I suspect that your difficulty may come from confusion with に導入される = introduced to.
Here what exactly is the subject of 導入される is a bit hard to tell, but it should be the whole situation described in the previous sentence: switch to the private sector.
The phrase parses as ((飲料水などに使う) 上水道で)導入される = introduced in water supply used for drinking water etc. The に is for, the で is in/at (location).
In this case で can be replaced by に (上水道に), but possibly で was used so that に does not appear too often. As an example, うちの会社で新システムが導入された = うちの会社に新システムが導入された: A new system was introduced in/to our company.
Note 上水道 is the system of water supply, used in contrast to 下水道 = sewerage. So the first sentence says the water-related infrastructure in Miyagi Pref. is run by a private company, replacing the local government. And the next sentence means, in particular, it is the first case where 上水道 is run by a private company (= Sewerage is managed by private sector in some other prefectures).