Yesterday I pointed out how much water is being stashed in Lake Mead as an example of how folks on the Colorado River are overcoming the old “use it or lose it” problem in western water.

Here’s another example, this time with water taken off of the river and stored underground, in this case excess water in Phoenix’s allocation being stored via a collaborative relationship with Tucson, which has big spreading basins and aquifer storage capability:

“This is Colorado River water that they can’t use today. But if they don’t use it, they don’t have it later in the future,” Molina said. “We worked out an agreement with them where they will store extra water in our recharge facilities at no cost to us.”

The key here is the creation of a new institutional arrangement – a Phoenix-Tucson water banking deal – to overcome a shortcoming in the existing institutional arrangement. Here’s the issue: Phoenix doesn’t currently use its full Colorado River allocation. Four years ago, it toyed with the idea of simply storing its unused allocation in Lake Mead. But that can’t happen, because rules. The rules proved difficult to change, so Phoenix and Tucson developed a side deal, inventing a new institutional widget that allowed them to accomplishment something quite similar under the existing rules.