This study investigates water usage in electricity generation within the water-scarce Southwestern United States, focusing on the Colorado River Basin states. It highlights the challenges posed by factors such as water scarcity, population growth, and changing climate patterns. Water withdrawals for thermoelectric power generation, predominantly steam turbines, have been a major contributor to water consumption. As the region transitions from hydroelectric to alternative energy sources, particularly natural gas, the study emphasizes the need for comprehensive water conservation strategies and highlights the potential of renewable energy, especially solar power, to reduce water dependence. The research utilizes System Dynamics modeling to project future water usage, considering factors like population growth, electricity consumption, and state-level water usage per unit of electricity, while assessing the impact of Renewable Portfolio Standards (RPS). The findings underscore the importance of adopting more water-efficient energy sources to address water scarcity effectively and advocate for a more comprehensive understanding of water consumption in electricity generation.