Kataras' water isn't pure ("We're drinking your bending water You used this on the swamp guy!") so I think that fighting so amny people would have created salt that conducts eletricity. That is unless she purified it after that episode, like in the Blue Spirit, but I really doubt this.
Whilst you're getting a life, can I have on too?
Well, I may as well abuse not having a life.
Even though I thinkl Azula could electrocute her water, I still Katara would win because:
1. Kataras' skilll at waterbending has improved greatly since the Boy in the Iceberg (and it wasn't too shabby to start off with) and I believe that she's developed ata rate far greater that Azula. So I think by now she could beat Azual.
2. Katara is driven by emotions. This makes her the complete oppoaite of the cold manupilator (oxymoron). I thinkm this would just make her stronger since she has so much passion.
3. If the3 combined team of Zuko and Sokka could hold off Azuala, then I think Katara could beat hr by now (since she could beat Zuko with a near full moon in series one).
4. Things haven't been going great for Azula. She finds out that Aang's alive, her friends betray her. Overall I think this would make her a weaker firebender since this probably causes her to lose her composure.