Risk-causing scenarios in the water supply industry can be classified as either nonoperational scenarios or operational scenarios. The former, which includes natural and anthropogenic disasters, have been well studied using quantitative risk analysis and vulnerability assessment methodologies. Their study will undoubtedly continue due to recent financial allocations for infrastructure vulnerability assessments in the wake of last year's terrorist attacks in the United States of America. For daily water supply operations, however, utilities are concerned with operational failure events that result in decreased production quality, quantity, and pressure without long-term disastrous consequences. In spite of this concern, few methodologies for operational risk assessment currently exist. This brief paper introduces the concept of conditional risk-based performance indicators and demonstrates their application to the identification and quantification of operational risk in the water supply industry. The utility of the methodology is demonstrated through the examination of operational risks related to water quality at a full-scale treatment facility in Canada. Through the application of conditional risk-based performance indicators to historical operational data, utilities can identify raw water quality and operational conditions that are more likely to cause system failure, lengthen failure events, and increase the severity of failure. Includes 3 references, tables.