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For decades, parts of Arizona have relied heavily on groundwater for irrigation and water supply, deplet- ing underground aquifers. In the 1950s, when it came to securing Colorado River water, Arizona found itself in much the same position that Nevada is at the start of the 21 st century: rapid growth and not enough developed water supply. Arizona's volatile water situation began in the 1920s when the seven Colorado River Basin states agreed to divide Colorado River water use into two basins, Upper and Lower and make apportionments of water to each. Arizona initially refused to ratify the Compact. primarily because the Compact did not allocate water to each Lower Basin state or protect Arizona from California's seemingly unquenchable thirst. The two states already were competing for the same water. Arizona's rocky relationship with California finally took a step towards harmony when. in 1963, the U.S. Supreme Court determined Arizona's Colorado River basic apportionment to be 2.8 million acre-feet annually, California's basic apportionment to be 4.4 million acre-feet and Nevada's to be 300,000 acre.feet. The court decision also determined that Lower Basin tributary supplies, such as the Gila River. could not be counted against Arizona's mainstream allocation. Meanwhile, Arizona had been seeking support for what became known as CAP - a massive federal project to divert water into its more populous areas, Phoenix and Tucson, as well as to its agricultural regions where groundwater was being depleted. But the proposal for a federally financed aqueduct to bring about 1.5 million acre-feet per year of the state's Colorado River allocation to central Arizona stalled in Congress. hampered by California's strong anti-CAP lobbying. In 1968, after Arizona agreed that California's water would have priority over CAP water during water shortages, California withdrew its opposition to the project. Construction began in 1973, and in 1985. the first CAP water was delivered 190 miles to Phoenix from Lake Havasu. The 336-mile, concrete- lined canal and tunnel system terminates a few miles south of Tucson. Although CAP is designed to deliver up to 2.2 million acre-feet. by 1990 annual deliveries initially peaked at 780.000 acre-feet and then declined in the following years. Many farmers, so desperate for the water decades earlier, encountered tough financial . .... """'- ..... times and could not afford CAP water. Instead, they relied on less expensive groundwater. Urban growth also slowed and in~state surface water runoff brought plentiful local supplies, minimizing water needs from CAP. To maintain the project's flows and not risk losing water (projecting that by the mid-21 st century urban areas will need the water) Arizona. in 1994, reduced the price of CAP water to farmers to encourage them to use project water rather than declining ground. water supplies. Deliveries through CAP increased. reaching about 1.4 million acre.feet in 1997. Projecting that their cities will need additional CAP water in the future, Tucson and Phoenix officials support the decision to subsidize farmers' use of the water for now. But even though water usage is on the rise, Arizona must stilt repay the federal government for CAP. In 2000, Arizona and Interior reached consensus on a long-standing dispute over repayment for CAP - a $4 billion system, which federal officials declared complete in 1993. Under the agreement linked to Indian water rights seUlements (see page 22), the Central Arizona Water Conservation District (CAWCD) wilt pay Interior $1.65 billion (vs.lnterior's claimed $2.18 billion). In turn. non-Indian CAP users will relinquish some of their water supply to Interior in order to meet tribal water rights claims. Arizona also is seen as water a supply resource lor the other two Lower Basin states. In 1996. the Arizona Legislature created the Arizona Water Bank- ing Authority (AWBA) to divert and store up to 400.000 acre-feet of Arizona's unused apportionment of Colorado River water that was being used by southern California. The AWBA began storing water in groundwater aqUifers and established a ground- water bank that would allow for off-stream storage of Colorado River waler.ln 1997. Arizona for the first time used its full 2.8 million acre.feet apportionment - no longer allowing California to take advantage of Arizona's annual unused apportionment. Arizona has ..,..-'" \VaterJrom the Central Ariama Project is used in urhan area.'1like Phoenix. 17