“The thing I keep trying to tell people is, in the Colorado River Basin, we are not running out of water,” Rhett Larson, a professor of water law at Arizona State University, said. “We are running out of cheap water.”

One federal option, which could realistically go into effect, would cut water to the Central Arizona Project by nearly 60%, according to Rhett Larson, an ASU water law professor and chief legal counsel for the Arizona Municipal Water Users Association.

“People’s response to the threat was, we’re going to retrench and fight,” Larson said.

Kathryn Sorensen, director of research with the Kyl Center for Water Policy, said three key factors are driving the increases: inflation, aging infrastructure, and the dwindling supply from the Colorado River.

On inflation, Sorensen pointed to the rising cost of equipment and labor. On infrastructure, she said the systems that deliver safe drinking water are overdue for replacement.

Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University, said it could be a “very tidy solution to a really big problem.”

“I think it's a win-win,” Porter said. “San Diego County Water Authority has an overbuilt desal plant, and they would like help paying for that most expensive water and there are water users in southern Nevada and central Arizona that are urgently looking for new water supplies because they're facing uncertainty, except for certainly very deep cuts.”

Every day, hundreds of thousands of drivers travel Phoenix-area freeways lined with desert trees, shrubs and cactuses. Few likely consider what it takes to keep those landscapes alive, or how much water it requires. A new partnership between Arizona State University and the Arizona Department of Transportation is taking a closer look.

Led by Harry Cooper, director of water conservation innovation for the Arizona Water Innovation Initiative, the ADOT Urban Freeway Landscape Water Use Efficiency Project aims to better understand how much water is used to irrigate freeway landscapes, and how to use less while keeping plants healthy.

“They hold great promise. They do incentivize conservation. They do create tremendous operational flexibility,” said Kathryn Sorensen, director of research at Arizona State University’s Kyl Center for Water Policy. “I think people want to see them go forward. They just also know that there’s some things that need to be fixed.”

Despite local backlash, water experts and many local officials appear to have largely made their peace with the industry’s arrival — and with the Phoenix region’s emergence as one of the nation’s largest AI infrastructure clusters.

“There’s not a hair-on-fire context right now,” said Sarah Porter, a fellow at Arizona State University’s Kyl Center for Water Policy. “We just don’t see it.”

“The reason for this current impasse is because the upper basin states have refused to take cuts in their Colorado River use,” said Sarah Porter, the center’s director.

Upper Basin states like Colorado and Utah rely on different water rules than Arizona and other Lower Basin states, complicating negotiations that have dragged on for years.

“If anything, it seems like that gap is widening, which is unfortunate,” said Kathryn Sorensen, director of research at Arizona State University’s Kyl Center for Water Policy. “It doesn't seem like it's moving in the right direction.”