EDIT
Under rules that date to the 1920s, the four upper Colorado River basin states of Colorado, New Mexico, Utah and Wyoming are obligated to let 8.23 million acre feet of water per year flow to three lower basin states -- Arizona, California and Nevada. An acre-foot is about 326,000 gallons, or about enough to supply two homes for one year, according to water authority estimates.
Under the proposed plan, the upper basin states could release less water downstream during a drought and if a less-than-average snowpack accumulates on the western slopes of the Rocky Mountains.
The lower basin states would adjust through what the plan calls "intentionally created surpluses." For example, the Southern Nevada Water Authority would be able to tap water holdings in the Coyote Spring area of Nevada and exercise its rights to draw water from the Virgin and Muddy rivers. Water for agriculture in Southern California could be "banked" in Lake Mead for future use if farm lands are allowed to go fallow.
The proposal also contains a promise from the authority to help finance construction of a reservoir in Southern California's Imperial Valley, near the Mexico border.
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http://www.enn.com/today.html?id=12682