Successfully Navigating Water Quality Compliance: Expert Insights in a Changing Regulatory Landscape

April 17, 2024

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The water utility industry currently faces a multitude of challenges due to ever-evolving federal regulations, budgetary constraints, competing priorities and projects, customer expectations, and operational limitations. In our recent KloudGin Expert Insights webinar, our panel of water industry leaders discussed strategies and best practices for prioritization and decision-making in the face of these challenges. In today’s complex regulatory landscape it’s essential to be able to quiet the noise and focus on determining and addressing the critical priorities of the organization. This will increase operational agility while driving the initiatives which will deliver the highest returns – and avoiding those that don’t.

Table of Contents 

  • Evolving Challenges for Water Utilities 
  • Strategies for Water Utilities Balancing Competing Priorities 
  • Best Practices for Water Utilities in a Changing Regulatory Landscape 
  • Looking to the Future 
  • KloudGin: Proudly Supporting Water Utilities 
  • Our Water Utility Industry Expert Panel 
  • Evolving Challenges for Water Utilities 

Water utilities are facing increasing demands to improve safety, water quality, and customer service levels.  The need to meet new regulatory and compliance requirements can be challenging to navigate efficiently and effectively. It’s a difficult situation, with a finite amount of funding available to utilize. Water utilities have numerous costly assets and systems to maintain – from tanks, valves, under and above ground assets, and expensive cybersecurity and IT infrastructure – and have been put under even greater financial pressure from recent regulatory requirements. It is estimated that the recent new regulations will cost hundreds of billions of dollars for public and private utilities across the country. 

New regulatory requirements

Alongside cornerstone legislation, including the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA), regulations for the water industry continue to evolve as new environmental concerns, emerging contaminants, and technological advancements develop and change. Recent and emerging regulations that are directly impacting the water utility industry include: 

Lead and Copper Rule Revisions: With the goal of reducing lead exposure levels, the LCRR mandates that public water utilities must develop and submit a lead service line inventory and lead service line replacement plan to their state agencies by October 2024. Since the promulgation of the LCR, the number of the nation’s largest drinking water systems with action level exceedances have decreased by over 90%.

Per- and Polyfluoroalkyl Substances (PFAS): Recently, the EPA has proposed national drinking water standards for several PFAS chemicals, setting a maximum contaminant level (MCL) that would require water utilities to adapt their water quality testing and reporting for PFAS accordingly. This is particularly pressing as the EPA’s recent Fifth Unregulated Contaminant Monitoring Rule (UCMR5) data has shown that PFAS were present in 33% of the drinking water systems tested. 

Budgetary and operational constraints

Adding to the complexities of the current regulatory landscape, budget constraints, competing initiatives, and limited operational resources compound the challenges for water utilities. Budget-wise, it is an ongoing struggle for water utilities to balance the need for infrastructure investments with affordability for their customers. Organizational resources are being pulled into many different directions: infrastructure investment and maintenance, including necessary IT upgrades; water treatment and quality assurance, made more complex with new regulations; operations and workforce management, complicated by labor shortages and an aging workforce; and customer service and public outreach – all the more important when needing to deal with PR situations and maintain positive public sentiment. The recent situation in Flint, Michigan is one important and educational example of how quickly public perception can sway. 

The current regulatory environment compounds this issue, as it has a direct impact on operational costs for utilities as they redirect resources to address and comply with new regulations.  This can be particularly challenging for smaller utilities that face even greater budgetary and resource constraints than their industry counterparts. 

At the same time, while utilities might want to shift their priorities to lead levels or one of the other recent regulations, they can’t do so at the expense of maintaining proper service levels and quality across their network. If a utility gets a backflow cross connection on an irrigation line into their network, they’re likely going to make an entire neighborhood sick in a day.  Therefore some of the longer term, big investment challenges will have to be dealt with across time, because utilities can never lose their vigilance towards immediate health threats or give any opportunity for something as severe as a bacterial outbreak to happen.


Strategies for Water Utilities Balancing Competing Priorities 

With all of these pressing needs to consider – regulatory compliance, public health, public perception, and safety, budget, customer affordability, infrastructure, workforce utilization and more – where should water utilities start, and how can they balance all of these competing priorities? Our expert panel shared some key strategies to consider: 

Optimize operating expenses 

Perhaps the most central concern when it comes to addressing multiple competing needs is what the available budget is, and where it needs to go first. An essential strategy for any utility is to focus on implementing cost-saving measures and efficiency improvements to free up resources for capital investments.

The first job of the utility leader is to look at how much operating expense balance can be reduced in order to fund additional capital under current rates, not future rates.” 

David Stanton, CEO, Cleanwater1

Prioritizing the smart usage of operational expenditure has a trickle down effect on customer goodwill. Honest, transparent communication with customers is hard, so it has to be authentic. The best way to make it authentic is for utility companies to demonstrate that they’re doing everything possible to drive down operational costs and increase the amount of capital they’re investing under rates – which will ultimately have a net benefit for customers. 

Adopt new technologies to improve efficiency and reduce costs 

Understanding where digital transformation can drive immediate, significant value is an essential strategy for water utility companies looking for quick start solutions to improve their operational efficiency while reducing costs. By bridging the gap between people, processes, and tools, water utility companies can empower their workers with a complete view of the company’s assets and workforce. AI-powered scheduling can optimize resource allocation, guiding workers with real-time data and instant asset insights, allowing companies to track progress, optimize crew assignments, and empower field teams with complete historical records, manuals, and decision support, all at their fingertips.

This improved intelligence and collaboration reduces downtime, enhances safety, streamline compliance, and results in higher-quality work – all driven by the power of connected planning, scheduling, and a well supported workforce.

Utilizing technologies like GIS can also assist in rapidly addressing regulatory requirements like lead service line inventories, while equipping water utilities with the ability to visualize, understand and manage their infrastructure more effectively. Emerging technologies like generative AI also provide utilities the ability to help augment their workforce through streamlined onboarding; provide real-time voice assisted support; and enable instant access to essential operational and historical information. 

We should be focusing on digital transformation for better service [and] better experience, but also for lower operating cost – as well as investing in ideas in the utility that drive OpEx in the right direction, so that now we have capital to invest in these new solutions.” 

David Stanton, CEO, Cleanwater1

Prioritize high value efforts for maximum impact

It’s essential for utility leaders to clearly identify, understand, and prioritize the initiatives that will have the most profound impact on their organization’s success. In a business environment overflowing with competing projects, this strategic clarity is the difference between surviving and modernizing. By pinpointing the highest-impact projects, utilities can maximize their return on investment (ROI) on increasingly scarce resources like labor and capital.

Without this focus, utilities risk spreading themselves too thin. Limited resources risk being squandered on ‘wants’ instead of needs, or on projects that deliver marginal returns instead of transformative change. The result? Inefficient deployment of capital, missed opportunities, and an erosion of customer satisfaction. By identifying and understanding the projects that truly matter, utility leaders can cut through the noise and invest wisely, ensuring greater success for their organizations into the future.


Best Practices for Water Utilities in a Changing Regulatory Landscape

In addition to these practical strategies for balancing priorities, we’ve outlined three best practices and long-term approaches that can help strengthen a water utility organization’s ability to adapt, manage, and succeed in today’s challenging landscape.

Communicate, collaborate and learn from industry peers 

All water utility organizations across the US are contending with the same challenges. It’s important to make sure to be talking to peers in the industry, to share vital information around best practices for treatment practices or technologies that can more efficiently and effectively address the new regulatory demands. For smaller utility companies that have limited buying power, it’s important to reach out to and engage with industry associations, whether a Rural Water Association, the AWWA, NAWC or others.

“The water utility industry is a highly supportive community made up of individuals who are committed to working together to try to make the landscape better for everyone – and we’re absolutely willing to do that.”

Spencer Bruce, President and CEO, Louisville Water

“Make sure you’re collaborating with other folks in the industry to really tackle some of these challenges that are hitting us front and center. I think the more you can do that, the more success you’re going to have over time.” 

Michael Luu, Senior VP, Corporate Services & Chief Risk Officer, California Water Service Group

Proactively plan and adapt to changes

It’s vital for utility leaders to ensure they are staying aware and informed of regulatory changes. Given the multitude of challenges the industry is facing, successfully managing them can’t be done in a vacuum. Reaching out to industry associations and peers and having open conversations to share concerns, perspectives, and strategies is invaluable. Smaller utilities in particular may benefit from working together to partner for efficiencies in buying power and better contract agreements with vendors. 


Leading industry associations include: 

American Water Works Association (AWWA): The leading advocate for the water industry. They offer:

  • Webinars, conferences, and publications focused on regulatory compliance.
  • Analysis and summaries of new regulations.
  • Advocacy and lobbying efforts to shape future regulations.

National Association of Water Companies (NAWC): Represents the interests of private water utilities. Provides regulatory updates and compliance support tailored to the needs of private companies.

Water Environment Federation (WEF): Focuses on wastewater treatment and water quality. Excellent resource for wastewater compliance and technological solutions.

This proactive approach can also help connect utilities with new technologies, solutions, and sources of funding. Staying up to date with regulations, requirements, and grant opportunities can help ensure long enough lead times to successfully address regulatory changes, as well as open up avenues for funding that can help enable the new requirements. 


Resources for regulatory updates include: 

Environmental Protection Agency (EPA): The primary regulatory body for water utilities. Their website offers:

  • Up-to-date regulations on drinking water, wastewater, and source water protection.
  • Guidance documents, compliance assistance materials, and technical resources.
  • News and updates on regulatory changes and enforcement actions.

State Environmental Agencies: Each state has its own agency that oversees water regulations within its jurisdiction. A comprehensive list of state agencies is on the EPA website

WaterISAC (Water Information Sharing and Analysis Center): Dedicated to cybersecurity and critical infrastructure protection for the water sector. 

Industry-Specific Publications: WaterWorld, Opflow, Water Finance & Management, and others offer news articles, analysis, and best practices regarding regulations.

Focus on customer engagement and transparency 

Central to the success of all of these initiatives is the importance of clear and transparent communication with customers. By being honest about regulatory challenges, clearly communicating the reasons behind rate increases, and actively engaging with customer concerns, water utilities can strengthen their trust with the communities they serve. It’s imperative that utility companies acclimate customers to the reality that their water bills will be going up over time. Given the amount of capital the water utility industry requires to complete the work needed to meet the new regulatory requirements, current rates are not adequately reflecting the capital needs. Utilities therefore need to sensitize their customer base to the idea of higher rates over time.  

“What makes it authentic for utility leadership is if they can truly say we’ve done everything we can to make this as palatable as possible: we want the highest quality water, the highest quality environmental outcome, and we want the lowest rates possible under the rules to bring that together.”
David Stanton, CEO, Cleanwater1

Making the effort to explain how the organization is balancing spending on water quality, infrastructure maintenance, treatment upgrades, and customer service enhancements, is an essential approach when communicating these rate increases to customers. 

“We like to stay ahead of the curve […] we publish reports  that show here’s how much money we spent in 2023 to maintain our mains, to replace our vows, to rehab our tanks. We’re an asset heavy industry, and there is a lot of work that goes into keeping that water flowing and making sure that our customers receive safe drinking water.”

Michael Luu, Senior VP, Corporate Services & Chief Risk Officer, California Water Service Group


Looking to the Future 

When looking ahead at the future of the water utility industry, our experts agreed that strong leadership within utility organizations, along with collaboration among government, private industry, and the greater water utility community are crucial to navigate these challenges and ensure a sustainable future for the industry. 

“The challenges that we face as an industry are enormous: the leadership challenge, the funding challenge, the technical challenge to resolve all these issues coming at us. I think we’ve got to look at our business model differently. We’ve got to look at the industry differently.”
Michael Luu, Senior VP, Corporate Services & Chief Risk Officer, California Water Service Group

“We’re going to have to slow pedal some of these longer term big investment challenges, and we’ll have to deal with some over time. But we cannot ever be losing our vigilance on the immediate health threats that we manage day to day.”
David Stanton, CEO, Cleanwater1

By embracing innovation via modern tools and processes; fostering collaboration with industry peers; and incorporating a strong customer engagement strategy; water utilities can better navigate the changing regulatory landscape and while ensuring the delivery of safe, reliable, and affordable water to their customers. Continuous adaptation, smart strategic planning, and a commitment to public health are essential for the long-term success of water utilities in consideration of today’s complex landscape. 


About KloudGin

KloudGin was uniquely born in the field alongside the hard-working men and women who keep our lights on and water and gas flowing. KloudGin deeply understands the challenges faced by utility companies, and we have designed our platform for today’s modern, mobile workforce. We are not just software developers; we are partners, standing alongside you on the journey towards a more efficient, resilient, and safer industry.

To learn more about how KloudGin can best support your organization, our team would be glad to have exploratory conversation with you to understand your organization’s challenges and requirements. Please get in touch with us today! 

About Our Expert Panel 

Spencer Bruce, President and CEO, Louisville Water: Spencer Bruce is Louisville Water Company’s President and CEO, a role he’s held since January 2016. Spencer has worked at Louisville Water for over 18 years, where he progressed from managing daily operations of the company’s distribution system and directing the daily operations of the company’s two water treatment plants to serving as Vice President and Chief Engineer, responsible for managing $1 billion in company assets. LinkedIn 

Michael Luu, Senior VP, Corporate Services & Chief Risk Officer, California Water Service Group: Michael Luu is the chief risk officer and VP of information technology at California Water Service Group (NYSE: CWT), the third-largest investor-owned water and wastewater utility in the United States. He is a senior executive with a successful track record in enterprise risk management (ERM), utility operations, information technology and customer experience. LinkedIn

Angela Maria (Angelita) Fasnacht Ph.D., M.P.H., P.E., Visiting Fellow, Andlinger Center for Energy and the Environment, Princeton University: Dr. Angelita Fasnacht, an esteemed Environmental Engineer and C-Suite Executive, has made significant strides in the realm of water sector management and environmental protection. Renowned for her dedication to sustainability, public health, and environmental protection, Dr. Fasnacht’s career is marked by extensive experience across federal, state, international corporate sectors, and academia. Currently, she serves as a Distinguished Visiting Fellow at Princeton University’s Energy and Environmental Center, bringing her wealth of knowledge and innovative approach to the forefront. 

David Stanton, CEO, Cleanwater1, Inc.: David has over 27 years of experience in the water and environmental industries in the U.S. and abroad. David served as CEO of SUEZ Utility Holdings, Inc., responsible for overseeing the third largest portfolio of regulated water and wastewater businesses in the nation. Prior to Suez, David led the growth and improvement of water and environmental service companies. He served as chief executive officer and member of the board of APTwater, a start-up company focused on re-use of difficult to treat water. LinkedIn 

Vikram Takru, Co-founder and CEO, KloudGin: Vikram co-founded KloudGin with the vision of creating transformative field service and asset management technology that eliminates silos, connects people, process, and technology, and creates access to information where and when it is needed. He is committed to delivering solutions that work for field crews in the toughest conditions. His vision has served as the inspiration for KloudGin to become the only, combined, one-cloud Field and Asset management solution that transforms processes, customer experience and worker productivity. LinkedIn 

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