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The Pecos River Basin occupies most of the eastern half of the state of New Mexico. At its most northern point, the Pecos River Basin watershed begins at an elevation of over 12,000 feet on the western slope of the Sangre de Cristo mountain range in Mora County. The Pecos River flows southeast, then south for about 250 miles to where it crosses the New Mexico-Texas state line at an elevation of less than 2,000 feet. The Pecos River flows another 300 miles through Texas before reaching its confluence with the Rio Grande. Average annual precipitation varies throughout the Pecos River Basin. In the mountain regions, average annual precipitation is 16-to-17 inches per year. The eastern and northeastern plains receive an average of 12-14 inches per year while the lower elevation areas in the central and south basin receive an average of 10-to-12 inches per year.

The Pecos River Basin covers most of San Miguel, Guadalupe, Lincoln, Chaves, and Eddy counties, and all of De Baca County. The largest cities in the Basin are Roswell, Carlsbad, and Las Vegas.

The Pecos River Compact was signed by New Mexico and Texas in 1948. President Harry S. Truman signed it into Public Law 91, 81 st Congress on June 9, 1949.

In 1988, as a result of a lawsuit filed by Texas against New Mexico, the U.S. Supreme Court entered an amended decree, which appointed a federal river master and established an accounting methodology to verify state line water deliveries. Since 1988, New Mexico has struggled to maintain compliance with the compact and decree, which enjoined the state from defaulting on its annual obligation to deliver Pecos River water to Texas. New Mexico’s failure to comply with the terms of the compact and decree could ultimately result in federal intervention, whereby the state could lose its ability to manage its water on the Pecos River.

In January 2003, the U.S. Department of Interior, State of New Mexico, NMISC, Carlsbad Irrigation District (CID), and Pecos Valley Artesian Conservancy District (PVACD) entered into the Carlsbad Project Settlement Agreement. The settlement settles the project phase of the Lewis Adjudication, provides for an annual water allotment of 3.697 acre-feet per acre to CID members, and establishes a schedule for delivery of water to the state line. Implementation of the settlement requires implementation of the conditions precedent, which include: entry into a partial final decree (PFD); implementation of the consensus plan, including land and water rights acquisition and developing an augmentation well field; and completion of federal National Environmental Policy Act (NEPA) requirements.