On December 16, the U.S. Army Corps of Engineers (the Corps) issued a proposed rule to update and clarify its policies governing the use of its reservoir projects for domestic, municipal and industrial water supply under Section 6 of the Flood Control Act of 1944, 33 U.S.C. § 708 and the Water Supply Act of 1958, 43 U.S.C. § 390b. This is the first time the Corps has proposed a rule to set policy on these important issues.The proposed rule addresses many policy issues relating to water storage and usage of water in Corps reservoirs, some of which have been heavily contested as part of regional water disputes. Specifically, the proposed rule: explains the purpose and scope of the authority conferred under Section 6 of the Food Control Act and under the Water Supply Act, including the water supply uses that may be accommodated, and statutory limits on the Corps’ authority to include storage for water supply; defines key statutory terms, including “surplus water”; and discusses pricing methodologies for surplus water contracts and for water supply storage agreements under the Water Supply Act.

The proposed rule also includes provisions to simplify and streamline the Corps’ administrative processes for authorizing surplus water withdrawals, provisions to clarify the amount of water that may be withdrawn under water supply storage agreements and procedures to account for water supply uses, and provisions to ensure coordination of proposed water supply actions with states, tribes, federal agencies and the public. Most notably, the Corps proposes to codify the Corps’ informal policy of accounting for return flows and other inflows in the same manner as all other inflows rather than crediting them fully to the particular entity that provides the return flows.

This is an important regulatory development coming from the Corps in the evolving role of the federal government in water supply management. The Corps notes that the rule is prospective in nature, applies only to reservoir projects operated by the Corps, and would not alter existing contractual arrangements at Corps reservoirs. Nevertheless, it will have significant implications for ongoing management of Corps reservoirs and current and prospective water withdrawers from Corps reservoirs.

The Corps is accepting public comments on the proposed rule through February 14, 2017.  The proposed rule is available here.