The city said customers can continue to expect safe, reliable water service, but Phoenix is preparing to lean more heavily on backup supplies. A three-part strategy will draw on those reserves, develop new water sources and drive down consumption.

Under the demand-reduction effort, businesses and residents are being asked to voluntarily cut water use by 5%, while city departments are directed to trim their own usage by 10%. The city will also offer conservation incentives and impose a temporary drought surcharge on excessive water consumption.

"Based on current usage, the surcharge would affect an estimated 16 percent of residential monthly bills, 7 percent of commercial bills and 1 percent of industrial bills. Most customers are not expected to incur the surcharge," the city said.

The surcharge would charge $2.10 for each unit of water used above monthly thresholds set for each customer class, with one unit equaling 748 gallons. Residential customers would pay the fee above 20 units per month, commercial customers above 300 units and industrial customers above 15,000 units. The charge applies only to water used beyond the monthly limit; customers who stay within their threshold face no added fee. Early modeling projects the surcharge would generate roughly $40 million to support conservation efforts and secure more water supplies.

Mayor Kate Gallego framed the move as a necessary next step after years of preparation. "We've spent decades preparing for the challenges we're facing today, and those investments have put us in a good position," Gallego said. "But the cuts from the federal government require us to take further action. Phoenix is stepping up its own conservation efforts, and we're asking residents and businesses to join us. The choices we make today will help determine the strength and resilience of our city for generations to come."

Vice Mayor Kesha Hodge Washington, a member of the AMWUA board of directors, emphasized that conservation support must reach all communities. "Water conservation is a shared responsibility, but we also recognize that families, neighborhoods and businesses have different needs and resources," she said. "As Phoenix takes these additional steps to protect our water future, we must make sure customers have access to the information, tools, and assistance that can help them conserve. Our goal is to protect reliable water service while helping every community be part of the solution."

The city's backup supply strategy relies on regional water partnerships, renewable backup supplies, groundwater recovery systems and stored one-time use water. Officials cautioned that some of those resources remain limited, though they add operational flexibility.

For the longer term, Phoenix is developing Pure Water Phoenix, with planned advanced purification facilities at North Gateway, Cave Creek Road and 91st Avenue. The city is also involved in regional efforts to increase Verde River storage through the Bartlett Dam project and to pursue water-sharing opportunities through the Secure Water Arizona Program.

The Stage 2 warning takes effect when standard supplies run short, requiring additional water resources or cutbacks in demand. City officials say customer service will not be interrupted.

The pressure stems from new federal operating guidelines under which annual Colorado River deliveries to Lower Basin states will drop by 1.25 million acre-feet in 2027 and 2028. A proposed sharing agreement assigns 760,000 acre-feet of those cuts to Arizona. The river provides about 40% of Phoenix's drinking water, and the city faces a potential 30% drop in those deliveries. Although recent rainfall boosted storage levels in the Salt and Verde River system, it will not offset the looming cuts to the state's Colorado River supply.

The Phoenix Water Services Department delivers drinking water and wastewater services to about 1.7 million residents.

A Stage 2 declaration also widens free water-efficiency consultations for residents, businesses and homeowner associations and boosts financial incentives. The grass-removal incentive would rise from $2 to $4 per square foot, the smart irrigation controller incentive from $75 to $150, and a new $100-per-year leak-repair incentive would be established.

City officials outlined five practical actions for residents to lower water use: finding and repairing leaks; tailoring irrigation and outdoor watering to weather conditions; swapping unused grass for desert-adapted landscaping; installing water-efficient fixtures; and making small, consistent daily changes.