With the increasing penetration of distributed generation (DG) in distribution systems and the concern of energy efficiency, the nexus between electrical and water systems is becoming more apparent and strengthened via combined heat and power (CHP). This paper investigates the nexus between DG penetration and urban water infrastructure. The AC optimal power flow (ACOPF) based optimization model is used to assess DG capacity and determinate DG location. The IEEE 123-bus distribution test system is selected as the test bed and the corresponding water distribution network is developed based on the system cost minimization to constrain the thermal output utilized by water and to check node pressure head. The results indicate which bus in the system is suitable to place a DER and the capacity that can be accommodated by the system. Finally, the nodal pressures of water system are checked to see if the existing water distribution system could support the large penetration of DG.