6.2Industry

Electric, Gas & Water Utilities

Investor-owned, municipal, and cooperative utilities delivering electricity, natural gas, water, and EV charging services to end consumers.

7
Segments
28
Verticals

Overview

Electric, Gas & Water Utilities covers the regulated, capital-intensive infrastructure that delivers essential services — electricity transmission and distribution, natural-gas distribution, and water and wastewater service. Sized from investor-owned operations, it represents roughly $618 billion, though thousands of municipal and cooperative systems serving a large share of customers sit largely outside this figure.

Utilities are monopoly-franchise businesses earning regulated, rate-base-driven returns, and the sector is in a massive capex supercycle — grid modernization and hardening, electrification, decarbonization, surging data-center load growth, gas-pipeline safety, and water-infrastructure renewal. It is consolidating among investor-owned utilities while remaining structurally fragmented across municipal and cooperative ownership.

Market snapshot

Market size
~$602B
Growth
~6.3%CAGR (2017–22, nominal)
Companies
~5,711 firms
Firms by employee count

77% of firms have fewer than 20 employees: 4,398 micro-businesses, below most mandates.

The investable universe1,313 firms with 20+ employees
20–99
81562%
100–499
29522%
500+
20315%

Rate-regulated revenue, which is why the growth reads high: 2022 recovered fuel costs that utilities pass through rather than margin they keep. The investable story is not the top line but the rate base — regulated returns are earned on capital deployed, so a utility grows earnings by spending on its own network, and the count here is dominated by small municipal and cooperative systems rather than the investor-owned names.

NAICS 221122, 221210, 221310, 221320, 221330. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census.

Business model & economics

Revenue model

Regulated, rate-base returns on essential-service delivery

Key economics

Revenue per firm
$105,416,624
Revenue per employee
$1,096,029
Employees per firm
86.6
Recurring revenue
High

recurring, non-discretionary utility service

EBITDA margin
Stable, regulated utility economics
Capex intensity
High

Characteristics

  • Scale-driven — payroll is only 10% of revenue; the cost base is assets, not headcount
  • Deep strategic-buyer pool — 203 firms exceed 500 employees, so a scaled asset has trade buyers
  • Monopoly-franchise, rate-base-driven returns.
  • Massive capex supercycle (grid, electrification, water).
  • Data-center load growth a major new demand driver.

NAICS 221122, 221210, 221310, 221320, 221330. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census.

Geographic concentration

AlabamaAlaskaArizonaColoradoFloridaGeorgiaIndianaKansasMaineMassachusettsMinnesotaNew JerseyNorth CarolinaNorth DakotaOklahomaPennsylvaniaTexasWyomingConnecticutMissouriWest VirginiaIllinoisArkansasCaliforniaDelawareDistrict of ColumbiaHawaiiIowaKentuckyMarylandMichiganMontanaNew HampshireNew YorkOhioOregonTennesseeUtahVirginiaWashingtonWisconsinNebraskaSouth CarolinaIdahoNevadaVermontLouisianaRhode IslandSouth DakotaNew MexicoMississippi

Mississippi carries eight times the national concentration of utility operators, and New Mexico and South Dakota follow — a map of rural systems, not of population. Where no metropolitan utility ever consolidated the territory, service is still provided by hundreds of small districts, associations and cooperatives, each a separate company.

MississippiNew MexicoSouth Dakota

U.S. Census Bureau — 2022 Statistics of U.S. Businesses (firms by state), NAICS 221122/221210/221310/221320/221330. Concentration shown by location quotient.

M&A deal context

Deal activityModerate

Who’s acquiring

  • Investor-owned utility holding companies
  • Infrastructure funds & investors
  • Water-utility consolidators

What’s driving deals

  • Investor-owned utility consolidation.
  • Water-utility roll-up of municipal systems.
  • Rate-base growth and capex programs.

Segments in this industry

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