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In early December 2021, the Denver International Airport made headlines across the U.S. after a hot water pipe broke a month before a major terminal expansion project was expected to complete. The scalding water spilled on floors and across the airport concourse, causing $50 million in damage and a nine-month delay to the project.

While the spill at DIA is a dramatic example of the problems water in the wrong places can cause, it is not an isolated one, particularly in building projects. According to HSB, a global specialty insurer, water damage is the second most frequent cause of loss during building projects. And insurance premiums have only gone up.

“Water damage claims as a result of plumbing failures account for approximately half of all builders’ risk claims,” says Chris Burns, president of Technical Risk Underwriters (TRU), a specialty underwriter of construction risk insurance. Leaky faucets, toilets, misconfigured irrigation systems and faulty workmanship can all cause small spills which, if not caught quickly, can lead to major damage. “Water damage deductibles are exponentially higher today than they were a few years ago,” Burns adds. As a result, some construction and design firms are beginning to use smart water systems in their buildings to hedge against rising deductibles and premium costs.

For decades, intelligent water systems have been used by water and wastewater utilities that want to determine when leaks are occurring in their systems and address the problems quickly. The sensors have cut down on waste and resulted in significant financial savings for the utilities that use them.

But smart water technology—for water utilities or in buildings—has gotten a whole lot smarter over the past five years, industry sources say. The rapid rise of artificial intelligence and its ability to predict water usage and other patterns, combined with further development of internet of things (IoT) technologies, has led to an explosion of small startup firms that provide solutions to address not only leaks, but optimize capital planning and treatment.

“There’s a lot of just amazing companies out there to partner with that are coming up with these incredible new technologies to consider, and it’s hard to keep up with all of it,” says Jake Walsh, assistant chief engineer of planning at San Jose Water in California.

The abundance of options can leave decision-makers’ heads spinning. “There are thousands of products and applications and features within product sets,” says Tim Braun, vice president of enterprise solutions at Xylem, a provider of smart water technologies. “It’s a very fragmented space. I think it’s confusing for a lot of utilities as to how to piece all that together.” Moreover, different systems often don’t talk to each other.

The hope among industry firms is that integration of these systems will let users unlock the benefits of shared data across different silos. But the market isn’t there yet, says Braun. “We’ve got a lot of work to do.”


developers and project teams to select locations for smart flow meters and valves so they can identify leaks and shut them off before they become a problem.
Schematic courtesy WINT
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Intelligent Water Monitoring

The number of startups offering smart water solutions is truly mind-boggling. Many of them use AI to unearth patterns in data collected from strategically placed flow meters in buildings, or in various locations at water and wastewater treatment plants and sewer systems. Changes or disruptions in the patterns either trigger a warning to key personnel, or shut off water valves so a leak can be repaired. The eventual goal is for AI to predict when a leak is likely to occur, allowing operators to make the necessary repairs before any damage is done.

And there are practical reasons for contractors to consider these kinds of technology investments. WINT Water Intelligence, a provider of water management and leak prevention tools for buildings, announced in April it had formed a partnership with HSB to provide coverage for up to $250,000 to construction firms and developers that install WINT into their projects.

“Our customers—both GCs and developers, have been expressing concerns about the cost of water damage deductibles and the impact it may have on their business,” says Yaron Dycian, WINT’s chief product and strategy officer. “When water enters buildings, on average, a quarter of the water will go to waste.”

“I believe we’re only a few years away from water-flow detection systems being an industry standard for large commercial construction projects.”
Chris Burns, President, TRU

Toll Brothers has been using WINT’s products on multifamily residential buildings for approximately three years, and gets a 10% discount on risk insurance premiums with TRU for any projects installing WINT’s systems. After piloting the technology on a multifamily project in Massachusetts, the real estate giant made a decision to incorporate WINT’s technology company-wide on projects going forward.

Matt Windisch, Toll Brothers’ assistant vice president of risk management, says Toll Brothers as an organization recognized the value not just in reduced payments for water damage, but also the related delays and change orders during the construction process. He explains that it’s important to incorporate these smart-water systems early on in a project. “The later you introduce the concept in the design process … it really brings in a lot of potential issues that are very avoidable.” Adding elements to a project design during the construction phase, he explains, can lead to change orders or questions upon inspection. “We kind of learned that the hard way. Like anything, it’s a learning process,” Windisch says.

TRU’s Burns says that smart water technologies have evolved quickly in just a few years. Historically, systems used sensors that clamped onto the exterior of pipes. “The technology has come a long way through the use of inline sensors and remote shutoff valves.” Those developments have proven to be game changers, he says. TRU now requires firms to install some form of a water-flow detection system as a minimum condition for assuming the risk for many of its large commercial buildings projects.

As the technologies continues to mature, more firms working in the buildings sector will incorporate them into their projects, says Burns. “I believe we’re only a few years away from water-flow detection systems being an industry standard for large commercial construction projects in the U.S.”


Utilities Look for a Good Fit

Smart water technologies are also now on the radar of water utilities, although many are still weighing their options. “There’s a lot of forward-thinking utilities that are using these tools,” says Barry Liner, chief technical officer at the Water Environment Federation. But it’s less likely to be happening at smaller, cash-strapped utilities. “We are seeing the adoption at larger, more advanced and more innovative utilities because they have a staff focused on innovation, they’re trying things, and they’re keeping up with what’s going on in the world,” Liner says. “Smaller utilities don’t have the depth of resources.”

San Jose Water piloted an AI solution to monitor performance of approximately 100 of its compound flow meters. Compound flow meters combine both high- and low-flow meters into one device, with a crossover valve to manage fluctuations based on water level flows. “We found that the AI-based tool allows us to understand where we had problems with the crossover that were occurring … it was pretty eye-opening for us,” Walsh says. San Jose Water currently is evaluating various AI solutions that go beyond metering into asset management, including monitoring the activity and health of water pump equipment.

For the past several years, San Jose Water has installed various vibration, temperature and other sensors into its pumping equipment. But it’s hard to reach actionable decisions because individual sensors provide disparate data streams, and they have to be analyzed separately, he says. AI technology could make it easier to identify problems even before they occur, he adds. “We believe predictive analytics are going to help us reduce unplanned pump and motor failures. It’s going to help us reduce operational costs [and] greenhouse gas emissions related to less pumping.”

Digital solutions can also be used to optimize equipment and chemical treatment use. For example, pump- blowing equipment at an energy resource recovery facility is often set to run continuously. “But you may not need that demand the whole time,” Liner says. AI tools can use machine learning to identify the actual demand and adjust to it. Utilities adopting AI solutions for blowing optimizations are seeing an average of 30% in savings in their energy costs, he says.

Water and wastewater utilities

Water and wastewater utilities are finding that they can reduce capital costs by using smart technology to avoid replacing equipment and infrastructure before it’s needed.
Photo Courtesy of Xylem/Buffalo Sewer Authority

Major Firms Embrace Wider Role

Many large engineering firms are now in the smart water market as well, as solutions providers. Gregg Kennedy, vice president of digital water platform at Jacobs, says that previously Jacobs was largely focused on engineering and construction services. “But with some of the acquisitions we’ve made and some of the new products that we’ve developed or co-developed, we now find ourselves spending time in the asset management and operations [work] with utility clients.”

Kennedy adds that Jacobs is able to use its size and lessons learned working with different clients to work with smaller utilities.

For example, Jacobs is currently providing operations and maintenance services to a municipal wastewater treatment plant and combined sewer overflow system for a small utility in Delaware.

While typically under-resourced, Kennedy says smaller water systems can sometimes have an advantage over larger ones, because their systems are less complex and take less time to get new technology up and running than those for larger systems. And Jacobs is not the only firm providing digital water solutions. “Simply put, if you don’t have a digital service offering, then you’re just not that attractive to clients anymore,” says Kennedy.


Moving Toward a Common Approach

Amidst these changes, the larger tech companies in the water market have continued to gobble up startups, expanding their capabilities while providing economies of scale for emerging technologies. Xylem announced in January a $7.5 billion deal to acquire Pittsburgh, Pa.-based Evoqua Water Technologies. The transaction was just the latest in a string of acquisitions by the company, which also include Valencia, Spain-based sensor developer Aanderaa Data Instruments back in 2011 and South Bend, Ind.-based smart solutions provider EmNet in 2018.

Xylem’s Braun says the acquisitions are enabling the firm to drive the water sector’s adoption of digital technologies and offer a One Water approach.

“We’re not saying the machines are taking over soon. But using machine learning and AI [can] help us make decisions faster and just more efficiently operate facilities.”
Jennifer Baldwin, Digital OneWater Strategic Growth Lead, Jacobs

Typically, smart water technologies have been as siloed as the water sector itself, Braun says. With ratepayers and public missions driving them, public water utilities have long been slow in adapting to change or, in the case of smaller utilities, unable to. As a result, custom tools have been developed for different functions and departments.

What’s needed is a more holistic way to look at all data streams across departments, says Braun. These systems traditionally haven’t been able to talk to each other in a way that could help utilities avoid duplicating efforts. “I swear, we hear every week [from customers] that they want one single sign-on,” Braun notes.

But now water technology vendors are beginning to offer more integration of data across different utility functions. This integration lets utilities see all of their data sets at the same time to get a better understanding of the entire water cycle.

And with wider adoption of integrated systems, technology providers can begin to look at greater automation. “How can we use machine learning and AI to really take care of some of the tasks we’ve been doing that we shouldn’t have to do manually anymore?” asks Jacob’s Kennedy.

Jennifer Baldwin, Digital OneWater strategic growth lead at Jacobs, adds, “I think where we’re really heading is … helping water utilities to be able to more efficiently upgrade their facilities, complete all their regulatory reporting and everything else.” With so many operators and staff at utilities approaching retirement age, there is a real risk of losing institutional knowledge. Digital solutions can help fill in the coming knowledge gaps. “We’re not saying the machines are taking over soon. But using machine learning and AI [can] help us make decisions faster and just more efficiently operate facilities.”