Peoria City Council Approves $104 Million Water Deal to Shore Up Long-Term Supply

Peoria has taken a major step to safeguard its long-term water future after the city council approved two agreements with Vidler Water Company in a 7-0 vote.

The deal, which will cost the city approximately $104.2 million, includes about $95.5 million for water credits and nearly $8.7 million for associated land and infrastructure. The purchase secures 173,672.7 acre-feet of long-term storage credits spread across 100 years, representing roughly 1,736 acre-feet per year.

Deputy City Manager Kevin Burke explained the volume in practical terms. The resource equals roughly 1.5 million gallons of water per day over the next 100 years, enough to serve approximately 5,028 homes over that period.

The acquisition also includes 120 acres of land, two wells, and associated infrastructure in La Paz County, located about 75 miles west of Peoria City Hall. City staff said the water was originally Colorado River water that was stored underground after being delivered through the Central Arizona Project, or CAP, system.

Peoria plans to recover the water through the Vidler wells, return it to the CAP canal, and transport it to the Pyramid Peak Water Treatment Plant.

City officials said the purchase is being driven by the persistence of drought conditions in the Colorado River Basin and the federal government's planned cuts to Peoria's water sources, which are scheduled to begin on Jan. 1 of 2027.

"Four years ago, the council said water security is one of its top priorities," Burke said. "That has only risen in prominence as the Colorado River Basin had yet another dry year and the federal government has issued cuts to Peoria's water sources, scheduled to start on Jan. 1 of 2027."

Water Resources Advisor Melinda Whittington said the long-term storage credits from Vidler will also offset the reduction in available Colorado River water. As shortage conditions persist, Lower Basin states face mandatory reductions totaling 1.25 million acre-feet annually in both 2027 and 2028, including 760,000 acre-feet per year for Arizona. Those cuts will result in a 20% reduction in Peoria's CAP allocation.

Whittington said the impact on Peoria in 2027 will be minimal because the Arizona Water Banking Authority will backfill reductions of municipal and industrial contract water with long-term storage credits.

Before the Vidler acquisition, Peoria's maximum available annual water supply totaled 78,113 acre-feet. The city's greatest water supply source is CAP Colorado River water, at 34,121 acre-feet. The city delivered 34,341 acre-feet of water to customers last year.

"We base our annual maximums on Peoria's 100-year designation of assured water supply," Whittington said. "While we know that some years we use more water, primarily due to weather, the water supplies listed here are annual goals spread out over 100 years."

Councilmember Rick Stokes asked about the possibility of future restrictions on water transportation. Whittington responded that this particular water will belong to the city of Peoria.

"No, this particular water will belong to the city of Peoria," Whittington said. "Originally, it started its life as CAP water that was stored and we're recovering that particular water. Once it earns a long-term storage credit, it becomes the property or asset of the buyer."

Whittington added that the only worst-case scenario she could imagine would be if, for some reason, the CAP could no longer move the water.

Peoria is expecting its designation of assured water supply to be renewed by the end of the year. Once received, the designation will be valid until 2036. Staff will also present a drought plan to the council within the next few months.

The transaction will be considered as part of Peoria's ongoing biennial water-rate study, with discussions and action expected later this year.