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Two of the most important environmental challenges in the 21st century are to protect the quality of fresh water resources and to utilize renewable energy sources to lower greenhouse gas emissions. This study contributes to the solution of the first challenge by providing methodologies for optimal design of real-time water quality monitoring systems and interpretation of data supplied by the monitoring system to identify potential pollution sources in river networks. In this study, the optimal river water quality monitoring network design aspect of the overall monitoring program is addressed by a novel methodology for the analysis of this problem. In this analysis, the locations of sampling sites are determined such that the contaminant detection time is minimized for the river network while achieving maximum reliability for the monitoring system performance. The data collected from these monitoring stations can be used to identify contamination source locations. This study suggests a methodology that utilizes a classification routine which associates the observations on a contaminant spill with one or more of the candidate spill locations in the river network. This approach consists of a training step followed by a sequential elimination of the candidate spill locations which lead to the identification of potential spill locations. In order to contribute the solution of the second environmental challenge, this study suggests utilizing available excess energy in water distribution systems by providing a methodology for optimal design of energy recovery systems. The energy recovery in water distribution systems is possible by using micro hydroelectric turbines to harvest available excess energy inevitably produced to satisfy consumer demands and to maintain adequate pressures. In this study, an optimization approach for the design of energy recovery systems in water distribution networks is proposed. This methodology is based on finding the best locations for micro hydroelectric plants in the network to recover the excess energy. Due to the unsteady nature of flow in water distribution networks, the proposed methodology also determines optimum operation schedules for the micro turbines.