By Habari Entertainment | November 10, 2026
PHOENIX — Phoenix expects to enter Stage 2 of its Drought Management Plan in January 2027, asking residents and businesses to voluntarily reduce water use by 5% and introducing a temporary surcharge for higher-volume customers as Colorado River deliveries decline.
City officials outlined the response during Tuesday’s City Council Policy Session. The plan also calls for City departments to reduce water use by 10%, expand conservation assistance, and increase incentives for grass removal, efficient irrigation controllers, and leak repairs.
According to the City’s Nov. 10 announcement, safe, reliable water service is expected to continue. Phoenix plans to rely more heavily on backup supplies while developing new sources and reducing demand.
Who would pay the drought surcharge?
The planned surcharge would add $2.10 for each unit of water used above a monthly threshold. One unit equals 748 gallons. The charge would take effect when Stage 2 is declared.
| Customer class | Monthly threshold | Additional charge |
|---|---|---|
| Residential | 20 units, or 14,960 gallons | $2.10 per unit above the threshold |
| Commercial | 300 units, or 224,400 gallons | $2.10 per unit above the threshold |
| Industrial | 15,000 units, or 11.22 million gallons | $2.10 per unit above the threshold |
Only consumption above the threshold would incur the surcharge. For example, a residential customer using 25 units in a month would pay an additional $10.50 on the five units above the threshold.
Based on current usage, the City estimates the charge would affect 16% of residential monthly bills, 7% of commercial bills and 1% of industrial bills.
Preliminary modeling projects approximately $40 million in revenue to help fund conservation programs and additional water supplies. The release does not specify the period covered by that estimate.
Bigger incentives to save water
Phoenix plans to expand no-cost water-efficiency consultations for residents, businesses, and homeowners associations, alongside increased financial incentives.
| Conservation incentive | Current amount | Planned amount |
|---|---|---|
| Grass removal | $2 per square foot | $4 per square foot |
| Smart irrigation controller | $75 | $150 |
| Leak repair | New incentive | $100 per year |
The City is encouraging customers to repair leaks, adjust irrigation to the weather, replace unused grass with desert-adapted landscaping and install water-efficient devices.
Water Services Director Brandy Kelso said conservation would help preserve backup supplies while Phoenix works to maintain reliable service. Vice Mayor Kesha Hodge Washington emphasized making assistance accessible to communities with different needs and resources.
Colorado River reductions drive the response
Phoenix receives approximately 40% of its drinking-water supply from the Colorado River, and those deliveries could decline by about 30%, according to the City.
The City said new federal operating guidelines would reduce Lower Basin deliveries by 1.25 million acre-feet annually in 2027 and 2028. Under a proposed sharing agreement, Arizona would absorb 760,000 acre-feet of those reductions.
Recent rainfall has improved storage in the Salt and Verde River system, the City said, but does not eliminate the expected Colorado River reductions.
Phoenix has been in Stage 1 — Water Alert since June 2022. The anticipated Stage 2 — Water Warning response would increase conservation efforts and the use of additional supplies.
Backup supplies and new projects
Phoenix’s response includes renewable backup supplies, stored water, groundwater recovery infrastructure, and regional partnerships. Water Resources Management Advisor Max Wilson said those resources provide flexibility but require careful management because reserves are limited.
Longer-term projects include Pure Water Phoenix, with advanced water purification facilities planned at Cave Creek Road, North Gateway and 91st Avenue. Phoenix is also participating in efforts to expand Verde River storage through the Bartlett Dam project and pursue water-sharing opportunities through the Secure Water Arizona Program.
Mayor Kate Gallego said decades of preparation have positioned Phoenix to respond, while calling on residents and businesses to join the City’s conservation efforts.
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