Nevada's lawsuit comes after states and the federal government have been in tense negotiations over how to manage the Colorado River after current guidelines expire at the end of this year.

The lawsuit challenges the record of decision released Friday, which governs how Colorado River water is divided among the seven basin states. Under the decision, Nevada's 300,000-acre-foot allocation could be cut by up to 213,556 acre-feet.

Since January 2023, the Las Vegas Valley Water District has charged residential customers a flat $9 for every 1,000 gallons they use beyond a seasonal threshold — roughly five times the district's base tier rate, and nearly 1.5 times its top-tier rate. 

Nevada is one of three states to see its water rights curtailed under a new federal proposal. The state hopes to negotiate a better agreement.

For nearly two years, the developer of the Tahoe-Reno Industrial Center has traded legal barbs with the quasi-governmental entity that provides water to companies. 

Nevada will give up 50,000 acre-feet of Colorado River water a year over the next two years under a federal operating framework released Friday that cuts distributions to three states.