Utilities

Performance Highlights

The sector's revenue has grown at a CAGR of 1.6% from 2018 to 2023, reaching $1.1 trillion, despite a decrease of 1.9% in 2023 alone. Electric power transmission is the largest service within the Utilities sector, accounting for 46.0% of sector revenue in 2023. Natural gas overtook coal as the leading source of electric power in 2016, generating 47.1% of all electric power in the US.

Geographic Distribution

The highest concentrations of businesses are in California, Texas, Florida, and New York, driven by large populations and economic activity. The Southeast region has the largest concentration of utilities companies, reflecting population density patterns and the use of natural gas.

Industry Outlook

Revenue is expected to grow at a CAGR of 0.5% from 2024 to 2028, reaching $1.1 trillion. Increased consumption of electric power due to economic activities post-COVID-19 and substantial investments in renewable energy will drive growth. The Inflation Reduction Act allocates over $350 billion to develop clean energy, further supporting sector growth.

Competitive Forces

The industry is characterized by low concentration and high competition. Barriers to entry are high due to significant regulatory and capital requirements. Successful businesses maintain a strong reputation and adopt advanced technologies like smart grids and efficient transmission systems.

Major Companies

Notable players include Exelon Corporation (2.8% market share), Duke Energy Corporation (2.3% market share), Nextera Energy Inc. (1.7% market share), and American Water Works Company, Inc. (0.4% market share).

Revenue

$1.1 trillion

Employees

973,000

Businesses

54,582

Wages

$115.3 billion

Economic and External Factors

The Utilities sector is highly regulated, with businesses having to comply with a myriad of regulations, making it extremely costly to operate. The price of natural gas and electric power significantly affects sector revenue and profitability.