Why intentional collaboration between water utilities and industry matters more than ever

For decades, water utilities have focused on delivering safe, reliable service while balancing regulatory requirements, affordability, environmental stewardship and long-term infrastructure needs. At the same time, industries have managed water through a different lens – one centered on operational reliability, resource availability, cost, sustainability and business continuity. 

Today, those worlds are increasingly intersecting – so much so that the topic of shared investments between water utilities and industry is one of the most important conversations in the water sector right now. 

Population growth, industrial expansion, climate pressures, regulatory constraints and community expectations are pushing both utilities and industry toward a broader view of water as a shared strategic resource. That’s why collaboration between water utilities and industry is no longer a "nice-to-have." It is essential to how our communities meet increasing demands in a sustainable and equitable way. 

Collaboration is becoming more strategic  

Industries today face a complex ecosystem of challenges. They are evaluating resource availability, speed to market, regulatory compliance, financial incentives, sustainability commitments and long-term resilience. 

Water sits at the center of many of those decisions, and many industries are establishing increasingly ambitious sustainability and water stewardship goals. 

Even with continued improvements in water efficiency, industrial water demand will continue to increase, especially for the digital infrastructure sector. For example, water use by data centers, semiconductor manufacturing and associated power generation is expected to increase by 129% by 2050, with 40% of the world’s data centers currently situated in areas of high or extremely high-water stress.  

As a result, water has become more than a utility service. It is a strategic factor in site selection, investment decisions and operational resilience. 

This is why collaboration with the water sector – through coordinated planning efforts, formal partnerships or shared investments – matters. 

For water utilities, this collaboration must be grounded in transparency and fairness, and focused on long-term public value and environmental benefit. A utility’s role is to plan, invest and operate in ways that support reliable service, protect ratepayers, comply with regulatory obligations and steward shared water resources. 

The goal is not simply to meet demand. It is to reduce risk, improve resilience and develop infrastructure solutions that create value for both utilities and industry while supporting the broader community and protecting the environment. 

These types of collaborative models are not new. Utilities and industrial water users have collaborated for decades to address shared water challenges, particularly in regions where freshwater supplies are constrained or where industrial growth requires innovative infrastructure solutions. One example is the City of Midland, Texas, where the city worked with a local industrial user to expand wastewater treatment capacity and increase reclaimed water use.  

Water reuse as a shared solution 

Like in Midland, Texas, the convergence of priorities between industries and utilities is one reason water reuse is gaining momentum. 

At its core, water reuse is the intentional capture, treatment and beneficial use of water that would otherwise be discharged, lost or underutilized. It allows utilities to create additional value from water resources already being managed, while providing major water users with a fit-for-purpose supply that can support operational needs without placing pressure on potable water systems and water resources.  

For utilities, reuse can help preserve potable supplies while strengthening resilience and supporting growth. For industry, it can provide a reliable and sustainable water source that aligns with both operational and environmental objectives. As data centers, semiconductor manufacturing and other high-growth industries look to mitigate or eliminate freshwater withdrawals, water reuse will be a critical solution.   

Perhaps most importantly, reuse changes the conversation from one of competing demands to one of shared opportunity. 

Stafford County, Virginia: Supporting economic growth and long-term water supply resilience 

Stafford County, Virginia offers a compelling example of how intentional collaboration between water utilities and industry supports the next generation of industrial growth. 

Located between Washington, D.C. and Richmond, Stafford County sits directly south of Northern Virginia's "Data Center Alley," one of the world's largest concentrations of digital infrastructure. As data center development expanded southward, the county received requests for millions of gallons per day of additional cooling water demand. 

Although Stafford County has relatively abundant water resources, utility leaders recognized that relying solely on potable water to support large-scale industrial cooling was neither operationally desirable nor strategically sustainable over the long term. 

Instead, the county pursued a purpose-built reclaimed water system designed to support economic growth while protecting potable supply. The nearly $500 million initiative includes advanced treatment, reclaimed water storage and a dedicated distribution network to serve data center customers. 

The project demonstrates the benefits of intentional collaboration between a water utility and industry. The infrastructure is being privately funded by data center owners, helping accelerate investment while reducing impacts on ratepayers. Once completed, the system will transition to county ownership and operation. 

Of course, water reuse alone will not solve every water challenge, but Stafford County's approach demonstrates how utilities and industry can move beyond transactional service relationships toward shared resilience strategies. As industrial water demand continues to grow, collaborative models like that in Stafford County will become increasingly important. 

An integrated approach creates more options  

Collaboration between utilities and industry reflects the core principles of OneWater: all water has value; water management challenges are complex and interconnected; and water management solutions must be sustainable, resilient and equitable.  

Recognizing that water supply, wastewater, reuse, economic development and environmental stewardship are interconnected, a OneWater approach encourages utilities and stakeholders to manage water holistically across an entire watershed. 

That matters because this integrated mindset creates opportunities that may not be visible through a traditional utility-customer relationship. 

We cannot simply think in terms of how to meet new industrial water demands and then work backward to provide supply. That approach is transactional. 

Instead, a OneWater perspective opens the door to broader solutions: regional water reuse, shared infrastructure investments, expanded water and wastewater services, comprehensive planning with partner agencies and new models for collaboration between utilities and major water users. The result is better alignment between community priorities, utility objectives and economic development goals. 

As water challenges become more complex and interconnected, shared responsibility for water management, with greater collaboration between utilities and industry, will be essential to a sustainable water future. 

We recently explored this topic in a Jacobs In the kNOW webinar. Learn more: 

Watch the recording