1. PILOT SYSTEM CONSERVATION PROGRAM
December 14, 2017

2. Pilot System Conservation Funding Agreement Effective July 30, 2014
Parties to the Funding Agreement
Reclamation, CAWCD, MWD, SNWA, Denver Water
Purpose
Reduce Colorado River water demand through voluntary, compensated system conservation
Retain conserved water in Colorado River reservoirs Lake Powell and Mead to help offset declining reservoir levels due to historic drought for the benefit of the system
Implementation
Upper Colorado River Commission - Upper Basin
Reclamation’s Lower Colorado Region - Lower Basin 2

3. Implementation Approach
Proposals requested
Selection Criteria
Conserved water must have history of use
Cost per AF of conservation
Diversity
Project type
Water user class
Geographical location
Test new concepts
Agreements
3 contracts per project
Contract Administration 3

4. Pilot Program Funding and 2015 Through 2017 Costs
Total Program Funding: ≈ $23 million
Upper Basin: ≈ $4.5 million
Water conservation: ≈ 22,000 AF
Lower Basin: $18.6 million
Non-Federal/Federal cost-share: 44%/56%
Water conservation: ≈ 117,000 AF in Lake Mead
Average cost: $160/AF 4

5. Pilot System Conservation Program Lower Basin 2015 Through 2017
10 Projects
3 system efficiency projects - AZ and CA
1 agricultural land fallowing project - AZ
3 forgone offstream banking projects - AZ
1 local water supply substitution project - AZ
2 water importation projects - NV
Critical Mechanisms
Project participant must submit a downward adjusted water order to Reclamation
Junior water user(s) in same state as system conservation project agrees not to order the conserved water 5

6. Lower Basin Summary Pilot Program Success
Voluntary agreements with participants in Lower Division States
Average cost is $160/AF
Wide variety of projects
All classes of water users participated
Ultimately increase Lake Mead elevation by 1.4 feet
Shortage averted in the Lower Basin
Recipient of John W. Keys III Award for Building Partnerships and Strengthening Relationships 6