Prescott Valley, Ariz., has auctioned the rights to some of its treated wastewater to buyers who could use it to build subdivisions.
The auction is the first of its kind in the United States.
According to The Arizona Republic, the plan is to create a new source of water for growth in a part of Arizona that has almost used up its existing reserves.
The city is auctioning enough water to support nearly 6,000 homes and more, if apartments or condominiums are built.
The treated wastewater will not flow directly into homes but will percolate into aquifers, recharging them as wells supply the new homes.
The Arizona Republic reported that bidders will determine the final price, but the minimum bid is set at $28,000 per acre-foot, or roughly 340 times the cost of Colorado River water in the Phoenix area. An acre-foot equals 325,851 gallons.
Selling the rights to effluent marks an advance in the use of recycled water, which until now has been limited to irrigating golf courses or parks.
If the auction is successful, it could also help speed the transformation of water from a public resource to a commodity that is traded, bought and sold on the open market.