Gov. Katie Hobbs announced last June that the state would no longer approve some development projects in areas where groundwater is the only source. But in her State of the State address earlier this month, Hobbs proposed a new pathway for groundwater-reliant communities to continue growing.

To build a new home in most urban parts of Arizona, developers must prove the property has enough water supply to last 100 years. But a 2023 study by the Arizona Department of Water Resources showed groundwater in the Phoenix area would fall short of demand within a century. Hobbs said at the time that meant the state could no longer allow new development where groundwater is the only available water supply.

To provide another option, the Governor’s Water Policy Council recommended creating the Alternative Designation of Assured Water Supply program. Tom Buschatzke, director of the Arizona Department of Water Resources, said the program would allow some utilities and smaller municipalities ways to work around hurdles to the 100-year Assured Water Supply permits.

“It allows some groundwater to be used for some period of time to build homes, but it requires the acquisition and the eventual deployment of non-groundwater supplies,” Buschatzke said. “All the details are still being worked out in terms of those timeframes and the amount and the number of years, but over the 100-year period it will reduce groundwater pumping in total.”

As participating communities transition off groundwater over time, Buschatzke said they may be able to negotiate for new water supplies from the Colorado River Indian Tribes or from other groundwater basins beyond the Phoenix area that have been specially designated for urban uses.

Communities like Buckeye and Queen Creek, which rely heavily on groundwater, would be most impacted by the governor’s new plan. But Buschatzke said private water companies might also take advantage of the program.

Arizona continues to face major challenges to its Colorado River water allotment and its underground aquifers, but Buschatzke said he believed providing this new option for development to continue on the periphery of the Phoenix area would not threaten the state’s dwindling water supply.

“This is completely consistent with the Assured Water Supply program rules. It’s not a step backwards. It’s actually a step forward for those providers who right now are using water but don’t have an obligation to replenish the groundwater pumping,” Buschatzke said.

Hobbs could implement the plan without legislative approval. Buschatzke expects the Governor’s Regulatory Review Council will begin looking over the proposed rules within the next month. He said the program would likely take effect in September or October.