The Colorado River, which provides drinking water to over 40 million people in seven US states, is straining under the worst drought in 12 centuries, with impacts compounded by climate change.
The US government has called on Western states to agree to reduce between two to four million acre-feet of water that could supply eight million households a full year.
The deadline passed, with tensions rising between the seven states dependent on the basin.
California submitted a plan detailing conservation methods to save water, detailing cuts based on the elevation of Lake Mead.
The six other western states submitted a competing proposal, which aims to address water loss due to water transportation and evaporation.
Neither were able to agree on how to proceed, and the decision will be left to the Bureau of Reclamation, who will decide this summer on a course of action.
Although the much-needed water from snowpacks and rainfall has improved conditions in the parched West, experts warn that around 60% of the region remains in some form of drought, continuing a decades-long spiral into water scarcity.
Historically, one-third of California's water supply has come from melting snow, and state water officials say the snowpack is pacing well above the state's wettest season on record, emphasising that it is too soon to know if the winter's snowpack will make any significant difference.
The stakes are high, with 20 years of drought compounded by the impacts of climate change.
Environmental Defense Fund's Water policy specialist, Kevin Moran, says catching up on reduced water usage is "absolutely critically needed."
The Colorado River serves 40 million people across the West and Mexico, generating hydroelectric power for regional markets and irrigating nearly six million acres of farmland.
With the seven states having made an agreement 100 years ago, 20 million acre-feet of water was the expectation; to date, the river is straining desperately to meet the population's needs.
"Our snowpack is off to an incredible start, and it's precisely what California needs to help break from our ongoing drought," claims Sean de Guzman, the Manager of the Department's snow surveys and water supply forecasting unit.
However, Rhett Larson, professor of water law at Arizona State University, argues that rainfall after months of extreme drought in the US "...is a little like finding a $20 bill when you've lost your job and you're being evicted from your house."