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June 27, 2023
Bureau of Reclamation Funding in the Inflation Reduction Act
(P.L. 117-169)
In August 2022, Congress enacted P.L. 117-169, popularly
Previous Reclamation updates on IRA implementation have
known as the Inflation Reduction Act (IRA). Among its
been compiled on Reclamation’s IRA website
funding provisions, the law provided approximately $4.6
(https://www.usbr.gov/inflation-reduction-act/) and in the
billion in mandatory appropriations for four new authorities
January 2023 White House Inflation Reduction Act
of the Bureau of Reclamation (Reclamation, part of the
Guidebook (https://www.whitehouse.gov/wp-content/
Department of the Interior). IRA mandatory appropriations
uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf).
are available from FY2022 through FY2026 or FY2031
(depending on the provision). The majority of IRA funding
The remainder of this In Focus discusses Reclamation IRA
is for drought mitigation in Reclamation States and
funding for each of the four authorities receiving funds.
territories, with priority given to the Colorado River and
areas experiencing “long-term drought.”
Drought Mitigation
Section 50233 of the IRA provided $4.00 billion in funding,
Congress provided Reclamation’s IRA funding in addition
available through FY2026, to mitigate drought in the 17
to another major emergency supplemental appropriation,
semiarid western Reclamation States (as authorized in the
the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-
Reclamation Act of 1902). Reclamation is to make this
58), enacted in November 2021. For its part, the IIJA
funding available to public entities and Indian tribes in the
included $8.3 billion in emergency supplemental
form of grants, contracts, or financial assistance
appropriations for Reclamation, in equal installments from
agreements. Congress also specified that priority for these
FY2022 to FY2026. The IIJA provided funding for 13 new
funds shall be provided to the Colorado River Basin and
and existing Reclamation authorities (Figure 1).
other areas experiencing comparable “long-term drought.”
Congress specified several potential uses of these funds:
Figure 1. Bureau of Reclamation Funding in the
Inflation Reduction Act (P.L. 117-169) and
1. Compensation for a temporary or
Infrastructure Investment and Jobs Act (P.L. 117-58)
multiyear voluntary reduction in
diversion of water or consumptive water
use.
2. Voluntary system conservation projects
that achieve verifiable reductions in use
of or demand for water supplies or
provide environmental benefits in the
Lower Basin or Upper Basin of the
Colorado River.
3. Ecosystem and habitat restoration
projects to address issues directly caused
by drought in a river basin or inland water
body.
Colorado River Basin System Conservation and
Efficiency Program
Reclamation has announced several programs in the
Colorado River Basin to be funded by Section 50233
(Table 1). In October 2022, the bureau announced a new
program, the Lower Colorado River Basin System
Conservation and Efficiency Program, that expands on
previous pilots of this concept. The first component
(referred to as Component 1a) will pay Colorado River or
Central Arizona Project (CAP) water delivery contract or
entitlement holders a set amount per acre-foot over the next
Source: CRS, based on P.L. 117-169 and P.L. 117-58.
one to three years for efforts that will result in additional
Notes: IRA = Inflation Reduction Act; IIJA = Infrastructure
water in Lake Mead. Under the program, one-year
Investment and Jobs Act; m = mil ions; CO River = Colorado River;
agreements receive $330 per acre-foot, two-year
DCP = drought contingency plan.
agreements receive $365 per acre-foot, and three-year
https://crsreports.congress.gov
Bureau of Reclamation Funding in the Inflation Reduction Act (P.L. 117-169)
agreements receive $400 per acre-foot. Reclamation also
R45546, Management of the Colorado River: Water
announced a component for contractor-proposed prices and
Allocations, Drought, and the Federal Role.
terms. As of June 2023, Reclamation had allocated $17
million for these projects in 2023 and expected to allocate
Disadvantaged Community Domestic
$125 million for these projects through 2026.
Water Supply Projects
Section 50231 of the IRA contained $550.0 million,
In May 2023, Reclamation announced a second component
available through FY2031, for Reclamation to provide up to
for this program, for “long-term” contractor-proposed
100% of the cost for the planning, design, and/or
agreements. It would similarly pay Lower Colorado River
construction of water projects where the primary purpose is
Basin contractors a set price per acre-foot for consumptive
to provide domestic water supplies to disadvantaged
use reduction, based on contractor-proposed prices,
communities or households. Pursuant to this authority,
duration, and verification methodologies. Contractors must
Reclamation is to establish and adopt criteria to identify
provide economic justifications for their terms, which will
applicable disadvantaged communities or households in a
be reviewed and finalized by Reclamation. The
Reclamation state or territory that do not have reliable
announcement is open until the end of July 2023.
access to domestic water supplies (43 U.S.C. §391). The
funding mechanism may be via grants, contracts, or
Table 1. Lower Colorado River Basin Conservation
financial assistance agreements at a cost share determined
and Efficiency Program
by the Commissioner. In May 2023, Reclamation
Potential Payments to Contract Holders
announced $5.5 million available to the U.S. territories of
American Samoa, Guam, the Commonwealth of the
Funding
Northern Mariana Islands, and the U.S. Virgin Islands for
($ per
projects to provide domestic water supplies to communities
Acre-
that do not have reliable access to potable water. As of June
Component
Description (Term)
Foot (af))
2023, Reclamation stated that it is developing a program for
the remainder of this funding.
1a.
Set price agreements (one year)
$330/af
1a.
Set price agreements (two years)
$365/af
Solar Canal Improvements
Section 50232 of the IRA contained $25.0 million,
1a.
Set price agreements (three years) $400/af
available through FY2031, for the design, study, and
implementation of pilot projects that would cover water
1b.
Contractor-proposed agreements
TBA
conveyance facilities with solar panels. To date, these
2.
Contractor-proposed long-term
TBA
projects have not been implemented on a large scale in the
agreements
United States, but they may have potential to meet dual
goals of reducing evaporative losses and generating energy.
Source: CRS, based on information from the Bureau of Reclamation,
Reclamation has stated that it is identifying pilot projects
at https://www.usbr.gov/lc/LCBConservation.html.
for this funding and expects to issue a funding
Note: TBA = to be announced.
announcement in summer 2023.
Reclamation announced other Colorado River allocations
Emergency Drought Relief for Tribes
for this funding, including $250 million for Salton Sea
Section 80004 of the IRA included $12.5 million, available
restoration and $250 million for system conservation efforts
through FY2026, for near-term relief actions to mitigate
in the Upper Colorado River Basin. Further, Reclamation
drought for Indian tribes “impacted by the operation of a
has stated that it will soon develop programs for this
Reclamation project.” Congress authorized Reclamation to
funding to help mitigate the effects of drought in other
make available funds in the form of direct financial
Reclamation river basins. To date, it has not announced
assistance to (1) address drinking water shortages and (2)
funding allocations for other basins.
mitigate the loss of tribal trust resources, with no cost share
required. Reclamation stated it will issue funding
Funding under this section of the IRA would supplement
announcements under this authority in summer 2023
other Reclamation funding to mitigate drought in the
through its Native American Affairs Technical Assistance
Colorado River Basin, including funding available in the
Program.
IIJA and through annual appropriations. To date, it is the
only instance of funding for Reclamation contractors to
forgo deliveries of federally delivered water. It is unclear
Charles V. Stern, Specialist in Natural Resources Policy
whether the approach of paying contractors to forgo water
Anna E. Normand, Analyst in Natural Resources Policy
deliveries will entail additional long-term funding (i.e.,
IF12437
beyond that appropriated in the IRA). For more information
on Colorado River drought mitigation, see CRS Report
https://crsreports.congress.gov
Bureau of Reclamation Funding in the Inflation Reduction Act (P.L. 117-169)
Disclaimer
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https://crsreports.congress.gov | IF12437 · VERSION 1 · NEW