Even the most definitive studies on sea-level rise, for example, conclude with a range of scenarios. A recent National Research Council study projected that sea-level rise in the Pacific Northwest—Oregon, California and Washington State—would be between 0.4 meters to 1.4 m by 2100. "However, observation is telling us it's going to be in that range of risk. It's not like that range of risk is not definitive enough. It's a fairly large range, but it has a high percentile of being in that range," HDR's McMahon says. "Our job, more than anything else, is to communicate risk."

Freas says CH2M Hill helps clients "incorporate climate risk into the array of risks [the clients] already consider for their planning." Some of those other risks include population and growth expectations as well as new regulations.

One solution the Seattle Public Utilities (SPU) is considering is the greater use of green infrastructure, Fleming says. "The flexibility of options of [green infrastructure] modularity … hopefully will enable you to make adjustments over time" so that, if conditions change, so can systems and plans.

Utilities also can look at what they can do differently in terms of operating and managing the assets they do have, Fleming says. For example, SPU conducted a study in which it looked at varying water levels in its reservoirs using different weather scenarios. "It was a modeling exercise, but what it told us was that there is some flexibility within our system if we think about managing it differently than we have in the past." In other words, he says, "It is not just what you build but how you manage what you build."

Show Me the Money

A 2009 study by the National Association of Clean Water Agencies and the Association of Metropolitan Water Agencies found that climate-related infrastructure needs could total anywhere from $25 billion to $1 trillion over the next 20 years. Even before the numbers are updated, they suggest climate-change upgrades will strain many cash-strapped municipalities.

The days of relying primarily on municipal bonds or raising water rates to pay for the upgrades could be a thing of the past, says Wallis-Lage. "As with our water-supply strategies, what we have done historically is not necessarily an indication of what we need to do going forward. We do need to be more innovative in our financial strategies," says Wallis-Lage.

New funding ideas include public-private partnerships and more energy-performance contracting in which energy savings gained by efficiencies are invested to pay for capital upgrades, Wallis-Lage says.

Ceres—a Boston-based non-profit that directs the Investor Network on Climate Risk, a network of 100 institutional investors with collective assets totaling more than $11 trillion—is advocating that water utilities be subject to stronger disclosure requirements on issues such as water-supply scenario planning, climate-change impacts and pricing strategies.

Although some utilities already disclose this information, there is no federal requirement they do so when preparing financial disclosure forms for credit agencies and potential investors, says Sharon Leurig, senior manager for Ceres' water program.

"The operating environment of water providers is changing, and investors need to be sure utilities whose debt they are holding are adapting. If utilities are not adapting, they may end up not having the money to repay their debts," notes Leurig.

Leurig adds, by creating a more stringent and transparent disclosure framework, utilities would have an incentive to develop adaptation plans that would be more attractive to the investors who buy the bonds that pay for infrastructure projects.

With additional reporting by Debra K. Rubin