Power gets the headlines. But as states compete to land data centers and advanced manufacturing, water is a critical resource that can make or break the deal.
"States are competing against each other to bring data centers into their states, and water and cooling is an important part of that," John Griffith, CEO of American Water, told Standard & Works at the NARUC Winter Policy Summit.
Griffith has one of the most comprehensive views of the national water map.
The company operates in 14 states and on 18 military installations, and that footprint provides unique insight into the constraints and opportunities facing industrial growth.
A merger with Essential Utilities would add three more states to its footprint.
The picture: The American Society of Civil Engineers gives America’s water infrastructure a C-minus and wastewater a D-plus, Griffith says.
In some parts of the country, water losses run as high as 50% — treated water that's already been processed and paid for, leaking out of aging systems before it ever reaches a tap.
Nationally, an estimated 2 trillion gallons are lost every year. "That's just flushing money down the toilet," Griffith said.
Part of the problem is structural.
With roughly 55,000 municipal water providers nationwide, the sector is extraordinarily fragmented. Small systems face massive capital needs – from PFAS remediation to lead service line replacement to cybersecurity upgrades – without the scale or resources to address them.
What States Can Do
Griffith's prescription is straightforward: reduce fragmentation, open the door to capital, and stop treating water as an afterthought.
American Water's model is acquisition-driven – buying municipal systems, deploying capital and expertise, and spreading costs across a larger customer base.
The affordability question looms large for all utilities, and water is no different.
Griffith said American Water is exploring how AI can identify customers who qualify for assistance programs and proactively enroll them – an AI use case that goes beyond the leak-detection and operational efficiency applications most utilities are eyeing.
The Reliability Wake-Up Call
Griffith said the recent Winter Storm Fern that swept huge parts of the country gave regulators a fresh reminder that like the electric grid, extreme weather tests water systems too.
"It's in the harshest conditions when you need the utilities the most," Griffith said. "And that takes a lot of investment."
Griffith was careful to note that American Water's first obligation is to existing customers: no sacrificing their supply or shifting costs to subsidize new industrial demand. But he sees large-scale projects as an opportunity as long as the underlying infrastructure is there to support it.
The states that modernize water systems at scale won't just serve a public need. They'll also build a competitive moat.
