The Western U.S. relies heavily on water-dependent electricity generation, with hydropower and fresh surface water dependent thermo-electric plants accounting for over 60% of generating capacity. We recently demonstrated the sensitivity of operations to inter-annual variations in regional water availability on such an electric grid. Leveraging this framework, we evaluate the sensitivity of the contemporary grid to future water availability and demonstrate the importance of capturing regional diversity of generating resources when developing grid-scale, long-term water-energy plans. Acknowledging that long term energy planning is driven by a variety of factors, we extend the approach to integrate future water availability in long term resources adequacy and reliability studies using both capacity expansion and production cost models. This presentation will discuss those scientific advances, future research directions, and identified modeling gaps, which range from diversity in production cost models, representation of water-sensitive operations, and the role of markets and agents of decision making.