Using Operational Data To Prioritize Water Infrastructure Investments
By Sheila Kee
Most U.S. water utilities are being asked to do more with their operational and distribution systems, both of which are becoming increasingly difficult and expensive to maintain. Aging infrastructure, population growth, climate variability, and changing regulations continue to squeeze budgets, stress staffing, and complicate long-term planning.
At the same time, utilities have access to more operational data than ever before. Meter reads, pressure measurements, leak alerts, and maintenance records all provide valuable insight into system performance. The challenge for most utilities is that this information often exists in silos across multiple systems, making it difficult to connect individual data points and determine what requires attention first.
For the utilities who adopt technology to be able to see this information in one place, it becomes easier to understand what's happening across the distribution system and identify where action and investment is needed most. When a utility gains access to near-real-time data, advanced analytics and AI-driven analysis, they can identify emerging issues earlier, direct their resources more effectively, and make more informed investment decisions. What is driving these utilities to create this visibility and digitize their systems? Let’s take a look.
Water Loss Is A Financial Signal
With capital becoming increasingly harder to secure, and a growing list of projects that need funding, knowing which projects to prioritize becomes critical. According to the American Water Works Association, drinking water utilities invest approximately $33.6 billion in capital each year, while projected annual needs are closer to $90.2 billion. That difference creates a $56.6 billion annual gap, meaning utilities would need to increase capital investment by 168% to meet all projected needs. If utilities relied on rates alone to close the gap, the average annual household bill could rise from $429 (the average in 2025) to nearly $1,000 by 2050. These numbers highlight a challenge facing utilities everywhere: it’s not realistic to fund all the infrastructure needs, they need to determine where to invest limited resources to deliver the greatest value.
NRW (non-revenue water) is a challenge that clearly illustrates this connection between operations and finances. NRW represents treated water that never generates revenue because it is lost through leaks, meter inaccuracies, or other system inefficiencies.
The impact of NRW extends well beyond the water itself as every gallon lost has already consumed energy, treatment chemicals, and labor before it reaches the distribution system. Reducing NRW allows utilities to recover more value from existing infrastructure, preserve capacity during periods of peak demand, and, often, defer costly infrastructure expansions that may not yet be necessary.
This is why measurable reductions in NRW provide a compelling business case to support future investment decisions. Demonstrated results can help utilities show how targeted improvements enhance system reliability, improve operational efficiency, and control costs. Utilities can deliver these tangible benefits to customers and stakeholders without relying solely on rate increases.
From Detection To Prioritized Action
Data becomes even more valuable when AI can help identify patterns, prioritize issues, and guide action. In an environment where utilities are managing thousands of assets and generating large volumes of operational data, AI can help operators focus on the issues that need immediate attention.
The first step is modernizing the utility network and data management to unify how data is collected and stored in a single system. This breaks down silos that prevent disconnections in how the utility can evaluate and visualize the distribution system.
In an Itron case study, Eastside Utilities District (EUD) deployed AMI (advanced metering infrastructure) meters to 100% of the 24,000 residential water accounts the utility services. The changeout resulted in an immediate 10% increase in EUD revenue due to more accurate leak detection and correction of water losses. The revenue increase alone will cover the cost of the meters within five years. More importantly, the increasingly consistent customer billing helps the utility avoid future rate increases while increasing end user satisfaction and providing more actionable data.
Eastside Utilities is just one example of a broader principle. As the volume of operational data grows, utilities need ways to prioritize action. Advanced analytics provides this advantage.
Robust data also sets the stage for employing modern artificial intelligence solutions, which use AI and machine learning to augment the meter data with CIS and utility data, as well as public data — weather, geographical data, pipe age, and more — to uncover patterns, identify anomalies, and surface conditions that help identify specific pipes and mains that warrant investigation.
AI is helping utilities prioritize pipe rehabilitation and replacement strategies by focusing on the pipes most likely to fail, as well as identifying which pipes to focus on first based on criteria like utility budget, timeframe, and more. This asset management approach helps the utility make data-informed decisions and de-stresses the budget dilemma they may be facing without this visibility.
Building A Defensible Capital Case
A common misconception is that utilities must replace existing meters, sensors, or software platforms before they can benefit from advanced analytics. In reality, many utilities can begin by bringing together data they already have and using it more effectively.
Creating a unified view of system performance gives utilities a better understanding of asset health, operational trends, and areas of risk. From there, utilities can add new capabilities where the business case is strongest, measure results, and expand strategically over time.
This visibility becomes even more valuable when AI-driven analysis helps utilities identify trends, quantify risk, and better understand where investments can deliver the greatest return. Data related to water loss, repair frequency, service disruptions, asset performance, and projected savings provides decision-makers with clearer insight into system needs and investment priorities.
When utilities can demonstrate the operational and financial impact of proposed projects, conversations with boards, regulators, and community stakeholders are more productive. Better data helps clarify trade-offs, justify priorities, and build confidence in long-term investment plans.
Modernization Without A Blank Check
The most effective modernization efforts usually start with a clearly defined operational challenge rather than a broad technology initiative.
Whether the goal is reducing leak repair times, improving field crew productivity, recovering lost water, lowering energy consumption, or increasing asset reliability, well-defined objectives help utilities prioritize investments that deliver measurable outcomes.
By focusing on specific use cases, utilities can validate assumptions, demonstrate value quickly and refine their approach before scaling. This helps ensure that scarce resources are directed toward solving actual operational problems rather than implementing technology for its own sake.
At the same time, the need for water infrastructure investment will continue to grow, and no amount of analytics can eliminate the need to replace aging assets, modernize treatment facilities, or comply with regulatory requirements. With better information, utilities can direct limited resources to where they will have the greatest impact.
As funding pressures intensify and water system become more complex, utilities need better ways to connect day-to-day operations with long-term capital planning. AI can help bridge that gap by turning growing volumes of operational data into actionable insight. Utilities that successfully put these insights to work will be better positioned to meet future demands while maximizing the value of every infrastructure investment.
Sheila Kee, Senior Product Marketing Manager for Global Water Outcomes at Itron, brings more than 20 years of experience in the water and technology sectors. She is responsible for delivering value-based outcomes to water utilities globally focused on non-revenue water management and reduction.