Colorado River Operations After 2026

In Brief

The Bureau of Reclamation’s July 2026 Final Environmental Impact Statement (Final EIS) marks a major step toward replacing the Colorado River operating rules that expire at the end of 2026. The Preferred Alternative does not prescribe one fixed set of rules through 2036. Instead, it proposes a 10-year framework of operational principles, sideboards, and recurring decision points, with operating guidelines anticipated in two-year intervals unless a consensus-based agreement supports a longer period.

For Basin water users, the practical result is a wider range of potential operations and more frequent planning decisions. The framework preserves room for negotiated solutions, but the modeled shortage levels, priority-based allocation rules, and unresolved interstate disagreements also create material legal and business uncertainty.

The Framework at a Glance

2 YEARS ANTICIPATED OPERATING INTERVAL

5.0-12.0 MAF MODELED LAKE POWELL RELEASE RANGE

UP TO 3.6 MAF MODELED LOWER BASIN SHORTAGE

Modeling assumptions for the Representative Preferred Alternative. The 3.6 maf shortage figure includes assumptions about reductions to Mexico.

A Decision Framework — Not Final Operating Rules

Reclamation’s Final EIS analyzes a Preferred Alternative designed to govern how operating guidelines are developed and adopted through 2036. The framework itself would remain in place, subject to later federal action and environmental review, while the specific operating guidelines for each interval would be developed using then-current hydrology, reservoir conditions, stakeholder input, and the framework’s operating sideboards.

That distinction is central. The Final EIS does not set the actual operating rules for every year through 2036. Reclamation anticipates issuing each interval’s guidelines through a separate decision document published in the Federal Register and then implementing those guidelines through Annual Operating Plans. The Final EIS uses a Representative Preferred Alternative as a modeling construct to evaluate the framework’s potential effects; actual operating guidelines may differ within the analyzed sideboards.

For water users, the framework trades some long-term certainty for operational flexibility. It also creates recurring decision points at which new hydrology, negotiated agreements, and unresolved allocation issues may materially change supply conditions.

What The Representative Preferred Alternative Contemplates

Lake Powell and Upstream Operations

The modeled framework places a strong emphasis on protecting critical infrastructure at Glen Canyon Dam. Lake Powell releases range from 5.0 to 12.0 million acre-feet (maf), depending primarily on Lake Powell elevation, with consultation over additional actions if the reservoir is projected to fall below elevation 3,500 feet.

The Final EIS also contemplates coordinated releases from the Colorado River Storage Project’s Upper Initial Units—Flaming Gorge, Blue Mesa, and Navajo reservoirs—when needed to protect critical Lake Powell elevations, generally within the scope of those facilities’ existing Records of Decision. Voluntary Upper Basin conservation contributions of up to 200,000 acre-feet per year, subject to hydrologic conditions, are also within the analyzed framework.

Lake Mead and Lower Basin Shortages

The Representative Preferred Alternative models Lower Basin shortages of up to 3.6 maf, including assumptions about reductions to Mexico. For 2027-2028, shortages up to 1.5 maf would be distributed according to the approach developed by the Lower Division States; amounts above 1.5 maf would be distributed by priority. After 2028, shortages would be distributed by priority unless the states reach further agreements. Additional reductions would be considered if Lake Mead is projected to fall below elevation 1,000 feet.

These modeled assumptions show the potential scale and distribution of reductions within the framework. They should not be read as the final operating guidelines for every interval.

Why Basin Water Users Should Care

• Shorter planning cycles. A two-year operating cadence can move material supply decisions closer to the time when budgets, capital projects, crop plans, development schedules, and public-service commitments must be finalized.
• Priority exposure. If the states do not reach a later agreement, priority-based shortage allocation after 2028 could create substantially different outcomes among Lower Basin contractors and entitlement holders.
• Broader operational tools. Reservoir coordination, conservation, storage, and voluntary contribution programs may create opportunities, but participation and accounting terms will matter.
• More frequent federal decision points. Each interval may require close review of new decision documents, Annual Operating Plans, technical records, and stakeholder processes.
• Transaction and contract implications. Long-term water, power, real estate, financing, and infrastructure contracts should address shortage, replacement supply, delay, and cost risk.

Litigation Risk Remains Material—But Is Not Inevitable.

The litigation risk is material. The Final EIS follows more than four years of federal, state, Tribal, and stakeholder engagement without a long-term consensus among the seven Basin States, and Arizona officials have publicly objected that elements of the federal approach could place a disproportionate burden on Arizona water users.

At the same time, the structure of the Preferred Alternative creates potential off-ramps. The anticipated two-year intervals allow the states and other parties to continue negotiating, and consensus-based agreements could support guidelines of longer duration. Because the Final EIS establishes a process and sideboards rather than one, fixed allocation regime, the legal posture may evolve as later decision documents adopt specific operating guidelines.

If the Upper and Lower Basin States remain divided over shortage sharing or key Colorado River Compact obligations, interstate litigation remains a realistic possibility. Challenges to later federal operating decisions may also arise. Litigation should be treated as a planning risk, but not as a predetermined outcome.

What Clients Should Do Now

• Quantify exposure. Identify the priority, contract, facility, and operational assumptions underlying each Colorado River-dependent supply or obligation.
• Stress-test the modeled range. Evaluate financial and operational performance across the 5.0-12.0 maf Lake Powell release range and shortage scenarios up to 3.6 maf, with special attention to priority-based outcomes after 2028.
• Review critical agreements. Assess whether water, power, financing, real estate, and project documents adequately address shortage allocation, substitute supply, cost escalation, schedule impacts, and regulatory change.
• Track the next decisions. Monitor Federal Register notices, operating-guideline development, Annual Operating Plans, and stakeholder processes; consider whether technical or legal submissions are warranted.
• Build contingency options. Assess conservation, storage, alternative-supply, portfolio, and transaction strategies before a shortage or project deadline becomes acute.

The Bottom Line

The Final EIS moves the post-2026 process forward without resolving the Basin’s hardest allocation disputes. Its adaptive structure may help the system respond to changing conditions and preserve space for agreement, but it also shifts critical choices into recurring decision cycles. Water users should plan now for both shortage risk and process risk. Clark Hill’s Water team advises public and private clients on Colorado River matters, water-supply planning and transactions, regulatory participation, infrastructure and project strategy, and related litigation. We can help evaluate exposure, develop contingency strategies, and engage as the next federal and interstate decisions take shape.

Clark Hill Water Team

PROFESSIONAL	OFFICE	EMAIL	PHONE
Gabe Racz	Boulder	gracz@clarkhill.com	303.301.2925
Scott Clark	Denver	saclark@clarkhill.com	303.674.7000
John Lemaster	Phoenix	jlemaster@clarkhill.com	602.440.4800
Axel Buchwalter	Phoenix	abuchwalter@clarkhill.com	602.440.4806
Daniel S. Herder	Phoenix	dherder@clarkhill.com	602.440.4898
Sheryl Sweeney	Phoenix	ssweeney@clarkhill.com	602.440.4824

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