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Finding an appropriate balance between capacity expansion and conservation can result in quantifiably reduced demand, which yields benefits for water utilities. One benefit is reduction in operation and maintenance expenses, because less pumping energy and fewer chemicals are used in the acquisition, treatment, and disposal of water. Another benefit is the deferral or downsizing of capital facilities. Comparing current supply with projected demand aids in the identification of future needs for demand management or increased supply. In addition to cost factors, nonmonetary factors, including environmental effects, should be considered. In this article, case studies from Texas, California, Idaho, and New Zealand illustrate this balancing process. Includes 9 references, tables, figures.