U.S. drinking water needs could reach $2.4 trillion by 2050, AWWA report finds

A new report from the American Water Works Association warns that the cost of maintaining and upgrading U.S. drinking water infrastructure could reach between $2.1 trillion and $2.4 trillion over the next 25 years, raising significant concerns about long-term affordability for utilities and customers.

The report, Beyond the Replacement Era: Balancing Compounding Infrastructure Needs with Household Affordability, outlines a shift in the water sector from simple asset replacement to a more complex set of cost drivers, including regulatory compliance, climate resilience, cybersecurity and treatment of increasingly challenging source waters.

“Drinking water infrastructure underpins the health and economic vitality of our communities, but the cost of sustaining it is rising rapidly,” said AWWA President Heather Collins in a press release. “Beyond the Replacement Era makes clear that the path to a resilient and affordable water future depends on collaboration — among water utilities, policymakers, all of us — while keeping front and center the people and families who must be able to afford water without sacrificing other essential needs.”

According to the report, current capital investment levels—about $33.6 billion annually—fall well short of the estimated $90.2 billion needed each year, creating a funding gap of roughly $56.6 billion. Closing that gap would require a 168% increase in capital spending.

The financial strain is expected to impact ratepayers significantly. If utilities rely solely on rate increases to fund infrastructure, average household water bills could more than double, rising from $429 in 2025 to $969 by 2050 in real terms. Even under more moderate scenarios, bills are projected to climb substantially due to increasing operational and maintenance costs.

The report also highlights growing affordability challenges. By 2050, an estimated 30.4 million households could spend more than 2.5% of their income on drinking water, while 53.5 million households could exceed a 1.5% affordability threshold. To mitigate these impacts, the report estimates that $13.6 billion in annual assistance would be required.

AWWA emphasizes the continued importance of federal financing programs such as the State Revolving Fund and the Water Infrastructure Finance and Innovation Act, particularly as funding from the Infrastructure Investment and Jobs Act begins to phase out after fiscal year 2026. Currently, only 3.9% of public water sector funding comes from federal sources.

“The first step toward solving any challenge is recognizing its full scope, and Beyond the Replacement Era does exactly that,” said AWWA CEO David LaFrance in a press release. “It makes clear that progress will require collaboration across all levels of government and a shared understanding of why drinking water is so critical in our communities. AWWA looks forward to collaborating with our many partners in the water sector and beyond to prepare a future where reliable water is available and affordable to everyone.”

The report was unveiled during the AWWA/WEF Utility Management Conference in Charlotte, North Carolina, and builds on previous AWWA analyses of long-term infrastructure and affordability trends.