2021-01089. Central Arizona Project, Arizona; Water Allocations

AGENCY:

Bureau of Reclamation and the Office of the Secretary, Interior.

ACTION:

Notice of final decision to reallocate non-Indian agricultural (NIA) priority Central Arizona Project (CAP) water.

SUMMARY:

The Department of the Interior (Department) hereby issues notice of its final decision to reallocate NIA priority CAP water in accordance with the Arizona Department of Water Resources' (ADWR) recommendation for reallocation. The Department will implement this decision by offering to enter into a subcontract with the entities and for the quantities of NIA priority CAP water listed in this notice, as recommended by ADWR. Any NIA priority CAP water subject to this decision which remains uncontracted after completion of the contracting process shall be available for future round(s) of ADWR recommendation and subsequent contracting.

FOR FURTHER INFORMATION CONTACT:

Ms. Leslie Meyers, Bureau of Reclamation, Phoenix Area Office, 6150 West Thunderbird Road, Glendale, AZ 85306-4001; telephone [phone]; facsimile 623-773-6480; email [e-mail]. Persons who use a telecommunications device for the deaf may call the Federal Relay Service at 1-800-877-8339 TTY/ASCII to contact the Ms. Meyers during normal business hours or to leave a message or question after hours. You will receive a reply during normal business hours.

SUPPLEMENTARY INFORMATION:

Previous Notices Related to CAP Water

Previous notices related to CAP water were published in the Federal Register at 37 FR 28082, December 20, 1972; 40 FR 17297, April 18, 1975; 41 FR 45883, October 18, 1976; 45 FR 52938, August 8, 1980; 45 FR 81265, December 10, 1980; 48 FR 12446, March 24, 1983; 56 FR 28404, June 20, 1991; 56 FR 29704, June 28, 1991; 57 FR 4470, February 5, 1992; 57 FR 48388, October 23, 1992; 65 FR 39177, June 23, 2000; 65 FR 43037, July 12, 2000; 67 FR 38514, June 4, 2002; 68 FR 36578, June 18, 2003; 69 FR 9378, February 27, 2004; and, 71 FR 50449, August 25, 2006. These notices and decisions were made pursuant to the authority vested in the Secretary of the Interior (Secretary) by the Reclamation Act of 1902, as amended and supplemented (32 Stat. 388, 43 U.S.C. 391), the Boulder Canyon Project Act of December 21, 1928 (45 Stat. 1057, 43 U.S.C. 617), the Colorado River Basin Project Act of September 30, 1968 (82 Stat. 885, 43 U.S.C. 1501), the Arizona Water Settlements Act (Settlements Act) (Pub. L. 108-451, 118 Stat. 3478), and in recognition of the Secretary's trust responsibility to Indian tribes.

Background of CAP Water Allocations

In a Record of Decision (ROD) published on March 24, 1983 (48 FR 12446), the Secretary, among other actions, superseded and replaced the 1980 ROD (45 FR 81265, December 10, 1980), reiterated the allocations to Indian tribes reflected in that 1980 ROD, allocated CAP water for non-Indian municipal and industrial (M&I) uses, and allocated the remaining amount for NIA uses. Subject to certain conditions, the CAP water for Indian uses was allocated to 12 Indian tribes for irrigation use or for maintaining tribal homelands. Also subject to certain conditions, the CAP water for M&I uses was allocated based on the State of Arizona's 1982 allocation recommendations for non-Indian entities that provided an amount of CAP water for M&I use to certain non-Indian entities, with the remaining amount of CAP water allocated for NIA use. The CAP NIA water was allocated to 23 non-Indian irrigation districts or other agricultural entities as a percentage of the NIA water supply that was available in any given year.

Two-party CAP water service contracts were executed between the United States and individual Indian tribes in 1980 pursuant to the 1980 ROD. CAP non-Indian M&I water service subcontracts and CAP NIA water service subcontracts were executed with those entities allocated CAP water and desiring to enter into subcontracts for CAP water. The CAP water service subcontracts for the non-Indian M&I water and the NIA water are three-party subcontracts among the entity, the Central Arizona Water Conservation District (CAWCD), and the Bureau of Reclamation (Reclamation). Some of the entities that were allocated NIA water and M&I priority water elected not to contract for the offered allocations. After completing the initial subcontracting process, 29.3 percent of the NIA water supply and 65,647 acre-feet per year of M&I water was not under contract.

Congress enacted the Salt River Pima-Maricopa Indian Community Water Rights Settlement Act of 1988 (102 Stat. 2558) (SRPMIC Act). Pursuant to section 11(h) of the SRPMIC Act, the Secretary was required to request a reallocation recommendation from ADWR for the remaining NIA water that was not under contract. The Secretary was also required to reallocate the uncontracted CAP water for NIA use and to offer new or amendatory subcontracts for such water.

By letter dated January 7, 1991, ADWR recommended an allocation to the Secretary. The Secretary published a notice on June 20, 1991 (56 FR 28404), inviting public comments on the proposed reallocation of CAP water. After considering the public comments, the Secretary published a final decision on February 5, 1992 (57 FR 4470). That decision contemplated that new or amendatory CAP water service subcontracts would be offered soon thereafter.

CAP water service subcontracts for the reallocated water were not executed for several reasons, including but not limited to the following: (1) Some entities could not meet the financial feasibility requirements for receipt of CAP water; (2) lack of agreement on the form of the CAP water service subcontract, and (3) financial difficulties in the CAP NIA sector.

Beginning in the early 1990s, long-term utilization of the CAP water available for reallocation under the 1992 decision and of the uncontracted CAP M&I priority water was a central issue in negotiations to resolve various operational and financial disputes between Reclamation and CAWCD. After attempts at negotiations failed, water contracting issues were included in litigation and the resulting stipulated settlement between the United States and CAWCD. To implement some of the conditions contained in the stipulated settlement, new Federal legislation was required.

After the 1992 decision but before Federal legislation was enacted, the Secretary published on June 4, 2002 (67 FR 38514), a notice of proposed modification to the 1983 decision. The 1983 decision provided that the M&I allocation can be made more firm by execution of feasible non-potable effluent exchanges with Indian tribes and the M&I allocation was subject to adoption of a pooling concept, whereby all M&I entities share in the benefits of effluent exchanges. The pooling concept provision was included in the CAP M&I water service subcontracts. The 2002 proposed modification to the 1983 decision was to delete the mandatory effluent pooling provision in M&I subcontracts with the cities of Chandler and Mesa, and from other M&I water service subcontracts upon request. That provision in the CAP M&I water service subcontracts was an impediment to effluent exchanges and effective water management in central Arizona. After review and consideration of the public comments, the final decision was published on June 18, 2003 (68 FR 36578), deleting the mandatory effluent pooling provision.

The Settlements Act was enacted on December 10, 2004, and provides, among other things, for: (1) A final allocation of CAP water, with a CAP supply permanently designated for Indian uses and a CAP supply designated for non-Indian M&I or NIA uses; (2) a reallocation by the Secretary of 65,647 acre-feet per year of currently uncontracted CAP M&I water to 20 specific M&I entities; (3) ratification of the Arizona Water Settlement Agreement (the “Master Agreement”) among the United States, ADWR, and CAWCD, which provides a statutory-based framework to enable the CAP NIA districts to relinquish existing rights to the delivery of CAP NIA priority water under their CAP water service subcontracts, including their rights, if any, to the reallocated water; and, (4) a reallocation of the relinquished and uncontracted NIA water supply to various Arizona Indian tribes and ADWR for future M&I use.

On August 25, 2006, the Secretary published a final reallocation decision (71 FR 50449) that, among other things, reallocated the CAP NIA water and the uncontracted CAP M&I water. The August 2006 reallocation decision is summarized below:

The Secretary's decision reallocated up to 96,295 acre-feet of agricultural priority water per year to ADWR, pursuant to section 104(a)(2)(A) of the Settlements Act and subject to subparagraph 9.3 of the Master Agreement, to be held under contract in trust for further allocation pursuant to section 104(a)(2)(C) of the Settlements Act. Direct use of the agricultural priority water by ADWR is prohibited under the Master Agreement.

In accordance with section 104(a)(2)(C) of the Settlements Act, before water could be further allocated, the Director of ADWR had to submit to the Secretary a recommendation for reallocation. After receiving the recommendation, the Secretary carried out all of the necessary reviews for the proposed reallocation in accordance with applicable Federal law. If the Director's recommendation was rejected, the Secretary was mandated to request a revised recommendation from the Director of ADWR and proceed with any reviews required.

The reallocation of agricultural priority water to ADWR pursuant to section 104(a)(2)(A) and section 104(a)(2)(C) of the Settlements Act was subject to the Master Agreement, including certain rights provided by the Master Agreement to water users in Pinal County, Arizona. The agricultural priority water reallocated to the ADWR was subject to the condition that the water retain its non-Indian agricultural delivery priority.

As required in Section 104(a)(2)(C)(i)(I) of the Settlements Act and the August 25, 2006 final reallocation decision, ADWR submitted to the Secretary a recommendation for reallocation of agricultural priority water. This recommendation was transmitted by letter dated January 16, 2014, and ADWR requested the Secretary carry out all of the necessary reviews of the proposed reallocation in accordance with applicable Federal law.

Reclamation prepared an Environmental Assessment (EA) in accordance with the National Environmental Policy Act (NEPA) of 1969, as amended, and pursuant to Section 104 of the Settlements Act. Public scoping was initiated on November 30, 2015 with a newsletter that was sent to interested parties and published on Reclamation's website. Scoping comments were accepted via facsimile, email, U.S. mail, and in-person at the scoping meetings, which were held on December 8-10, 2015 in Phoenix, Casa Grande, and Tucson, Arizona, respectively. Reclamation received two public responses during this initial scoping period, one of which resulted in Reclamation honoring a request for a comment period extension to January 18, 2016.

In June 2016, Reclamation mailed Notices of Availability of the Draft EA to Federal, state, and local agencies, Indian tribes, organizations, proposed recipients, and other interested stakeholders. A public meeting was held on June 22, 2016 in Casa Grande, Arizona, and the commenting period closed on July 22, 2016. Reclamation conducted in-person consultation with the Tohono O'odham Nation on February 17, 2017, and with the San Carlos Apache Tribe on June 16, 2017. The draft EA was revised in response to the comments received. A Notice of Availability for the Final Environmental Assessment—Arizona Department of Water Resources Recommendation for the Reallocation of Non-Indian Agricultural Priority Central Arizona Project Water in Accordance with the Arizona Water Settlements Act of 2004 was issued on November 15, 2019 and the Final Finding of No Significant Impact—Arizona Department of Water Resources Recommendation for the Reallocation of Non-Indian Agricultural Priority Central Arizona Project Water in Accordance with the Arizona Water Settlements Act of 2004 was signed on November 8, 2019.

Rationale for Decision

The Department's decision is to allocate CAP NIA water in accordance with ADWR's recommendation. The ADWR recommendation covered the initial phase, reallocating 46,629 acre-feet per year of NIA priority CAP water of the 96,295 acre-feet per year to be reallocated, as shown in the table in this notice. The total of 46,629 acre-feet per year of CAP NIA priority water in this phase is in two pools: (1) A municipal pool of 34,629 acre-feet for M&I water providers within the CAP service area and the Central Arizona Groundwater Replenishment District, and (2) an industrial pool of 12,000 acre-feet for industrial water users within the CAP service area. The rationale for the decision is based on the following:

(1) ADWR's extensive public outreach, in consultation with Reclamation, to interested parties regarding its recommendation.

(2) An EA evaluating impacts of the proposed reallocation, in accordance with NEPA, and the resulting Finding of No Significant Impact (FONSI).

The Final EA and FONSI can be found on Reclamation's website at: https://www.usbr.gov/​lc/​phoenix/​reports/​reports.html.

Comments on the Proposed Reallocation and Responses

The proposed allocation was published in the Federal Register on June 3, 2020 (85 FR 34232). Comments were accepted through July 6, 2020. The comments received, and responses to those comments, are summarized below.

Three comment letters were received during the Federal Register notice public comment period. Two letters, one from the City of Buckeye and one from Rosemont Copper Company, dated June 30, 2020 and June 24, 2020, respectively, were submitted in support of the proposed action. One letter from the San Carlos Apache Tribe dated July 6, 2020, was submitted opposing the proposed action. The issues raised in this comment letter and Reclamation's response to those comments are summarized here:

Comment 1: The San Carlos Apache Tribe opposes the proposed reallocation of NIA Priority CAP water and respectfully requests that the Secretary decline to approve the proposed reallocation as described in Table 1 of the Final EA (p. 9 of Final EA).

Response 1: The comment is noted.

Comment 2: Reclamation has failed to fulfill its obligation to satisfy all applicable Federal Law in the Final EA. `The Arizona Water Settlements Act (AWSA) states that, prior to making a decision to accept or reject ADWR's recommendation, the Secretary shall carry out all necessary reviews in accordance with applicable law' (p. 1 of Final EA). The Final EA does not satisfy that requirement.

The Final EA contains no legitimate material analysis of the impacts of any of the proposed reallocations. “. . . prior to recipients taking and using the NIA Priority CAP Water reallocation, all environmental compliance, including NEPA, would have to be completed” (p. 9 of Final EA). This quotation reflects the fact that there has been no specific environmental analysis of any of the individual recommended reallocations and that there has been no evaluation of the cumulative impact of the combined recommended reallocations. This approach ensures that there will never be an analysis of the cumulative impact of the recommended reallocations. 'The AWSA obligates the Secretary to approve or reject ADWR's recommendation for reallocation' (p. 5 of Final EA). Therefore, this is a singular decision by the Secretary, the potential impacts of which must be reviewed in a comprehensive cumulative Environmental Impact Statement.”

Response 2: The Final EA was developed in compliance with NEPA, the AWSA, and other applicable authorities.

The scope of the Final EA was to evaluate the proposed decision of the Secretary to approve or reject ADWR's recommendation for NIA Priority CAP water reallocation. The EA has identified the baseline conditions and evaluated impacts on the human environment associated with the Proposed Action to the degree they are known or reasonably foreseeable. Where potential future impacts might occur from a Proposed Recipient's future construction of infrastructure to take and use its NIA Priority CAP water allocation, but no other details are known about the associated location of, or amount of ground disturbance anticipated by, this infrastructure, environmental compliance for such activities cannot be evaluated until those details are known. Further, CAP water service subcontracts that would entitle recipients of the reallocations to actually receive delivery of water in a particular year have not yet been issued. Each CAP water service subcontract typically includes a clause that states, in part, “notwithstanding any other provision of this subcontract, Project Water shall not be delivered to the Subcontractor unless or until the Subcontractor has obtained final environmental compliance from the United States . . .” This is to ensure that any site-specific environmental compliance processes that may be appropriate will be completed prior to actual delivery of any of the reallocated water.

Comment 3: A decision to adopt the recommended reallocation would imprison what little unallocated CAP water remains available to the Central Arizona Project and would establish avenues of unjust enrichment for the proposed recipients of the recommended reallocations. Upon execution of the contracts, each proposed recipient would be in the position to `bank' such water that is available to them under their reallocation, even though they may have no immediate need and/or delivery systems to accept and use the water within the proposed recipients' service or project area.

Response 3: The AWSA provides that the Director of ADWR shall submit to the Secretary a recommendation for reallocation of certain NIA Priority CAP water. The Secretary must either approve or reject the recommendation for reallocation. The AWSA does not authorize the Secretary to change certain recipients or direct alternate uses of the water. ADWR conducted a public process to evaluate and select the proposed recipients that were identified in its recommendation for reallocation. The proposed recipients identified by ADWR have indicated they will use the reallocated water in accordance with applicable laws, for direct use and/or recharge purposes. The Final EA evaluated, pursuant to NEPA, the effects on the human environment of the Secretary's decision whether to approve or reject ADWR's recommendation.

Comment 4: The Final EA fails to disclose the length of time during which the reallocations would exist. Without the time component for each and all recommended reallocations, no credible impact analysis can be developed.

Response 4: No particular length of time was specified because the reallocations would exist indefinitely. The analysis of impacts within the Final EA was framed as such. The Final EA further explains that actual delivery of the reallocated water will occur only after appropriate subcontracts have been executed.

Comment 5: The Final EA fails to address that the growing demand is unsustainable as both a physical and economic fact. The analysis fails to show how the recommended reallocation would meet or lead to the achievement of a sustainable balance between water supply and water consumption under current conditions. `In 2014, municipal water demand was 1.4 million acre-feet annually (MAFA), which was 21 percent of Arizona's water demand' (p. 5 of Final EA). It also fails to analyze how the recommended reallocation would fuel the increased consumption of water and the exacerbation of demand. `The projected statewide water demand will increase to between 8.1 and 8.6 MAFA by 2035, and between 8.6 and 9.1 MAFA by 2060 (Water Resources Development Commission (WRDC) (2011)' (p. 5 of Final EA). The recommended reallocation based upon such growth is unsustainable and therefore irresponsible.

Response 5: The Final EA addresses the issue of growing water demand in the State of Arizona. Additionally, the AWSA empowers the Director of ADWR to make a recommendation for reallocation of NIA Priority CAP water to the Secretary, and thus gives ADWR discretion to weigh, in the first instance, questions of sustainability and competing needs for the water. The recommendation for reallocation was based on ADWR's evaluation criteria. The Secretary must either approve or reject the recommendation.

Comment 6: The Final EA further fails to illustrate how the reduction of groundwater overdraft will occur in the face of increased water use by proposed recipients such as Resolution Copper.

Response 6: As stated on pages 9-10 of the Final EA, the Proposed Action includes reallocation of up to 2,238 acre-feet (AF) annually to Resolution Copper. On pages 12-14, the Final EA further describes why Resolution Copper is not dependent on the reallocation of NIA water for mine operations and as such the mine would still be developed in the absence of this reallocation. The Final EA evaluated the impacts of the proposed reallocation of 2,238 AF annually of NIA water to Resolution Copper to be used for groundwater recharge. An Environmental Impact Statement (EIS) addressing impacts resulting from the proposed mining operations and associated water use is being prepared by the Tonto National Forest (TNF) for the proposed Resolution Copper Mine.

Comment 7: The Final EA fails to show how some of the recommended reallocations are hydrologically connected and therefore fails to analyze the impacts of the interconnections.

Response 7: The Final EA analyzes both the affected environment and the anticipated impacts of the proposed reallocation on water resources. For Apache Junction and Town of Queen Creek, page 50 of the Final EA explains that “. . . based on their proposed direct use of their allocation, no adverse impacts are anticipated because there would be no change from the current uses.” Groundwater modeling using ADWR models for the Active Management Areas (AMAs) potentially affected by Proposed Recipients intending to directly use their CAP allocation has not been performed due to the direct use of the Proposed Recipients' CAP allocation.

Page 50 of the Final EA identifies that Johnson Utilities and Resolution Copper Mining would use its CAP allocation for recharge to offset their groundwater use. Central Arizona Groundwater Replenishment District's (CAGRD) CAP allocation would be used to meet replenishment obligations incurred as a result of excess groundwater use by CAGRD members. No adverse impacts are anticipated from the use of CAP water to offset groundwater use and the use of existing infrastructure to convey the water. Groundwater modeling using ADWR models for the AMAs potentially affected by Proposed Recipients recharging their allocation has not been performed because of the small NIA allocation volumes for each subbasin affected and the net positive benefit to the AMAs from the Proposed Action.

Pages 51-52 of the Final EA state that Resolution Copper would not be “. . . required to offset their permitted groundwater usage, [its] allocation would help in achieving or maintaining safe yield conditions in [Resolution's] respective AMA.” Direct use of the CAP allocation by the mine, if developed, would help to alleviate groundwater decreases around the proposed wellfields.

Additionally, as Page 53 of the Final EA states, Resolution Copper Mine is not dependent on the reallocation of NIA water for mine operations. Therefore, the Proposed Action under this EA is not a connected action with the development of the mine (see Section 3.1 of the Final EA). The effect mining operations would have on the East Salt River Valley Subbasin is not currently known but would be determined as part of the TNF NEPA process for the mine. Accrual of Long-Term Storage Credits under the Proposed Action until the mine is operational or for potential future direct use of the CAP allocation once the mine is operational will only benefit the East Salt River Valley Subbasin.

Comment 8: The Final EA fails to analyze the impacts of recommended reallocation to proposed recipients on the San Carlos Apache Tribe and other Arizona tribal governments and entities that would be impacted by the development of the Resolution Copper Mine. It fails to recognize the vital and essential role that the recommended reallocation directly to Resolution Copper Mine would have on these Tribes.”

Response 8: Please see Response #6.

Pages 12-14 of the Final EA explain why the proposed Resolution Copper mine is not dependent on the reallocation of NIA water for mine operations; the two actions are separate and “not interdependent parts of a larger action, nor do they depend on a larger action for their justification.” An EIS is being prepared by the TNF for the Resolution Copper Mine project. The EIS will address any impacts on the human environment resulting from the proposed mining project. The Secretary's decision regarding whether to approve or reject ADWR's recommendation for reallocation of NIA Priority CAP water has no bearing on the viability of the proposed mine, and TNF's decision regarding Resolution Copper's proposed operations will be made after completion and review of its Final EIS.

Comment 9: Clearly, Reclamation has failed to comply with all the applicable laws when it has not evaluated the cumulative impact of the entire proposed reallocation, including the environmental impact of the use of CAP water at the various locations and for the various activities anticipated by the reallocation.

Response 9: Please see response #2.

The EA has evaluated indirect and cumulative impacts associated with the Proposed Action to the degree those impacts are reasonably foreseeable, and not speculative or totally unknown. Most of the locations at which reallocated water may be used in the future are geographically distant, and it is therefore speculative whether, or how, cumulative impacts may arise from the use of CAP water in these locations. Pages 12-14 of the Final EA state “. . . water service subcontract for the Proposed Recipients contains language that requires completion of site-specific environmental clearances prior to any ground-disturbing activities related to constructing infrastructure necessary to take and use the reallocated water.”

Comment 10: The Final EA does not analyze certain impacts, relies on incomplete or misleading calculations or information, or makes improper assumptions.

Response 10: The comments appear to relate primarily to the sufficiency of the Final EA and not the proposed allocation decision itself. Reclamation considered all comments received relating to the Draft EA and made appropriate revisions before releasing the Final EA and issuing a FONSI. The Final EA and FONSI contained a thorough assessment of the potential effects of the proposed reallocation of NIA priority water on the quality of the human environment. The Final EA and FONSI fully comply with NEPA and appropriately inform the Secretary's decision whether to approve or reject ADWR's recommendation for reallocation.

Secretarial Decision

I hereby give notice of the Department's decision to allocate CAP NIA priority water in the amounts and to the entities as set forth in the table in this notice, and direct the Commissioner of Reclamation, through the Regional Director, Lower Colorado Basin Region, Boulder City, Nevada, to proceed to enter into contracts in accordance with this decision. This decision is made after consideration of the comments received after a proposed allocation was published in the Federal Register on June 3, 2020 (85 FR 34232). A summary of those comments, and responses to those comments are contained below.

CAP NIA priority water allocations are hereby modified in accordance with the information contained in the table below. This decision is effective as of the date of this notice. Insofar as previous allocation decisions are inconsistent with this allocation notice, the affected provisions of such decisions are hereby rescinded.

The Department is publishing this decision of the reallocation of NIA priority CAP water in accordance with the Settlements Act, 118 Stat. 3478, and the Secretary's Final Decision of CAP Water Reallocation, 71 FR 50449 (August 25, 2006). The following table lists the entities to receive NIA priority CAP water and the quantities reallocated to each.

Secretary's Decision for Reallocation of NIA Priority CAP Water

Municipal pool		Industrial pool
State of Arizona entity	Amount in acre-feet per year	State of Arizona entity	Amount in acre-feet per year
Carefree Water Company	112	Viewpoint RV and Golf Resort	400
Metropolitan Domestic Water Improvement District	299	New Harquahala Generating Company	400
Town of Cave Creek	386	Rosemont Copper Company	1,124
EPCOR—Sun City West	1,000	Salt River Project	2,160
Town of Queen Creek (Acquired H2O Water Company)	4,162	Resolution Copper Mining	2,238
Town of Marana	515	Freeport-McMoRan-Sierrita Inc	5,678
Apache Junction Water Utilities Community Facilities District	817
City of El Mirage	1,318
Town of Gilbert	1,832
City of Buckeye (Formerly was Town of Buckeye)	2,786
Johnson Utilities	3,217
Central Arizona Groundwater Replenishment District	18,185
Total NIA Priority CAP Water Reallocated to Municipal:	34,629	Total NIA Priority CAP Water Reallocated to Industrial:	12,000
Total NIA Priority CAP Water Reallocated: 46,629 Acre-Feet Per Year

Timothy R. Petty,

Assistant Secretary for Water and Science.