Drought’s Long Reach Requires Proactive Risk Management

As Water Shortages Grow Across the U.S., Planning Becomes Even More Important 

Although drought lacks the shock value of a flood, hurricane or wildfire, it is a devastating natural disaster. Drought may develop more slowly than a sudden storm, but its consequences can be more disruptive, further-reaching and longer-lasting than other climate-related crises.

Across the United States, shifting precipitation patterns, rising average temperatures and changing demands on water infrastructure are deepening drought. Drought is no longer a cyclical occurrence but instead has become a persistent challenge for utilities, municipalities, communities and industries alike — including for some that have almost no experience in facing its consequences.

As of Oct. 14, 2026, 42.5% of the United States and Puerto Rico and 50.67% of the Lower 48 states were experiencing drought, according to the National Integrated Drought Information System (NIDIS) Drought.gov. Flash drought conditions, driven by below-normal precipitation combined with unusually high temperatures and elevated atmospheric evaporative demand, continued to intensify across the Southern Plains and Lower Mississippi River Basin and expanded into portions of the Southeast.

The news about drought is consistently bad. However, drought risk can be anticipated and mitigated with adequate planning and a long-term commitment.

The Widespread Impact of Drought

Drought results in more than a simple water deficit. Because water supply is fundamental to any community, a lack of water affects all parts of the economy, households and ecosystems. It is a systemic risk that simultaneously stresses infrastructure, public policy, financial models, watersheds and community trust. 

Data from NIDIS notes show that drought lowers financial returns and escalates operational costs across every major sector in the economy, in turn decreasing job growth.

Drought can also increase human mortality indirectly by intensifying extreme heat, escalating wildfire smoke and dust, degrading water quality, reducing food security and worsening mental health stress. 

The Difficulty of Drought Response

The challenge begins with uncertainty. Drought conditions vary by region, severity and duration, making it difficult to rely on historical patterns alone. In many places, reduced snowpack and shifting spring runoff patterns strain long-term water availability. In river basins, such as the Colorado, long-term droughts (such as the current one that has now lasted more than 20 years) have caused soils to dry out to the point that an average precipitation year no longer produces an average runoff year. It will take many years of above-normal precipitation to reverse this “aridification.” 

Elsewhere, periods of below-normal rainfall are punctuated by short bursts of intense precipitation that run off quickly and do little to recharge supplies or improve long-term resilience. Increased groundwater pumping is straining aquifers, causing some to become irreversibly compacted, which adversely affects our ability to draw water from them.

The NIDIS Drought.gov highlights how drought conditions are shaped by multiple indicators, including precipitation, temperature, soil moisture and streamflow. 

How to Respond to Drought

Just as the harm of sustained drought is complex, serious and widespread, so must be the response. More than supply should be considered.

Communities are best positioned when they treat drought not as an occasional emergency, but as a long-range planning challenge that requires a broad lens that touches operations, capital investment, rates, regulation, public trust and collaboration.

Effective drought planning looks beyond whether a drought may occur and asks a broader set of questions to better evaluate risk:

• How severe could it become? 
• Who and what would be most affected? 
• What are the financial impacts to the utility? 
• What are the possible implications on the groundwater basins that may affect watersheds, ecosystems, waters of the state or U.S. and resulting regulatory interests?
• What are the likely economic, operational and social consequences?
• Which actions make sense now, even under uncertain future conditions?
• Can we partner with other agencies, organizations and businesses that would also benefit from long-range preparedness and holistic resilience?
• What are we or others doing now that could undermine our future efforts toward drought resilience?
• Have once-appropriate policies or practices become outdated as drought persists?

Answering those questions requires more than a single technical study. It calls for an integrated approach by a multidisciplinary team of climate scientists, water engineers, utility management planners, economists, environmental specialists, regulatory strategists and communications professionals to help a utility evaluate risks, understand trade-offs, and make decisions with confidence.

This integrated perspective is important because drought decisions are rarely isolated. A utility evaluating new supply options, for example, will likely also need to consider environmental effects, regulatory requirements, rate impacts, public acceptance and the economic consequences of inaction. Looking at these issues together helps leaders prioritize no-regret actions that build resilience over time.

What Does a Drought Resilience Plan Look Like?

While every community and watershed faces unique conditions, comprehensive drought resilience plans share several key components:

• Risk-informed water supply planning. Probabilistic hydrological modeling, scenario testing and advanced demand forecasting help utilities prepare for a wider spectrum of potential climate futures rather than relying solely on historical conditions. In a sample case, we integrated water supply and demand modeling to evaluate a utility’s surface, groundwater and imported supplies relative to probabilistically defined future scenarios. 
• Capital and operational strategies. Resilience can involve both long-term infrastructure investments and shorter-term operational improvements. These may include diversifying water sources, reducing system losses, improving storage or reuse strategies and identifying practical steps that strengthen reliability before severe shortages occur.
• Financial resilience. Drought can create difficult financial dynamics for utilities and communities, especially when reduced consumption, emergency response costs or supply constraints put pressure on revenue and affordability. Risk-informed rate studies and financial planning can help decision makers better align funding strategies with long-term water management needs. These analyses can provide the basis for evaluating prudent levels of reserves, development of rate structures to maintain revenue stability, establishment of drought charges and capital funding plans to support identified needs. 
• Economic and community impact analysis. Water shortages affect more than utility systems. They can influence jobs, household costs, industry performance and regional economic health. Understanding these broader impacts helps communities evaluate the full value of resilience investments. For instance, to address persistent drought risk in Iowa, we quantified household and business loss that would result from reduced water supplies if a new reservoir were not developed.
• Ecosystem impacts and regulatory strategies. Reduced streamflows, lower reservoirs, groundwater supplies, ground subsidence due to overpumping, and ecosystem impacts can have dramatic impacts on habitat. Response strategies require varied levels of regulatory approvals. Proposed mitigations can challenge project approvals and have long-term restoration requirements. Early considerations of these issues can prevent fatal flaws from developing during project implementation programs. With an integrated process, these issues may even create opportunities for comprehensive mitigations, adaptation and even long-term enhancements. 
• Clear communication. Even the strongest technical plan can stall without understanding and support. Effective communication intentionally shifts the narrative away from one-off shortages and use restrictions toward a holistic, long-term storyline of preparedness, resilience and practical solutions. Engaging early, often and transparently with key partners builds trust, understanding, and the social and political will to support the actions needed for a reliable water future. We demonstrated these principles recently in communicating the need for higher water rates relative to value gained from increased water reliability. 

When to Respond to Drought

Drought accumulates over months and years and can quietly build towards catastrophe. That’s why the most critical factor in drought management is proactivity. Engaging in early, cross-disciplinary planning gives utility leaders and municipal officials the time needed to evaluate alternative supply options, phase capital investments, engage stakeholders and avoid emergency-driven decision-making.

By uniting climate science, robust engineering, sound economics and transparent communication, communities can navigate future water uncertainty and protect their long-term economic and environmental health.

This article reflects the collective expertise and collaboration among HDR professionals dedicated to advancing a more sustainable future for the water industry, including Chris Behr (economics), Kim Colson (funding and finance), Blaine Dwyer (water supply management), Shawn Koorn (water rates analysis), Erin Little (climate science), Amy Shahar (strategic communications), Leslie Tice (environmental planning) and Roger Null (utility management).