2026 Water Utility Outlook: Regulation, AI, And Resilience In The Face Of Scarcity

By Kevin Westerling,
@KevinOnWater

Water utilities are staring down a triple threat in 2026: mounting regulatory pressure, more severe weather, and pipelines at their breaking point. Sheila Kee, Senior Product Marketing Manager for Global Water Outcomes at Itron, shared her thoughts with Water Online on what’s coming — and what can be done about it.

Regulating Water Waste

Heading into 2026, Kee forecasts that “Stricter regulations around water usage, driven by growing concerns over scarcity and non-revenue water, are expected to evolve.” The regulatory levers to pull could include mandatory audits, public scorecards, and funding tied to hard numbers.

“Regulators will likely implement more proactive and outcome-based approaches, focusing on measurable reductions in water loss and improved efficiency,” Kee warns. “This will mean increased requirements for utilities to adopt data-driven solutions that not only track but also reduce non-revenue water. In fact, utilities will need to adopt more robust reporting, including mandatory water loss audits and performance benchmarks, which could even be tied to funding eligibility.”

AI: From Reactive To Predictive

The answer isn’t (just) more wrenches, Kee explains. It lies in AI.

“Artificial intelligence will play a critical role in this transformation, helping utilities shift from reactive to proactive operations,” she says, noting the power of predictive analytics to flag a failing pipeline before a burst, and how smart meters can pinpoint exactly where a leak is hiding.

“By leveraging predictive analytics, utilities can prioritize asset maintenance and identify at-risk infrastructure before failures occur,” Kee continues. “Advanced solutions … will be integral in enabling these advancements, allowing utilities to focus resources where they are needed most, ultimately reducing costs and improving reliability.”

Preparing For Extremes

Climate change will continue to bring intense storms and severe drought — with no end in sight — but Kee sees a solution:

“As extreme weather events become more frequent and severe, the need for real-time data and predictive insights is more pressing than ever. Aging infrastructure, combined with the unpredictability of climate impacts, underscores the need for real-time monitoring to address challenges like droughts, floods, and storm damage before they escalate.”

The Long Game: Efficiency And Resilience

The struggle is ongoing, Kee warns, noting that “Utilities must also look toward long-term solutions, such as adopting energy-efficient technologies and smarter asset management tools, to build resilience and meet sustainability goals.” Overwhelmingly, such tools and technologies will be part of utilities’ digital transformation, and have evolved from pilot programs to everyday, near necessary practice.

Kee’s Keys To Success

“With these trends in mind, water utilities will need to embrace smarter technologies and data-driven strategies to meet evolving regulatory requirements, manage operational risks, and ensure a more sustainable and resilient water future,” Kee advises — for 2026, and beyond.