This article was sent to me in an email earlier this week. As you might have guessed from the headline, I think their plan is a little self-serving. That's not to say it is clearly without merit. I don't have access to the study their conclusion is based on, but I would be very interested to read it.
I agree that seepage into the Navajo sandstone that borders the lake could soak up a significant amount of water stored there, but wouldn't much of what enters the rock during high water periods later exit the rock when the water is low? Admittedly, some of that water would be bound up in the rock matrix over time, but once that matrix porosity has been filled it can't be refilled again. So in some sense, the damage has been done and won't be undone by changing the management strategy of the reservoir. But I would like to see the data and calculations or models that were employed to get a better sense of how they reached their conclusions.