation of a study for long- Water augmentation proposals include construction of a regulating reservoir along Drop 2 of the All- American Canal.