The City of San Diego faces a two-pronged infrastructure challenge as it seeks to provide continued excellence in water service to its customers. The City continues to undergo rapid growth in many areas of the system, while at the same time facing an accelerating need for rehabilitation and replacement of aging transmission and distribution mains. Over the coming years, these challenges could place a significant strain on the water system infrastructure if proper planning and execution of capital projects are not accomplished in a timely manner. The Water Policy, CIP Finance, and Planning Division of City of San Diego Water Department (SDW) is responding to this challenge by applying optimization analysis to help identify the most cost-effective and hydraulically appropriate planning solutions. This paper describes a cutting-edge genetic algorithm (GA) optimization study of pipeline replacement options that SDW recently completed for its Alvarado Water Treatment Plant service area. The GA consultants customized their software to suit SDW's Alvarado area hydraulic model, then proceeded to optimize rehabilitation and replacement options for 25.7 miles of existing pipelines and 10.5 miles of potential new pipes. SDW is now moving ahead to implement the first stages of the resulting $35 million year 2030 optimized Alvarado area plan. Includes 4 references, figures.