A major drought spanning over two decades has intensified the age-old battle for water among western U.S. states, particularly over the allocation of Colorado River water, which not only provides water to seven states but is also essential for electricity generation. Last month, the federal government finalized a plan to manage those water reserves for the next two years, after years of fraught negotiations and several missed deadlines.
While the plan is an important step forward, it’s certainly not the end of discussions regarding the Colorado River, and there are many angles for journalists to cover when it comes to current water issues in the United States.
Shrinking rivers and lakes
The new plan for the Colorado River was approved just in the nick of time, as the current agreement expires next month. Under the new plan, the Lower Basin states (California, Nevada, and Arizona) will reduce their collective water use by 1.25 million acre-feet each year, with Arizona facing the steepest cut of 760,000 acre-feet or about 30% of its overall water allocation from the river. To bring that number down to scale, the Arizona Republic noted that “an acre-foot is about enough water to supply three households for a year.” For now, the Upper Basin states (Colorado, New Mexico, Utah, and Wyoming) will not face any changes.
It’s possible that California, Nevada, and Arizona may see even larger cuts after 2028, depending on water levels at that time. However, the U.S. Bureau of Reclamation noted this would only be considered if hydropower production and infrastructure at the Glen Canyon Dam and the Hoover Dam are put at risk by declining water levels at Lake Powell and Lake Mead, which serve as the country’s largest reservoirs. Both lakes are fed by the Colorado River and each hit its lowest water level ever recorded this summer.
Cities have made efforts toward community water conservation, such as a ban on watering lawns by Denver Water starting October 1, and the city of Las Vegas, Nevada released a notice in May that “all restaurants are prohibited from serving water to their customers except when specifically requested by the customers.”
Water alternatives
As Arizona faces steep water cuts, officials are looking for alternative options to ensure future water security in the state. Phoenix Mayor Kate Gallego called for the federal government to do more to help fund purification plants that can turn wastewater into drinking water, likening it to disaster aid. Arizona is also considering plans to import water from outside the state, such as working with California on funding desalination infrastructure.
Two other proposed water developments in California are being explored, with the Water Infrastructure Finance Authority of Arizona approving over $7 million for the studies. This money comes from the $1 billion committed to the Long Term Water Augmentation Fund in 2022, though officials have noted that this money on its own would not be enough to see projects through to completion. There are a great number of federally-supported programs to improve water infrastructure across the U.S., including $411 million for EPA’s Drinking Water SRF program and $893 million for wastewater infrastructure, though the current administration’s discretionary budget request proposed “to reduce or eliminate funding for a number of water infrastructure programs” in 2027.
The data center impact
In addition to drought, data centers are another player changing the water landscape across states. They have been shown to use large amounts of water, and over 60% of planned data centers are set to be built in drought-afflicted areas. Although public attention has been more focused on their impact on electricity rates in recent years, Greg Pierce, the director of UCLA Water Resources Group, noted that “water systems tend to be much smaller than energy utilities” and that “data centers are big industrial customers of water systems, and their demands can be significant and even harmful or overwhelming locally.” The Arizona Attorney General has called for a pause on data center construction in the state, pointing to estimates of a 450% jump in water demand if all planned Phoenix-area projects are built.
With all the money in data centers, there are opportunities for cities to benefit, but this may not always work out as planned. For example, SpaceXAI broke ground to build a wastewater treatment plant in Memphis, Tennessee, in late 2025, but paused construction in April of this year to focus on finishing other data center construction. Though some speculated the high cost may have played a factor in the decision to pause, the company said it would resume construction in January 2027 after the City of Memphis threatened to seize the land. In other cases, data centers have either been found responsible for or been suspected of contaminating water supplies, including in Wyoming and Georgia.
