In early June, Lake Powell sat near an elevation of 3,527 feet, about 37 feet above the 3,490-foot minimum power pool, the level below which Glen Canyon Dam's turbines stop generating electricity. That was the backdrop on June 10 when the chair of the Senate Energy and Natural Resources Committee told three downstream states what a lawsuit would cost them.
Across the whole system, the picture is the same. Total storage in the Colorado River reservoirs stood at about 34 percent of capacity, down from 40 percent a year earlier, according to the Bureau of Reclamation's weekly readings. Seven states draw on what is left, and they have spent the better part of two years failing to agree on how to draw less.
Sen. Mike Lee, a Utah Republican and one of the Upper Basin's voices in Washington, used his committee's June 10 hearing to put a price on the failure. He warned Arizona, California, and Nevada that they would lose access to roughly $354 million in federal conservation aid if they sued their fellow states over water rights. The money expires at the end of September.
"States that choose to sue their fellow basin states over Colorado River operations should not expect Congress to reward that decision with additional federal funding," Lee said. "Federal taxpayers should not be asked to subsidize litigation among the states."
The threat lands where it does because the money is the engine of the Lower Basin's own plan. The $354 million is what remains of the $4 billion the 2022 Inflation Reduction Act set aside for drought, and whatever goes unspent when the fiscal year closes on September 30 reverts to the Treasury. The proposal the three Lower Basin states submitted on May 1 leans on precisely that kind of funding. It would conserve 3.2 million acre-feet through 2028, including 700,000 acre-feet of new cuts, paid for through a federal and state cost-share. Cut the federal share, and the arithmetic comes apart.
Lee did not hide his irritation with the states he was addressing. He faulted Lower Basin officials for, among other things, taking out newspaper ads attacking the Upper Basin, and he said negotiators on both sides appeared to be "preparing actively for litigation." Reporters at the hearing confirmed as much: officials in both camps have said privately that they are preparing for court.
Utah arrived with an offer and a limit. Amy Haas, who runs the Colorado River Authority of Utah and has worked on these negotiations for close to two decades, told the committee the state would commit up to 23,000 acre-feet of conservation in 2027 and 2028 through its own funded program, with the Upper Basin pledging 100,000 acre-feet over the first two post-2026 years. Set against the roughly 1 million acre-feet Utah draws each year from its 1.725 million acre-foot allocation, the offer is modest, and Haas framed it as a counter to the charge that the Upper Basin has put nothing on the table. The window to settle this without lawyers and judges, she said, is shrinking faster than Lake Powell.
She was firmer about what Utah would not concede. Federal managers have been releasing water from Flaming Gorge, the reservoir straddling Wyoming and Utah, to keep Lake Powell above its critical elevations. Haas told the committee that those releases cannot become a standing supply. "Flaming Gorge will not save the system," she said, arguing the water must be capped and recovered rather than spent down to cover a Lower Basin shortfall.
The Interior Department, which will write the rules if the states cannot, refused to endorse anyone at the hearing. Andrea Travnicek, the assistant secretary for water and science, said the department could not accept either the Lower Basin's May 1 plan or the latest Upper Basin proposal as written. If the states could not close the gap themselves, she told the committee, "we are going to have to make the decision," and the federal government was prepared to do it.
It has already shown what that could look like. Reclamation's draft environmental review, released in January, lays out five ways to operate Lake Powell and Lake Mead after 2026. Most impose new delivery cuts on the Lower Basin, and none force mandatory cuts on the Upper Basin, though some set Upper Basin conservation targets. The most severe alternative would reduce Arizona's share by as much as 77 percent and Nevada's by 6 percent while leaving other states at current rates.
Lee was not the only senator pressing Travnicek. Arizona Democrat Ruben Gallego pushed from the opposite side, telling her the river is a lifeline for a state that hosts the most advanced semiconductor manufacturing in the Western Hemisphere, an industry that cannot run without water.
The dispute traces back to a 1922 compact that split the river evenly between the two basins, 7.5 million acre-feet each, on the assumption that it carried 16.4 million acre-feet a year. Flows since 2000 have averaged 12.4 million. The deal divided water that was never there.
The current operating guidelines expire on October 1, 2026. The states already missed a November 2025 deadline to deliver a consensus framework, and some operational decisions for 2027 must be made as early as August. Lee reminded the room that Congress holds approval authority over any long-term interstate compact and that it intends to exercise that authority. "Congress will not be a bystander in this process," he said. "Delay carries its own consequences, and the basin can no longer afford to wait."
