State considers using effluent water credits

The Arizona Water Banking Authority is exploring the possibility of buying purified wastewater to distribute later – which would be unprecedented.

At the AWBA commission’s meeting on Sept. 13, new bank manager Rebecca Bernat asked whether she should look into the possibility of the bank using effluent water credits.

Until 2019, AWBA has only used excess Colorado River water long-term storage credits. That’s for the Central Arizona Project water stored in aquifers. Users can get the water later during a potential shortage by pumping it back out.

Now, there isn’t any excess CAP water left.

“It’s a different source for the bank,” Eric Braun, Gilbert water resources manager, said of the effluent storage. He was appointed to the commission by former Gov. Doug Ducey and said he supports the effluent water idea. “There’s no more longer use CAP entitlement water for the bank to purchase. … As the supply of those credits decreases, they’re looking for new alternatives.”

The Central Arizona Project is the only type of water the bank deals in now. The CAP canal system transports water across the Valley and not just any type of water can be added to it – which is one of a few challenges AWBA could face with effluent water.

CAP specifically does not allow effluent water to be added into the canal system, so that water would have to be moved around in other ways. Or CAP could potentially change its rules.

Effluent water is treated wastewater, but pure enough to meet drinking water standards. Like Colorado River water, it can be used to recharge aquifers and be pumped out for future use. It just comes from water treatment facilities rather than the river.

Effluent credits exist now and are purchased by various entities, but the bank has never used them and they aren’t used as much as CAP long-term storage credits (LTSCs).

This year, the Phoenix active management area (AMA) actually had a big spike in the sale of effluent water credits – larger than any other time in the past 25 years, but 87% of the AMA’s credits are CAP LTSCs and 13% are effluent LTSCs. Those numbers vary between AMAs, but CAP LTSCs are more broadly used.

The Phoenix AMA has 1,036,226 effluent credits and Tucson AMA has 323,511 LTSCs. Bernat said the other AMAs might also have effluent credits. But wherever the bank buys credits (if they decide to) needs to be where recovery of the water can happen.

Facilities that produce effluent water tend to be located in AMAs because that’s where Arizona’s population is concentrated, Bernat said.

Another thing AWBA must consider is the price difference between purchasing effluent credits and CAP credits.

Bernat said in her presentation that the data is limited because prices don’t need to be disclosed when buyers get credits, but in one case she studied in the Tucson AMA, the CAP credits were sold at $209 per acre foot and the effluent credits sold for $180. But whether effluent credits would be cheaper now remains to be seen.

Ultimately, the commission agreed to direct Bernat to investigate this potential move further. Tom Buschatzke, ADWR director and AWBA commission chair, said, “We certainly need to pursue all water resources. Many other forums are having the same types of discussions. We can’t look at it with a myopic or singular view.”

Braun said he expects that the bank’s use of effluent credits is not far off at all if they do decide to go forward with it.

“I think it’s a good idea yeah, I still need to hear about what might be some drawbacks to it, but my first inclination is that it’s a new market to try to get into,” he said.

The next AWBA meeting is scheduled for Dec. 6.