Key Points:

• Three proposals involve creating desalination plants using ocean water

• State law will keep proposals confidential until contracts are announced

• The proposals come amid years of cuts to the Colorado River water supply

Three years after an obscure Arizona agency was tasked with finding new water supplies for the state, it has received six proposals from groups hoping to tap more than $375 million in state money to develop new water sources.

The proposals include three to create desalination plants using ocean water — likely from the Sea of Cortez in Mexico. 

But exactly what is being proposed — and how much it will cost — remains confidential. And the Water Infrastructure Finance Authority says state law will keep it that way until its board members award one or more contracts to move ahead with more detailed plans.

The board of the agency known as WIFA heard only the names of the companies or teams of companies making the proposals at their meeting last week. Ted Cooke, a board member who chairs the agency’s Long Term Water Augmentation committee, said he and other board members won’t learn more until they prepare to award contracts, which could happen as soon as October.

Instead, agency staff will review each submission confidentially to determine if they meet the requirements laid out by the board in its solicitation.

“Even the board members will not be involved in that evaluation,” Cooke told the board.

The three teams that made proposals either declined to provide details of what they want to build or did not respond to requests for comment.

The developments come while Arizona, which lost part of its Colorado River water supply in recent years, navigates more possible cuts as river flows continue to remain low. In addition, demand for groundwater in metro Phoenix prompted state water officials to halt many new housing developments as groundwater depletion remains an issue statewide.

“WIFA is the next stop for new water supplies as the existing water supplies that we have as a state are impaired, reduced or more, go away in some other, some other means,” Cooke said. “And that’s why this is so important.” 

Cooke is a former general manager of the Central Arizona Project, which runs the canal bringing Colorado River water into Phoenix and then south to Tucson. He’s been nominated by President Donald Trump to run the U.S. Bureau of Reclamation, which has the ultimate authority over Colorado River supplies, but will remain on the WIFA board until the Senate confirms him.

The initial contracts will not actually produce any water. Instead, they will task the companies with further developing their plans using some of the money the Legislature has given WIFA since 2022. And once they are awarded, all six proposals will become public.

The expanded role of obtaining new water supplies was originally to be funded with $1 billion over three years. However after the initial $333 million deposit in the augmentation fund in 2022, state budget woes and political decisions limited additional investments. 

That means WIFA will need to use some creative financing or other means to help support the huge private investments water suppliers will need to make to build massive new plants and pipelines to move the water into central Arizona. 

WIFA solicitation documents show the state needs to obtain from 100,000 to 500,000 acre feet of new water in the next 5-15 years and could need as much as 1.5 million acre feet of new supplies by 2060. An acre foot equals about 325,000 gallons, enough water for three families for a year, according to the Arizona Department of Water Resources.

For now, WIFA wants up to 500,000 acre feet of new water to be available within 10 years. The 2022 law envisions at least 75% of that water to come from out of state. 

Four of the six proposals come from a Canadian company, EPCOR, a firm that currently supplies many Arizona municipalities with water and wastewater treatment. 

It proposes a desalination plant and aims to develop three other sources. EPCOR contemplates treating wastewater, tapping surface water and using a third, unidentified source to provide new supplies. The board’s public announcement contains no information about that source.

The company has a broad reach but no experience building desalination plants.

Its sole shareholder is the city of Edmonton in the province of Alberta. EPCOR builds, owns and operates electrical and natural gas networks, water transmission and distribution networks and treatment facilities, and sewer and floodwater systems in Canada and the United States.

Another desalination proposal comes from a company called ZARETAW, LLC, led by an Israeli attorney. That lawyer, Erez Hoter-Ishay, pushed WIFA to approve an unsolicited desalination proposal for a plant on the Sea of Cortez to be built by an Israeli company, IDE Technologies, in 2022.

That proposal came shortly after the then-Gov. Doug Ducey and the Legislature approved the 2022 law expanding the mission of the once-obscure state agency to include finding new supplies to import into Arizona.

The unsolicited proposal was never acted on after it prompted questions from some lawmakers about backroom dealings.

Ducey had visited Israel numerous times during his eight years as governor with an eye on new water technologies. He called for Arizona to build a desalination plant in his 2022 state of the state address, his last as the state’s chief executive. 

The cost of the proposed new plant would have been more than $5 billion and be privately financed, Hoter-Ishay told the WIFA board at the time. However, the development group needed Arizona to commit to buying all the water produced — whether or not the state needed it.

Hoter-Ishay was at the time working for IDE, an Israeli firm that has developed desalination plants since the 1960s in Israel, China, the U.S. and other countries. It runs plants in several countries. 

In November 2023, ZARETAW and IDE responded to a request from WIFA with another proposal for a desalination plant in Mexico, along with a pipeline to bring the water to the Phoenix area. 

WIFA spokesman Ben Alteneder said he could not say if IDE was involved in the current proposal, and Hoter-Ishay didn’t respond to an email seeking more information.

That proposal contemplated delivering at least 300,000 and as many as 1 million acre feet of water from Mexico to metro Phoenix through a 200-mile pipeline. The initial plant and pipeline construction would cost about $5.5 billion, with the state committing to buy the water for 100 years at a price that wasn’t outlined in the plan. 

The third desalination proposal is from a partnership called the ACCIONA-Fengate Water Augmentation Alliance. There’s no other description of the group, but Acciona is a Spanish firm that develops those plants across the world. 

Acciona and a construction firm won a contract last December to design and build a desalination plant in Carlsbad, CA. It already runs plants in Saudi Arabia, Australia and Florida, among others. Fengate Capitol is a private equity firm that specializes in infrastructure investment. 

Once the board picks one or more of the proposals and awards the contracts to further develop their plans, it will wait for more detailed proposals and eventually could pick one or more of the projects to fund. 

Board member Peter Kim said he’s going to ask tough questions along the way, even though last week’s meeting was not the time to do so.

“Throughout this process, we’ve got an important decision to make, and I’m just going to state that I’m always going to ask the same questions,” he said. “So I might as well ask them now, just to start the pattern: How much water is each of these projects and where does it go? How much does it cost, and when do we get it?”

Those answers wouldn’t come immediately, but they will come, WIFA Director Chelsea McGuire, said.

“So this is as much public information as we are allowed, essentially, to provide,” McGuire told the board.

“But the questions you have obviously are valid, and that is the kind of information that the long term augmentation committee and then ultimately, the board will have before it makes decisions on these proposals,” she said. “You’re not going to be asked to make any decisions without seeing the information you need to make those decisions. It’s just not public information at this point.”

Board chair Jonathan Lines then asked McGuire to lay out the legal rules that bar the public release of more information now.

“I think it might be appropriate to explain why this is necessary,” Lines said.

“Because there’s, let’s be honest, everybody always expects that … there’s some backroom deal going on,” he continued. “And I know that’s not what’s happening here, but the controlled rollout of the information might appear to some (to imply that), so let’s just take the opportunity to say why we’re doing it this way and why it’s a good thing.”

McGuire then cited provisions of Arizona law and its administrative code that keep the procurement process confidential.

Cooke, for his part, said he was excited to be at this point just a year after the board approved the process for soliciting proposals. He said as the board moves toward evaluating and then approving actual projects, he can actually envision water coming out of a pipe in metro Phoenix.

“I’m very excited, if you can’t tell, and I never would have predicted this,” he said. “I’d hoped for this outcome, but I never would have predicted it.”