A climatically driven, water system modeling framework that captures a full range of interacting components at necessary spatiotemporal scales was developed for the Southwestern United States, including a detailed representation of California’s water supply and demand network, within the Water Evaluation and Planning (WEAP) system. Credibility of the model as a tool for water-energy analysis was garnered through evaluation of the historic regional water balances, including metrics of water supply, water use, groundwater storage, environmental requirements, and the energy use associated with water. The ability of the model to address policy-relevant questions was demonstrated by evaluating the impacts of a future 30-year drought scenario that included a realistic 2°C warming trend through 2050. With drought, the total energy used to supply water decreases by about 3% compared to the historic use, and warming alone reduces overall energy use by a modest 1% due to overall reductions in water delivery. The strongest signal of persistent warming expresses itself in groundwater storage, which decreases by an additional 9% beyond the impact of drought alone. A water conservation scenario was used to demonstrate the response of the water sector to the types of conservation strategies being pursued at local and state levels, with conservation reducing water use by about 10% and energy use by 3% relative to historic levels. Such measures overcome the warming trend, but it is demonstrated that persistent drought challenges groundwater conservation strategies and reductions in energy use by the water sector, leading to further overdraft of aquifers and increased energy use.