ARIZONA WATER

Arizona groundwater and data centers: assured water supply, AMAs and Colorado River cuts

How Arizona manages groundwater — Active Management Areas, the 100-year assured water supply rule, the Phoenix AMA model — and what Colorado River cuts and data center growth mean for water availability.

By Argos Tellus · Updated October 2, 2026

KEY TAKEAWAYS

Groundwater is about 41% of Arizona’s water supply; the Colorado River delivers about 38%, in-state rivers such as the Salt and Verde about 18%, and reclaimed water about 3% (Arizona Department of Water Resources).
Arizona’s 1980 Groundwater Management Act created Active Management Areas (AMAs) with strict groundwater rules; there are now seven, including Phoenix, Tucson and Pinal.
In June 2023 ADWR’s Phoenix AMA model projected about 4.86 million acre-feet of unmet groundwater demand over 100 years, and the state stopped approving new assured water supply determinations that rely solely on groundwater there.
The first-ever Colorado River Tier 1 shortage cut Arizona’s 2022 allocation by 512,000 acre-feet — about 18% — pushing more demand onto groundwater.
For data centers in Arizona, water risk is shaped as much by rules (AMAs, assured supply, provider portfolios) as by hydrology — and cooling design choices matter more here than almost anywhere.

Where Arizona’s water comes from

Arizona draws on four main sources. According to the Arizona Department of Water Resources (ADWR), groundwater supplies about 41% of the state’s water, the Colorado River about 38% (largely through the Central Arizona Project canal), in-state surface water such as the Salt and Verde river systems about 18%, and reclaimed water about 3%.

Groundwater is the buffer. When Colorado River deliveries fall, farms and cities turn to wells — which is why Colorado River shortages and groundwater depletion in Arizona are tightly linked.

Source	Share of Arizona water supply (ADWR)
Groundwater	≈41%
Colorado River	≈38%
In-state rivers (Salt, Verde and others)	≈18%
Reclaimed water	≈3%

Active Management Areas and the Groundwater Management Act

Arizona’s 1980 Groundwater Management Act is one of the strictest groundwater laws in the U.S. It created ADWR and designated Active Management Areas (AMAs) — Phoenix, Pinal, Prescott and Tucson — where groundwater rights are defined, irrigated acreage cannot expand, and conservation requirements apply. Santa Cruz was added in 1994, Douglas in 2022, and Willcox later became the seventh AMA.

Outside AMAs and irrigation non-expansion areas, groundwater pumping is far less regulated, which has drawn large agricultural users to rural basins and raised concerns about falling water tables there.

The 100-year assured water supply rule

Inside AMAs, new subdivisions must demonstrate a 100-year assured water supply — physically, legally and continuously available water of adequate quality — either through their own certificate or by being served by a water provider with a designation of assured water supply.

In June 2023, ADWR released a Phoenix AMA groundwater model projecting about 4.86 million acre-feet of unmet demand over 100 years (about 4% of projected groundwater demand). As a result, ADWR said it would no longer approve new assured water supply determinations based solely on groundwater in the Phoenix AMA. A later model update reduced the projected unmet demand to about 3.6 million acre-feet, largely by assuming more pumping, not better aquifer conditions.

Colorado River shortages push demand onto groundwater

In August 2021 the federal government declared the first-ever Tier 1 shortage on the Colorado River for 2022, cutting Arizona’s allocation by 512,000 acre-feet — about 18% — with the cuts falling on Central Arizona Project users, especially agriculture in Pinal County. Deeper shortage tiers and conservation agreements followed as Lake Mead declined.

Each acre-foot of lost river water must be replaced, conserved or pumped from aquifers. That shifts risk onto groundwater basins already in long-term decline.

What this means for data centers in Arizona

Metro Phoenix is one of the largest U.S. data center markets, and its hot, dry climate makes evaporative cooling very effective — and very water-intensive. Operators increasingly pair Arizona campuses with water-saving designs; Microsoft, for example, has said it will pilot its zero-water evaporative cooling design in Phoenix (see data center cooling and water).

For a specific site, the questions are: which water provider serves it and how secure is that provider’s portfolio (Colorado River, Salt River Project surface water, groundwater, reclaimed water); whether on-site groundwater use is allowed and under what rights; how the local basin’s water levels are trending; and how much demand peaks in summer, when supplies are tightest. The data center groundwater due-diligence checklist covers each step.

Frequently asked questions

How much of Arizona’s water comes from groundwater?

About 41%, according to the Arizona Department of Water Resources. The Colorado River supplies about 38%, in-state rivers about 18% and reclaimed water about 3%.

What is an Active Management Area in Arizona?

A region designated under the 1980 Groundwater Management Act where groundwater use is strictly regulated: rights are defined, irrigated acreage cannot expand, conservation requirements apply, and new subdivisions must prove a 100-year assured water supply. Arizona has seven AMAs, including Phoenix, Tucson and Pinal.

Why did Arizona limit new groundwater-based development around Phoenix?

In June 2023, ADWR’s Phoenix AMA groundwater model projected about 4.86 million acre-feet of unmet demand over 100 years, so the state stopped approving new assured water supply determinations that rely solely on groundwater in the Phoenix AMA.

How much did Colorado River cuts reduce Arizona’s water?

The first Tier 1 shortage, for 2022, cut Arizona’s Colorado River allocation by 512,000 acre-feet, about 18% of its entitlement.

Can data centers in Arizona use groundwater?

It depends on location and water rights. Inside Active Management Areas groundwater use is tightly regulated; most data centers are served by municipal providers whose portfolios mix Colorado River, Salt River Project, groundwater and reclaimed water. Site-level due diligence should confirm the provider’s supply and any on-site rights.

HOW ARGOS HELPS

Phreatic — groundwater availability

Water-level forecasts, drawdown and sustainable yield for a site’s wells across its design life.

CARI — aquifer reasoning agent

Ask how secure a site’s groundwater supply is, in plain English.

SOURCES

Figures are taken from the primary sources above and dated as of the update shown. Concentrations are expressed in mg/L. Spot an error? Email support@argostellus.com.

RELATED GUIDES

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