Water resale consideration

San Diego is trying to turn surplus desalinated water into a tradable drought supply for Arizona, Nevada and other thirsty neighbors. (sdcwa.org) The San Diego County Water Authority said on April 2, 2025 that it had enough water for local demand “for the foreseeable future” and was seeking to transfer a limited amount to areas of the West with greater scarcity. The agency said sales or leases could help offset the cost of decades of water investments and ease pressure on local rates. (sdcwa.org) That effort moved from concept to structure in 2026. In February, the authority approved a memorandum with the U.S. Bureau of Reclamation, the Metropolitan Water District of Southern California, and agencies in Nevada and Arizona to explore an interstate pilot, and on March 19 it signed a separate 21-year deal to send at least 10,000 acre-feet a year to Western Municipal Water District in Riverside County. (sdcwa.org, sdcwa.org) The water at the center of the talks comes from the Claude “Bud” Lewis Carlsbad Desalination Plant, which began commercial operations in 2015. The San Diego County Water Authority says its 30-year purchase agreement allows it to buy up to 56,000 acre-feet a year, roughly 10 percent of regional demand. (sdcwa.org) Desalination means removing salt from seawater or brackish water so it can be used for drinking or industry. California’s Department of Water Resources has been pushing the broader strategy as climate swings widen the gap between wet years and dry years, and in February 2026 the state set a target of 9 million acre-feet of additional water supply by 2040. (water.ca.gov, water.ca.gov) California’s water agency also says transfers are already a routine drought tool, with hundreds occurring each year, usually between willing buyers and sellers with legal rights to the water. The state says those deals must avoid harming other users or the environment, which is one reason interstate exchanges can take months or years to arrange. (water.ca.gov, sdcwa.org) The San Diego pitch is not to pipe Carlsbad water directly across state lines. The structure under discussion is an exchange: other Colorado River users would help fund desalinated output in return for access to San Diego’s share of Colorado River supplies, according to a Wall Street Journal report reposted by the water authority. (sdcwa.org) That proposal is landing as Colorado River shortages keep tightening the region. The Wall Street Journal report said Lake Mead had fallen to about 1,060 feet in elevation and Arizona users had already cut water consumption by nearly a third, while Southern Nevada Water Authority General Manager John Entsminger said he planned to sign an exploratory agreement with San Diego and Arizona’s water agency. (sdcwa.org) San Diego says its own planning supports the export push. The authority’s draft Urban Water Management Plan says its diversified supplies and conservation programs can meet regional needs through 2050, even through multiple dry years, and the Riverside deal is expected to generate about $13.5 million a year in revenue. (sdcwa.org, sdcwa.org) The next step is not a water sale but more negotiation and approvals. If the pilot clears federal, state and local hurdles, San Diego’s most expensive local water source could become a new bargaining chip in the West’s drought economy. (sdcwa.org, sdcwa.org)