Regulations, Cybersecurity, Workforce and Data Centers Among Top Challenges in U.S. Water Sector

Black & Veatch 2025 Water Report reveals only 34% of respondents are “very confident” in the resiliency of their water systems, a sharp 11-point drop from 2024

OVERLAND PARK, Kan.--(BUSINESS WIRE)--As the U.S. water sector grapples with aging infrastructure and workforce shortages, new headwinds are rising — from regulatory uncertainty and growing cybersecurity threats to emerging water demands tied to artificial intelligence (AI) and data centers. These pressures, detailed in Black & Veatch's newly released 2025 Water Report, reflect a sector increasingly challenged to protect public health while modernizing systems for the future.

Now in its 14th year, the report draws on insights from 680 industry stakeholders and offers critical guidance for utilities navigating a fast-changing environment. Black & Veatch, a global leader in human critical infrastructure, analyzes a wide range of issues spanning regulations, contaminants, digital transformation and more, leveraging more than a century of experience partnering with water utilities nationwide.

“This report highlights the challenges our water clients are facing, from cybersecurity threats to aging 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 modernizing systems to ensure long-term reliability and resilience. With AI-driven data center growth and an increase in cyberattacks against our water infrastructure, the need for resiliency has never been more clear."

Key Findings:

• Regulations: Despite recent regulatory rollbacks, half of respondents say they intend to maintain existing priorities, particularly regarding per- and polyfluoroalkyl (PFAS) remediation and sustainability practices;
• Cybersecurity: With cyberattacks escalating, 95% now prioritize cybersecurity investment, focusing on safety and public welfare as their top motivation over data protection and regulatory compliance;
• Workforce: Retirement rates remain high, with 68% reporting losses among management, operators and engineers — even as the trend shows slight improvement from 2024;
• Data Centers and AI: Although AI adoption accelerates, 54% of respondents admit they have not yet factored rising data center water demands into long-term resource planning.

Emerging Themes:

The report paints a picture of an industry under strain yet innovating. Confidence in water system resiliency has weakened, with only 34% saying they feel "very confident" — a sharp 11-point drop from 2024 — amid persistent concerns about aging infrastructure, affordability and supply reliability.

Contaminants such as PFAS loom large, with 46% of respondents detecting “forever chemicals” in their water supplies. Treatment remains complex and costly: a Black & Veatch study conducted for the American Water Works Association (AWWA) estimated nationwide PFAS compliance could cost over $3.2 billion annually.

Funding challenges intensify the strain. Forty-one percent of respondents believe long-term funding will be insufficient for necessary capital improvements. Although federal funding opportunities exist, many utilities cite administrative burdens as a significant obstacle.

Yet amid these challenges, opportunities emerge. Sustainability efforts are gaining momentum, with 58% of utilities making it a strategic focus — prioritizing resilience and environmental stewardship even as affordability pressures persist. Respondents also report making significant progress with compliance with the U.S. federal Lead and Copper Rule regulations, with more than half of respondents embracing predictive modeling to estimate their remaining unknown service line materials, helping utilities plan their work more effectively and enhancing transparency and safety for customers.

Access the full report here.

About Black & Veatch

Black & Veatch is a 100-percent employee-owned global engineering, procurement, consulting and construction company with a more than 100-year track record of innovation in sustainable infrastructure. Since 1915, we have helped our clients improve the lives of people around the world by addressing the resilience and reliability of our most important infrastructure and energy assets. Follow us on www.bv.com and on LinkedIn, Facebook, X (Twitter) and Instagram.