Phoenix Stage 2 drought plan: Surcharges, voluntary cuts announced

PHOENIX - Phoenix officials are calling on businesses and residents to cut back on water use as the city prepares to enter Stage 2 of its Drought Management Plan.

The backstory:

"The City of Phoenix expects to enter Stage 2 of its Drought Management Plan in January as Arizona prepares for significant reductions in Colorado River water deliveries. Phoenix customers can continue to expect safe, reliable water service, but the City is preparing to rely more heavily on backup supplies," the city said in an Nov. 10 news release.

A three-part city strategy will draw on backup supplies, develop new water sources and drive down consumption.

The demand-reduction effort asks businesses and residents for a voluntary 5% cut in water use, while directing city departments to trim usage by 10%. The city will also provide conservation incentives and impose a temporary drought surcharge on excessive water consumption.

"Based on current usage, the surcharge would affect an estimated 16 percent of residential monthly bills, 7 percent of commercial bills and 1 percent of industrial bills. Most customers are not expected to incur the surcharge," the city said.

What they're saying:

"We’ve spent decades preparing for the challenges we’re facing today, and those investments have put us in a good position," Mayor Kate Gallego said. "But the cuts from the federal government require us to take further action. Phoenix is stepping up its own conservation efforts, and we’re asking residents and businesses to join us. The choices we make today will help determine the strength and resilience of our city for generations to come."

"Water conservation is a shared responsibility, but we also recognize that families, neighborhoods and businesses have different needs and resources," said Vice Mayor Kesha Hodge Washington, who is a member of the AMWUA board of directors. "As Phoenix takes these additional steps to protect our water future, we must make sure customers have access to the information, tools, and assistance that can help them conserve. Our goal is to protect reliable water service while helping every community be part of the solution."

Three-part plan:

Here's a breakdown of the city's three-part plan and how it'll work.

• Backup supplies: Phoenix plans to cushion Colorado River delivery cuts through regional water partnerships, renewable backup supplies, groundwater recovery systems and stored one-time use water. The resources add operational flexibility, though some remain limited.
• Next-generation supplies: The city is developing Pure Water Phoenix with planned advanced purification facilities at North Gateway, Cave Creek Road and 91st Avenue. In addition, the city is involved in regional initiatives to increase Verde River storage through the Bartlett Dam project and pursue water-sharing opportunities through the Secure Water Arizona Program.
• The next stage of the Drought Management Plan: The expected Stage 2 response targets unnecessary water use, broadens conservation assistance and safeguards backup supplies as long-term projects move forward.

Phoenix has remained under a Stage 1 Water Alert since June 2022. A Stage 2 Water Warning — the next escalation level — takes effect when standard supplies run short, requiring additional water resources or cutbacks in demand. City officials say customer service will not be interrupted.

What you can do:

To help lower water use, the city outlines five practical actions: finding and repairing leaks; tailoring irrigation and outdoor watering to weather conditions; swapping unused grass for desert-adapted landscaping; installing water-efficient fixtures; and making small, consistent daily changes.

• Click here to find water-saving tips and information about conservation programs.
• Click here for more information about drought conditions and the City’s Drought Management Plan.

Surcharge:

The city plans to roll out a temporary surcharge on excessive water consumption as part of a Stage 2 drought response. Customers would pay $2.10 for each unit of water used above monthly thresholds designated for their class, with one unit equaling 748 gallons.

• Residential: $2.10 per unit above 20 units per month.
• Commercial: $2.10 per unit above 300 units per month.
• Industrial: $2.10 per unit above 15,000 units per month.

Surcharges would apply solely to water used past the monthly limit. Customers who stay within or below their threshold would not face the added fee.

The measure takes effect only under a declared Stage 2 drought. Early modeling projects the surcharge would generate roughly $40 million to support conservation efforts and secure more water supplies.

Incentives:

A Stage 2 declaration also widens free water-efficiency consultations for residents, businesses and homeowner associations, while boosting financial incentives for conservation.

• Boost the grass-removal incentive from $2 to $4 per square foot
• Raise the smart irrigation controller incentive from $75 to $150
• Establish a new $100 per year leak-repair incentive

City officials intend for the increased assistance to help consumers lower their water usage while supporting the city’s overarching conservation goals.

By the numbers:

Under new federal operating guidelines, annual Colorado River deliveries to Lower Basin states will drop by 1.25 million acre-feet in 2027 and 2028. A proposed sharing agreement assigns 760,000 acre-feet of those cuts to Arizona.

The river provides about 40% of Phoenix’s drinking water, and the city faces a potential 30% drop in those deliveries. Although recent rainfall boosted storage levels in the Salt and Verde River system, it will not offset the looming cuts to the state's Colorado River supply.

The Phoenix Water Services Department delivers drinking water and wastewater services to about 1.7 million residents.

EnvironmentPhoenixNews