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A transition from conventional centralized to hybrid decentralized systems has been increasingly
advised recently due to their capability to enhance the resilience and sustainability of
urban water supply systems. Reusing treated wastewater for non-potable purposes is a promising
opportunity toward the aforementioned resolutions. In this study, we present two optimization
models for integrating reusing systems into existing sewerage systems to bridge the supply–demand
gap in an existing water supply system. In Model-1, the supply–demand gap is bridged by introducing
on-site graywater treatment and reuse, and in Model-2, the gap is bridged by decentralized
wastewater treatment and reuse. The applicability of the proposed models is evaluated using two
test cases: one a proof-of-concept hypothetical network and the other a near realistic network based
on the sewerage network in Chennai, India. The results show that the proposed models outperform
the existing approaches by achieving more than a 20% reduction in the cost of procuring water and
more than a 36% reduction in the demand for freshwater through the implementation of local on-site
graywater reuse for both test cases. These numbers are about 12% and 34% respectively for the
implementation of decentralized wastewater treatment and reuse.