The Verde River Valley is situated in the central part of Arizona, primarily in the transition zone between the Colorado Plateau and the Basin and Range physiographic provinces. The entire river valley, from north of Cottonwood to east of Phoenix, was investigated to ascertain whether a suitable reservoir exists that would be capable of supplying 50,000 to 150,000 acre feet of groundwater per year for 30 years. The reservoir and geothermal energy would be coupled in a desalination project to augment Arizona's water supply. A study of the ground-water reservoirs in the Verde River Valley for desalination and water supply augmentation indicate that the operation would at best be marginal. In addition, there is a potential for conflict with environmental groups. The Paradise Valley Basin has sufficient water in storage for the development of an economic desalination operation. However, the area is very well developed with cities, towns and residences. Subsidence might occur, as a result of ground water withdrawal and could pose a significant problem. In addition, the vast majority of the land is under state trust and fee ownership, making development by the federal government difficult. Twenty-one pages.