Use of Federal Water Projects for Municipal and Industrial Water Supply: Current Legal and Policy Issues Related to the Water Supply Act of 1958 (WSA; 43 U.S.C. § 390b)

Cynthia Brougher, Coordinator
Legislative Attorney

Nicole T. Carter
Specialist in Natural Resources Policy

James E. Nichols
Law Clerk

Congress has authorized the U.S. Army Corps of Engineers (Corps) and the U.S. Bureau of Reclamation (Reclamation), the agencies with primary responsibility for federal water resources management, on a project-by-project basis to construct water projects for specified purposes. In the case of Corps dams and reservoirs, Congress has limited the use of such projects for municipal and industrial (M&I) water supply. Growing M&I demands have raised interest in— and concern about—changing current law and reservoir operations to give Corps facilities a greater role in M&I water storage. Reallocation of storage to M&I use from a currently authorized purpose would change the types of benefits produced by a facility and the stakeholders served. 

The Water Supply Act of 1958 (WSA) authorizes the Corps and Reclamation to include water storage for municipal and industrial use as project purposes for new and existing projects. The WSA prohibits water storage as a project purpose for existing projects if adding it would seriously affect existing purposes or involve major structural or operational changes. However, the WSA does not define the extent to which water storage must affect existing purposes or what constitutes major changes. This ambiguity has become a particular issue when severe drought raises the competition for water supply, and is an especially contentious issue in eastern riparian states where all users are affected by any drought. Because of such water shortages in some riparian basins with Corps projects, the Corps' reallocation of water at its discretion has been of particular interest. 

This issue is at the center of ongoing litigation related to the Corps' operation of Lake Lanier in the Apalachicola-Chattahoochee-Flint River Basin (ACF). The issue had not been resolved in litigation in the first half-century of the WSA. The issue was the subject of a 2008 decision by the U.S. Court of Appeals for the D.C. Circuit, Southeastern Federal Power Customers v. Geren, and a 2009 decision by the U.S. District Court for the Middle District of Florida, In re Tri-State Water Rights Litigation. Both cases addressed a tri-state water dispute involving Lake Lanier, a Corps water project in the ACF shared by Alabama, Florida, and Georgia. 

Using the Corps' reallocations of water for municipal and industrial use as an example, this report analyzes the reallocation issues under the WSA to provide a context for Congress as courts consider this issue for the first time. Specifically, it examines the Corps' authority under the WSA, including the issue of the scope of the limitation for modifications that would constitute major operational changes. The report details data regarding the Corps' reallocations under the WSA and provides examples of the Corps' use of its WSA authority. It also analyzes the various legal challenges to the inclusion of water storage as an authorized purpose for Lake Lanier and discusses results of the litigation and options for Congress. Although the WSA provides authority to Reclamation as well, the application of the WSA to Reclamation is beyond the scope of the report. 


Date of Report: March 4, 2010
Number of Pages: 18
Order Number: R41092
Price: $29.95

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