As U.S. water utilities continue to address long-standing issues like aging infrastructure and workforce shortages, they are now also encountering additional challenges such as cybersecurity threats, regulatory shifts, and increasing water demands linked to artificial intelligence (AI) and data centers. These findings are detailed in Black & Veatch’s newly released 2025 Water Report, which presents an overview of the evolving landscape for the sector.
Now in its 14th year, the report gathers insights from 680 industry stakeholders and aims to provide guidance for utilities navigating a rapidly changing environment. Black & Veatch, a company specialising in infrastructure solutions, explores a range of topics including regulation, water contaminants, digital innovation, and more, drawing on over a century of experience in the water sector.
“This report highlights the challenges our water clients are facing, from cybersecurity threats to ageing infrastructure, AI adoption and the impacts of climate change,” said Donnie Ginn, Executive Vice President and water solutions group portfolio leader for Black & Veatch. “As they face these new challenges, utilities must rethink how they deliver water — advancing smarter sustainability practices, adapting to new regulations and modernising systems to ensure long-term reliability and resilience. With AI-driven data centre growth and an increase in cyberattacks against our water infrastructure, the need for resiliency has never been more clear.”
Key findings
- Regulations: Even as some regulatory requirements have been eased, 50% of respondents plan to maintain their current priorities, with a particular focus on PFAS (per- and polyfluoroalkyl substances) mitigation and sustainability efforts.
- Cybersecurity: As cyber threats grow, 95% of respondents are investing in cybersecurity, citing public safety and welfare as their main reasons for doing so, ahead of compliance or data protection.
- Workforce: High retirement rates persist, with 68% of respondents noting losses in key roles such as management, operations, and engineering. The situation has seen slight improvement compared to the previous year.
- Data Centers and AI: While AI adoption is accelerating, 54% of utilities have yet to incorporate the growing water demands of data centers into their long-term planning.
Emerging themes
The report depicts a sector managing mounting pressures while also seeking innovation. Confidence in system resiliency has declined, with only 34% of respondents reporting they are "very confident" — an 11-point drop from 2024 — reflecting ongoing concerns about infrastructure condition, affordability, and supply reliability.
PFAS contamination remains a significant issue, with 46% of utilities detecting these substances in their systems. Treatment is often complex and costly; a related study by Black & Veatch for the American Water Works Association estimates that compliance with PFAS regulations could exceed $3.2 billion annually across the U.S.
Funding remains a major concern. Forty-one per cent of those surveyed believe that long-term funding will be inadequate to meet capital improvement needs. Although federal funding programs are available, many utilities report that administrative challenges make access difficult.
Despite these obstacles, the report identifies areas of progress. Sustainability has become a strategic priority for 58% of respondents, with a focus on resilience and environmental responsibility. Additionally, many utilities are making headway in complying with the federal Lead and Copper Rule. More than half are using predictive modeling to identify unknown service line materials, helping them plan more effectively and improve transparency with customers.
